How to Build Employee Commitment and Improve Performance

The Office of Management and Budget has reversed a Trump-era management directive and will once again require agencies to develop strategic goals and objectives. OMB’s memorandum to agencies focused on performance but the change will also strengthen an agency’s brand for recruiting and building a shared workforce commitment to achieving objectives. Everyone who has played on a sports team knows how important goals are in playing to win championships. 

As this was written, President Biden announced his new goal of administering 200 million COVID-19 vaccination shots by the end of his first 100 days in office. The health system’s performance in tackling this crisis demonstrates the power of stretch goals.

Pam Coleman, OMB’s associate director of performance and personnel management, was correct in her memo to agencies: “Grounded in proven management practices of high-performing organizations both private and public, the framework emphasizes a focus on implementation by engaging senior leaders through ambitious and data-driven goal setting, regular reviews of progress, and public reporting of results.” 

Experience with high performing organizations suggests replacing “senior leaders” with “everyone.”

Two recent events highlight the importance of goals to employee commitment. First, the rapid turnaround of the nation’s health system to address the COVID-19 crisis. The second was the landing on Mars of the rover, Perseverance. The video from the day of the landing and the question from a young girl wearing a NASA T-shirt makes the point. Celebrating accomplishments builds collaboration and support at all levels.

A 2018 NAPA report, “Strengthening Organizational Health and Performance in Government” highlighted government’s problem: “A good statutory framework has evolved over the past two decades to improve government performance and results, but it is still too top-down and does not meaningfully engage front line units—which is where direct contact with the government’s customers and partners occurs. Too often, these units have not been a focus of attention.” 

In those front line units, team or group performance has never been a serious concern. In fact, the focus has been limited to the few employees whose performance is unsatisfactory. Any interest in high performance is lip service at best.

The Barrier to Improved Performance

A related problem, rigid performance management practices, was highlighted in Terry Gerton’s Foreword to the new report from the National Academy of Public Administration, “Elevating Human Capital: Reframing the U.S. Office of Personnel Management’s Leadership Imperative”:

“The public sector’s inability to respond quickly and flexibly to the ever-growing challenges and demands confronting government shaped the burning platform for this initiative. If the nation is to address critical issues successfully … government must improve its operations to tackle problems in new ways and, importantly, earn the public’s trust...”

“As government is increasingly called upon to address complex and interconnected ‘wicked problems,’ the need for leaders, managers, technical experts, and front-line workers in the right jobs, with the right skills, at the right time has never been greater. Unfortunately, federal (and state/local) government struggles today to build a public service workforce that can meet the unique demands of our time. It is limited by rigid and outdated hiring, pay, and performance policies and practices.”

Those rigid practices are a barrier to improved performance. Rigid practices may make sense for manual jobs in manufacturing or for paperwork processing office jobs. However, in organizations expected to respond to unexpected or complex problems, rigid practices are a barrier to responding effectively. They also deny employees opportunities to use their capabilities fully.

OPM-initiated changes have improved hiring although the time to fill vacancies is still untenable. The rigid pay system remains a problem despite the introduction of locality pay and the special rate authority. But the rigid, limited approach to performance management stands out as the most deeply entrenched barrier to the new approaches needed at all levels. It’s the most serious human capital management problem. 

All the evidence confirms a key point: If the rigid practices are not addressed, government will be unable to realize meaningful performance gains. The headline phrases ‘agile organization’ and ‘organizational health’ both emphasize the importance of flexible management approaches for high performance. Both emphasize the importance of quick responses, readiness to try new approaches, and a shared focus on achieving mission and goals. 

The New Performance Management Model

Government’s problems with employee performance are not unique. A 2019 survey of HR leaders by Gartner found 81% were experimenting with different ideas for improving performance management. Only 18% agreed performance management was “achieving its primary objective—improving performance.” 

Today those percentages would likely be lower. Working remotely has severely diminished a supervisor’s ability to monitor or coach subordinate performance. The separation highlights the new reality of empowerment. The new working relationships make it important to reconsider the practices used to manage performance.

