Excellence in Government

In 2009 President Obama signed an executive order, similar to one signed in 1993 by former President Clinton, establishing government-wide labor-management forums and promoting partnerships between federal employee groups and agency officials.

Supporters of Clinton-era labor-management partnerships say they fostered greater  cooperation between labor and management, recognized the importance of input from employees and their union representatives in agency decisions, created effective processes for engaging frontline employees, and facilitated faster resolution of contract disputes and grievances.

Detractors argue the process sometimes excluded middle managers from important discussions, required senior managers to relinquish too much power, created costs for attending partnership meetings that yielded limited results, required consensus-based bargaining tactics which understated critical differences, and failed to hold managers accountable for implementing partnerships.

Labor-management partnerships fared much better at some agencies than others. The most important contributor to successful labor-management partnerships was support from agency chief executives and union presidents.  Top executives must be prepared to do whatever it takes to ensure agency chief human capital officers and labor relations specialists understand that partnership is a legitimate approach to labor-management relations.  Union chiefs must foster similar acceptance among their contract negotiations staffs.

The successes and failures of various partnerships under Clinton’s executive order surfaced helpful implementation guideposts for agency executives and union officials.

Agree on the Mission. Labor and management officials must develop a shared understanding of what their partnership is trying to accomplish.  For example, they could define partnership broadly as using stakeholder involvement and cooperative problem solving to influence the agency’s direction and decisions affecting employees’ work environment.

Get it in Writing. Draft a formal partnership agreement that clearly defines manager accountabilities and employee responsibilities when decisions are made with employee input.  Regard the agreement as a “living document” subject to periodic adjustment to meet changing circumstances.  In multi layered agencies, such agreements describe in detail how labor-management forums and processes will work at various levels within divisions or functions, and how they will foster communication and coordination across these operating units. 

Use Consultants Sparingly. Agency employees often team up with outside consultants to provide their labor-management forums with start-up guidance and training.  After that, agency officials should rely on consultants primarily to develop in-house facilitators who can support ongoing partnership activities without external assistance.

 Provide Multiple Forums. Productive partnerships include regular, on-going and sometimes intense interactions in scheduled and structured labor-management forums.  They also create platforms for episodic, impromptu and informal exchanges of information and practices, including face-to-face interactions, virtual networks and task teams.

Develop an Input Process. Develop a common understanding of the input process leading up to management decisions—what the process entails, why it is in everyone’s respective interests, what results are expected, and what actions will occur after the process has concluded.  Agencies should provide managers, employees, union officials and other stakeholders with substantive information and involvement in workplace decisions before establishing policies or taking actions that affect the work environment.  Management officials should provide this information honestly, openly and early enough to secure direct, informed and credible input from these stakeholders.

Break the Consensus Barrier. Consensus is neither necessary nor attainable on every labor-management issue.  Adopt a “strive-for-consensus” approach.  Forum participants should make good-faith efforts to reach agreements each side can live with and publicly support.  But use other methods—such as voting or delegating to the forum chair—when consensus is jointly perceived to be unnecessary or unattainable.

Build Partnering Skills. Every participant in labor-management forums should receive training in interest-based problem solving, strive-for-consensus decision making and collaborative bargaining.  Agencies should foster these partnering skills through professional development programs and training for union stewards and agency managers.  Effective interpersonal communication and collaboration create positive agency-union partnerships and constructive agency-stakeholder relationships—both of which are vital to agency performance.

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Federal agency plans and priorities have always been subject to significant redirection based on Presidential and Congressional election outcomes.  Seldom, however, has this political fact of life been demonstrated as dramatically as it was when Massachusetts voters unexpectedly elected Scott Brown, a virtually unknown Republican state senator, to fill the U.S. Senate seat vacated by the death of long-time Democratic Senator Edward M. Kennedy.

 Costing the Democratic party its 60-vote super majority in the Senate, the Brown victory, coupled with the partisan ideological divide between the two parties, seriously diminished chances for the passage of comprehensive health insurance reform legislation, despite the fact that preliminary versions of a bill had already passed both houses of Congress and entered into the mark-up process preceding a final vote.  With 41 Republican Senators (including Brown) publicly lined up to vote against the bill, what had been the all-but-certain prospect of comprehensive health insurance reform legislation was reduced by one special-election result to a long-shot at best.

 The loss of a Democratic super majority in the Senate also sharply diminished the likelihood that the Obama administration would be able to enact two other major initiatives, education reform and energy reform, which along with health care reform were centerpieces of President Obama’s campaign platform.

