Union, principally financed by the EU
A joint initiative of the OECD and the European
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
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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
Rewards
Selection
Performance
The human resource management cycle
Appraisal
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
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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
21st 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
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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
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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