Government executives and human capital professionals offer a road map for designing and implementing effective performance management systems.
By Bill Trahant
What’s the best way for government executives to create high-performance cultures in federal agencies? In March 2007 testimony before the House Subcommittee on the Federal Workforce, Bob Tobias, Director of Public Sector Executive Education at American University (AU), said it will never happen until you “change the behavior of every employee in government.” And that won’t happen, he said, until you “build robust performance management systems that can objectively evaluate different levels of job performance and guarantee a fully funded reward system.”
Creating such systems is difficult, Tobias told lawmakers.They must be very robust and able to synthesize large amounts of data relating to work standards, job requirements, and other performance specifications. What’s more, designing them is a “time-consuming process that requires the close collaboration of government employees and their managers,” he added.
Government Focus on Performance Management
The design and implementation of performance management systems have become a frequent topic of recent government executive conversation. Agencies are striving to comply with The President’s Management Agenda (PMA) and the Human Capital Assessment and Accountability Framework (HCAAF), the U.S. Office of Personnel Management (OPM) road map for transforming government human capital management.
For these reasons, “How to Build Effective Performance Management Systems” was the topic of a briefing for government executives at the National Press Club in Washington,DC, on May 29, 2007.Held under the auspices of AU’s Institute for the Study of Public Policy Implementation and sponsored by Watson Wyatt Worldwide, the forum brought together government executives from a range of agencies. It dealt with everything from the effective design of performance management systems to the management concerns and organizational and political obstacles that often stand in the way of their deployment in agencies (see box).
Featured speakers included AU’s Tobias;Marta Perez, chief human capital officer at the U.S. Department of Homeland Security; and Bill Leidinger, former assistant secretary for management and former chief human capital officer and chief information officer at the U.S. Department of Education (ED).
Cultural Challenges
Tobias noted that cultural impediments have prevented these systems from being easily implemented in government agencies in the past. “Since 1993, when Congress passed the Government Performance and Results Act, agencies have struggled to identify outcome versus output goals,” he said.
One reason is that agencies and government executives find it hard to reduce achievement of their public mission to clear and measurable objectives.“At the program level,managers find it tough to define measurable program outcomes.And at the supervisory level, supervisors have trouble translating organizational goals into individual employee job requirements and performance expectations.”
At the same time,Tobias said, supervisors and employees have struggled to redefine their working relationships— to put more focus on measurable job results and less on pro forma job evaluations. Still,Tobias asserted that if managers and employees can come together to collaboratively design and implement performance management systems, they have the potential to “totally transform” their long standing traditional relationships in the federal government.
Performance management can also energize employees to perform at higher levels and assume greater job ownership,Tobias noted, because they see how their everyday jobs are connected to the strategic goals and priorities of their organization. He added, “When employees understand the linkage between their efforts and desired agency outcomes, their engagement in their work and productivity increases.” Involving employees in defining job requirements also “enables managers to leverage the natural desire of employees to improve agency goal achievement,” said Tobias.
Today, however, he said most federal agencies don’t do a very good job of identifying output and outcome goals, so “employees feel uncertain about how their individual job efforts (and performance) impact overall organizational goals and performance.” Manager-Employee Dialogue Like Tobias, Perez, a principal architect of HCAAF while at OPM,noted that the key to making performance management work is getting supervisors and employees to work together to define critical job requirements and articulate performance metrics to which both sides can agree.“It’s all about good communication,” she said.
Perez noted that the public sector has traditionally emphasized performance appraisal and not performance planning, coaching, and development. Conversations between managers and employees “traditionally have been about activities—not outcomes,” she said. By contrast, she added,“Performance management involves continuous dialogue between managers that is focused on achieving specific, concrete results. There is shared responsibility and involvement by managers and employees alike.Thus, it becomes a workplace partnership.” Perez is striving to align the work of the Department of Homeland Security’s (DHS’s) twenty-two component agencies with the overarching strategic goals of DHS as a department. One way is by holding focus groups with managers and employees in all DHS components to articulate work standards and evolving job requirements in key DHS positions and operating areas.