 Big electoral surprises may be among the most dramatic of events that create federal policy challenges and opportunities, but they are only one of many different kinds of events that can reshape a federal agency’s planning environment virtually overnight.  Whenever control of the Presidency or both houses of Congress passes from one party to the other, it is not uncommon to hear agency executives saying, “I hope the policy pendulum doesn’t swing too far in the opposite direction based on the ideological consequences of this latest power shift.”

 Hope, however, is no substitute for an effective plan.  Agency executives often ask us, “How can we prioritize and plan when we don’t even know what will happen in the next election cycle?”  Effective planning is not dependent upon accurate political or economic forecasts.  The contingency section of a carefully thought-out strategic plan becomes most valuable precisely when forecasting is most difficult.  In an uncertain or volatile political or economic situation, contingency planning—which is really preparing for the possible but improbable—may even be a requirement for the survival of an agency or some of its operating units.

 The purpose of contingency planning is for agency executives to give full consideration to all reasonably foreseeable internal and external opportunities and challenges that could confront the agency, and to outline and agree on the trigger points and action steps the agency will initiate for each such extraordinarily good or bad set of events, should it occur.

Contingency planning puts agency executives in a much better position to deal with the unexpected by forcing them to explore scenarios other than the most probable ones.  Usually short, general in nature, and not as detailed as the basic strategic plan itself, the contingency section of a strategic plan is extremely important in the event of a crisis—such as an international financial meltdown, or if something happens that makes the agency’s basic plan invalid—such as the unexpected loss of White House or Congressional support.  If things get far better or get far worse than originally anticipated, an approach exists for dealing with the improbable situation that has actually materialized.

It is preferable to prepare contingency plans in an atmosphere of calm and reason rather than to wait for a crisis to occur and then attempt to plan under highly emotional and strained conditions.  Careful attention to the early warning signs of critically important changes in an agency’s operating environment can assist the agency in both creating and executing effective contingency plans.  Serious contingency planning can prompt an agency to develop more thorough tracking systems that monitor changes in its internal capabilities and limitations as well as in its external challenges and opportunities.

Every federal agency should revisit the contingency section of its strategic plan in light of the intensely partisan political divide between the parties, the volatile and shifting mood of the national and local electorates, and the continuing uncertainty of the national and global economies.  A “continuity of operations” plan, while important for obvious reasons, does not by itself constitute an adequate contingency plan.  Agencies should also address other possible albeit improbable upsides and downsides.  Here are some questions we have found useful for that purpose:

1. How can we build reasonable but not unlimited flexibility into our agency’s strategic plan?
2. What contingency actions would our agency take if an extraordinarily good or bad set of events were to occur?
3. How would our agency respond to specific future situations that are far better or far worse than we actually anticipate?
4.  What key indicators will trigger awareness in us of the need to re-examine the adequacy of the strategic direction our agency is currently following?
5. How will our agency monitor these indicators?
6. At what points, if any, will higher-level monitoring be triggered?
7. At what points will contingency actions be triggered?

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Recent Office of Personnel Management (OPM) regulatory changes that implement legislation enacted in 2004 require federal agencies to provide managers with better training throughout the supervisory phase of their careers.  The frequently stated purpose of this new focus on management training effectiveness is to strengthen each agency’s mission-accomplishment capabilities by closing what are commonly referred to as workforce talent or skills gaps.

The frequent use of the words “talent” and “skills” interchangeably indicates a widespread and potentially problematic blurring of the fundamental difference between these two different types of human capacities.  This misconception—which appears to exist among well-intentioned federal law makers and conscientious OPM regulators alike—could produce unrealistic and unrealized expectations for the legislatively mandated mission-integration of federal agencies’ management training and succession planning programs.

Talent, or what human performance researchers commonly refer to as “potential,” is not nearly as susceptible to enhancement through training as are knowledge and skills.  That is because most of the knowledge and skills needed to manage employees effectively are capacities which lie at or near the surface of an individual’s conscious awareness and can therefore be cultivated by targeted instruction and guidance.

In contrast, human performance research has shown that much of the talent or potential that ultimately distinguishes outstanding from average “people managers” is embodied in capacities which either reside at or are absent from the deeper levels of human consciousness and are therefore very difficult to create or increase through training or coaching.

For example, well-designed training programs can introduce newly minted supervisors and reintroduce experienced supervisors to those factual and how-to items—actions, options, strategies, techniques and procedures—which they need to know and use when:

1. conducting employee performance appraisals
2. dealing with unacceptable performance and poor performers
3. mentoring employees to improve their performance and productivity

But even the most thoughtfully conceived training cannot foster in current or future managers the underlying motivation needed to truly care about an employee’s professional development, or the underlying self-concept needed to actively embrace accountability for grooming employees to replace current managers.

