Human Resources and Security Specialists should use this tool to determine the correct investigation level for any covered position within the U.S. Federal Government.
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.
Employee performance management includes:
The revisions made in 1995 to the Governmentwide performance appraisal and awards regulations support sound management principles. Great care was taken to ensure that the requirements those regulations establish would complement and not conflict with the kinds of activities and actions practiced in effective organizations as a matter of course.
Additional background information on performance management can be found in the following articles:
In an effective organization, work is planned out in advance. Planning means setting performance expectations and goals for groups and individuals to channel their efforts toward achieving organizational objectives. Getting employees involved in the planning process will help them understand the goals of the organization, what needs to be done, why it needs to be done, and how well it should be done.
The regulatory requirements for planning employees' performance include establishing the elements and standards of their performance appraisal plans. Performance elements and standards should be measurable, understandable, verifiable, equitable, and achievable. Through critical elements, employees are held accountable as individuals for work assignments or responsibilities. Employee performance plans should be flexible so that they can be adjusted for changing program objectives and work requirements. When used effectively, these plans can be beneficial working documents that are discussed often, and not merely paperwork that is filed in a drawer and seen only when ratings of record are required.
In an effective organization, assignments and projects are monitored continually. Monitoring well means consistently measuring performance and providing ongoing feedback to employees and work groups on their progress toward reaching their goals.
Regulatory requirements for monitoring performance include conducting progress reviews with employees where their performance is compared against their elements and standards. Ongoing monitoring provides the opportunity to check how well employees are meeting predetermined standards and to make changes to unrealistic or problematic standards. And by monitoring continually, unacceptable performance can be identified at any time during the appraisal period and assistance provided to address such performance rather than wait until the end of the period when summary rating levels are assigned.
Back to Top
In an effective organization, employee developmental needs are evaluated and addressed. Developing in this instance means increasing the capacity to perform through training, giving assignments that introduce new skills or higher levels of responsibility, improving work processes, or other methods. Providing employees with training and developmental opportunities encourages good performance, strengthens job-related skills and competencies, and helps employees keep up with changes in the workplace, such as the introduction of new technology.
Carrying out the processes of performance management provides an excellent opportunity to identify developmental needs. During planning and monitoring of work, deficiencies in performance become evident and can be addressed. Areas for improving good performance also stand out, and action can be taken to help successful employees improve even further.
From time to time, organizations find it useful to summarize employee performance. This can be helpful for looking at and comparing performance over time or among various employees. Organizations need to know who their best performers are.
Within the context of formal performance appraisal requirements, rating means evaluating employee or group performance against the elements and standards in an employee's performance plan and assigning a summary rating of record. The rating of record is assigned according to procedures included in the organization's appraisal program. It is based on work performed during an entire appraisal period. The rating of record has a bearing on various other personnel actions, such as granting within-grade pay increases and determining additional retention service credit in a reduction in force.
Although group performance may have an impact on an employee's summary rating, a rating of record is assigned only to an individual, not to a group.
In an effective organization, rewards are used well. Rewarding means recognizing employees, individually and as members of groups, for their performance and acknowledging their contributions to the agency's mission. A basic principle of effective management is that all behavior is controlled by its consequences. Those consequences can and should be both formal and informal and both positive and negative.
Good performance is recognized without waiting for nominations for formal awards to be solicited. Recognition is an ongoing, natural part of day-to-day experience. A lot of the actions that reward good performance like saying "Thank you" don't require a specific regulatory authority. Nonetheless, awards regulations provide a broad range of forms that more formal rewards can take, such as cash, time off, and many nonmonetary items. The regulations also cover a variety of contributions that can be rewarded, from suggestions to group accomplishments.
In effective organizations, managers and employees have been practicing good performance management naturally all their lives, executing each key component process well. Goals are set and work is planned routinely. Progress toward those goals is measured and employees get feedback. High standards are set, but care is also taken to develop the skills needed to reach them. Formal and informal rewards are used to recognize the behavior and results that accomplish the mission. All five component processes working together and supporting each other achieve natural, effective performance management.
This document summarizes the key factors that have helped set the stage for the current performance management approaches.
The Civil Service Reform Act of 1978 brought performance appraisal to the center of many aspects of personnel management. The Governmentwide system was standardized in the mid-1980's to use five rating levels and establish strict links between ratings and related personnel actions such as cash awards. Over the years, dissatisfaction with this one-size-fits-all approach increased. Rating inflation grew steadily and the entire system lost its credibility for all its stakeholders.
Several committees studied and recommended changes for the Federal performance appraisal system. In 1990, the Committee on Performance Appraisal for Merit Pay, a National Research Council committee established at OPM's request, reviewed current research on performance appraisal and merit pay and supplemented the research findings with an examination of the practices of private sector employers. In 1991, the Pay-for-Performance Labor-Management Committee examined ways to strengthen the linkage between the performance of Federal employees and their pay. Also that year, the Performance Management and Recognition System (PMRS) Review Committee was established to review and recommend improvements to the PMRS system of merit pay for the Government's mid-level managers. All three committees concluded that an appraisal approach must be flexible and decentralized so that it would be able to fit its context of both work technology and organization culture. Consensus was also clear about the value of involving employees in the design and implementation of appraisal and awards systems for increasing credibility and acceptance.
In its initial report, From Red Tape to Results (1993), the National Performance Review recommended a decentralized approach to performance management that would encourage employee involvement in system design, focus on improving performance, and maintain individual accountability. In its more detailed accompanying report, Reinventing Human Resource Management (1993), the NPR was more specific, proposing that decentralized systems should be developed by managers and employees and their representatives; policies should be revised to support team structures; and pass/fail appraisal should be possible. The National Partnership Council also supported the NPR recommendations and noted the shared interest of both labor and management to foster high-performance organizations. The President's Management Council called for more flexibility and decentralization, while emphasizing using appraisal to establish and maintain individual accountability.