Perez said doing so is critical to building employee engagement with DHS’s strategic mission goals. In an agency like DHS, which is concerned with evolving mission requirements related to national security, Perez said “the need for continuous dialogue” about job requirements, work standards, and results is especially acute, and an activity to which she and other DHS executives give constant attention.
To foster good communication between supervisors and employees,DHS intensively trains managers in goal setting and interpersonal communication—in the classroom and through webcasts and teleconferences. Such training is critical because “managers must be trained on how to do performance evaluations with employees, how to communicate job expectations, and how to effectively engage with employees to define work requirements,” she said.
To be fully operational, performance management must be integrated with “operational planning, goal setting, and decision making,” Perez emphasized.
How, Perez was asked, do organizational discussions about performance at DHS actually get translated into specific job activities and performance metrics? Moreover, how does the department take the work tasks of individual employees and guarantee that they “roll up” to serve the overarching goals of DHS as the guardian of our nation’s security?
Job Linkage to Mission Goals
“Today, we’re trying to have as much dialogue about work expectations and job tasks as we can, to help people understand the linkage of their work with the overall mission goals of DHS,” Perez said. She showed how this works in the department by describing how one strategic DHS priority—safety and terrorism prevention at the nation’s airports—is broken down into specific component objectives, unit and program objectives, and individual and team objectives.
To ensure airport safety, Perez said a key objective of the Transportation Security Administration (TSA), the DHS component agency charged with protecting the nation’s transportation systems, including airports, is “to deploy layers of security to protect the traveling public and the nation’s transportation system.”To accomplish this objective,TSA has developed specific airport priorities and goals, which include improving the efficiency and effectiveness of airport screening and maintaining an excellent safety record.
These priorities and goals are advanced by airport managers’ taking specific actions such as improving efficiency and quality of airport screening, she said. These actions are then made operational through the daily work tasks that individual airport screeners and security personnel perform at the nation’s airports.
“You can see, from this simple example, a framework of performance management goals and measures that aligns the work of people at all levels of TSA around the strategic organizational goals of DHS,”said Perez. It serves to create a strong organizational line of sight on key departmental priorities and focuses on results. (Frontline TSA personnel, and their immediate supervisors, get evaluated, according to Perez, on metrics such as “wait time” for passengers going through airport security, and the goal is to ensure that“wait time for 80 percent of people going through airport security is 10 minutes or less.”) .
Constant Dialogue
At DHS, Perez emphasized,defining critical work and the standards by which it is evaluated is an ongoing process because ensuring airport security requires constant review and vigilance.“We spend a lot of time in DHS and TSA talking about how to improve the security of airports while, at the same time, creating more efficiency in the way we do business,”said Perez,noting that this is the subject of regular conversations she has with TSA Administrator Kip Hawley and other DHS executives.
Perez said DHS could make airports so secure that nobody would be able to move through them. But “we don’t want to do that.We want people to be able to travel, and to move through our airports as quickly and safely as possible.” Perez told attendees that when agencies clearly define critical work requirements and align them with strategic goals, it supports a strong employee line of sight and focuses jobs on performance. “When you articulate metrics so they reflect program priorities, organizational conversations about performance become clear, and judging individual employee performance becomes easier,” she said.That’s because employees know what is expected of them and on what they will be judged.
Perez noted that for performance management systems to take firm root in agencies, they can’t be seen as a function run by the human resources department. Instead,“agency line managers and executives must clearly own the performance management system” they design and build, so that employees will accept it as a fair and credible tool to objectively evaluate people’s job performance.
Senior Leadership Commitment
Even that, however, isn’t enough to ensure complete success with performance management, said Perez.Top government executives and political appointees must be enthusiastic backers of performance management, she added, and must promote its importance to agency success at every opportunity. “Leaders from the top of the organization down to…first-level supervisors must have continuous conversations about performance with employees. They must communicate a vision to employees of where the organization is going, and the critical role that employees have to play in making completion of that mission a reality.”
