Performance Management in the Public Sector

Performance management is the systematic process by which an agency involves its employees, as individuals and members of a group, in improving organizational effectiveness in the accomplishment of agency mission and goals._[1]

While a career of public service can be highly rewarding and well respected, in recent years, particularly in the State of California, the private sector often perceives public service in a negative light. This perception, whether fair or not, when coupled with ongoing budget difficulties, affects the morale and performance of all internal and external stakeholders. Efforts have begun in earnest to improve both real and perceived issues beginning with a focus on performance management, a regularly misunderstood strategy.

One example is the Human Resources Modernization Project (HR Mod). According to Raye Zentner, Executive Project Director for HR Mod, “HR Mod was initiated in October of 2007 to reengineer, simplify and modernize recruitment, selection, classification, compensation, workforce planning, performance management and staff development for the State of California’s over 220,000 employees.”[2]

Guarded efforts to implement performance management systems are also being driven by economic pressures and the need to do more with less. In this paper, we will define what performance management is in the public sector as it is currently being used. We will also identify some of the problems and issues a performance management system can help correct, some of the unique benefits and challenges of implementing an effective performance management system, and present a tactical approach to the implementation of a performance management system.

The Performance Management Push

Our representative democracy model of governance creates several structural conflicts. There must be “an elaborate system of checks and balances to prevent abuse and concentration of power”_[3]. Such a system must also have built in mechanisms to slow down processes and avoid actions that could be harmful to certain groups of individuals. The risk of doing harm tends to outweigh the virtue of doing well. Said another way, safety tends to outweigh efficiency.

By definition, this leads to situations where efforts to maximize the positive impact of resources must be tempered with the risk of doing harm. For this very reason, creating a highly efficient and productive government cannot happen. Efforts must therefore be focused on incremental improvement, not large scale change.

One approach that has provided positive results focuses on finding ways to get the most out of each employee and to ensure their efforts are focused on the right things. Such an approach, commonly referred to as performance management, depends on the ability to identify areas where people have untapped potential that can be developed and applied. It requires a linking of individuals to teams and teams to departmental goals, which also creates conflict with each election cycle due to the changing focus of elected leaders; another critical limitation of the ability of state governments to implement meaningful change.

One positive change that can be done incrementally is to define performance to include more than simple mastery of technical skills or individually assigned tasks. This approach involves moving toward team based environments, which require the development of special skills or competencies that must be mastered for these teams to work effectively, if not efficiently.

Team based skills include the ability to communicate with individuals that have different communication skills and skill levels, the ability to collaborate, and  the ability to quickly and positively deal with conflict. These skills are at the core of every performance management system and the ability to measure them is critical to their success.

The pain being felt throughout California demands efforts to improve efficiency across all levels of government. To serve the system of checks and balances, enhancement can only come about slowly and through well thought-out adjustments to systems and processes which must be carefully monitored and measured to ensure positive results and limited negative impact. Those measures must then be reviewed over an adequate period of time, typically one year minimum, to ensure improvement as intended.

Generational Transitions

Irrespective of current economic realities, a universal and unavoidable issue throughout all sectors of our economy is the wave of baby-boomer age retirement, sometimes referred to as the silver tsunami. These losses put stress on the ongoing workforce in two areas. First, there is increased pressure to work at optimum proficiency and productivity levels. Second, demands on recruiting, hiring, and deployment of workers with the proper job skills and competencies are increasing.

The shifting of our national workforce is already taking place. Much like the shifting of tectonic plates that cause earthquakes, changes in culture and skills are being felt today throughout government - even the smallest workforce transition causes disruption and confusion that ultimately leads to financial consequences paid for with taxpayer dollars. Loss of historical knowledge, understanding of past precedents, policies and procedures, and advanced skills are drifting away at an ever increasing pace and making it more difficult to rebalance work to ensure objectives are being met.

A performance management system describes the connections between tasks, outcomes, and goals for each individual as well as the other stakeholders they affect and are affected by. With this type of roadmap, the rebalanced workforce can focus their time and attention on actions with the greatest positive impact and avoid time consuming distractions and unproductive efforts. Teams can focus on specific tasks and outcomes while knowing how their performance impacts others. This connectivity leads to stronger team based understanding, better ability to collaborate, and more consistent results based on the expectations of management.

A residual benefit can be leveraged when the need for new staff is identified and acted upon. Knowledge of the proper technical and soft skills makes each position easier to define and recruit good applicants, which in turn ensures those coming in to their new roles have a clear understanding of what will be expected of them and how they will be measured.

Work Transitions

In the past, work was easy to see and easy to measure. Technological enhancements have made the need to be physically present in an office less and less important. Whether working from home or in remote and changing locations, new workers want the flexibility to take a mocha break in the middle of the afternoon to visit with friends while staying connected with their iPhone.

The ability to communicate with anyone anywhere in the world anytime has changed the way people work regardless of the job or the work environment. The lines between good work and bad have become blurred, and the ability to measure performance has become more difficult. Today’s workers have a different concept of what work is. They create value working in non-traditional modalities beginning with the desire to telecommute.

Telecommuting presents a series of challenges to the observation of performance and the timely delivery of behavioral feedback. The ‘distance-working model’ puts pressure on managers to find ways to monitor their direct reports that does not involve in-person observation and supports the need for better performance metrics and measures.

