Agencies Could Learn a Lot from Tennessee’s Shift to Pay for Performance

Federal agencies will certainly not be the first public employer to switch to pay for performance. The most recent may be Tennessee, and by all standards it’s demonstrated one of most successful transitions. The stat’s civil service reform efforts offer many lessons for the federal government. For more, click here.

What aspects of the Tennessee pay-for-performance plan do you think would work at your agency or organization? Which would not?

4 Perceptions (and Realities) about Federal Adverse Actions

Perception 1

It is impossible to fire a Federal employee.

Reality: From FY 2000-2014, over 77,000 full-time, permanent, Federal employees were discharged as a result of performance and/or conduct issues[1].

Perception 2

Agency leaders have no authority to serve as proposing or deciding officials in title 5 adverse actions.

Reality: Title 5 empowers the agency to take an adverse action. If agency leadership chooses to delegate the proposal or decision authority to lower levels, then it cannot interfere with the decision-making process of those delegees. But, prior to the assigned decision-maker’s involvement in a particular case, current statutes permit delegations to be abandoned or modified at will by the agency[2].

Perception 3

There are no legal barriers to firing an employee in the private sector.

Reality: Many of the laws that apply to removing employees in the Federal civil service also apply to private sector employment or have a similar counterpart, such as the Civil Rights Act of 1964 (Title VII – Equal Employment Opportunity), and the Uniformed Services Employment and Reemployment Rights Act of 1994 (USERRA), both of which permit private sector employees to pursue litigation[3].

Perception 4

An agency must pay a salary to an employee who has been removed until any appeal has been resolved.

Reality: An employee is not paid while appealing his/her removal to MSPB. If the action is found to have been unwarranted, then reinstatement and back pay may be awarded. But, there is no pay while removed[4].

Reprinted from Issues of Merit, a publication of the Office of Policy and Evaluation, U.S. Merit Systems Protection Board.



[1] Analysis of data from U.S. Office of Personnel Management, Central Personnel Data File (CPDF), FY 2000-FY 2014.

[2] Goeke v. Department of Justice, 122 M.S.P.R. 69, ¶ 23 (2015); see Boddie v. Department of the Navy, 827 F.2d 1578, 1580 (Fed. Cir. 1987); Ward v. U.S. Postal Service, 634 F.3d 1274, 1279 (2011); 5 U.S.C. § 7513.

[3] See 38 U.S.C. §§ 4301-4333 (USERRA); Civil Rights Act of 1964, Pub. L. No. 88-352, 78 Stat. 241, § 706(e)-(g) (authorizing discrimination litigation in Federal courts).

[4] See 5 U.S.C. § 5596 (b)(1)(A).

Effective Performance Discussions: Don’t Forget to Look Forward

Much of the guidance on performance evaluation focuses on measurement— developing standards of performance, evaluating performance against those standards, and documenting the results. Performance evaluations matter greatly to employees as a factor in pay decisions and as a lasting reflection of the organization’s valuation of employees’ work contributions. Thus, it is important that they be done carefully rather than casually.

Performance evaluations and performance discussions should not focus exclusively on the past. The purpose of performance evaluation—and the employee-supervisor discussion of an evaluation—is not merely to look back. It is also to look forward—to think about what should be done to sustain or improve performance. Indeed, one of OPM’s warranty conditions for a performance management program is “commitment to… conscientious development of employees.” That look forward should include both performance (What results do we want?) and the person (What skills or support does the employee need to achieve those results?). …

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Improving Performance: The Role of Contextual Behavior

In good times and in tough times, Federal agencies need employees to direct their capabilities, energy, and effort towards more than just their core job duties. Mission success requires that employees also recognize—and seize—opportunities to support the agency in ways not necessarily specified in their position descriptions (PDs) nor tied to their formal job tasks. Indeed, agencies need employees to think and behave “outside the box” of formal job tasks and to do, support, or help with what needs to be done in the name of broader mission accomplishment. Agencies need employees to direct their effort towards both task and contextual performance.

What are Task and Contextual Performance?

Employees’ performance at work can be divided into task and contextual performance[1]. Task performance is the “meat” of an employee’s job: the technical, core duties that directly feed into creation of an organization’s products and services. Meanwhile, contextual performance behaviors are the “gravy” or those employee actions that season the work environment where task performance occurs. In essence, contextual performance behaviors make the work environment more conducive to the generation of task performance. There are five general categories[2] of contextual performance behaviors: …..

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Leaders: “Recognizing” Employees Requires More Than Just Knowing Who Works for You

Results of a 2012 American Psychological Association (APA) survey of working Americans indicate that feeling valued was a key driver of engagement and job performance[1]. For example, among employees who indicated that they were valued, 93% agreed that they were motivated to do their best at work and 88% reported that they felt engaged. In sharp contrast, employees who thought they were not valued indicated agreement levels of only 33% and 38%, respectively, to these same questions about motivation and engagement.