Bill Leidinger agreed that an agency’s top leaders must be vigorous champions of performance management, if it is to get real traction inside federal agencies today.But he worried that such top-level leadership support often isn’t there.“That’s one of the biggest concerns I have about performance management in the federal government today. I don’t know where the leadership is to make it work. I mean,‘Where is it?’”
Leidinger noted that for performance management to take hold in federal government culture, leadership support of performance management must be consistent at all levels of government.“The president, cabinet secretaries, and all political appointees have to be involved in driving change right along with employees.They need to roll up their sleeves, and also give employees the tools they need to make it work,” he said.
When it comes to agency transformation, and the importance of top leadership in driving change, Leidinger knows what he’s talking about. As a top ED executive in the early 2000s, he was intimately involved in massively reengineering the talent recruitment process at the department. “That initiative required a lot of hands-on effort by everybody, including top execs,” says Leidinger.“It wasn’t something we did through a few memos and town hall meetings.”
Leidinger said the same kind of commitment is required today to design and implement performance management systems in federal agencies.“To play a leadership role in agency transformation today—and specifically to implement performance management—top government executives and political appointees need to spend time with the people they supervise.They need to manage their organizations by walking around, and by intimately understanding the nature of people’s jobs.”
Four Openers
What does Leidinger suggest to managers and political appointees who want to create strong performance- based cultures in their agencies?
For starters, he said, managers and supervisors must deeply understand the nature of the daily work their subordinates do. “You don’t get that understanding by sitting in an office.You need to walk around and talk to people.You need to ask them what they’re doing, how they do it, and why they do it.You also need to understand the constraints they face, and figure out how you can help them do their jobs better.”
Second, managers need to look for inefficiencies in the organization and for skill gaps in people, Leidinger said.“Again, unless you spend time walking around and talking to people, you won’t know where these weaknesses exist.And you won’t have any idea of how to align people’s work with your agency’s strategic or mission goals.”
Third, government executives must take action when they find impediments to people doing their work effectively, said Leidinger. For example, he says, “If you find skills gaps in employees, you must give people training and coaching to remedy those gaps. If you find people’s work isn’t clearly related to the agency’s goals, you need to look at that, and create better alignment. You can do this in focus groups and through small, intense team meetings. Otherwise, you won’t improve efficiency or productivity.”
Finally, Leidinger said, federal agencies today need to spend more time on careful and systematic workforce analysis.“You need to understand the current demographics of your workforce and the current state of people’s skills in your agency,” he said. “You also need to carefully project your agency requirements and skill needs into the near-term future in order to get a strategic handle on how to align people around critical agency or mission priorities going forward.”
Doing the aforementioned is critical, said Leidinger, if an agency wants to create a performance-based culture and a line of sight to strategic mission goals.
Patience in Process
Under the best circumstances, Leidinger cautioned, aligning employees with mission goals and connecting everyone’s job to specific organizational outcomes doesn’t happen overnight. It takes time. “In my opinion, any agency that wants to implement an effective performance management system must commit two to three years to develop,modify, and tweak that system to make it work,” he asserted.
Part of the reason is that agencies need time to delineate job tasks and performance criteria for every employee and to logically link daily employee job tasks to the overarching strategic needs and mission requirements of the agency for which they work. In some cases,making those connections isn’t that hard,he said. In others,he says,“It’s tough to determine how someone who’s processing transactions deep inside the organization personally impacts the outcomes of their agency.You need time [therefore] to make those connections, and to create mutual understandings (between a supervisor and an employee) around job tasks and performance expectations.”
The need to create organization-wide buy-in and train large numbers of managers in performance-based job evaluations are other reasons that implementing successful performance management systems takes time, according to Leidinger. That’s okay, he said, emphasizing that the process of implementing performance management is best thought of as a long term organizational initiative that will have multiple phases, each building on the best practices, successes, and organizational learning of the previous phases.
“You’re not going to create the perfect performance-driven organization overnight,” Leidinger said.“In fact, most studies show that real, sustainable culture change and organizational transformation take five to seven years to achieve.”
