U.S. Office of Personnel Management - Ensuring the Federal Government has an effective civilian workforce

Archive

IAG Minutes March 1999

Interagency Advisory Group
Performance Management and Recognition Network Meeting
Minutes for March 16, 1999

The Interagency Advisory Group (IAG) Network on Performance Management and Recognition met on Tuesday, March 16, 1999, at the U.S. Office of Personnel Management (OPM). This IAG Network is made up of human resource professionals who are responsible for administering performance management and/or incentive award programs in their agencies. We use this forum to share information and provide updates on the latest developments in performance management and incentive awards. At this meeting, presentations on the following were made.

• NPR SURVEY
• STRATEGIC USE OF AWARDS
• PERFORMANCE-ORIENTED PAY
• INCENTIVES FOR MANAGERS

The purpose of the NPR Survey, which was conducted in the summer of 1998, was to evaluate the progress of the Government's reinvention efforts. The results of the survey will be used to analyze Governmentwide trends by resurveying the Federal workforce from time to time in the future.

Cynthia Maahs, a Personnel Research Psychologist from the Personnel Resources and Development Center, OPM, presented a briefing that outlined the Governmentwide results from the survey, with a special emphasis on the Recognition and Rewards category. The Recognition and Rewards category was one of 14 different categories that made up the 33-item survey.

Three specific items measured employee perceptions of their agencies' recognition and reward programs.

Item	Favorable Response
Recognition and rewards are based on merit	32 percent
Creativity and innovation are rewarded	30 percent
Satisfied with the way agency recognizes and rewards employees	42 percent

Rewarding creativity was one of the categories where the data indicated a need for improvement. While Government employee responses to these items are not strongly favorable, they are generally in line with responses in the private sector.

Barbara Colchao, a Team Leader in the Performance Management and Incentive Awards Division, OPM, addressed the results of the recognition and reward section of the NPR survey. Her presentation, "The Strategic Use of Awards: Suggestions to Help Improve the NPR Survey Scores on Recognition and Rewards," offered suggestions for improving the scores of the survey by designing effective awards programs that include commitment, clear line of sight, variety, and good communication.

Commitment. Involve all employees in the development of awards. Make sure that managers and supervisors know how to use the awards authority to motivate employees. If they do not buy into the program, it probably will not work. Also, executives have to support and believe in the program. Do not counteract the awards program with other policies.

Clear line of sight. Employees need to understand why they are being rewarded. For example, all organizations have goals and objectives. Develop awards that reward achieving those results. If an agency's goal is to improve customer service, it should develop awards that recognize employees who provide exemplary customer service. It is also important to commit to conscientious and objective performance distinctions. Award programs lose credibility if everyone receives awards regardless of performance. Reward those employees who have truly surpassed expectations to achieve an objective. If the organization sets goals that have mutual benefits for both the organization and the employee, employees will be more likely to buy into the organizational goals. Agencies should ensure that employees know why they are being recognized.

Variety. Agencies should build flexibility into awards programs. Have a variety of awards available by both developing incentives and recognizing employees for their achievements. Provide a balance between incentives and recognition, individual-based awards and group-results awards. The forms that awards can take include: cash, honorary recognition, informal recognition, and time off. Those formal awards are important, but it is also important to remember that agencies can recognize employees informally, by just saying thank you, recognizing them during meetings, and writing small thank-you notes or email. Managers should have several options for recognizing and rewarding employees.

Communication. Use all the communication tools available. When new employees come into the organization, take advantage of the orientation session to brief them on how the awards program works. Use publications, award ceremonies, and all-hands meetings to promote the awards program. Use staff meetings to recognize employees who have achieved specific objectives. Spotlight award winners in meetings, newsletters, and public forums and explain why they received the award. The awards program can also reinforce for employees what the agency values.

Doris Hausser, Assistant Director, Office of Performance and Compensation Systems Design, OPM, provided an update on the performance-oriented pay initiatives that are currently under consideration. Ms. Hausser also discussed the shift in the way Government is talking about performance, moving from process to results. She stressed that measuring process is still important, but emphasis on results is growing. Ms. Hausser reiterated the Vice President's interest in holding managers accountable for business results, customer satisfaction, and employee satisfaction with workplace environment.

Karen Lebing, a Team Leader in the Performance Management and Incentive Awards Division, OPM, briefed attendees on ways in which agencies can use the flexibilities that already exist to design incentive programs for managers.

Vice President Gore urges Federal agencies to appraise and recognize managers using balanced measures, which should include:

• achievement of Government Performance and Results Act (the Results Act) goals:
• results of customer satisfaction surveys; and
• employee satisfaction with workplace quality, including training opportunities and working conditions.

Ms. Lebing provided three examples of how agencies can design incentive programs to reward managers for organizational performance on these balanced measures. The examples illustrate three simple approaches.

Traditional Performance Award Process. Managers' performance plans can incorporate organizational performance in their performance elements. If ratings of record are based on elements that measure organizational goal achievement, customer satisfaction, and/or workplace quality, then performance awards based on those ratings of record will be rewarding good performance in these areas.

Straight-line Incentive Program. Agencies can design an incentive program for managers that is separate from the appraisal process. The incentive program would set organizational performance goals for managers and grant awards based on the achievement of those goals. For example, if a manager's organization met its goals of (a) achieving Results Act objectives, (b) exceeding the previous year's customer satisfaction index by 5 percent, and (c) improving at least half its workplace quality indicators, the manager would receive a bonus equal to a percentage of his or her salary. All of the goals must be met to receive the award in this example. A variation of this program gives the manager a third of the whole award amount if only one of the goals is met, two thirds of the amount if two of the goals are met, and the whole amount if all three goals are met.

Using an Intensifier. Another incentive program uses a set of goals as the criteria for granting an award, but also uses a separate factor that affects the amount paid, either positively or negatively. For example, a program could set the criteria for an award payout as the achievement of Results Act objectives and the achievement of a certain level of customer satisfaction. However, a third factor measuring workplace quality would be used as an "intensifier" to affect the amount of the award. If Results Act objectives are met and the organization achieves a certain level of customer satisfaction, a payout would be made. But if workplace quality indicator levels also are met, the manager would receive an additional 10 percent of the payout amount. However, if the goals are met but workplace quality indicator levels are not met, the manager would receive 10 percent less than the full payout would have been.

These three examples show how awards programs can recognize managers for organizational performance using balanced measures. Agencies can design a variety of such programs within our current regulations to focus managers on achieving a balanced set of results.