Practices and trends in performance assesments in OECD countries

Edwin LauDivision Head, Reform of the public sectorOECD

Issyk-Kul, Kyrgyz Republic August 25, 2015

• Raises accountability• Motivates/incentivizes the civil service -

positive impact on workplace productivity • Enforces goal alignment from the

organisational level to the individual level

• Informs about the gaps (helps improve)

Why performance management matters?

Cascading objectives in Canada

Source: Treasury Board of Canada Secretariat

Extent of the use of

performance managemen

t

Existence of mandatory formalised

performance assesment

Frequency of use of performance

assesments tools

Number and types of

performance criteria explicittly

used

Legal importance of good performance

assesments

How does the OECD measure the use of performance management?

Yes, for all or almost all No, only for some No, not used at all

AUSTRALIA, AUSTRIA, BELGIUM, BRAZIL, CHILE, DENMARK,

ESTONIA, FINLAND, FRANCE, GERMANY, GREECE, HUNGARY,

IRELAND, ISRAEL, ITALY, JAPAN, KOREA, MEXICO,

NETHERLANDS, POLAND, PORTUGAL, SLOVENIA,

SWEDEN, SWITZERLAND, TURKEY, UKRAINE, UNITED KINGDOM,

UNITED STATES.

CANADA, ICELAND, NEW ZEALAND, NORWAY,

SPAIN.

CZECH REPUBLIC, RUSSIAN FEDERATION,

SLOVAK REPUBLIC

Total: 28 Total: 5 Total: 3

Is formalised performance assessment mandatory for all employees?

Source: OECD Strategic Human Resources Management Survey 2010

What are the current performance criteria explicitly used in most organisations?

Activiti

es underta

ken

Timelin

ess of a

ctiviti

es underta

ken

Outputs / a

chieve

ment of o

bjective

s

Timelin

ess of o

utputs / a

chieve

ments

Cost-effecti

veness

of outputs'

producti

on

Quality of o

utputs

Impro

vement o

f competencie

s

Values, disc

ipline and in

puts

Interperso

nal/management s

kills

It varie

s significa

ntly acro

ss org

anisation

0

5

10

15

20

25

30

35

30

25

33

25

11

2829

26

29

10

Source: OECD Strategic Human Resources Management Survey 2010

Importance of performance assessment regarding:

 

Career advancemen

t

Remuneration (bonuses; the grade

does not necessarily change)

Contract renewal in the civil service/

remaining in the civil

service

Employment contract

renewal in the public service

High 18 14 7 6

Medium 11 10 15 10

Low 4 8 7 9

Source: OECD Strategic Human Resources Management Survey 2010

 

Top managemen

t

Middle managemen

t

Professional

Secretarial staff

Technical support

Years of experience

15 19 17 16 13

Performance appraisals

19 24 22 21 17

Qualifications (relevance of education)

26 28 27 23 22

Other 12 8 5 5 4

Which of these factors are important for being promoted?

Source: OECD Strategic Human Resources Management Survey 2010

Extent of the use of performance assessment

PORTUGAL

DENMARK

JAPAN

UNIT

ED KIN

GDOM

MEXIC

O

AUSTRALIA

ISRAEL

KOREA

SWEDEN

TURKEY

FRANCE

HUNGARY

IRELAN

D

SLOVENIA

SWIT

ZERLAND

CANADA

ESTONIA

ITALY

GERMAN

Y

UNIT

ED STATES

POLAND

BELGIUM

CHILE

NETHERLANDS

NORW

AY

CZECH R

EPUBLIC

ICELAN

D

AUSTRIA

FINLAN

D

SPAIN

GREECE

UKRAINE

BRAZIL

0.0

0.1

0.2

0.3

0.4

0.5

0.6

0.7

0.8

0.9

1.0

Composite Indicator OECD31 Average

Source: OECD Strategic Human Resources Management Survey 2010

– Training– Pay

Figure: Extent of the use of performance-related pay in central government (2010)

Link with other management aspects

United Kingdom

Switzerla

nd

Czech

Republic

Slovenia

Finland

DenmarkJapan

Korea

Australia

France

HungaryIsr

ael

Sweden

CanadaChile

United States

Italy

Norway

Estonia

Germany

Spain

Portugal

Ireland

New Zealand

Austria

Netherlands

Brazil0

0.1

0.2

0.3

0.4

0.5

0.6

0.7

0.8

0.9

1

Composite indicator OECD32 average

Consequences of Performance in Budgeting

OECD, Budgeting Practices and Procedures in OECD Countries, 2014

Normal distribution

Ministry distribution

(Israel)

What can we learn from the private sector?

• Microsoft: eliminates ‘stack rankings’ (2013)

• Google: Pay discussions are separated from annual reviews [Laszlo Bock, Work Rules!, 2015]

• General Electric: from “command and control” to “empower and inspire”: regular informal ‘touchpoints’ between managers and employees

What drives individual performance?

• Skills (hard and soft)• Knowledge

Ability

• Intrinsic• Extrinsic

Motivation

• Work design• Organisation

Opportunity

Levers to shape & prepare the Civil Service

• Leadership

• Recruitment

• Holistic planning (link org capacity with strategic outcomes)

– Workforce planning

– HR development

– Leadership development

• Compensation

• Work Environment & Conditions

• Performance & Accountability Regime

• Monitoring & managing employee engagement

• Training; Learning

• Composition: diversity, gender experience, education

• Post-public employment

Australian Public Service Capability Review Framework

Motivation

• Stable self-perception and self-confidence are therefore the most important motivators for individual success.

• Pay mainly demotivates (in the event of bad payment) or not (if payment is appropriate). Rarely adds motivation.

Targets that take the

individual's abilities into

account, feedback and

rewards

Improve the employee's confidence

Higher success expectancy,

higher self-set targets and improved

performance.

Source: Demmke, Christoph 2007

Opportunity: an enabling workplace

• Performance and target achievement in public service almost always depends on a multitude of factors beyond the individual:–Organisational culture and

structure –Work conditions–Workplace technology –Management– Job profile

Why I no longer commit myself:

• Inadequate information flow from superior: 97%

• Decisions without involving employees: 95%• Manager cannot solve group conflicts: 82%• Errors in superior's management behaviour:

81%• No communication of purpose by the

organisation: 71%• Too much bureaucracy in organisation: 71%

Source: Wolfgang Seidel, Emotionale Kompetenz, Heidelberg 2004, p. 314

Australia: Perceptions of Senior Leadership

In my agency, senior leaders engage with staff on how to respond to future challenges...

19

What is employee engagement?

Value congruence

Perceived organisational

support

Positive core self-evaluation

Autonomy and challenge in the job

Antecedents

Vigour

Dedication

Absorption

Work Engagement

Higher individual performance

Higher organizational citizenship behaviour

More pro-active, innovative behaviour

Lower labour turnover

Lower absence

Higher job satisfaction and

personal well-being

Outcomes

• Performance and motivation is not only about the individual, but also about the work environment, organisational culture, and quality of management.

• A good PA process should help to improve employee’s ability, motivation and opportunity to perform.

• Pay for performance depends on a careful assessment of the work and the situation, and has not always worked well in OECD countries.

• OECD countries are simplifying PA systems, and instead investing in the capacity of managers to manage performance.

Concluding thoughts

To find out more…

OECD website:www.oecd.org/governance

http://www.oecd.org/employment/pem/

OECD iLibrary:http://www.oecd-ilibrary.org/