The arguments for rethinking performance practices focus on three issues: 

• The most important is the new emphasis on coaching and ongoing discussions to improve employee performance. The change in role for managers requires different skills. That makes investing in training to develop those new skills essential. In this era of rapid change, individual performance expectations need to be adjusted as the year unfolds. Managers play a vital role in sustaining employment engagement.
• Second, there is recognition that many individuals are affected by an employee’s performance. Now, in assessing performance, managers can rely on 360 degree feedback that includes co-workers, subordinates. and customers. 
• Third, in government, performance ratings are badly inflated. With the renewed focus on equity and fairness, employers are looking for ways to validate ratings. Metrics and analytics are helpful. Requiring managers to explain at least the high and low ratings in meetings with peers is another strategy. (The court decision, Santos v. NASA, gives agencies a new reason to develop defensible ratings.)

A few companies have eliminated formal ratings but career decisions will always be based on an assessment of an employee’s past performance and potential to be successful in higher level jobs. As Josh Bersin, a prominent adviser on talent management, argues, ratings are essential:

“Let me simply say that after a decade of discussion on the topic, the concepts of ratings themselves are not the issue. Organizations need to make decisions about people … and these decisions themselves are essentially evaluative by nature. The key today is to use lots of data and feedback to make these decisions; do them in a transparent and fair way; clearly communicate what is valued in the company; and give people visibility into others’ goals and projects.” 

Employers need to recognize both their best and their worst performers. Unfortunately, the historical focus on poor performers defines the context for today. Employees do not decide to be poor performers. Ineffective supervision is often the reason. Inadequate training is another. Bias or discrimination is also possible. The root causes need to be understood. Too often the problem is not addressed early. OPM has constructive advice on its website. 

The best performers should get far more attention. Studies show the best perform appreciably better than the norm. They stand out and consistently exceed expectations. They look for opportunities to learn and grow. They need to be empowered to address operational problems.  Leaders need to solicit their ideas and recognize their contributions. Their value goes unrecognized.

The overwhelming majority of employees—70% to 80%—are performing satisfactorily. 

But government has made a mistake in its approach to managing their performance—that’s the failure to recognize the importance of team or group collaboration. Teamwork and collaboration are essential for improved performance. 

Recognizing and Rewarding Team Accomplishments

A prominent difference between the public and private sectors is the business reliance on financial rewards. Today the phrase “pay-for-performance” encompasses both merit salary increases and cash incentives. The typical company relies on both along with one-off bonuses to recognize accomplishments throughout the year. The practices are effectively universal.

A key point is important: Business incentives (with the exception of sales incentives) are based on team or group performance. Today, management incentive plans link payouts to financial results balanced with success in achieving additional goals like increased customer satisfaction or growth in market share. 

At lower levels, so-called gain sharing plans introduced in the 1930s linked payouts to increased efficiency and reduced costs. Those plans evolved into today’s goal sharing plans which reward team members for achieving goals. Several years ago, a unit of General Services Administration installed a goal sharing plan. The union initially resisted but after the first payouts, the union wanted it extended to all of GSA. 

The city of Denver in 2011 adopted Peak Performance, with cash payouts linked to achieving departmental goals. In an interview, Mayor Michael Hancock stated the goal is “to make government fun, innovative and empowering.” When Hancock took office, the city had an $80 million budget shortfall. In the interview he cited savings to date of over $25 million from employee efforts.

The mayor made performance improvement and innovation a priority. Employees were encouraged to develop proposals to improve results. The city provided training in reengineering and process improvement. The payouts had to be paid from savings. Research has shown the potential to improve productivity can exceed 30% to 40%. It’s a strategy that can work in any organization.

Non-financial rewards are always a possibility. However, government needs broad based change. Non-financial rewards are not suited to reinforcing essential behavior change with large employee groups. 

Government is not ready for performance-based salary increases. That will require a multi-year investment in training to prepare managers. Group incentives can fill the void. It’s a key to improved performance.