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„Performance Appraisal of Civil Servants – Problems, Methods and Developments“
VII Astana Economic Forum„Civil Service Personnel Management: current issues and prospects“
Prof. Dr. Dieter Wagner Potsdam Center of Policy Management (PCPM) University of Potsdam, Germany
May 22, 2014 Astana, Kazakhstan
HR Management Activities
May 22, 2014 Prof. Dr. Dieter Wagner - Potsdam Center of Policy Management (PCPM) 2
GLO
BA
L
ENVIRONMENTALCULTURAL/GEOGRAPHIC
TECHNOLOGICAL
POLITICAL
SO
CIA
L
LEGAL
ECONOMIC
OrganizationMission
Cultur
e
Size
Operations
External EnvironmentInternal Environment
HR Planning• HR Planning• HR Information and Assessment Systems
Equal Employment Opportunity• Compliance• Diversity
Staffing• Job Analysis• Recruitment• Selection
HR Development• Training• Career Planning• Performance Mgmt.
Compensation andBenefits• Administration• Incentives• Benefits
Health, Safety and Security• Health & Wellness• Safety & Security
Labor Relations• HR Policies• HR Rights and Privacy• Union/Mgmt. Relations HRHR
ActivitiesActivities
Traditional Principles of a Professional Civil Service: The German Example
May 22, 2014 Prof. Dr. Dieter Wagner - Potsdam Center of Policy Management (PCPM) 3
• lifetime occupation and an “office-appropriate” salary
• Loyalty
• political neutrality and moderation
• dedication to public service
• no right to strike
• subjection to special disciplinary regulations
Civil service systems
A. Focus at career development:
•Career system: each civil servant starts at the bottom of a career level after competitive entry exams and continuously “climbs up” the career ladder
•Position system: civil servants are recruited to work in a specific job position; career development is less or not relevant
B. Employment status:
•Statutory employment: recruitment based on legal act
•Contractual employment
May 22, 2014 Prof. Dr. Dieter Wagner - Potsdam Center of Policy Management (PCPM) 4
Career vs position systemand employment variants
May 22, 2014 Prof. Dr. Dieter Wagner - Potsdam Center of Policy Management (PCPM) 5
Position-based systems
Career-based systems
Statutory Contractual
Traditional core functions in government
Services and other production functions
(Knut Rexed, 2007)
Civil servants
Public Employees
In various countries: employment of “civil servants” with specific privileges (e.g. pension, life-long tenure and specific duties (e.g. neutrality, loyalty, no right to strike) and of “public employees” (similar to private sector conditions)
Personnel selection
May 22, 2014 Prof. Dr. Dieter Wagner - Potsdam Center of Policy Management (PCPM) 6
General principle:
aligning qualification requirements of positions with competences of candidates
Requirement profile (job specifications)
Competence profile of candidates
Job Requirements, Skills, and Qualification Profiles
May 22, 2014 Prof. Dr. Dieter Wagner - Potsdam Center of Policy Management (PCPM) 7
Type
Extentexisting, but not required capabilities
required, but not existing capabilities
Job Requirement Profile Skill Profile Qualification Profile
Position classification
Position classifications are formal job descriptions that organize all jobs in a civil service system into classes on the basis of duties and responsibilities, for the purposes of delineating authority, establishing chains of command, and providing equitable salary scales.
