Performance Management

Performance Management Insight September 27, 2006 The Old Mill

No need to take notesThis presentation and a lot more material is on these issues is available on our web sitewww.healthandeverything.orgFor more information you can write to me sholom@glouberman.com Notes

The NHS • The Blair government created strategic health authorities (SHAs) in 2002 specifically to performance manage the newly created primary care trusts (PCTs). • There was thus a four year experiment with a large scale performance management effort worth looking at.

Performance Management NHS 2002-2005 Minister of Health Department of health 28 Strategic Health Authorities 200 Primary Care Trusts 180 Acute and Mental Health Trusts 1.000.0000 Employees

My Role • I have been meeting semi-annually with a representative cross section of the NHS from 1990 to review the state of play and changes that have occurred • I consulted to a strategic health authority from 2001 to 2005 • I met with them 4 times a year to see how they were doing and lend a hand in their efforts. • I also consulted to a Primary Care Trust from 2001 to 2003 • I met with them 5 times and helped with their planning efforts

Introducing Performance Management in the UK • A specific publication on performance management was prepared in 2002, but is no longer available on the internet or in hard copy • So I have used standard sources to give an overview of Performance Management • Various Outlines and Reports are available that helped to describe how it was implemented in the NHS

Performance management Performance management is the systematic process by which an organization involves its employees, as individuals and members of a group, in improving organizational effectiveness in the accomplishment of its mission and goals.

Employee performance management includes: • Planning work and setting expectations, • Continuallymonitoring performance, • Developing the capacity to perform, • Periodically rating performance in a summary fashion, • Rewarding good performance. Planning Monitoring Rewarding Developing Rating

Employee performance management includes: Planning Monitoring Rewarding Developing Rating

Planning • Set performance expectations and goals • Involve employees in the planning process • help them understand goals (what why and how) • Establish elements and standards of performance appraisal • that are measurable, understandable, verifiable, equitable & achievable. • Hold employees accountable as individuals • Plans should be flexible • Plans should be discussed often and not seen only when formal ratings are required. Planning

Planning in the NHS: Trust Involvement • Introduction of 3 year Local Delivery Plans to be prepared by individual trusts • Bottom up planning to involve all local agencies with support from the SHA • Stabilization of planning and funding over 3 year periods Planning

Monitoring Monitoring • Monitor continually. • Consistently measure performance • Provide ongoing feedback on progress toward goals. • Compare performance against their elements and standards. • Change unrealistic or problematic standards • Identify and correct unacceptable performance quickly

Monitoring in the NHS Monitoring • Three Major agencies to monitor and assess the system • NICE: National Institute for Clinical Excellence • To review standards and improve clinical practice • CHI: Commission for Health Improvement • To consider impact on health of the nation • Audit Commission • To monitor and assess fonancial and operational management

Developing Developing • During planning and monitoring of work • Deficiencies become evident and can be addressed • Successful employees can be helped to further improve • Evaluate and address developmental needs • Increasing capacity to perform through training, • Give assignments to introduce new skills or higher levels of responsibility, • Improve work processes • The above encourage good performance • Strengthen job-related skills • Help employees keep up with changes in the workplace

Developing in the NHS Creation of the “Modernization Agency” • Seconded the best development officers • To help define the shape of the “New and modern NHS” • Then to identify and develop the new skills and competencies needed for the new NHS • To identify and deal with development issues quickly Developing

Rating Rating • Organizations need to know who their best performers are. • Rating allows you to compare performance over time or among various employees. • Evaluates employee or group performance against the elements and standards • Assigns a summary rating of record for each employee. • based on work performed during an entire appraisal period. • has a bearing on various other personnel actions • granting within-grade pay increases • determining additional retention service credit in a reduction in force.

Rating in the NHS • An Annual Report on the performance of individual organizations • Linked to the measurable targets • Uses a three star rating system • 0 stars = poor • to 3 stars: excellent • Individual Managers and organizations are rated using these performance measures at every level of the system Rating

Rating in the NHS: 45 Measurable Targets Planning

Rewarding Rewarding • Recognize employees, individually and as members of groups, • Acknowledge contributions to the mission • All behavior is controlled by its consequences • formal and informal • positive and negative. • Informal recognition is constant and ongoing like saying "Thank you“ • More formal rewards include cash, time off, and many non-monetary items.