As agencies begin to monitor their training efforts more strictly in compliance with the recent OPM regulation, the fundamental distinction between skills and talent has at least three significant implications:

•  First, since training often builds management skills but seldom increases management talent or potential, federal agencies will do well to remember the “make-or-buy” challenge of workforce development strategy and focus their hiring and promotions on potential while concentrating their training and coaching on skills (and knowledge).
• Second, agencies should use the results of relevant, valid and reliable job competency research to identify the specific management competencies associated with outstanding performance in each of their supervisory management jobs or job series.  (Management competencies are the personal characteristics that research has shown to drive outstanding performance in a particular organizational management job, role or function).
• Third, agencies should review published management competency inventories and dictionaries to determine which of their supervisory job competencies are surface-level or intermediate-level capacities for which incumbents and candidates can and should be trained and coached, and which of their supervisory job competencies are deeper-level or underlying capacities for which current and future supervisors can and should be selected and hired or promoted.

Agency heads and their human capital management teams must remain mindful of these important selection-versus-development guidelines and apply them judiciously if they expect to establish management training and succession programs that are in constructive compliance with the statutory provisions and implementing regulations of the 2004 Federal Workforce Flexibility Act.

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Federal agency performance appraisal systems are required by law to establish objective performance evaluation criteria “…related to the job in question for each employee or position under the system.”  Many federal managers, union officials and frontline employees misinterpret this statutory language to mean that every employee at every agency in the same position must have their performance evaluated against the same set of criteria, and that performance expectations and evaluations have to focus exclusively on the individual employee without taking into consideration the context in which the employee works.  Neither of these interpretations are accurate. 

For example, assume that an important context element for a common federal position in a particular agency is the work group and task teams or committees of which the incumbent employee is a member.  If successful job performance in that position in that agency requires that the position incumbent work effectively with immediate co-workers and with other employees on ad hoc and standing teams or committees, then that agency-specific collaborative performance expectation may be reflected in one (or more) of the performance evaluation criteria established by the agency for the employee’s position.  And it may be used by the employee’s manager to rate the employee’s performance.

Further, the applicable statute and policies do not limit employee performance evaluation criteria solely to position-specific quantitative outputs.  Agency managers are allowed to take into account how as well as “how much” and “how fast” when rating the performance of subordinates.  Performance appraisal criteria may include behavioral standards that specify the expected manner of job performance, such as “collaborates and cooperates effectively with other members of the work group and task teams of which the employee is a member.”  If it happens that collaboration with others is by far the most important single element of an employee’s job, then that job element may be designated as a “critical element” and weighed correspondingly more heavily than any of the other job elements in the performance rating.

The “behaviorally anchored rating scale” is a tested and proven mechanism for ensuring that employee performance is observed and assessed objectively in relation to a behavioral performance standard.  In this particular example, such a rating scale would provide several concrete descriptions of “collaborative and cooperative behavior” corresponding respectively to varying degrees of falling short of, meeting and exceeding satisfactory performance on that context-sensitive performance standard.  The supervisor rating the employee’s performance would decide which behavioral description on the scale most accurately describes how the employee worked with other group, team or committee members during the performance period in question.

Common misconceptions such as the belief that performance standards for the same position must be fixed across all agencies or that context factors must be excluded from employee performance appraisals underscore the need for performance appraisal training among federal managers, supervisors,  employees and their union representatives.  Ongoing federal efforts to tie pay to performance only heighten the urgency and importance of providing such training.

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At least two dozen federal agencies have begun using a technique developed in the private sector called Lean Six Sigma to streamline wasteful operating practices and burdensome administrative processes.  Many more federal agencies are expressing interest in doing the same.  The Lean portion of the technique focuses on reducing waste in operating practices; the Six Sigma element on eliminating defects in administrative processes.  From our experience facilitating public sector applications of Lean Six Sigma, here are a few practical insights in how to make the Lean Six Sigma streamlining process work.

Streamlining within an agency or organization is the act of downsizing or changing an activity or group of activities that takes an input, adds value to it, and provides an output to an internal or external customer.  The object of the downsizing or change is to reduce variability, cycle time or cost thereby making the activity or group of activities more effective, efficient, responsive and productive.

Our experience has shown that an appropriately tailored set of facilitated working sessions is the key to a successful streamlining project or program.  Accordingly, we would encourage any federal agency planning to apply Lean Six Sigma to use facilitated working sessions in a sequence, format and style that has been used successfully within agency operating environments and workforce cultures similar to its own.

The facilitated working sessions should include an (optional) education element that might run from a half day to two days depending on the desired depth of instruction in the Lean Six Sigma streamlining technique.  They should also include a deployment element designed to be delivered either in a single working session lasting a few days or in a series of working sessions phased over several weeks depending on the scope, complexity and sensitivity of the agency’s streamlining challenge.

The deployment element should consist of working sessions in which one or more facilitator(s) guide one or more streamlining teams through the analysis and improvement of the targeted operating practices and administrative processes.  The facilitated working sessions should be designed to make use of collaborative problem solving and consensual decision making methods that elicit and capture team knowledge about the practices and processes in question and translate that knowledge into project deliverables. 

The facilitated working sessions should involve both stakeholders and subject matter experts in scoping the streamlining effort, defining the measurable performance-level targets, analyzing the practices and processes, building process maps and requirements models, identifying desired improvements and developing a change management plan to ensure that the required changes are implemented.

The facilitator(s) of each working session should perform four basic functions:

• Help the team to identify and solve the difficult problems and make the necessary decisions.
• Monitor the clarity and quality of the team’s thinking and communications.
• Manage the team’s interpersonal and group dynamics.
• Ensure that the results of each working session are documented in usable formats that are of practical value to the team and its sponsors.

The facilitator(s) should guide the streamlining team(s) through the following problem solving and decision making activities required for a comprehensive and systematic approach:

• Development of a clear streamlining problem statement
• Analysis of each streamlining problem to verify its nature and identify its key causes
• Generation and clarification of potential streamlining solutions through focused brainstorming
• Use of criteria rating tools to reach agreement on solutions and implementation plans
• Management and monitoring implementation of the selected solution(s)
• Evaluation of the results or impacts of the selected solution(s)
• Execution of necessary adjustments in the implementation or evaluation approaches

The facilitator(s) should ask thought-starter questions to help the streamlining team(s) develop clear problem statement(s).  Here are examples of some helpful thought-starter questions:

1. How might we best determine whether one of our operating practices or administrative processes adds less value than the time and effort it takes?
2. What recurring practices or processes do we perform whose value might be questionable?
3. Approximately how many of our people are involved in questionable practices or processes?
4. What streamlining or simplification opportunities would eliminate the need for these practices or processes?
5. Approximately how much staff time and labor cost would be saved if these practices or processes were eliminated or streamlined?
6. Approximately how much non labor cost would be saved if these practices or process were eliminated or streamlined?

The facilitator(s) should ensure that team members are not:

• Jumping to a conclusion without analyzing all aspects of the process problem
• Failing to gather critical data, either about the problem or about proposed solutions
• Tackling practice issues or process problems that are beyond the team’s influence
• Working on practice issues or process problems that are too general, too large or not well defined
• Failing to develop an adequate rationale for a streamlining solution
• Failing to involve key stakeholders or potential contributors outside the team when looking for streamlining solutions
• Failing to plan adequately how to implement and evaluate the selected solution(s)

The facilitator(s) should always ensure that, within the streamlining team(s), there is an appropriate balance among three interdependent elements: task accomplishment, group dynamics and ground rules compliance.

When focusing on the task accomplishment dimension of a streamlining team’s work, the facilitator(s) should do the following:

• Ask for facts, opinions, suggestions or any other information that will promote productive discussion and thoughtful dialogue.
• Allow time for silence to provide a comfortable environment for reflection.
• Direct the team’s attention toward what needs to be done next.
• Summarize major points and restate related themes or ideas.
• Encourage the discussion of difficulties that the team may be experiencing while working toward its goals.
• Establish or point out relationships among different thoughts and ideas.
• Compare team decisions and accomplishments with team goals and standards.

When concentrating on the group dynamics element of a streamlining team’s work, the facilitator(s) should do the following:

• Suggest breaks whenever necessary and appropriate.
• Propose energizing approaches to group work to ease tensions and increase participation.
• Encourage the participants to be open and innovative and to take sensible risks.
• Use their observations of the process followed in the group to evaluate the team’s effectiveness.
• Share personal observations about the way the team is working.
• Ask participants to share their thoughts and ideas about how the team is working.

When attending to compliance with the ground rules governing a streamlining team’s work, the facilitator(s) should attempt to ensure the following:

• There are no evaluations during brainstorming
• All participants are actively involved in the analysis and discussion.
• The analytical tools and techniques of streamlining are used correctly.
• Participants strive for genuine consensus at each of the key decision points.
• Participants do not inadvertently move on to the next streamlining step before achieving the goal of the step on which they are working.
• Off-the-subject discussions and side conversations are limited and minimal in order to keep the team focused on the appropriate streamlining step or activity.

