Realizing the “Performance” Side of “Pay for Performance” in Federal Agencies Establishing Collaborative Accountability

"Pay for Performance" is a hot topic among federal agencies these days. Managers and employees alike want newly mandated personnel policies to compensate federal employees fairly while enhancing their ability to produce measurable results for taxpayers.

The Office of Personnel Management (OPM) is coordinating consistent federal policies related to employee pay, but will largely delegate to agencies the responsibility for defining and implementing the "performance" side of pay for performance. This flexibility represents a great opportunity – as well as a tremendous challenge – for organizations throughout the federal government.

Mary Lacey, program executive officer of the National Security Personnel System (NSPS) in the Department of Defense (DoD), confirmed that this is the case. When  asked to describe how individual performance would  be managed under the new personnel system, her response was:

The performance management process will be the key to the success of NSPS. Under NSPS, supervisors and employees will work together to define clear and measurable goals and expectations for the year; and those will be linked to the strategic and tactical goals of the organization… The exact process for how that occurs will have to be tailored to the specific work environment. ¹

Advanced Performance Consulting Group, Inc. (APCG), is at the forefront of helping federal agencies tackle the challenge of designing and implementing performance management systems that are tailored to specific work environments.  Our experience working with the Departments of Defense and Homeland Security has enabled us to develop a valuable, efficient approach that can be customized for virtually any organization.

Our Collaborative Accountability ™ performance management system is designed to be integrated into your current management practices in a time-efficient way that enhances your organization’s ability to achieve strategic objectives. Our approach is based on a solid foundation that includes:

• Comprehensive Strategic Alignment to create line of sight from organizational strategic objectives down to individual employee results
• Collaborative Performance Planning, in which managers and employees collaborate to explicitly define expectations for achieving individual strategic results and for demonstrating strategic and professional behavior
• Collaborative Performance Management that entails ongoing attention to employee performance, organizational needs, and changes in the work environment
• Pay for Performance that compensates employees fairly while providing incentives that encourage staff to be accountable for and achieve strategic results

APCG’s Collaborative Accountability ™ performance management system provides the necessary strategic framework for the organization, as well as an inclusive set of standard practices and tools for actively managing employee activities. The hallmark of our approach is a balanced individual scorecard that can be used by managers to rate employees systematically and fairly, accounting for differences across job responsibilities, levels, and career tracks, and backed up by a documented history of strategy-anchored performance discussions between managers and employees.

Federal managers benefit from this approach by having a well-constructed system to evaluate employees based on consistent, concrete evidence of results achieved and professional behavior demonstrated. Federal employees benefit from this approach by clearly understanding what is expected of them and by being compensated commensurately with their appropriately defined contributions to the organization’s strategic goals.  And both managers and employees are able to recognize and evaluate intangible strategic contributions that are critical to success, yet are typically difficult to capture.

In this way, APCG assists government organizations in reaping the rewards of a flexible, effective performance management system. This type of integrated, collaborative approach is a must for managers struggling to address pay-for-performance challenges.

¹ See Mary Lacey’s responses to questions from March 16, 2005