(www.csub.edu)
e.g. Germany: 4 “classes” with each 5 grades:
•Administrative class
•Executive class
•Clerical class
•Subclerical class
May 22, 2014 Prof. Dr. Dieter Wagner - Potsdam Center of Policy Management (PCPM) 8
Job Performance and Selection Criteria
May 22, 2014 Prof. Dr. Dieter Wagner - Potsdam Center of Policy Management (PCPM) 9
Elements of Job Performance•Quantity of work•Quality of work•Compatibility with others•Presence at work•Length of service•Flexibility
Selection Criteria for Employees Meeting Performance Elements•Ability•Motivation•Intelligence•Conscientiousness•Appropriate risk for employer•Appropriate permanence
Predictors of Selection Criteria•Experience•Past performance•Physical skills•Education•Interests•Salary requirements•Certificates/ degrees•Test scores•Personality measures•Work references•Tenure on previous jobs•Previous jobs held•Drug test•Police record
Evaluating for HR Development
May 22, 2014 Prof. Dr. Dieter Wagner - Potsdam Center of Policy Management (PCPM) 10
Potential Candidate
Promotable Candidate
Key-PerformerUnder-
Performer
Outperforms job requirements Able to take over next-hierarchy-level-task in the short term
Perfect match of job requirementsPromotion to next-hierarchy-level likely in the long term
Minimum match of job requirements
Promotion rather unlikely
No match of job requirements
Role of performance in public sector HRM
• Performance assessment in PA is traditionally not very important in terms of a comprehensive analysis of performance, conduct, personal development, professional capabilities and soft skills.
• There are no clear guidelines for:
– How is individual performance defined?
– What is good or exceptional performance?
– What happens if performance is very good or bad?
• Little willingness to accept that there are sustantial differences in individual (and group) performance and that incentives must be created to support „high performers“
• remarkeable reluctance to measure individual performance and to let these measures make a difference for pay, career etc.
May 22, 2014 Prof. Dr. Dieter Wagner - Potsdam Center of Policy Management (PCPM) 11
Role of performance in public sector HRM
• Lacking knowledge about appropriate incentives
• discussion concentrates on monetary rewards but money is not a key driver for motivation and performance in PA
• Instead, individuals want to be appreciated for their work, supported in their personal development, have interesting and demanding jobs, aspire responsibility and discretion
• Immaterial incentives are not yet sufficiently integrated in the general rewards systems: job profile, self-efficacy, responsibilities, workplace environment, training, career perspectives etc.
May 22, 2014 Prof. Dr. Dieter Wagner - Potsdam Center of Policy Management (PCPM) 12
Main conditions of performance orientation of public servants
May 22, 2014 Prof. Dr. Dieter Wagner - Potsdam Center of Policy Management (PCPM) 13
ability willingness
transparency of performance
(targets, inputs,costs, outputs, outcomes)
qualification
performancemotivation
(performance-related incentives)
performance-related rewards and
sanctions
performanceorientation
Schematic Structuring of HR Appraisal
May 22, 2014 Prof. Dr. Dieter Wagner - Potsdam Center of Policy Management (PCPM) 14
HR Appraisal
PersonalityAppraisal
PerformanceAppraisal
Hybrid Systems
Hybrid Systems
PerformanceAppraisal
PotentialAppraisal
DevelopmentAppraisal
Performance Appraisal Problems
May 22, 2014 Prof. Dr. Dieter Wagner - Potsdam Center of Policy Management (PCPM) 15
ProblemsProblemsProblemsProblems
Abstract & Unrealistic
Goals/Objectives
Abstract & Unrealistic
Goals/Objectives
Neglecting “Daily
Business”
Neglecting “Daily
Business”
Concentrationon the
Appraisal ofSpecial Tasks
Concentrationon the
Appraisal ofSpecial Tasks
Orientation on Outperformers
Orientation on Outperformers
InaccurateScaling of
Performance Standards
InaccurateScaling of
Performance Standards
Experiences with performance appraisals (in the OECD world):
(at least) yearly performance appraisal
•closely linked with performance agreement
•assessing individual achievement of agreed targets
•feedback about necessary adjustments and improvements
•consequences for training and/or task adjustments
•experienced countries: U.S.A., U.K., Australia, Belgium, Canada, Denmark, the Netherlands, Norway, Spain, Sweden and Switzerland (partly only for senior staff or only voluntarily)
some typical deficits:
•measurement problems
•allocating fair judgements to individuals (tendency of leniency)
•Lack of “punishing” low performers
May 22, 2014 Prof. Dr. Dieter Wagner - Potsdam Center of Policy Management (PCPM) 16
Performance Appraisal Cycle
May 22, 2014 Prof. Dr. Dieter Wagner - Potsdam Center of Policy Management (PCPM) 17
• Establish a common understanding between the evaluator and evaluatee regarding work expectations; the work to be accomplished and how that work is to be evaluated.