The collaborative problem-solving and consensual decision making methods that facilitator(s) share with a streamlining team should be designed to accelerate the team’s progress while building the team’s ownership of the streamlining effort’s results.  The following outcomes are indicative of a well-designed and an effectively facilitated Lean Six Sigma streamlining effort:

1. Ownership of the process and the data has been transferred to mid-level managers and frontline employees and they have a clearer understanding of how their actions affect their customers.
2. The agency’s workforce has been empowered to take more responsibility for initiating needed changes in their day-to-day work practices and processes.
3. Significant operational improvements are enhancing customer service and lifting employee morale.
4. The agency has a template for managing the changes associated with transitioning from the way it currently does business to the way it plans to do business in the future.

As a streamlining team becomes more comfortable with collaborative problem solving and consensual decision making methods and gets better at using the analytical techniques of streamlining, the agency’s facilitator(s) should reduce the amount of time they spend with the team until it is clear that the team has learned to facilitate and support itself effectively.  When that time comes, the facilitator(s) may rightly regard their streamlining support role as having been completed.

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Why Manage Executives’ Perceptions? How senior executives perceive the results produced by their agency’s pay and performance appraisal systems has a critical bearing on their job satisfaction.  It also affects how they perceive their agency’s senior leadership, performance culture and talent management.  Federal agencies should therefore consider taking measures beyond those required by the Office of Personnel Management (OPM) to ensure that senior executives perceive the results produced by their pay and performance appraisal systems as fair and equitable.

Origin of SES Performance-Based Pay. Agencies have been shifting their Senior Executive Service (SES) members into OPM-certified pay and performance appraisal systems since July 2004.  That is when, as a precursor to the implementation of a new SES pay system, OPM first issued regulations establishing certification criteria for executive performance appraisal systems.

The new SES pay system required that OPM certify agencies’ executive performance appraisal systems, with OMB concurrence.  It allowed agencies with OPM-certified appraisal systems to pay their highest-performing SES members higher salaries and higher aggregate pay (salary plus cash performance award).  Today these performance-based pay systems cover virtually all 7,500 SES members in the federal executive branch’s civilian workforce.

OPM Criteria for Certifying Executive Performance Appraisal Systems. The OPM certification criteria represent several of the characteristics of effective performance appraisal systems.  The criteria require that a senior executive’s performance expectations:

• align with agency goals;
• hold executives accountable for achieving measurable results for at least 60% of their rating;
• include appropriate indicators of the use of employee and customer or stakeholder feedback and examples of leadership behavior that contributes to outstanding performance; and
• hold executives accountable for managing the performance of their subordinates and aligning subordinates’ performance plans with organizational goals.
• The OPM certification criteria also require agencies to:
• ensure that executives are involved in the development of their performance plans;
• train executives on the features of their pay and performance systems;
• inform executives of the ratings distributions and the pay adjustments and performance awards granted;
• make and communicate the results of appropriate organizational performance assessments and ensure that they are incorporated into the appraisal, pay and awards processes and are reflected in the ratings distribution; and
• ensure that final decisions about performance ratings, pay adjustments, rates of pay and performance awards are based on meaningful performance and pay distinctions.

Pay-for-Performance Perception Issues. OPM guidance memos to agencies make it clear that an important goal of these rigorous certification criteria is to prevent or dispel perceptions of quotas or “forced” ratings distributions skewed toward the lower rating levels.  Yet, despite the stringent OPM certification criteria, SES pay-for-performance systems may very well be at risk for perception issues of a different kind.

New data released by OPM show the agencies scoring highest on linking senior executive pay increases with performance ratings were not necessarily the ones that scored high on OMB’s assessments of program performance.  The OPM data also show the percentages of SES members receiving the highest possible performance ratings, the percentages receiving performance awards, and the average amounts of their performance awards all growing significantly since fiscal 2005.

These data could foster perceptions among executives already dissatisfied with some of their agency’s pay system results that agency rating distributions are gradually being “forced” or skewed toward the higher rating levels, albeit not to their personal benefit, and that some agencies’ organizational performance may not be receiving adequate consideration when the performance of their senior executives is assessed.

Why Performance-Based Pay Systems are Imperfect. Performance management systems throughout the federal government have been upgraded and judged against increasingly stringent standards ever since the Civil Service Reform Act of 1978 required agencies to use appraisal results as a basis for pay adjustments, performance awards and other personnel actions.  Despite these upgrades, more than three decades of federal agency performance management experience have shown that no appraisal system, regardless of how thoughtfully designed and diligently implemented, can operate flawlessly or in a manner even remotely resembling scientific precision.

