February 12 promises to be a significant day for federal employees. It’s the day the White House releases its 2019 budget request, along with its plans to restructure agencies, improve workforce management and performance, increase accountability, and reduce costs. One recommended change—the elimination of a layer or more of management—will have far-reaching implications. Such a move would reduce the workforce and expand the supervisory responsibilities of executives and managers, making continued micromanagement impractical.
Unless working relationships and work routines are changed, it’s highly unlikely performance will change. Eliminating a layer of management would shake-up those relationships. The transition to greater autonomy would not be smooth or easy for managers or employees but the change should lead to improved performance.
Companies went through a similar transition when the 1990-1991 recession impelled U.S. corporations to cut costs. The most prominent action was eliminating layers of management. Flattening organizations reduces bureaucracy and hierarchical management; organizations become more responsive to their markets and stakeholders. Corporate leaders learned they could delegate responsibility and trust their people.
The 1990s saw radical changes in workforce management—albeit not in government. The phrase “knowledge workers” emerged early in the decade. “Empowerment” and “engagement” were added to the lexicon. The exploding use of information systems made it possible to monitor performance from a distance.
Today there are millions of workers in business who have few reasons to meet with their “manager.” They know what they need to accomplish and go out and do it. They and their manager agree on goals and then metrics track their progress. They have considerable discretion in how they work. Research confirms employees enjoy the autonomy, they respond to the challenge, and perform better when they define their own work plans.
The increased autonomy accelerated the use of goal-based performance management. It’s become the universal practice for executives, managers and first line supervisors outside of government. It’s also used widely in state and local government (although there are no known surveys documenting its use). In a recent column (“Agencies Could Learn a Lot from Tennessee's Shift to Pay for Performance”) I discussed Tennessee’s reliance on goal-based management.
Performance Management in the Private Sector
In government, performance management is not a strong human capital practice. The SES performance management framework is superficially similar to that which is typical in large companies but a close reading of the material on the OPM website highlights key differences:
- Corporate executives and managers are paid under a unified compensation system. There is no distinction in the relevant policies applicable to the two groups. Together, executives and managers comprise “the management team.”
- The members of the team all have a component of their compensation linked to company success. That contributes to a shared focus and commitment.
- Incentive awards in the private sector are solidly linked to results, based on data and prescribed calculations. Unlike government, subjective adjustments are not common.
- Most companies take the performance rating process very seriously. Inflated performance ratings in government are evidence that the process is perfunctory.
- Performance planning in the private sector is based on aspirational goals that reflect improvement over a prior period, and achieving results is paramount.
- The terms used in the Executive Performance Agreement forms that guide members of the SES—terms such as “assesses,” “analyzes,” “acquires” and “administers”—would not be used in evaluating corporate executives.
The prospects of improving performance, increasing accountability, and reducing costs across government are slim to none, unless there is a governmentwide investment to strengthen the way performance is managed. As an early step, agencies should initiate an internal audit of their current practices.
Goals, Rewards and Accountability
The foundation of goal-based management is Dr Edwin Locke's pioneering research on goal setting and motivation in the late 1960s. Locke confirmed that employees are motivated by clear goals and feedback, and his goal-setting theory is the broadly accepted basis for managing employee performance.
In 1990, Locke partnered with Gary Latham to publish their seminal book, A Theory of Goal Setting and Task Performance. The research shows people perform at their best when they are committed to challenging goals. When managed well, it creates an invigorating, highly satisfying work environment.
Accountability in organizations is best defined as a sense of commitment or ownership to goal achievement. In other sectors, it is reinforced and operationalized by links to consequences.
But for reasons that are reflective of a very different management philosophy, accountability in government, at least to the critics, means making it easier to fire an employee. That needs to end. In business, firing an experienced employee is rare and requires egregious ethical behavior or unacceptable performance over an extended period.
Companies as well as hospitals reinforce individual accountability with consequences in the form of financial rewards. The money actually is less important than the message the approach sends. The promise of the reward provides focus and confirms a goal is an organization priority. Non-monetary rewards would no doubt be effective as well but organizations have not shown they can manage those rewards fairly across a large, diverse work group.
Does Goal-Based Management Fit Government?
I’ve tested the idea with a number of people, including Edwin Locke. There is general agreement that executives and managers should be able to state in specific terms what they plan to accomplish—their goals. It’s a commitment to their agency. The only caveat might be the availability of needed resources and the cooperation of others, but both can and should be considered in goal setting.
Everyone can define what for them is outstanding performance. Everyone also knows, or should know, what would be seen as unacceptable performance. Both should be documented in employees’ annual goals. At year-end, that defines the basis for managing and evaluating performance, and determining financial rewards.
Goals always involve uncertainty; circumstances change. In business, corporate executives hold progress meetings, often monthly, where problems are addressed and, if necessary, goals are modified.
When I asked Locke for his comments, he replied, “I think your statement is right on!”
It should be clear that goal setting focuses on results important to an agency’s mission. Initially to make certain goals are relevant and rigorous, it may be helpful to create committees of senior executives to review draft goal statements. Agencies have two-plus decades of experience setting organizational goals. This is an extension of that experience.
It may not be obvious but this is a management problem. The management of the goal-setting process should be organizationally located in the office responsible for setting the agency’s goals.
Almost a year ago the National Academy of Public Administration released Building a 21st Century SES: Ensuring Leadership Excellence for Our Federal Government, which presented an argument for reforming the Senior Executive Service. The White House initiative to improve performance, increase accountability, and reduce costs has to start with executives and managers.