IRS told to fine-tune performance management system

A new performance management system at the Internal Revenue Service needs further tweaking to help the agency accomplish its strategic goals, according to a new General Accounting Office report.

The 1998 IRS Reform and Restructuring Act forced the agency to focus on three goals: customer satisfaction, employee satisfaction and business results. To that end, job descriptions were created for managers and employees, but, in many cases, the specific duties outlined in the descriptions do not relate directly to the agency's overall goals, GAO found.

"Although the framework for IRS' frontline employee performance management system supports the agency's strategic goals, the description of the critical job responsibility given to IRS employees and the accompanying supporting behaviors do not always align with one another," GAO concluded in its report, "Performance Management Systems: IRS' Systems for Frontline Employees and Managers Align with Strategic Goals but Improvements Can Be Made" (GAO-02-804).

Often, job duties address functions not outlined in the job description, apply to other jobs or are unrelated to the job description altogether, the report said.

"The description of the customer service satisfaction application responsibility for revenue agents states that employees should always communicate with taxpayers in a clear, user-friendly manner," GAO found. "However, the supporting behaviors focus more on IRS' procedural requirements, such as quality of internal work products, than on whether taxpayers received understandable audit reports."

The agency also fell short in connecting its performance management system with its unit performance measures, which gauge the success of employees in achieving the agency's strategic goals.

"These misalignments can reduce the new system's ability to promote frontline employees' behaviors that help IRS achieve its mission," the report said.

Also, the goals of individual managers lacked clarity, making it harder to hold them accountable for outcomes, GAO found.

To make better use of the new performance management system, senior officials should more consistently communicate the agency's strategic goals to employees and managers should craft their written commitments clearly and concisely, GAO recommended.

"Misusing even a well-designed performance management system can drive dysfunctional behaviors, such as an overemphasis on certain activities to the detriment of the balanced approach IRS is trying to maintain and achieve," the report concluded.

In his written response to the report, IRS Commissioner Charles Rossotti commended GAO for highlighting his agency's accomplishments over the past few years and promised to incorporate the report's recommendations into the agency's performance management system.