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Performance Management at GAO

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Performance Management at GAO

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    1. 1 Performance Management at GAO Sally E. Thompson U.S. General Accountability Office April 21, 2005

    2. 2

    3. 3 GAO’s Mission and Performance Management GAO is charged with Improving the performance and assuring the accountability of the federal government GAO must be a Role Model to Lead by example in the federal government Rival the world’s premier professional services organizations Fulfill its responsibilities to the Congress and the American people

    4. 4 What We Did—Best Practices Multi-year transformation project based on Competencies as centerpiece Staff involvement – employee survey with 86% response rate Expectation-setting linked to our overall strategic goals and objectives Individual development plans (IDPs) focused on building both individual opportunity and institutional capacity Self-assessment giving staff opportunity and responsibility to assess and plan for own performance Designated performance manager ensures accountability by setting expectations, giving continuous feedback and coaching, and collaborating in the development of IDPs

    5. 5 Performance Management Process

    6. 6 Why We Did It—Drivers for Change Why Change? Increased demand for government performance and accountability Recognize importance of human capital and integrate “people” practices into overall GAO strategy Link performance standards to strategic plan and goals Need for accurate ratings and meaningful distinctions in performance Create transparency and enhance fairness in new system

    7. 7 Analyst/Specialist Appraisal Scores (1984-2002)

    8. 8 Why We Chose Competencies Competencies represent more than the technical aspects of GAO work, they Embrace important elements of customer service, interacting with others, and change management Are essential to helping the federal government improve its performance Include outcome-oriented standards for each competency which describe the types of behaviors expected at each level

    9. 9

    10. 10 Rating Categories Four-category weighted rating system Meets Expectations = 1.5 Raised the bar on expected performance—not just average or okay Exceeds Expectations = 3 Role Model = 5 Below Expectations = 0

    11. 11 Systems Goals Provide Information for: Candid and constructive conversations that maximize each person’s potential and contribution to GAO Recognizing and rewarding top performers Identifying and dealing with poor performers

    12. 12 Pay for Performance—System Safeguards Adequate safeguards, including reasonable transparency and accountability mechanisms, to ensure fairness and prevent politicization and abuse. Involve employees in system design and validation processes Provide for independent reviews (i.e., HCO and O&I) of rating decisions, pay determinations, and promotion actions Establish internal grievance processes to address employee complaints Provide for external appeal authority to our independent Personnel Appeals Board Publish overall results of appraisal and pay decisions while protecting individual confidentiality

    13. 13 Lessons Learned—Improvements Made for FY 03 Employee Advisory Council and Managing Director Feedback Provided more training on understanding and applying the performance standards and rating category definitions Reduced the number of pay categories from five to four Accelerated the timeframes for completing pay and promotion decisions Strengthened the link between pay and performance by communicating pay decisions at the same time performance appraisals are released to staff Provided more information on relative ranking

    14. 14 Next Steps—Continuous Improvement Implement competency-based performance management systems for attorneys (FY 03) and for administrative and professional support staff (FY 04) Evaluate the systems annually to identify areas for short term and long term improvements Monitor the operation of the systems throughout the performance management cycle Maintain transparency Obtain ongoing employee feedback Provide just-in-time refresher training at key points in the performance management cycle to improve the skills of staff and managers in using the tools and techniques required for proper implementation of the system

    15. 15 Pay Philosophy: When We Went to Pay- Banding in 1989 Pay ranges followed the GS schedule. Assumed that staff were correctly classified—may or may not have been the case. Everyone had the right to advance to the pay cap irrespective of their performance —not a matter of if, but when.

    16. 16 Classification and Compensation System: Key Guiding Principles Enable GAO to attract and retain top talent. Result in equal pay for work of equal value over time. Be reflective of the roles and responsibilities that we expect GAO staff to perform. Be reasonable, Enable GAO to attract and retain top talent. Result in equal pay for work of equal value over time. competitive, performance-oriented, and based on skills, knowledge, and role. Be affordable and sustainable based on current and expected resource levels. Be in conformity with applicable statutory limits. Try to assure a reasonable consistency in ratings and related compensation results within and between teams.

    17. 17 New Pay Philosophy: Performance-Oriented and Market-Based Pay ranges are set to be competitive with the labor markets in which GAO competes for talent. Everyone has the opportunity to advance to the pay cap—but individuals must have performance in excess of a certain level to advance beyond a certain point of the pay range (e.g., the 75th percentile) that is referred to as a “speed bump”. Pay ranges may overlap to adequately reward expertise, leadership, and performance.

    18. 18 Structure of Market-Based Compensation Ranges

    19. 19 Band II Compensation Range: Proposed New Approach

    20. 20 Geographic Zones

    21. 21 2005 Pay Adjustments, cont. Performance-Based Compensation for FY 04 Performance We will not use pay categories. Instead, performance-based compensation decisions will be made using a new methodology, which includes a Process for achieving reasonable consistency in ratings between teams, and Pay allocation model recommended by Watson Wyatt for distributing total performance-based compensation by individual, including allocations between merit increases (i.e.,base pay) and performance bonuses (i.e.,cash), as applicable.

    22. 22 2005 Pay Adjustments, cont. Specifically, the new methodology for determining performance-based compensation uses: Standardized Ratings Individual FY 04 performance ratings will be standardized within teams by band using a generally accepted methodology recommended by Watson Wyatt. Use of standardized ratings will remove the “easy grader/hard grader” differences and help to assure a reasonable degree of consistency between teams in ratings used for making performance-based pay decisions. All staff in the same career stream and band with the same standardized rating score will receive the same amount of performance-based compensation.

    23. 23 2005 Pay Adjustments, cont. Current Salary and Market-Based Compensation Ranges An individual’s current salary will be compared to the applicable new compensation range. The amount of performance-based pay will be computed using the midpoint of the applicable compensation range. Allocation Between Merit Increase and Performance Bonus The total performance-based compensation amount will be distributed between a merit increase and a performance bonus based on the individual’s current salary position in the market-based compensation range—the higher in the range, the greater the percentage that will be paid as a bonus.

    24. 24 How is a Standardized Rating Score Calculated? A Standardized Rating Score (SRS) is calculated as follows: Individual Rating Average – Team/Band Rating Average Standard Deviation for The Team/Band Example: Calculation of an SRS 2.667 - 2.345 .512 Appendix 1 provides details of how each of the elements used to produce the SRS is calculated.

    25. 25 What Do Standardized Rating Scores Mean? They generally range from +3.00 to –3.00 They indicate an individual’s position relative to the average rating for their band/team A SRS of 0.00 indicates that the individual’s SRS is equal to their team’s/band’s rating average Individuals in different teams with the same SRS have the same relative performance, thus achieving better comparability in ratings across teams

    26. 26 Distribution of Standardized Rating Scores for the FY 04 Performance Cycle

    27. 27 Determining the Dollar Amount of PBC Two key elements determine the dollar amount of PBC an individual will receive--% PBC and the Pay Range Midpoint. Example: Calculation of $ amount of PBC. The examples use the SRS = +.63 (calculated on slide #7) and a midpoint of $92,500 (for a Band II in DC). % PBC = SRS + 1.65* = .63 + 1.65 = 2.28 (%) $ Amount of PBC = Pay Range Midpoint X % PBC = $92,500 X .0228 = $2,109

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