Appraisal systems are conceived and operated by human beings and are therefore subject to human error.  This is particularly true of appraisal systems developed to assess the merit of performance at the senior executive level, where the complexity of the job content and job context requires a certain amount of qualitative and therefore disputable judgments about the relative value of efforts and outcomes.

How OPM Has Helped to Address Perception Issues. The OPM certification process has helped to ensure a degree of uniformity and standardization across the agencies’ SES pay and performance appraisal systems.  OPM’s dissemination of sample performance plans and a performance appraisal assessment tool built around the system certification criteria have helped executives, reviewers and appraisal system administrators to perform their respective roles more effectively.

What Can Agencies Do about Executives’ Perceptions? That said, something more may be required from the agencies themselves to manage executive perceptions of the results produced by their OPM-certified pay and performance appraisal systems.

For example,  we believe agencies should consider conducting more deeply probing assessments of their own appraisal systems and performance plans to determine not only whether their systems have sufficient rigor but also the extent to which their executives perceive the link between their pay and performance to be demonstrably stronger than the link between their pay and any other factor.

Build More “Best Practices” into Appraisal System Assessments. Toward this end, agencies should consider basing their appraisal system self-assessments on an expanded version of the OPM performance appraisal assessment tool that includes, at a minimum, the following well-known but often overlooked “best practices” of effective performance appraisal systems:

1. Leadership. Top management demonstrates clearly through words and actions that it strongly and unequivocally supports the system and is firmly committed its effectiveness.
2. Customization. The system is tailored (to the extent possible within OPM guidelines) to meet the unique performance management challenges and requirements of the agency.
3. Consequences. The system’s results are not merely recorded and placed in personnel folders, but are used and are perceived to be used to recognize top performers and to address performance problems.
4. Training. Raters are well-trained in the concept, philosophy and actual mechanics of the system—including in this case use of an expanded appraisal system assessment tool—as well as in how the system aligns with the agency’s goals and strategies and helps senior managers.
5. Feedback. Raters are skilled in conducting progress review and performance appraisal interviews, and they conduct and document both interviews in a timely manner.
6. Involvement. Users participate in the development and improvement of the system, and in the development of their performance plans.
7. Objectivity. Appraisals are directly linked to the job description of the executive whose performance is being evaluated, and the performance rating standards are as clear, concrete, objective and observable as possible.
8. Consistency. The system’s procedures and administration are standardized and uniform in their application.
9. Relevance. Appraisals are free of bias and are not influenced by race, sex, age, length of service or other irrelevant factors.
10. Transparency. The executive whose performance is being appraised has a right to know in advance of the performance period the identity of the person that will do the evaluation and the standards against which the executive’s performance will be evaluated.
11. Decentralization. To the greatest extent possible, each executive’s performance appraisal is done by a supervisory executive who is situated close to where the executive’s work is performed.
12. Documentation. Raters substantiate the performance ratings with reasons and examples that are carefully documented in writing and shared with the executive whose performance is being appraised.
13. Due Process. The system provides for a credible review of ratings by upper level managers, and for a meaningful appeals procedure to help ensure fairness.
14. Efficiency. The system is easy and economical to operate and administer; does not impose an unreasonable financial burden on the agency; and can be used by executives and system administrators without undue effort.
15. Oversight. The system has well-developed and well-implemented plans for monitoring and evaluating the appraisal process and outcomes to ensure that it is operating as planned and to identify areas for improvement in its design and administration.

Go Beyond Appraisal System “Best Practices” Whenever Necessary. Many of the items on this “best practices” check-list require a lot more than a cursory review.

For example, a particular agency’s appraisal system may not be perceived by senior executives as playing an appropriate role in their pay adjustments and performance awards (consequences) unless something more than the ratings distributions and average payouts are communicated to the executives covered by the system.  It may be desirable from time to time to disseminate information on the distributions and payouts by seniority, headquarters versus field, program area, length of service, or other categories, with explanations of disparate outcomes, depending on what misperceptions or misinformation the agency finds it necessary to dispel or correct.

For some senior executive positions, rating standards may not be perceived by the incumbents as clear, concrete, measurable and observable (objectivity) unless the agency takes the extra step of developing and disseminating rating scales on which the various rating levels are illustrated with examples of specific behaviors or results.  Training in the use of the behavior or results anchored rating scales might be needed to ensure their clarity and utilization.

Bottom Line: When it comes to managing senior executive perceptions of performance-based pay, the stakes—in terms of recruiting, retaining and motivating an outstanding executive workforce—are simply too high for agencies to rely solely on OPM’s compliance oriented implementing regulations and guidance.  Agencies should consider taking whatever additional actions are needed to continuously refine, improve and legitimize their SES performance appraisal systems.

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A draft Presidential executive order on federal sector labor relations requires agency heads to establish labor-management forums within their organizations, and to bargain in those forums over workplace matters normally not subject to mandatory negotiation.  Newly negotiable matters would include the number and qualifications of employees assigned to work on projects and the technology and work methods involved in those projects.

Unions representing federal employees had been submitting proposals to the President urging this type of executive order.  There were technical differences among the unions on what the proposed executive order should look like.  The most serious disagreement centered on whether the executive order should require the use of consensual negotiation methods and, in particular, the consensual method known as interest-based bargaining.

It turns out that the draft Presidential executive order is silent on the negotiating tactics to be used in the required labor-management forums.  Thus, assuming the President issues the executive order in its current form, agency managers and their union counterparts will most likely use a variety of bargaining approaches in those forums, running the gamut from traditional position-based methods to non traditional interest-based methods, even including a mix of these approaches when and as a bargaining situation dictates.

Well-publicized accounts of one highly visible and vocal union leader’s opposition to the use of the interest-based bargaining (IBB) approach reveal a series of inaccurate characterizations of that method which deserve to be identified and corrected.  The following paragraphs offer clarifying information that can help agency managers and union officials, as well as other dispute resolution participants, to make informed choices about the bargaining process they will use when negotiating over federal  workplace matters.

Fiction. The interest based bargaining (IBB) approach requires the negotiating parties to make decisions by consensus.

Fact. The IBB approach does not require consensus decision making.  It encourages the negotiating parties to agree on what process they will use to make decisions.  They may agree to make decisions through a positional bargaining process, a consensual bargaining process, or a “strive for consensus” bargaining process.  In the latter case, the parties agree to make every reasonable effort to reach agreements that all the bargaining participants can live with and publicly support, and to use a mutually acceptable back-up procedure for making decisions when consensus on a particular issue is not readily attainable (e.g., refer it to another forum, table it for revisiting at a later time, etc.)

Fiction. The IBB approach encourages the negotiating participants to compromise. 

Fact. The IBB approach encourages participants not to compromise.  In fact, compromise is part of the traditional positional bargaining process in which each side gives up something they want in order to get something else they want more.  Compromise typically occurs in win-lose situations when there is a fixed pie to be divided up. The IBB approach encourages participants to try to convert win-lose situations to win-win situations by thinking up ways to enlarge the pie before attempting to claim a share of it.

Fiction. The IBB approach grossly exaggerates the common ground between labor and management by ignoring the fact that each side has different interests at stake during negotiations, and by forcing labor and management to pretend that they have more in common than they actually do. 

Fact. The IBB approach explicitly acknowledges that labor and management have different interests which are often in conflict.  It encourages each side to generate alternative solutions that can satisfy the other side’s interests as well as its own. 

Fiction. The IBB philosophy gets in the way of doing good solid labor-management business because it prohibits candid discussion, robust exchanges and tough negotiations.  Instead, it creates an artificially polite atmosphere in which the union cannot “trust management to be management” and management cannot “trust the union to be the union.” 

Fact. If trusting management and the union to “be themselves” means attacking individuals on the other side in an effort to discredit their proposals by discrediting them, then a competent IBB facilitator probably would get in the way of such behavior by actively trying to discourage it.  That said, the IBB approach does leave plenty of room for “tough” negotiating behavior.  It instructs each participant to attack the issue but not the person, press hard for their side’s interests, insist on objective criteria for evaluating alternatives, and yield only to principle and never to pressure.

Federal agency managers and public employee union officials must have an accurate understanding of the true differences between traditional and consensual bargaining methods if they are to make the most of the workplace improvement opportunities offered by the anticipated Presidential executive order.  Hopefully the foregoing clarifications will help to dispel some common misconceptions that could otherwise cloud that understanding.

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We know from experience that strategic planning produces a more realistic and responsive plan when an organization’s key stakeholders are seriously consulted and thoughtfully listened to in the planning process.  Therefore, whenever possible we use stakeholder feedback to help organizations focus and validate their strategic plans. 

Typically we do this by surveying a representative sample of the organization’s major stakeholders, or by interviewing them individually or in small groups, as time and resources permit.  Helping the organization’s strategic planning committee to make good use of the resulting stakeholder feedback in their planning discussions often is fairly straightforward. 

