Chapter 6: Performance Appraisal and Pay for Performance
Chapter six focuses on two very closely connected features of personnel policy in the public sector. The first is a renewed interest in creating performance appraisal systems that actively support the performance management efforts of public agencies. The second is an effort to establish “pay-for-performance” systems that have positive effects on the motivation and productivity of public employees. Pay-for-performance requires supervisors and employees have confidence in the objectivity and fairness of the performance appraisal process.
Emphasis is being placed on relating the performance objectives and accomplishments of individuals to those of the organization and its programs. The methods used to evaluate and reward employee performance on all levels should be designed to promote the goals and policy objectives of public agencies. The current emphasis is on the managerial functions of performance appraisal systems.
As merit systems were established and expanded on all levels of government, the design and operation of performance appraisal systems came to be dominated by technical specialists working for commissions or their functional equivalents. It is difficult to conceive of a genuine merit system without a credible system for appraising individual performance.
The first problem is identifying and defining the performance dimensions of civil service positions. Professional and administrative jobs are often complex and variable. Even if agreement on performance dimensions can be reached, developing administratively feasible methods for accurately measuring performance on the job is an equally difficult technical problem. Technical problems associated with the appraisal of individual employees are considerable and attempting to solve them are expensive. The second category of problems is managerial. The third set of problems is organizational.
Total Quality Management (TQM) approaches the entire organization as a complex set of system of interdependent processes. The goals of the TQM approach are to study work processes to identify barriers to quality, to satisfy internal and external customers, and to create and organizational culture that values quality and continuous improvement. The objective of TQM is to change organizational systems to improve quality, rather than changing individual workers.
Pay-for-performance is a hallmark of Civil Service Reform II. Using PFP to raise productivity has been a basic element of management thinking in the United States since the late 1800s. The goal was to increaser “efficiency” in the blue-collar workplace. Pay-for-performance plans come in a variety of forms, including those using one-time bonuses or variable pay, permanent increases to base salary, and group-based bonuses or ”gainsharing.” Individual bonuses and base-pay increases are by far the most common in the U.S. public sector.
A performance evaluation process that is supported by supervisors and employees is a very important component of any merit system. The appraisal systems used by public employers have been technically crude and ineffective as performance management tools. During the past 20 years, the push to create performance appraisal systems that accurately and reliably discriminate among levels of performance has been driven by the popularity of PFP as the centerpiece of all civil service reform initiatives.
Chapter six focuses on two very closely connected features of personnel policy in the public sector. The first is a renewed interest in creating performance appraisal systems that actively support the performance management efforts of public agencies. The second is an effort to establish “pay-for-performance” systems that have positive effects on the motivation and productivity of public employees. Pay-for-performance requires supervisors and employees have confidence in the objectivity and fairness of the performance appraisal process.
Emphasis is being placed on relating the performance objectives and accomplishments of individuals to those of the organization and its programs. The methods used to evaluate and reward employee performance on all levels should be designed to promote the goals and policy objectives of public agencies. The current emphasis is on the managerial functions of performance appraisal systems.
As merit systems were established and expanded on all levels of government, the design and operation of performance appraisal systems came to be dominated by technical specialists working for commissions or their functional equivalents. It is difficult to conceive of a genuine merit system without a credible system for appraising individual performance.
The first problem is identifying and defining the performance dimensions of civil service positions. Professional and administrative jobs are often complex and variable. Even if agreement on performance dimensions can be reached, developing administratively feasible methods for accurately measuring performance on the job is an equally difficult technical problem. Technical problems associated with the appraisal of individual employees are considerable and attempting to solve them are expensive. The second category of problems is managerial. The third set of problems is organizational.
Total Quality Management (TQM) approaches the entire organization as a complex set of system of interdependent processes. The goals of the TQM approach are to study work processes to identify barriers to quality, to satisfy internal and external customers, and to create and organizational culture that values quality and continuous improvement. The objective of TQM is to change organizational systems to improve quality, rather than changing individual workers.
Pay-for-performance is a hallmark of Civil Service Reform II. Using PFP to raise productivity has been a basic element of management thinking in the United States since the late 1800s. The goal was to increaser “efficiency” in the blue-collar workplace. Pay-for-performance plans come in a variety of forms, including those using one-time bonuses or variable pay, permanent increases to base salary, and group-based bonuses or ”gainsharing.” Individual bonuses and base-pay increases are by far the most common in the U.S. public sector.
A performance evaluation process that is supported by supervisors and employees is a very important component of any merit system. The appraisal systems used by public employers have been technically crude and ineffective as performance management tools. During the past 20 years, the push to create performance appraisal systems that accurately and reliably discriminate among levels of performance has been driven by the popularity of PFP as the centerpiece of all civil service reform initiatives.
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