Performance Management

The Performance Management and Recognition System, the government's pay-for-performance system for managers in grades 13 to 15, has fallen short in meeting its goal of improving individual and organizational effectiveness. Supervisors have been inflating ratings to protect employees against being harmed by the rating, i.e., not being promoted. In addition, because the pool of funds available for awards is limited, the increasing number of employees receiving performance awards has shrunk the size of individual awards. General agreement exists that performance management systems need to be more flexible to permit tailoring to the mission and culture of each agency. The Office of Personnel Management's (OPM) recently circulated principles and features for performance management reform provide flexibility and allow agencies to design their own performance management systems with input from employees and their representatives. The thrust of OPM's reform proposals is consistent with GAO's recommendations. GAO encourages agencies to focus on developing a clear purpose for each element of their performance management system and to strengthen the elements of the system that are designed to regularly provide realistic feedback on performance, such as expectation setting and regular discussions about performance. Agencies need to establish, with OPM oversight, evaluation procedures that will routinely provide information and accountability so that rewards and recognition are handled fairly for all employees.