A Tale of Two Performance Management Systems

The 1990s ushered in a new era of government in the United

States,one that gave employees more autonomy and discretion

in performing their duties. In return,however, the government

instituted a results-driven management style to hold employees

accountable.According to the U.S.Office of Personnel Management

(OPM), agencies must have a results-oriented, high-performing workforce

and a performance management system that differentiates between

high and low levels of performance and links individual/team/unit performance

to organizational goals and desired results effectively. Moreover,

this system, called the results-oriented performance culture system,

includes ensuring that results are measured in performance appraisals and

that pay is linked to performance (pay for performance).

Therefore,when government employees are hired, they receive a job

description and the precepts used to evaluate their performance.After a

predetermined time, they are then rated on the basis of these precepts.

Permanent status,pay increases, and promotions are all inevitably rewarded

on the basis of the rating employees receive during these sessions.When

so much is riding on these ratings, how should agencies go about judging

employees performance? How can agencies ensure that the rating

process is handled appropriately and fairly?

The federal government has two separate categories of compensation

systems for evaluating performance of employees: those used for tra-ditional civil service employees and the one used by agencies

like the U.S. Departments of State, Commerce, and

Defense.Although there is some variation in each category,

these systems seek to determine who is eligible for

permanent status,pay, termination, and merit increases.The

traditional civil service system relies on the judgment of

the supervisor, while the other system affords the decision

to boards mainly comprising colleagues.This article

discusses the systems used by the Senior Executive Service

(SES) and States Senior Foreign Service (SFS).

SES Compensation System

According to OPM, a supervisor must establish performance

metrics in consultation with the executive

(agency head or designee) in the SES compensation system.

OPMrequires these performance indicators to be consistent

with the goals of the agencys strategic planning initiatives.

Employees can meet with their supervisor

throughout the year to determine their current status in

achieving these goals.At the end of the annual rating period,

the employees are held accountable for their individual

and organizational performance. Each year,when

employees meet with their supervisors, the latter propose

the initial rating,which the executive then reviews and determines

the final annual summary rating.Once this is completed,

personnel decisions, such as pay, awards, development,

retention, and removal are determined.Thus, a low

rating jeopardizes the employees status,while a high rating

improves the chances of being rewarded.

SFS Compensation System

The Foreign ServiceAct of 1980 stipulates the process

to be used to evaluate SFS employees at the Department

of State.At the beginning of each annual cycle, a supervisor

and subordinate meet to establish work requirements

for the current year. The two can meet periodically

throughout the year to discuss progress made toward these

requirements.At the end of this cycle, the supervisor prepares

a formal performance evaluation document, including

an employee evaluation report, which is essentially narrative.

In this document, the supervisor must address two

issues: the accomplishment of the established work requirements

and the employees potential for success if promoted

to the next level.

Once the formal performance evaluation document

is completed and the employee is counseled,Foreign Service

selection boards convene to review the dossier.These

boards,which comprise SFS employees and a public member,

meet each year during the summer months.The goals

of the boards are to rate each employee on the basis of

their formal evaluation document and, from this rating,

rank them accordingly. Since this document serves as a

basis for the performance evaluation, supervisors narrative

statements become important.As a result,board members

go back several years to review previous assignments

and statements written by other supervisors.Also, sustained

evidence of performance over these years, as opposed to

one year, inevitably factors into the boards decision.Therefore,

the board uses evaluations compiled over several years

to make their determination.

Once this is completed, the board gives the bottom

5 percent a low rank and recommends meritorious pay

and promotions to the next level for eligible SFS personnel.

The board then gives its recommendations to the secretary

of the agency and makes the evaluations available to

the employee.Although the process calls for boards to make

recommendations, the secretary must abide by these recommendations.

The secretary can momentarily deny the

recommendation while confering with the board,but the

board makes the ultimate decision. Finally, upon receipt,

the agency uses these recommendations to make necessary

personnel decisions (work assignments, tenure, promotion,

and termination).

Differences

Juxtaposing the two systems reveals clear differences.

One distinction is the manner in which employees are rated

and ranked.Although this element is not the focus of

this article, the SFS system is more performance driven

than the SES system.Another major difference is that selection

boards evaluate SFS personnel,but supervisors judge

SES employees.This distinction is important because,first

of all, a boardor a group of individuals comprising four

State officials and a public memberrate SFS employees.

Thus,five individuals who are not direct supervisors

determine the fate of an SFS employees service.Although

each board member is familiar with the employees job

description, duties, and accomplishments, and despite the

fact that they are given core precepts used to determine

ratings, board members do not have firsthand knowledgeof the employees service.Moreover, because they do not

have direct oversight or knowledge, they rely on what is

written in the formal performance evaluation report. In

other words, SFS employees, except in rare circumstances,

are judged by individuals outside of their vertical chain

of command.

Which Is Better?

Ostensibly, the answer to that question is determined

by the effectiveness of the supervisors judgments compared

with those of the boards or outside groups. Each

system has its advantages and disadvantages. For the SFS

boards performance system, the advantages are objectivity,

reduced bias, and group discussion and consensus; the

advantages of the SES system are that immediate supervisors

have firsthand knowledge and are intimately familiar

with the employees performance.Each of these strengths

is also the others weakness.That is, the weaknesses of the

SES system are bias, subjectivity, and centralized decision

making,while the lack of direct knowledge is a weakness

of the SFS system.

The same SFS employees who participate on the

boards are also rated by boards. In other words, SFS employees

not only go through the process as a board member

but also as an employee.Therefore,SFS employees have

a vested ownership in this process, giving each of them

incentive to ensure the process is handled appropriately.

With that backdrop,despite whatever reservations they

had when it began, SFS board members laud the process

as a success upon completion.Furthermore, they leave with

the feeling that the right people were awarded.To validate

this claim, the Congressional Research Service (CRS) stated,

in a report to Congress, that the SFS selection and promotion

experience has been viewed optimistically.Moreover,

the same report says that SFS personnel rate their

experience more positively than those under the SES

process.For instance, the report indicates that SES personnel

do not see a correlation between ratings,pay adjustments,

and bonus awards.As a result, 40 percent of SES employees

say the system negatively affects morale because they

feel that those doing a good job do not get pay adjustments.

Conclusion

In sum, the CRS report suggests that government employees

rate their experience more favorably when their

agencys performance evaluation system is conducted by

boards comprising colleagues rather than at the discretion

of the supervisor.They feel that the best employees are

compensated when agencies utilize systems like that of

the Department of State.Thus, a system that uses outside

reviewers and colleagues seems better.Whether the SFS

systems success should be attributed to the decentralized

process or to confidence in having groups outside of the

line of command make the decision is unclear, however.

In any event, the federal government should look at

implementing a method of decentralizing personnel decisions,

such as termination and promotions, in each agency.

Boards, like those used at State, could then be utilized to

confer those recommendations. Getting buy-in from supervisors

and employees in each agency when devising

a performance management system is also important.This

should not be difficult because most employees rated under

traditional systems do not feel the current system is

fair.Ultimately, the final version of the performance management

system should keep certain core principles, such

as decentralized personnel decisions, intact while meeting

each agencys needs.