• Ongoing assessment of performance and the progress against work expectation
• Exchange regular feedbacks of information to clarify and modify the goals and expectations, to correct unacceptable performance before it was too late, and to reward superior performance with proper praise and recognition.
Source: Mohrman A. et al., 1989: 109
Information to other
organizational systems
Defining performanc
e
Feedback about
performance
Measuring and
evaluating performanc
e
Performance Appraisal Methods
May 22, 2014 Prof. Dr. Dieter Wagner - Potsdam Center of Policy Management (PCPM) 18
possible performanceappraisal instruments:
Performance-oriented
•Traits•Skills
Behaviour-oriented
•Predetermined descriptionsof behavior
•Behaviorally anchoredrating scales (BARS)
• Ranking• Paired comparison
Comparison-Oriented
• Management by Objective (MbO)• Work planning and review
Result-Oriented
Measuring Performance
Src.: Adapted from Dessler G.2003:243-252 & Mohrman A. et al., 1989: 48-54
• Interviews• Written tests• On-job observations• (peer) feedback surveys• Assessment form
• manuals • checklists• guidelines• performance contracts• …
Integration of PA with other HRM Systems
May 22, 2014 Prof. Dr. Dieter Wagner - Potsdam Center of Policy Management (PCPM) 19
performanceappraisal
market base pay totalcompensation
pay action
humanresources
staffingplan
trainingprograms
selectionprocess
jobevaluation
job designstrategystructure
Source: Mohrman A. et al., 1989: 209
Reward Systems – General overview from business perspective
May 22, 2014 Prof. Dr. Dieter Wagner - Potsdam Center of Policy Management (PCPM) 20
Public sector compensation systems
• Merit system: Salaries based on seniority / merit
• Performance Pay: Salaries include pay elements for extraordinary individual performance
• other compensation elements:– social factors: family, age, etc; – allowances: for positions in remote areas or with risky tasks– health insurance and pension payments
May 22, 2014 Prof. Dr. Dieter Wagner - Potsdam Center of Policy Management (PCPM) 22
Case Study: Great Britain
May 22, 2014 Prof. Dr. Dieter Wagner - Potsdam Center of Policy Management (PCPM) 23
Basic SalaryThree performance “tranches” Based on relative contributionPosition in pay range and tranche marking determine award
BonusesIn year to recognize performance as it happens End year to reward exceptional achievements or outcomes delivered over
whole yearInformal noticeStaff appraisal
Basic SalaryTarget salary at the market median with premium rates for top performers Link progression into performance and development systemAgreed distribution
BonusesIncentives for top/high performers
Cab
inet
Offi
ceD
epar
tmen
t for
W
ork
and
Pen
sion
s
Experiences with performance-related pay (PRP):
May 22, 2014 Prof. Dr. Dieter Wagner - Potsdam Center of Policy Management (PCPM) 24
• majority of OECD countries introduced PRP
• sometimes extended PRP schemes for (senior) management staff
• evidence: limited impact of PRP on motivation and performance (“pacifier” function, modest position in reward’s rankings)
some negative side effects of PRP:• unfair measurement practices
• intransparent regulations
• unattractive/small bonuses
• restriction to a small proportion of high-performers = majority of dissatisfied “loosers”
• bonus distribution according to “equal share” principle
• withholding of previously paid bonuses
• neglecting of team performance
Contingency Pay
May 22, 2014 Prof. Dr. Dieter Wagner - Potsdam Center of Policy Management (PCPM) 25
Motivation
Message
to achieve higher levels of performance or depth of their competences or skills
that certain values or aspects of performance are important. ( quality, customer service, leadership and team working)
Equity people should be paid in relation to their performances
Rationale:
Clear about the target + clear target definition
Must influence people behaviour
Rewards may be meaningful enough
The bonus formula may be easy to understand
Reward should be done as quickly as possible
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5 Golden Rules: