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For the most part, the certification criteria for the Senior Executive Service performance appraisal system announced by the Office of Personnel Management in February were not a surprise. The required linkage to results and the new pay-for-performance philosophy were anticipated. But the element that had not previously surfaced was the requirement that each agency designate a senior performance official. The SPO would be instrumental in creating a culture that reinforces the president's management agenda and continues the shift to results-based management that has been going on, in fits and starts, for the past 10 years.

According to OPM, the SPO's job is to "assess the agency's performance, issue ratings guidelines based on that assessment, assure consistency between individual and organizational performance, and make meaningful ratings/compensation distinctions." In short, the SPO is being asked to answer two critical questions:

• How well did we (the agency and its programs) do this year?
• Given the answer to the first question, how should our executives be rated and rewarded?

That's a very difficult and high-level job. The closest thing to it today is probably the chair of an agency's Performance Review Board. Such panels oversee executive performance and approve executive ratings. That's part of the SPO equation. But what's new about the SPO is the requirement that executive ratings also flow from an assessment of the performance of the agency and its programs. Some review boards may have been doing this but probably not in a consistent, data-driven fashion.

OPM is proposing a more systematic and aggressive approach. The SPO will need to digest Government Performance and Results Act data, scores on the Bush administration's Performance Assessment Rating Tool, and other measures of organizational performance. The official will need to balance what that data shows against more subjective considerations such as changes in the business environment; and then make a judgment on the quality of organizational performance. Then the SPO will need to step into the Performance Review Board role, making sure executive performance ratings are in line with organizational performance.

There are no models or precedents for the SPO role in other sectors. In the corporate world, the responsibility for assessing performance is retained by the board of directors and the CEO. There, it's a relatively straightforward problem--common financial measures are well established. Over the past decade or so, the process has become somewhat more complicated as businesses have adopted versions of "balanced scorecards," but private firms do not have government's problems in identifying relevant measures or developing comparative data.

In most companies, there is a clear and explicit linkage between company or business performance, executive performance ratings, and financial rewards. The management of awards to recognize achievement of those goals is also well-established. Executive and employee performance management systems in the private sector are in the human resources domain, but primarily for administrative purposes. HR specialists do not manage performance; corporate managers and supervisors do. In successful companies, the cascading of goals establishes a line of sight so employees understand the importance of their contribution.

It's tempting to think of the SPO as the Performance Review Board in a new set of clothes, but it's a much more fundamental change than that. The SPO needs to have one foot solidly planted in the agency's strategic planning and performance measurement world, and the other in the HR world of executive performance management and pay. This alone is a significant change and suggests a possible consolidation under the SPO of the agency's ongoing efforts to plan for and measure performance.

But the most significant new role for the SPO is probably the more nebulous one of change agent. The new SES rules, by creating consequences for organizational performance, also create an opportunity to make real and lasting culture change. Federal agencies will need a champion to lead this change. Deeply entrenched practices and expectations for executive performance management will need to be tackled. A thousand reasons will be cited for why it can't be done, how it's unfair, how the business model for government is different. Ongoing communication and change management will be essential. Training and development of new skills to manage the process will be required. There will also be an ongoing need to keep agency leaders involved and to reaffirm their support for the change. The SPO should be at the center of these change management activities.

The senior performance official will need to be an expert on performance planning and measurement (or have this expertise on his or her staff), but perhaps more importantly must be a strong leader. The SPO also should have solid understanding of strategies and techniques for improving organizational performance. Senior executives as a group will be looking for ways to increase chances for meeting or exceeding performance requirements. The creation of a culture where the focus is on "demonstrable, measurable, and observable" results, to use OPM's words, involves a multifaceted strategy that could include coaching or guiding executives on how to move in that direction.

The SPO can have a significant impact if he or she has:

• A broad role in the management of performance at all levels.
• At least a peer-level relationship to those people leading performance planning and measurement initiatives.
• A good working relationship with program leaders as well as functional leaders.
• Credibility as a solid planner, along with people skills.
• A qualified support staff.
• A defined role in the management of financial rewards.

Like so much of the president's management agenda, the SPO represents an opportunity to put real teeth into the government's 10-year struggle to manage for results. Agencies should take full advantage of the opportunity. If implemented properly, the SPO requirement could lead a major revolution in federal sector management.

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COMMENTS

• How about a committee comprised of the subordinates of the managers to be evaluated? tax payer Posted April 29, 2004 6:56 AM
• The private sector model gives the power of compensation of the most senior executives to the Board of Directors- but the only people who can serve on such a board. are independent directors- those not involved as officers of the corporation. In the federal sector model, which I agree with the previous comment, is again misguided, we see a senior manager of the agency (company) acting as the performance/pay guru for his or her peers. I've been doing performance management at various agencies for over ten years. I've written many PIPs and handled countless grievances as a union official and as a labor and employee relations specialist. Can anyone spell performance management "train wreck." It just boggles my mind that we want to follow a pay for performance private sector model yet not adopt private sector best practices. No internal senior agency officials should be gauging the performance of their own programs and then paying their peers accordingly. Now if the White House wishes to have senior officials at one department review, grade and pay senior officials at another department- that plan might be doable. GovExec.com reader Posted April 23, 2004 1:20 PM
• The "Senior Performance Officer" is yet another example of mis-guided and fuzzy bureaucratic thinking about performance. Performance management becomes yet another "program" rather than a critical job element for senior executives under the SPO model. The SPO also provides another opportunity for the diffusion and/or avoidance of accountability by the SES corps in any given agency - "Performance management? That's the job of the SPO." "Our agency is not performing well? Talk to the SPO." Dana Broach Posted April 20, 2004 8:27 AM

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