Issue Briefs

Following is an article in a new MSPB publication calling for improvements to the performance appraisal process.

It is September, and agencies across the Federal Government are gearing up to do annual performance appraisals. Employees are scrambling to summarize their contributions. Supervisors are preparing to write lengthy narratives to justify summary ratings and ratings of record. Then they will sit down to discuss final ratings. At best, discussions will cover topics such as the employee’s progress, strengths, improvement areas, and training needs. Too often they will be short exchanges to inform employees of the rating and obtain a signature. We need to ask what we get from this exercise. Does it help improve performance, identify poor performers, motivate employees to do a better job, or recognize top performers? Responses to MSPB’s 2016 Merit Principles Survey (MPS) suggest that the answer to those questions is no.

Sixty-three percent of respondents felt that their appraisal was an accurate reflection of their performance. That is not an overwhelming endorsement of the exercise, and the numbers go down from there: 57 percent agreed that their annual performance review helped identify their strengths; 55 percent agreed that the standards used to appraise their performance are appropriate; 46 percent agreed it helped identify weaknesses; 44 percent agreed it made them feel more enthusiastic about their work; 39 percent felt that differences in work unit performance are recognized in a meaningful way; and 24 percent felt that the organization addresses poor performers effectively. We also found that the responses to most of these questions were not significantly influenced by the number of levels in the respondents’ appraisal system.

In addition, 2017 Federal workforce data suggests that the annual performance rating does not do a good job of making distinctions in employee performance. Over 99 percent of all permanent, full-time employees received at least a fully successful rating. For those agencies with 5-level appraisal systems, about 75 percent of employees were rated in the top two levels. Even in systems with only 3 levels, where the top rating should be reserved for the top performers, almost half were rated at the top level. Also, MPS results show that supervisors do not find the appraisal to be particularly helpful in managing development, promotions, retention, or dealing with poor performers.

Considering the time, resources, and effort that go into the current performance appraisal process, we need to ask if there is a better way. First, agencies should focus more on communication and less on annual grades. The performance management process should let employees know how they are doing, acknowledge exceptional work in a timely manner, and identify problem performance early and try to correct it. These goals cannot be met through 1-2 performance discussions per year. Communication needs to happen continually throughout the year.

Second, agencies need to choose the number of appraisal levels that work for their organization. In the spirit of simplicity, a 2- or 3-level system would probably meet the needs of most organizations. In 2-level systems, where employees are either performing unsuccessfully or successfully, employees and supervisors can focus on constructive discussions about performance instead of how the performance translates into a summary or annual “grade.” Adding a third level gives employers the opportunity to acknowledge the superstars in the organization.

Using a 2- or 3-level appraisal does mean that most employees will fall in the “fully successful” range. Since employees don’t typically enjoy being called average, this change will require a cultural shift in the organization. The best place to start that shift is with awards. Supervisors often rely on annual performance awards to make distinctions in employee performance. However, research indicates that providing recognition in real time, such as through special act awards, is far more effective than dividing award budgets once per year, long after accomplishments have been achieved.

In fact, the Office of Personnel Management also recently urged agencies to revisit their use of special act awards.

Finally, there are now technological solutions available to help supervisors better administer performance management systems. They go beyond just automating the paper-intensive appraisal process and provide tools to help define measurable performance standards, communicate work progress, share real-time feedback, identify problems early, provide ongoing coaching, and evaluate and recognize employees. Appraisals are just one aspect of performance management, but they tend to get more time, attention, and energy than more important pieces of the system, like setting goals, communication, and recognition.

This is just something to ponder as we embark on this annual exercise.