Often—but not always. 

For example, we recently facilitated a strategic planning process for a federally funded, nationally recognized community organization with a long and colorful history and two very strong-willed leaders.  As part of the process, we gathered feedback from a broad cross-section of the organization’s key stakeholders in confidential one-on-one interviews. The overwhelmingly critical feedback in these interviews made it clear to us that constituency trust and regard for the organization had eroded significantly over time.

Clear to us—but far from clear to the organization’s two strong leaders, both of whom jointly dominated the strategic planning committee with which we were working. 

During an initial feedback meeting with the committee, the two leaders and a few other committee members roundly dismissed the unflattering stakeholder feedback, their emotions alternately reflecting disbelief, bewilderment and anger.  Anticipating this type of reaction, we had begun the meeting with what we expected would be helpful guidance on how to make constructive use of others’ perceptions even when they differ sharply from your own. 

For example, we encouraged the planning committee members to try to “understand” any stakeholder criticism they regarded as clearly false by considering whether the source may be uninformed or misinformed about the matter in question or may have an agenda which conflicts with that of their organization, and to avoid becoming anxious or defensive by acknowledging at least the possibility of some element of truth in any other seemingly unwarranted criticism. 

We also encouraged them to determine the actionable elements in any vague-sounding criticism by asking clarifying questions to obtain specifics and improve their understanding of the feedback, and to recognize genuine problems without over-stating them by frankly acknowledging the merits of any criticism they believe to be justified. 

Despite this guidance and much to our dissatisfaction, the initial feedback meeting had been filled with angry defensiveness.  However, two-thirds of the way through the meeting and very much to our satisfaction, one of the more influential committee members repeated our initial guidance almost word-for-word (offering it as her take on how to make the process work). 

Then she strongly urged the committee to reconsider how they were dealing with the negative stakeholder feedback.  Her comments, because they came from a member of the strategic planning committee, triggered a thoughtful committee discussion about how much additional reflection it would take for them to convert the troubling feedback into reasonable and believable issue statements that could serve as a basis for constructive action

The result was a committee consensus to schedule as many follow-up meetings as necessary to frame stakeholder-driven issues.  Several meetings later, nearing completion of this issue-framing, we received an unexpected phone call from the organization’s forceful leader, who said: “I just want to thank you – we need this!” 

That was when we knew we had turned the corner and were headed for home in the “straightforward” stakeholder feedback phase of our strategic planning assignment. 

Lessons Learned:

(1) Provide a strategic planning committee with clear and well thought-out guidance on how to interpret, understand and make use of critical feedback before presenting the committee with critical feedback from their organization’s stakeholders.

(2) Establish an atmosphere in strategic planning committee meetings that allows everyone to feel safe participating openly and actively in discussions, even when strong-willed and dominant organizational leaders are present.

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There is no universally agreed upon definition of this rather lofty sounding term.  In management theory and practice, organizational excellence usually refers to the highest possible rating (or range of ratings) when an organization is evaluated qualitatively using a survey, inventory or scorecard made up of process and outcome criteria someone has decided constitute organizational ”best practices.”   However, there is no established theoretical foundation or reliable empirical support for translating the results of these organizational “quality” assessments into a coherent and defensible strategic planning process or strategic management philosophy.

A more practical and useful way of thinking about organizational excellence, from our organization consulting perspective, is embodied in a concept often referred to as “organizational effectiveness”.   In practice, organizational effectiveness is defined as how well an organization does at achieving the outcomes it intends or is required to produce.   We believe this goal-achievement approach to organizational assessment is  more realistic and more accurate than the criteria-scorecard approach.  The former balances customer and non customer “stakeholder” interests, as does the excellence approach.  Unlike the latter, however, the effectiveness approach does not impose a one-size-fits-all set of process and outcome “benchmarks” on the assessment of organizational “quality” or the evaluation of organizational performance.

Accordingly, our conception of organizational excellence is organizational effectiveness as defined above.  Therefore the posts that we contribute to this “organizational excellence” blog will always come from the pragmatic and developmental perspective of organizational effectiveness.

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For example, in a partnership between an employing organization and the international union that represents a major segment of its workforce, the two institutional partners acting through their respective designees can develop a collaborative approach to issue identification; agree to share the risks involved in joint undertakings; formulate and apply confidence, trust and respect building behavioral ground rules; define their common and separate interests; learn to respect their legitimate and significant differences; improve communication and information sharing; integrate end-to-end empowerment with individual responsibility and institutional accountability; and maintain a cooperative problem-solving approach to conflict management.

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