Many stakeholders had voiced concerns about the Federal performance management system as it operated prior to the 1995 regulations. Employees were dissatisfied with the old system; it was the single greatest source of grievances. Unions expected change to the system based on the recommendations in the Pay-for-Performance Labor-Management Committee report. Management associations expected change based on the recommendations in the PMRS Review Committee report. Taxpayers wanted to see pay-for-performance and individual performance accountability systems for Federal employees in part because many believe that service is poor, that mediocre performance is tolerated, and that pay raises are automatic. Federal managers had been demanding change and expressing growing frustration with the system that did little to add value or help them actually manage performance. And Congress had expressed the strong need to maintain individual accountability through the appraisal process and to ensure that rewards are allocated appropriately and can be justified.
A principal source of these problems and stakeholders' concerns lay in the underlying conflict between two purposes system designers intended for the performance management procedures and requirements. First, performance appraisal was to be the means of establishing and maintaining individual accountability and the basis for making decisions about rewards and sanctions. But it was also supposed to lead to improved employee and agency performance. Experience has demonstrated that the hard links between ratings and rewards have led inexorably to inflated ratings against standards that do not serve as effective performance targets and stretch goals. While the private sector has not solved the problems this dual use of performance management systems can produce, it does appear that organizational commitment to the performance management system reduces the problems that occur when the summary appraisal is the focus of the system. When the emphasis is on managing—rather than primarily judging—performance, frequent feedback to performers allows for correction of performance deficiencies before the summary appraisal is made.
As important as achieving a more effective balance between the reward allocation and performance improvement purposes of performance appraisal may be, the real key to increasing the credibility and utility of performance management processes lies in improving the performance measures that are used. Emphasizing individual accountability led to agencies establishing performance elements and standards that extracted process-input tasks and responsibilities from position descriptions. Although they were appropriate and usable for sustaining performance-based adverse actions before the Merit Systems Protection Board, such elements and standards often did not lend themselves to results measurement or goal setting. Also, although measuring individual outputs and results is usually possible, it may not be cost effective compared to the performance management value of measuring group or team outputs and results.
Fortunately, several Governmentwide initiatives are leading agencies to reexamine and improve their performance measures. The 1995 performance management regulations are primed to use those measures for managing and rewarding employees. Key performance initiatives require agencies to set goals and standards and to measure their performance in terms of results. When employee and group performance plans are aligned with these agency goals, everyone's efforts are focused on goal achievement and improving organizational performance. Setting goals and measuring performance are part of an effective performance management process. The Government Performance and Results Act of 1993 (GPRA) provides for the establishment of strategic planning and performance measurement in the Federal Government. It requires agencies to develop strategic plans and performance plans for program activities. Those performance plans establish objective, quantifiable, and measurable goals; establish performance indicators; and provide a basis for comparing program results with plan goals. And on September 7, 1993, the President issued Executive Order 12862, "Setting Customer Service Standards," which requires agencies to identify and survey their customers; post customer service standards and measure results against them; and publish a customer service plan that includes customer service standards and describes future plans for customer surveys.
A chronology of the major milestones in the evolution of employee performance management in the Federal Government is presented below.
Pendleton Act, or Civil Service Act
First Law on Appraisal
Classification Act of 1923
Uniform Efficiency Rating System
The Civil Service Commission established, by regulation, the Uniform Efficiency Rating System, which was used until 1950
Performance Rating Act
Incentive Awards Act
Government Employees' Training Act
Salary Reform Act
Civil Service Reform Act
Agencies required to develop appraisal systems for all Federal employees
Established a separate performance appraisal system for Senior Executive Service (SES) members
Established performance-related pay authorities
Civil Service Retirement Spouse Equity Act
Final Performance Management and Recognition System appraisal and pay regulations issued
Final Performance Management System regulations issued
Regulatory pay-for-performance system established
Legislation extends the Performance Management and Recognition System (PMRS)
Revised Senior Executive Service appraisal regulations
Legislation again extends the Performance Management and Recognition System
Federal Employees Pay Comparability Act
Revised regulations on summary rating levels for General Schedule and Prevailing Rate appraisal systems
Performance Management and Recognition System terminated
Revised performance management regulations
Revised regulations on reduction in force and performance management
Revised regulations on ratings of record
Chief Human Capital Officers Act
Established certification of performance appraisal systems for employees in senior-level (SL) and scientific or professional (ST) positions and SES members
Required the establishment of systems, standards, and metrics for assessing agencies' management of human capital
Established Chief Human Capital Officers (CHCO) and the CHCO Council
Provided authority for the Department of Homeland Security to design its own human resources systems, including a pay-for-performance system
Issued interim Presidential Rank Awards regulations
National Defense Authorization Act for Fiscal Year 2004
Established a pay-for-performance system for members of the Senior Executive Service
Established Human Capital Performance Fund to pay top-performing employees
Provided authority for the Department of Defense to design its own human resources systems, including a pay-for-performance system
Issued interim regulations for Certification of Performance Appraisal Systems
Issued final Senior Executive Service pay regulations
Revised regulations on performance-based awards to non-GS employees
Revised awards regulations on calculating the payment of performance-based awards
Established Performance Appraisal Assessment Tool (PAAT) for non-SES employees
Revised awards regulations on performance-based awards
Established Performance Appraisal Assessment Tool (PAAT) for SES and SL/ST appraisal systems for determining certification
Senior Professional Performance Act
Established access to higher pay for employees in SL/ST positions
Authorized certifications up to 24 months with a possible 6 month extension for SES and SL/ST appraisal systems
Inspector General Reform Act of 2008