Road Map
As part of his presentation, Leidinger laid out a series of recommendations—a road map of sorts—for government executives and political appointees who are designing and building performance management systems for their agencies.
“Think of these things as guidelines in implementing performance management in your organization, and in designing and building a performance management system to support your agency’s strategic mission goals,” he said.
Step 1. Align individual performance expectations with organizational goals.
Agencies must spend time articulating outcome goals that are consistent with the agency mission and set at a level that encourages innovation and improves individual job performance.
Step 2. Clarify roles, responsibilities, and expectations for all employees.
Agencies must involve employees in defining work expectations and delineating different levels of job performance. By doing so,“you create employee buy-in for specific performance standards and build trust that people’s job performance will be evaluated fairly and accurately during annual job reviews.”
Step 3. Create a clear line of sight so that employees at all levels understand how their individual jobs and objectives support achievement of the agency’s overall strategic or departmental objectives.
This not only provides people with a clear view of how their work supports the organization as a whole, noted Leidinger, but improves employee engagement and motivation (as Watson Wyatt human capital research has shown).
Step 4. Use core competencies as the basis for defining the skills and behaviors required of people in specific jobs.
To identify required competencies, an agency must first profile the workforce in detail and analyze skill gaps to discover its in-house competencies and those it must bring into the organization or develop in employees to meet future mission goals. “Top executives have a key role to play in driving such workforce analysis,” he said.
Step 5. Link pay to individual and agency performance.
Doing this right means linking pay, incentive, and reward systems to demonstrated employee performance on the job, Leidinger noted.
Step 6. Make meaningful distinctions in job performance.
Leidinger noted that effective performance management systems are designed partly on the basis of market pricing research. Performance management systems should be able to supply managers with credible pay and reward guidelines that can be used to make objective decisions on employee compensation and rewards.
Step 7. Include safeguards to enhance the credibility and transparency of employee performance reviews.
When such safeguards are built into a system, Leidinger said, agency leaders can assure employees that performance will be evaluated objectively and won’t be influenced by favoritism, office politics, or longevity in a job.
People Factors
Building effective performance management systems is one thing, but using them to drive agency work performance is another, said Leidinger. And that’s where critical people factors come into play. For example, he said, performance management systems can be used to formalize work expectations with employees, but they require that managers monitor employee job performance closely and link individual performance plans to agency goals. At the same time, employees must meet formal work standards that may not have been required before, but which are key to having their work evaluated fairly at review time and to ensuring it supports agency goals.
DHS’s Perez agreed with Leidinger that performance management requires fundamentally new work behaviors and attitudes on the part of managers and employees alike. “Managers must be able to define job and performance expectations with employees,” she said, “and be willing to listen to employees to understand their job challenges, concerns, and point of view.”At the same time, she added,“Employees must understand that their job performance will be based on specific criteria, and that while they’ll have input in shaping those criteria, their job performance will ultimately be judged on a range of factors and measures.”
Conclusions
Performance management can increase the organizational effectiveness of federal agencies by fostering tighter employee alignment with mission goals and by creating a framework for the effective and equitable evaluation of employee job performance. Some cultural issues have prevented such systems from being readily embraced by agencies and government executives in the past, but government executives can,with top-level leadership support and organizational focus, effectively design and implement such systems. Engaging employees in the effective design of performance management systems following the road map above will help government executives and federal human capital professionals in the design and implementation of such systems.
Establishing a strong culture of performance in the federal government is imperative for many reasons, including compliance with PMA and HCAAF and taxpayer expectations of improved government performance. In addition, as Bob Tobias noted in his March 2007 congressional testimony,“When employees understand how their own work impacts agency outcomes, their engagement in their work increases, as does their productivity, satisfaction, and morale on the job.” Clearly, this organizational outcome is as important as improved agency performance or compliance with PMA or HCAAF requirements.
Bill Trahant (William.trahant@watsonwyatt.com) is national leader of Watson Wyatt’s government consulting services practice in Arlington,VA.