General Trends and Challenges regarding performance evaluation of staff : the UK experience Dr Sylvia Horton University of Portsmouth, England © OECD

Emergence of performance management

• Performance management has preoccupied OECD since 1980s – reasons are: • Need to control public expenditure • ensure efficient and effective use of resources • Rising expectations of public • Increasing competition from private sector • Results culture

New management systems

• Results based budgeting • Human resource management • Competency management • Performance indicators • Staff evaluation • Continuing professional development

Performance Management in the British Civil Service- recent developments

What is performance management?

• A system for managing organisational performance • A system for managing employee performance • A system for integrating the management of organisational and employee performance

A system for managing organisational performance

• A rational approach involving: • Mission statements which set out the aims and values of the organisation • Corporate plans which set out the goals and objectives of the organisation • Business plans which set out specific plans, budgets , targets and standards of performance for each part of the organisation • All 3 are regularly and systematically reviewed

A system for managing employee performance

• Planning and setting key results areas, including performance targets, behaviour outputs and criteria for measurement • Monitoring behaviour and objectives – reinforcing desired behaviour and redirecting inappropriate behaviour • Appraising • Training and development, rewards • Re-planning

Selection Performance Rewards Appraisal The human resource management cycle Development

A system for integrating the management of organisational and employee performance

• This rests upon the assumption that the interests of the organisation and employees are complementary and compatible • It also assumes an integrated approach to strategic management in which strategic HRM is integrated both horizontally and vertically as part of business planning and in turn all aspects of human resourcing are linked i.e. recruitment, rewards, training and development

Performance management system

Planning •Performance objectives and targets •Identifying behaviour •Providing direction Managing •Monitoring behaviour & objectives •Reinforcing through rewards •Providing control Appraising •Formal appraisal •Performance •Training & •Developing •Determine rewards

Types of appraisal

• Top-down appraisal • Self-appraisal • Peer appraisal • Upward appraisal • 360 degree appraisal • See handout for problems associated with appraisal

Rewarding performance

• Multiple functions of reward systems • Types of reward systems – intrinsic, extrinsic, unconditional, conditional • Old pay- new pay • Throughout OECD move to New Pay • PRP, market led.

• •

Performance Management in the British Civil Service 1

Staff appraisal is not new to the civil service. Staff appraisal is an integral element of managing staff and deciding on promotion and development. But traditionally top down reporting by managers until 1970s Current systems of staff appraisal date from the introduction of NPM post 1979 with its results oriented approach to managing public services – rationalistic, economistic and generic.

• •

remains central to New Labour policies for reforming public services since 1997. Set out clearly in the Modernizing Government White Paper 1999, Reform of the Civil Service Wilson Report 1999, Vision of the Civil service for the 21 st Century Turnbull 2004. O’Donnell’s Vision – 4 Ps pride, pace, passion, professionalism Performance management is critical it is argued to creating a high performance culture, continuous improvement and total quality

The Civil Service in general

• • • •

All departments and agencies have their own systems of performance management and staff appraisal There are around 100 departments and agencies with devolved responsibilities for HRM including pay Pay is determined by collective bargaining and there are some 90 bargaining units Variations are limited by overall guidance and coordination by the Cabinet Office( central department for HRM and overall management of the service). Also the Management Code sets down procedures and rights etc of civil servants.

Performance Management In the SCS

• • • • •

The SCS consists of the top 3,700 civil servants found in all departments and large agencies. Managed by cabinet office. The system enables leaders to : focus individual performance & development on the delivery of strategic business priorities Motivate people to give of their best support and inform succession planning, career and personal development Provide capability - knowledge, expertise, experience a basis for continuous improvement, sustaining contribution and setting examples for all employees

Performance Management system in the SCS

• All SCS have a job description which is normally linked to a 4 year contract • performance year runs April to March • Performance agreement contains up to 4 business objectives or targets (SMART) • It also defines how the job is to be performed. It identifies key competencies, standards and behaviours • In year performance reviews evaluate progress

End year performance review

• Records achievements against objectives, overall contribution, growth in skills and leadership competence based on evidence from jobholder and 360% appraisal (line manager gathers this feedback) • Indicates whether there is need for a personal performance improvement plan (PPIP) • Separately makes recommendations on pay and bonus and information for succession planning

Further action

• • •

Within a month of the review individual and manager should meet to discuss and prepare a personal development plan Regular development reviews cover both short-term and longer-term development including specific feedback against SCS competencies and 360% feedback Line managers can draw up performance improvement plans which indicate actions, measures, timescales and consequences. PPIPs apply to lowest 20% of performers who are normally in the bottom tranche of the pay recommendation group

SCS Rewards

• • • • •

The SCS Pay system is a simple broad band structure underpinned by a tailored JESP scheme/ senior posts Most departments use 3 pay bands but some use 4 .

The SSRB (Senior Salaries Review Body) recommends the level of uplift to the bands and progression targets and also base pay and minimum bonus payments Bonuses are non-consolidates payments rewarding delivery of personal objectives. Managers make recommendations on eligibility and level of bonus

Base Pay

• • • • • •

Increases in Base salary recognises how the job has been done as well as what has been achieved End year managers make recommendations allocating staff to one of 3 tranches Top tranche top 25% Middle tranche 65-70% contributed well and delivered effectively Bottom tranche 5-10% contributed least compared to their peers Departmental moderation committees endorse and authorise pay rises and ensure consistency across the departments

Issues

• • • • • • • •

The system was introduced 2001 –early problems Difficulty for line managers in clarifying objectives and behavioural outcomes The appraisal forms were complicated Staff did not understand the new pay system Lack of transparency Concern about bias by line managers and the impartiality of departmental pay committees What to do with poor performers Unfairness

5 years on

• Improvement in recording systems – now simplified and more dialogue, less forms • Research into causes of poor performance and now guidelines for line managers to follow • Latest staff surveys and evidence to SSRB indicates higher levels of satisfaction • Latest report of Cabinet Office to SSRB indicates evaluation generally positive

SCS Competency Framework Leadership for Results

• • • • • •

Giving purpose and direction- creating and communication a vision of the future Making a personal impact- leading by example Thinking strategically- harnessing ideas and opportunities to achieve goals Getting the best from people –motivating and developing to achieve high performance Learning and improving – drawing on experience and ideas to improve results Focusing on delivery – achieving value for money and results

Latest developments in the SCS

• • • •

Revision of the competency framework Introduction of professional skills for government By June 2006 95% of SCS members will have development plans in place linked to PSG September 2007 75% of SCS will demonstrate competence in all 6 key skill areas, which are (i)people management (ii) financial management, (iii) analysis and use of evidence, (iv) project and programme management (v) strategic thinking (vi) communication and marketing

New School of Government

• • • • • • • •

The school will provide specialist courses in all areas of the new PSG structure and in particular courses in leadership training to achieve : Visible leaders who inspire trust Focus on strategic outcomes Take personal responsibility for delivering results Work across traditional boundaries Match resources to business priorities Honest, courageous and realistic with staff and Ministers Life long learner