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General Accounting Office (GAO) report released in October 2000, found results-oriented performance agreements between agency leaders and senior political and career executives led to improved organizational results. The report, Emerging Benefits from Selected Agencies' Use of Performance Agreements, centered on the implementation of performance agreements in three agencies—Veterans Health Administration, the Department of Transportation, and the Office of Student Financial Assistance within the Department of Education.
Each agency uses performance agreements to define accountability for specific organizational goals and to help its executives align their daily operations with the agency's program goals. Performance agreements, like performance appraisal plans, define individual employee performance expectations and establish results-oriented goals. When the agency aligns executive performance agreements with its goals, executives can better understand the connection between their organization's daily activities and agency goal achievement.
The GAO report listed five common benefits the three agencies gained by using executive performance agreements:
The GAO report stressed that performance agreements can encourage communication about organizational progress towards agency goals when those agreements are effectively implemented, given to executives in a timely manner, and provide the executives with useful performance information. Just as performance agreements provide a road map for executives to work toward organizational goals, performance appraisal plans provide the same type of guidance for supervisors and employees. Supervisors can make an important impact on the way their employees view how their efforts directly impact the organization's goal. By aligning employee performance appraisal plans with executive performance agreements and directly communicating agreement goals to employees, supervisors can drive home to employees just how their performance impacts organizational goals.
You may order a copy of the GAO report, Emerging Benefits from Selected Agencies' Use of Performance Agreements (GAO-01-115), by calling 202-512-6000 or visiting the GAO web site.