MSPB’s research confirms that appreciation is similarly important to Federal employees and Federal agencies. Our analysis revealed that employees who believed that their effort would result in higher performance and that they would receive recognition for that performance were more likely to perform well[2].

For these reasons, appreciation and recognition for a job well done are more than a matter of courtesy. Unfortunately, the trend in Federal employees’ experience of recognition is not positive, …..

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The How and Why of an Effective Performance Improvement Plan

As explained in our [MSPB’s] 2009 report, Poor Performers and the Law, title 5 of the U.S. Code currently provides two avenues by which agencies can demote or remove poor performers. The first avenue is codified in Chapter 43, while the second is in Chapter 75. Chapter 43 requires that agencies offer assistance to employees in an attempt to improve their unacceptable performance prior to implementing a performance-based adverse action[1]. Chapter 75 does not require agencies to provide such assistance. However, under Chapter 75, an adverse action’s reasonableness depends, in part, on the extent to which the employee was on notice of the required behaviors[2]. Therefore, a performance improvement plan (PIP) and a reasonable period of time to improve under the plan is necessary under Chapter 43, and can be helpful under Chapter 75.

An effective PIP will typically: …..

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Did any of this content surprise you? Have you seen it put into practice? What would you emphasize if you were advising a supervisor on the use of a performance improvement plan?

360-Degree Feedback: For Development or Evaluation? You Make the Call

360-degree feedback is a process in which an employee’s supervisor, peers, direct reports, and sometimes customers and suppliers, provide input about the employee’s work behaviors. The most common format is a questionnaire about the employee’s demonstration of critical competencies. Feedback is summarized for the employee in the form of both numerical ratings and narrative comments. The information provided by the raters is usually anonymous except for the feedback provided by the employee’s direct supervisor.

The application of 360° feedback can be divided into two broad categories: (1) employee development and (2) employee evaluation. Employee development applications include individual development planning, coaching and career counseling. The objective is to help the employee understand both strengths and developmental needs from the varying perspectives of the raters and provide an impetus to improve personal performance. Employee evaluation applications include performance appraisal, succession planning, and selection. The objective is to assess employees’ performance for annual appraisal or to select employees for jobs or special opportunities.

Organizations need to carefully consider their goals and organizational culture, as well as legal and ethical issues, before deciding how to apply 360° feedback. The considerations summarized below are based on recognized 360° research in organizations.

Employee Development Applications

• Raters are assured of anonymity. No records are kept of individual ratings. When raters believe they are anonymous, they provide more accurate ratings.

• Raters provide more candid feedback than for evaluation-type applications.

• Raters distinguish between different behaviors of the target employee, allowing the employee to better identify areas for development.

• Employees focus on the overall developmental value of the feedback rather than on numerical ratings.

• Participants are more comfortable with the process, more satisfied with it, and more trusting of their coworkers than when 360s are used for evaluation.

Employee Evaluation Applications

• When a 360 instrument is intended for performance appraisal or selection, the organization must be able to prove that the ratings are a valid and reliable indicator of the employee’s performance, i.e., that high 360 ratings correlate with demonstrated high performance and low 360 ratings correlate with demonstrated low performance.

• If 360 ratings are used to make personnel decisions, specific raters and their ratings must be identifiable in the event of an investigation or law suit.

• Raters for 360 evaluation applications tend to distinguish less among specific behaviors, using an overall impression to color responses.

• Research shows that raters tend to inflate their ratings for evaluation-type applications.

• Disgruntled raters may negatively distort ratings to “get back” at someone for real or imagined slights.

• Conscious or unconscious discrimination may occur based on personal prejudices of gender, race, or other personal characteristics not related to performance.

• Employees often focus more on which rater might have said what and on the numerical ratings rather than on the developmental value of the input.

• Evaluative applications can damage morale, teamwork and employee trust.

• If 360 feedback is used to appraise performance for supervisors and managers, they may avoid managing people appropriately due to concerns about obtaining favorable ratings from direct reports.

Development or Evaluation, But Not Both

The same 360 feedback process should not be used for both development and evaluation. The decision about how the feedback will be applied must be made when it is designed. The behaviors of raters and ratees differ with each application, and the basic premise of the ratings differs. For development, raters need to consider only the relative strengths and development needs of the individual employee. When a 360 tool is used for evaluation, raters need to differentiate among all the employees rated because decisions are made in which some employees receive “more “ of something based on the raters’ input, such as a higher appraisal rating, more pay or an opportunity. Because of these factors, organizations must be prepared to provide a strong foundation for the process before implementing 360 feedback, particularly when used as part of the formal evaluation process. It is especially critical that organizations clearly identify what they are trying to achieve. ¯

Reprinted from Issues of Merit, a publication of the Office of Policy and Evaluation, U.S. Merit Systems Protection Board.

