This first appeared as an ASPANET On-Line column in August  2002.

 

It’s All About Connecting People to Goals

by John M. Kamensky

Some reports recently released by the General Accounting Office (GAO) conclude that connecting employee performance with organizational goals is key to fostering results-oriented organizational cultures. The "managing for results" dialog over the past decade has centered largely on the development of plans, measures, tracking systems, reporting systems, and budgeting. These reports begin to expand the dialog to include the important role of human capital systems.

In one report, GAO examines the performance management systems in four countries – Australia, Canada, New Zealand, and the United Kingdom. It found four commonalities among their systems: 

• Creating a "line of sight" between individual and organizational goals.
• Using competencies to provide a better assessment of individual performance.
• Linking pay to individual and overall organizational performance.
• Fostering an organization-wide commitment to results-oriented performance management.

Some highlights of these systems include:

• The Australian Department of Employment and Workplace Relations (similar to the U.S. Department of Labor) reviews individual managers' performance not only against key business priorities, but also reviews his or her behavior against the Department's six organizational values (teamwork, respect, integrity, etc.).
• The Canadian Performance Management Program uses performance agreements to align top executives' efforts to government-wide priorities. When it first did this, it found the number of priorities was too great to be able to hold individuals accountable for all of them. This led to a re-examination and reduction of priorities, which resulted in increased accountability.
• The Canadian province of Ontario bases an individual executive's performance pay on several elements: (1) the performance of the provincial government as a whole, (2) the executive's own department, (3) that department's contributions to government-wide results, and (4) the executive's own performance.
• In New Zealand, one department, in cooperation with its union, asked its employees to vote on performance measures before they would be used in their individual assessments.

A second GAO report assesses the implementation of the performance management system at the Internal Revenue Service (IRS). It provides an excellent description of how the IRS is attempting to align the day-to-day performance of frontline employees and managers with its strategic goals. This report shows how the IRS has framed an excellent system. However, the report describes the importance of specifying the details of expected behavior before organization goals can become an effective influence on individual managers' behavior.

IRS executives and managers are evaluated on five "critical job responsibilities" - customer satisfaction, business results, employee satisfaction, leadership, and equal employment opportunity. Frontline employees are also assessed on five critical job responsibilities, but for different dimensions - customer satisfaction/knowledge of the work, customer satisfaction/application of knowledge, business results/quality of work, business results/efficiency, and employee satisfaction/personal contributions.

The GAO assessed how these critical job responsibilities are defined via "supporting behaviors" such as "listening to customers, constantly gathering their feedback, actively seeking to identify their needs and expectations." The GAO found consistently linking these supporting behaviors to the IRS's strategic goals was challenging, particularly in ways that are measurable. Many times, managerial performance commitments were focused on adhering to internal processes or measures rather than taxpayer-oriented outcome measures. It also found that about 85 percent of the written performance commitments did not meet the IRS's own criteria of being specific, outcome or output oriented – even though the GAO observed that the commitments were clear and achievable. 

 

The GAO concludes that, until the details of supporting behaviors are better defined, holding managers accountable for these behaviors will be difficult for the IRS. The report has an appendix with extracts from actual performance agreements that show the contrast between well-written and poorly-written commitments, as well as the IRS's performance agreement format.

 

The GAO promises to release a third report soon that focuses on several federal agencies' experiences in the application of a balanced scorecard for their executives. This third report should help frame strategies for other federal agencies, as well as continue the debate of shifting the senior executive service's performance management system and pay to be based more extensively on performance and results.