Rewarding in the NHS Rewarding • The main group reward in the NHS is through the creation of Foundation Trusts • Individual organizations that have far more independence and can increase their local rather than national reporting relationships • This is replicated inside SHAs and indeed inside the existing trusts • Successful managers move up quickly • A successful CEO of an SHA received a knighthood

2006 • In 2006 the Ministry of Health reduced the number of strategic health authorities to 14 and radically changed the primary care trusts. • They merged the monitoring agencies • Performance Management is no longer the flavour of the month • How did it all go so wrong? Not that anyone admits it.

Planning in the NHS: Trust Involvement Planning • The 3 year Local Delivery Plans (LDPs) took two years to frame • Local trusts did not perform well • The SHAs believed that they did not have the planning capacity to prepare the extensive documentation. • LDPs were renewed annually • LDPs were required top down and the bottom up was to get them done in an acceptable way • Annual revisions reduced the stability that was expected • The SHAs could not performance manage trusts adequately and were therefore largely merged into larger less directive organizations • What would bottom up planning be in the NHS?

Planning in the NHS: Targets • The priority targets were largely met or fudged. • Some incidents of faking data • Some incidents of meeting stated targets but subverting the real meaning • Widespread hidden overspend • Government boasted of success in reducing all waiting times • Head of NHS was fired for £1Billion accumulated deficit that emerged suddenly • What does measurable really mean? Planning

Monitoring in the NHS Monitoring • Three Major agencies to monitor and assess the system disagreed about the state of individual trusts that they examined • They functioned as largely independent and somewhat competing inspectorates • They disagreed about what the standards meant • They also overloaded individual trusts with monitoring demands • They were merged into one organization that is now much more hierarchically connected to the Ministry.

Developing in the NHS Developing • The Modernization Agency was disbanded in 2005 • (The government declared it to be a success and closed it down) • The best development officers had been stripped from local organizations and now would not go back • The performance management of development issues was largely done through punitive measures at the SHA rather than the Modernization Agency. • Many executive level managers of trusts lost their jobs. • The failure to perform “old skills” like those associated with budget management was widespread

Rating in the NHS • The Annual Report was awaited with bated breath because your job depended on it • Linked to the priority targets so other non-targeted areas suffered • Targets continue to be attacked constantly • The three star rating system had its downside • 0 stars pretty much meant that at least the CEO was fired • 3 stars meant that you became high profile • Individual Managers and organizations are rated using these performance measures at every level of the system Rating

Rating in the NHS

Rating in the NHS Key targets • A&E emergency admission waits (12 hours) • Cancelled operations not admitted within 28 days • Financial management • Hospital cleanliness • Improving Working Lives • Number of inpatients waiting longer than the standard • Number of outpatients waiting longer than the standard • Total time in A&E • Two week cancer waits

Rewarding in the NHS Rewarding • The main reward in the NHS is through the creation of Foundation Trusts • There is a serious question about how these organizations link to the rest of the NHS • This has consequence to everything from funding flow to patient flow. • Individual organizations that have far more independence and can increase their local rather than national reporting relationships • There is much talk about the future of these organizations • Punishment for failure seems more in the air motivator than reward for success • The knighted head of the NHS Sir Nigel Crisp lost his job over these efforts

The Law of Unintended Consequences • With all good intentions this massive effort to implement performance management failed • Does this mean that performance management will go the way of other similar management ideas? • Why did it fail? Can it be recuperated? Or should it simply cross the ocean to be implemented in Ontario? • I have some closing thoughts

Formulae are critical and necessary Sending one rocket increases assurance that next will be ok High level of expertise in many specialized fields + coordination Rockets similar in critical ways Relative certainty of outcome Optimism re results Formulae have only a limited application Raising one child gives no assurance of success with the next Expertise can help but is not sufficient Every child is unique Uncertainty of outcome remains Optimism re results Simple Complicated Complex Following a Recipe A Rocket to the MoonRaising a Child • The recipe is essential • Recipes are tested to assure replicability of later efforts • No particular expertise; knowing how to cook increases success • Recipes produce standard products • Certainty of same results every time • Optimism re results

Analysis • Health care organizations and systems are complex • Recipes won’t work and their application will have unintended consequences • Performance management like many other flavours of the month can be useful but should be applied with great care and foreboding while carefully considering the complexity of local conditions

Performance Management