Transforming the Organizational Culture to Focus on Performance

The personality of an organization can be changed through its pay system.

Each organization has its own unique personality and way of doing things. These shared norms are commonly known as the organization’s “culture.” Cultures tend to be remarkably enduring and serve to provide employees with guidance about what to expect when they come to work each day—for example, how communication flows through the organization or whether they should view their peers as collaborators or competitors. This guidance can also serve to promote the achievement of individual and organizational goals by identifying what types of behaviors are desired and how they will be rewarded.

In an ideal situation, employees join organizations with cultures well-suited to their values and needs. If their employer is not a perfect match, employees may be able to adapt to fit the culture. In contrast, changing organizational culture generally requires substantial time and effort due to the long-entrenched norms, behaviors, and traditions that must be changed to overcome organizational inertia.

Nevertheless, organizations can and do change their culture, particularly in response to external pressures from competitors or customers to improve efficiency or service quality. They may also need to drive cultural change following mergers or executive succession. Although these influences on culture have been studied primarily in the private sector, most of them are also relevant to the public sector. In particular, the Federal Government has faced increasing pressure in recent years to provide better services at lower costs, while experiencing unprecedented reorganizations and accompanying changes in leadership—all in the hopes of becoming more results-focused.

At the same time, agencies are increasingly being given the flexibilities to develop new employee compensation systems. These new systems can serve as powerful tools to align organizational culture with the focus on results. In particular, a pay for performance compensation strategy ties salary dollars directly to the achievement of organizational goals, rather than to the traditional basis of pay increases—years of satisfactory performance. As a result, pay for performance “raises the bar” by shifting the emphasis from “getting by” to distinguishing oneself as a top performer. Further, by aligning individual performance objectives with organizational goals, the agency coordinates the efforts of the workforce to accomplish mission-driven results.

However, these changes don’t occur overnight. Agencies must be prepared to invest substantial time, money, and effort into creating an organizational culture consistent with pay for performance. Agency leaders should demonstrate their commitment to a performance-based pay system and ensure that employees understand why it is necessary. Supervisors must be willing and able to distinguish between employees’ performance levels, reward them accordingly, and be held accountable if they don’t. Employees need to be involved in the development of the system to facilitate buy-in and after implementation as part of the on-going process of communicating with supervisors about performance goals and progress towards achieving them. In this manner, pay for performance can serve to align employee efforts with organizational goals, resulting in a culture that emphasizes performance. ¯

Reprinted from Issues of Merit, a publication of the Office of Policy and Evaluation, U.S. Merit Systems Protection Board.

The Crucial First Year in Federal Employment–A Time For New Approaches

In this article, Robbie Kuenther discusses use of the probationary period to affirm the decision to hire since “…the selection process is fallible. The best resume and interview do not always predict the best person available for that position. Once we observe their interpersonal skills, willingness to accept direction (or work without direction), ability to manage job stress, etc. our impressions of that individual may change for the worse. That’s why management is given up to one year to finalize their initial decision to hire. Every day a probationer comes to work (or doesn’t), the decision to hire can be reaffirmed or reversed.”

In your HR or supervisory career, have you seen probationary periods used effectively? Have you watched potentially good employees terminated or an agency saddled with a problem employee because of a supervisor’s inaction? Share your experiences with us here.

10 Reasons Supervisors Give for Not Trying to Resolve Employee Problems

As a federal supervisor, Personnel Officer for a federal agency, and ex-fed developing and delivering HR training for current federal employees, I have heard many supervisors bemoan how impossible they think it is to deal with problem employees, regardless of whether the difficulties result from performance and conduct. While I agree that dealing with difficult employees isn’t always easy–it does require some work and careful adherence to detail and rules/regulations–I completely disagree with the notion that it cannot be done or that the possibility of a not-completely-satisfactory end result makes the work involved not worth it.

In fact, I believe that the supervisor has a responsibility to deal with problem employees–a responsibility to the problem employee, to other successfully-performing employees in the unit, and to the taxpayer. Not dealing with a problem almost certainly causes morale problems. A lack of action implies to the problem employee that there is a positive aspect to not doing their job or disrupting the work unit, that the comfort of the status quo is more important than the temporary discomfort of dealing with a difficult situation. It causes satisfactory employees to question whether it is really all that important to meet the expectations established for their jobs. It shows excellent employees that the reward for good work is more and more work as they pick up the slack for problem employees. And your inaction impairs the unit’s ability to accomplish the goals for which it was established, cheating the taxpayer out of good service and good value for their money.

In the following article from, Bob Gibson delineates 10 reasons he has found that supervisors give for not trying to resolve employee problems and sorts out the myths and facts behind those reasons. Read the article and then let us know what you think—-Is it worth the risk to resolve your employee problems? What have your experiences taught you? Do you have any advice to share?