Show me the data: Performance management needs evidence-based, holistic reform

During the past year, the Office of Personnel Management has issued a flurry of guidance and proposals aimed at improving employee performance. The Partnership agrees with the challenge at hand: performance management reform is long overdue.

As part of our Government for a New Era initiative, we are taking a holistic look at performance management challenges and exploring key questions, including: How do we define performance management? What are the root causes of dysfunction? Which changes will have the biggest impact?

While we’re excited to find and share answers to these questions, we know this already: solutions should be evidence-based whenever possible and, if the evidence is not there, there should be a real attempt to gather it.

This is where we take issue with OPM’s two recent proposals to implement forced distribution across the civil service.

Forced distribution is counterproductive to long-term performance

Forced distribution means putting caps on certain performance ratings, such as reserving top ratings for a fixed percentage of employees. OPM proposes installing  this system across the civil service for General Schedule and Senior Professional employees, modeled on guidance already issued last year for the Senior Executive Service.

OPM’s own cited literature says that for organizations that depend on long-term workforce collaboration, like the federal government, “the risks associated with forced distribution tend to outweigh the benefits.”

Employees competing for limited top ratings have a built-in incentive to hoard information, avoid risk and undermine peers—leading to increased dysfunction. OPM said it is following private sector best practice, but companies like General Electric and Microsoft abandoned this system after it damaged morale without creating a sustainable, high-performance culture.

Forced distribution weakens the federal talent pipeline

Forced distribution also will negatively affect the government’s ability to hire and retain top talent. For example, extending forced distribution to senior-level and scientific or professional employees—a small cadre of around 2,000 of the senior-most federal technologists and specialized experts—creates significant risk for the government’s ability to deliver for Americans.

While this group can be paid more than other categories of employees, their compensation often still trails what they could earn in the private sector, and they generally choose government service for the mission. Forcing senior professional employees to be ranked against each other not only makes little sense given the singular and specific nature of their jobs, but also will result in lower ratings and reduced incentives for some high performers. The government will risk losing critical technical talent precisely at the moment when advances in AI, quantum computing and other technologies make them more essential than ever.

OPM should use demonstration projects to test reforms

OPM rules also propose specific changes that need more evidence to show that they will actually improve performance management or avoid negative side effects. For example, in the General Schedule proposed rule, eliminating union grievance options and mandatory higher-level reviews could reduce oversight, making it harder to catch unfair or mistaken evaluations.

Congress gave OPM the authority to conduct demonstration projects for this reason—to pilot personnel management innovations and gather data before applying them government-wide. Some may see this recommendation as adding a step, but pilots are quick and cheap compared to enacting wholesale changes that—if later determined to be ineffective—are costly to roll back. Testing can also provide critical information to inform wholesale implementation if pursued, reducing bugs and errors.

OPM has used demonstration projects productively in the past but has not conducted one since 2009. We urge OPM to work collaboratively with agencies to get more data on what changes will really create the high-performance culture we all want in government.

Purpose, people and process: three keys to effective performance management

Performance ratings are only one part of a larger system. Real improvement requires three connected ingredients – clear purpose, capable people and efficient processes.

Purpose: Does the system actually improve performance? Are leaders and employees aligned on what good performance looks like, how it connects to agency goals and how it will be assessed and rewarded?

People: Do managers have the skills, incentives and time to conduct performance management effectively? Do they want supervisory responsibility versus being in the role because it is the only path to advancement? Do they have training and resources to supervise well?

Process: Is the process simple and fair? Are steps like setting goals and writing evaluations streamlined with user-friendly technology? Does the system ensure due process and civil service protection?

For more on the Partnership’s response to proposed rules, read our full comments on Non-SES Performance Appraisal and Managing Senior Professional Performance.

Learn more about the Government for a New Era initiative, our effort to develop reforms for a more effective, responsive and accountable government.

Kelly Shih leads stakeholder engagement and performance management reform on the Public Policy & Stakeholder Engagement team. She previously led strategy development and implementation for the Public Service Leadership Institute.