Over the summer, ministers and top officials have renewed the drive to strengthen performance management systems in the civil service. Suzannah Brecknell considers the challenges they’re likely to meet on the way.

In his speech at this year’s Civil Service Live (CSL), Cabinet Office minister Francis Maude named “more rigorous performance management” as one of eight priorities for reforming and improving the civil service. “The stars should be able to rise faster,” he said, while poor performers should no longer be “overlooked and tolerated”; such forebearance, he said, demoralises the “dedicated majority who see the reputation of the whole being pulled down by the few”.

It’s likely that most of those in the audience agreed with him: across the civil service, the 2010 Civil Service People Survey found, 63 per cent of employees don’t think that their managers are dealing well with poor performance. And it’s not just staff opinion which makes performance management a priority: the civil service simply can’t afford to waste money on unproductive employees. In the private sector, cashflow issues often drive this agenda, suggests Mike Emmott, an adviser on employee relations at the Chartered Institute of Personnel and Development (CIPD). In the civil service, on the other hand, “when you carry poor performers it’s less easy to see how the bottom line suffers” – but now that departments are feeling an increased and long-term cash squeeze, there is a growing financial incentive to tackle poor performers.

Maude wasn’t the only leader to raise the issue of performance management at CSL. Robert Devereux, permanent secretary at the Department of Work and Pensions, observed that the department’s performance framework currently ranks about 90 per cent of people as ‘consistently good’ and said that he’s “thinking about whether that really works for us, and trying to make sure that it’s sending the right signals”. He noted that the system came about because “people didn’t like the previous regime, so you’re hanged if you do and hanged if you don’t – but it’s certainly on my agenda”.

Home Office permanent secretary Helen Ghosh also mentioned the importance of reforming performance systems. Speaking later to CSW, she said the case to do this is “unarguable at the moment”, because the civil service is trying to produce better outcomes “with fewer people, and that means we have to have highly skilled, highly talented, high-performing people within our departments and our agencies”. Ghosh has made reforming performance management one of her priorities for the Home Office, and lists three ways in which the department is tackling the agenda.

The first is by ensuring that it is providing effective learning and development options: Ghosh notes that staff “have consistently said that making sure that staff can get the development they need is crucial to developing high performance”.

Secondly, the department is planning to pilot 360-degree feedback – in which people receive comments on their performance from peers and those they manage, as well as from their managers – across all grades (it’s already in use for senior civil servants). This will be development-focused and not linked to the end-of-year performance system, at least at this stage, says Ghosh. Again, staff have been a key driver: “Lots of people simply don’t get feedback on how they perform as individuals [and] I had a very strong message from staff that people would really like to be able to give feedback on their managers and peers”.

Finally, the Home Office also plans to pilot a performance-management system which looks not only at “whether people are meeting their quantifiable, measurable objectives, but equally how they do it”, says Ghosh. The system will consider whether people achieve their goals collaboratively, for example, and how they foster teamwork. It’s a model that the Cabinet Office is developing for the whole of Whitehall, says Ghosh, “but we will be looking to see if we can have a shadow system like that within a year”.

CSW approached the Cabinet Office to find out more about work being done to reform performance management across the civil service. A spokesperson said the department recognises that “the greatest lever to change is a shift in culture”, adding that the HR profession will be working with ministers and departments “to support and enable that change. Discussions are underway and at an early stage.”

So with discussions progressing, what are the main challenges which civil service HR staff might face in effecting this change? Greg Richards, professor of performance management at Ottawa’s Telfer School of Management – who has studied these systems in public and private sectors in a number of countries – agrees that it’s important for senior leaders to “build a performance-oriented culture” in which performance measures are routinely used to help improve the organisation, but also suggests two broad factors which can inhibit successful performance management in the public sector. One is a lack of integration between operational managers and the planning and reporting teams who design performance frameworks. Corporate services teams may understand the frameworks, he suggests, but staff managers “often don’t get how this performance-management approach is supposed to help them deliver their services better”.

He also highlights the many ingrained systems or procedures within public organisations which can make it hard to enact change of any sort. HR systems can be the worst culprits here, he suggests – especially when it comes to tackling poor performers. Ghosh, too, suggests that managers may not always have had “the right kind of flexibility” to deal with poor performance: “Our procedures are sometimes very cumbersome when it comes to dealing with the very worst performers who we’d rather left the organisation.”

Emmott raises another cultural challenge. The tendency of the civil service to work in teams can hamper individual performance management, he says, as the “diffusion of responsibility” means that “relatively few individuals feel personally 100 per cent responsible for any particular outcome. There are always roomfuls of people who’ve been responsible for steering projects, and it may be easy to say who’s in charge, but not easy to say who is responsible for achieving some particular level of performance.”

Alongside this, he says, there’s the political context in which civil servants’ performance must be managed. The “goals are not always clear and there are not infrequent changes in objectives”, he says, creating an “unstable framework for the achievement of objectives”. This is pretty much unavoidable under UK-style democracies, says Richards, but most civil service managers are well prepared to handle such issues.
Ghosh confirms his analysis when asked about the political challenge, saying of the environment’s instability and lack of certainty: “I don’t think it’s something we as civil servants can ever complain about because it’s just the bread-and-butter of our lives.” Performance frameworks should take account of the changing political environment, she says, and should be geared to develop flexible employees who can respond to these challenges.

Although Ghosh recognises that dealing with poor performance is important, her focus when discussing performance management seems to be on supporting better performance and encouraging high performers. Yet one challenge for the civil service will be how it effectively rewards top performers in the current financial and political climate. Performance-related pay or cash bonuses are politically tricky – as evidenced by a recent report by the home affairs select committee, which criticised the Home Office for paying bonuses to top-performing staff – and the existing civil service-wide policy on paying bonuses is currently under review.

Richards suggests that access to training can be an important motivator for public servants, and Emmott believes that “cash isn’t the best way of recognising and encouraging high performers” (though he adds that he “wouldn’t want to discourage government from paying good civil servants more”). Particularly in the civil service, where “ hierarchical status is the beginning and end of job satisfaction”, he says, recognition and promotion may be more valued. Yet there will be less scope for promotion in a shrinking service, especially one seeking to become flatter and less hierarchical – another priority set out by Maude at CSL.

For Ghosh, “simply having what you do recognised and celebrated when you’ve done it is fantastically powerful”. Praise from ministers, as “one of our key customer groups”, is also crucial, she notes; and she has set up a ‘team of the month’ award within the Home Office to recognise good performance.

Even given effective frameworks, the flexibility to manage poor performance, and rewards to encourage good work, Richards, Emmott and Ghosh all suggest that it’s the skills and confidence of managers tasked with introducing a new performance-management system that will decide whether it succeeds.

“Line management training is the big neglected area,” says Emmott. “One often talked about and rarely tackled.” Ghosh says a key challenge will be managers’ confidence “to have open and honest discussions with staff, and indeed the staff’s [confidence] to give open and honest feedback to each other”. Building confidence, she suggests, will be partly a question of building skills, but also a function of strong leadership. It will be, she says, as much about “how I tell the story and how my senior team walk the talk as it is any formal performance-management system”.

Written by Suzannah Brecknell, CSW