To traditional management, this looks like lost productivity. Care must be taken to avoid focusing exclusively on outcomes and results and ignoring behaviors. The reality is that most telecommuters will work extended hours without additional compensation to get the job done if they are clear on what is expected of them.

Impact on Management

Over the years, the State has increased the number of people each manager is responsible for while adding operational assignments to their list of responsibilities. This has increased the time required to manage properly while simultaneously consuming the time needed to work on individual assignments beyond managing, which has changed the role of manager and the skills required to manage.

Through this subtle shift of focus, the value of interpersonal skills has been diminished and tactical skills have become more important. One critical responsibility that suffered is the performance review. Whether by design or accidental, the importance of individual reviews was lessened and the ability to conduct a positive, non-confrontation performance review was lost through attrition.

One major cause is lack of training. As new managers are promoted and assigned a group, they have not been sufficiently trained on the value of performance reviews or proper review skills. Another contributing factor is of lack of clarity with respect to performance goals that are current, relevant, and measureable.

The problem has grown over the years as individuals become further removed from positive review processes and are exposed to inappropriate techniques that result in negative, critical, demeaning or degrading experiences. Managers no longer have positive experiences to use as a point of reference. As a society, we seem to have lost the skill to deliver constructive criticism that helps individuals overcome their weaknesses without being confrontational.

A performance management system would facilitate identification of performance benchmarks and competency models, allowing for demonstration of good performance in an individual and team environment. Individuals must recognize what a good job is so they can strive to deliver it, and managers must be able to work with employees to help them improve, move people into more appropriate assignments, or take appropriate action when necessary.

Pace of Change and Its Impact

The rapid pace and volume of change has made it difficult for individuals to fully understand and connect with what they need to do to be successful in their job. There are three specific areas where this change has the greatest impact.

1.       Senior management turnover creating new agendas and an imbalance between authority and responsibility.

2.       Inadequate performance measurement tools, techniques and skills.

3.       Stable management confronted with the erosion of funding and infrastructure being pushed to improve its performance.

The design and implementation of an effective performance management system would provide for greater clarity of proper levels of authority as it relates to responsibility, identification of relevant, realistic and manageable performance metrics and tools, and result in improved performance and morale based on clear expectations and objective measurement of them.

Silos and Artificial Barriers

Finally, the lack of collaboration across traditional boundaries has created a trend of working in silos which creates operational barriers, weak alignment across functions, and difficulty integrating services within units. These virtual silos are inefficient and obscure natural connections while breeding provincialism.

An effective performance management system would not only serve to create greater awareness of critical goals and skill sets within departments, it would also create greater transparency of external groups and allow for the leveraging of external skill sets and resources to accomplish goals collaboratively.

How to Begin

The first step in launching a performance management system is education. Executives, managers, supervisors and employees must understand the changes that are being proposed and their benefits. Preliminary work must create awareness of the new expectations for each individual and the understanding that changing to a performance management system is a long process.

Job performance is divided into two categories: task performance and contextual performance. Task performance includes activities that transform raw materials into goods and services while contextual performance includes activities that go beyond technical aspects of the job such as helping and cooperating with others, and endorsing organizational procedures and objectives. Both involve competencies, which are defined as knowledge, skills, abilities and personal characteristics, as well as behavioral indicators and proficiency levels. Competencies must be defined for each position.

`Recruitment efforts in a performance management system are based on the assumption that it is easier to train someone how to type than to train for good customer service. Employees must first be hired for soft skills, then for those hard skills that are hardest to train on which allows for getting people up to speed quickly without being a burden to the training department.

The next step is to agree on the objectives to focus on, the measurement metrics with baseline and target values, and plans on how to achieve them. It is important to take into consideration the vast changes that are occurring in the world of work, determine the implications for the measurement and management of performance, and develop systems to facilitate those processes. This creates a family of tools that measures the levels of desired performance. These tools must seem relevant and useful to the people working with them. The next step is to monitor and track movement towards those goals and how well the measurement tools are working.

Individual performance measurement comes only after performance goals, measures and scoring protocols are agreed upon and tested for reliability and consistency. Supervisors and managers must encourage a high performing culture in the workforce. A common language must be developed collaboratively to help link processes together that have never been linked before. The next step involves conducting multiple pilots and gathering lessons learned from them.

Discussion and Conclusions

Performance management has historically been an inconsistently applied approach to managing human capital. It requires a shift in culture and a change in tactics, and education is the key. It depends on clarity of goals and how they are measured. It facilitates shifting from task based to outcome based measures and requires the definition of positions in such a way that managers are more engaged, not just going through a checklist, and that they know exactly what is needed for those positions to be effective.

Performance management begins with a good HR system and extends through the hiring process well into the management of staff and must be integrated with the entire purpose of the organization or department. From the point the system is begun, the hiring manager is working with HR and aware of individual gaps as they are interviewed and tested. It approaches recruitment as serving the organization’s mission, not just filling a position. 

A successful performance management system will help the State focus dollars on areas that need help and identify whether problems are training, dollar, or capacity issues. It would identify areas where there are more resources than needed while validating a return on investment and how the public is benefiting.

In addition to improving performance, morale, and operational efficiency, organizations can get the most out of a performance management system when it 1) is linked to the strategic goals of the Department, 2) reinforces organizational change, 3) reinforces organizational values, 4) functions as a communication tool between people, 5) provides valuable developmental information, and 6) is part of an integrated human resource system.

Report submitted to Cooperative Personnel Services, Organizational Strategy Division by Larry Mandelberg, July 22, 2009