With the private and public sectors renewing their emphasis on performance management, federal agencies should take broad steps to better coach employees, the report's authors, Howard Risher and Charles Fay, concluded. Risher is a consultant; Fay is a professor and chairman of the Human Resource Management Department at Rutgers University's School of Management and Labor Relations.
According to Risher and Fay, the terms "performance appraisal" and "performance management," often are used interchangeably, but they are critically different. While performance appraisals generally occur once a year and "are not designed to improve performance," performance management "is a broader, more comprehensive process that is future-oriented," they wrote in the report.
The Bush administration has pushed pay-for-performance measures, but the initiative has been met with resistance from labor groups like the National Treasury Employees Union and the American Federation of Government Employees. The report attributes that resistance to employees' lack of trust that they will be treated fairly in performance appraisals. Before pay for performance can be seriously discussed, "the emphasis should be placed first on putting effective performance management practices in place," the report stated.
"NTEU supports making the performance management process, and the resulting appraisals, more transparent, credible and fair …" said Colleen Kelley, the union's president. "As the report acknowledges, a pay-for-performance system cannot ever be successful without a fair, transparent and credible performance management system, and the pay determinations must be linked directly to the results under the performance management system."
The authors included recommendations for how the government could avoid appraisal tunnel vision and implement effective performance management practices. One of their suggestions was to better define what "performance management" means.
"A very real part of the problem in addressing performance issues is the use of poorly defined and loosely used words and phrases," they stated. They also recommended involving employees in the process of defining what successful performance is. According to Kelley this interaction is key.
"Agencies' efforts at improving performance management would be greatly aided if managers would listen to employees and their representatives about the best way to do the work of the federal government," she said.
The report advised agencies to lay the groundwork before embarking on performance management programs: Agencies first must change existing cultures and involve and prepare individuals who will be affected the most.
Risher and Fay cited the Homeland Security Department as one agency that recognized the need for cultural change. This realization played a role in canceling MaxHR, a personnel system designed to give the department more flexibility and tie pay more closely to quality of work, the report indicated.
"As DHS apparently came to realize, the organization has to be ready to embrace more rigorous performance management practices, and managers need to be ready to make tough but honest decisions about the performance of their employees," the report stated.
DHS is still engaged in personnel reforms, but is moving more cautiously on the pay-for-performance aspect. The new program is called the Human Capital Operational Plan.
Performance management success stories are generally small in scale, Risher and Fay said, and it's easier to introduce performance management and, eventually, pay for performance, in smaller organizations. Achieving high levels of performance depends on the support and cooperation of managers and employees. "It cannot be mandated or controlled from a distance," the authors noted.