Employee Performance Management in the Public Sector: How it works in reality

Modern employee performance management, which concerns the day-to-day actions to manage employee performance, is effective when done well, but is often done poorly. When done well it improves engagement, perceived fairness, and, not surprisingly, performance. It includes goals, regular feedback, development coaching, participation and consequences like rewards. It has shifted a long way from annual performance appraisals, and is also much more than a euphemism for disciplinary processes. A lot of the performance management narrative is close to people leadership - showing empathy, active listening, coaching and strategic thinking skills.

In this article we report – using insights from our ongoing research – on how performance management works in reality, not just bureaucratically, in the New Zealand public service. The research is based on interviews with people-leaders of knowledge workers across a range of public service organisations. We investigate both formal and informal performance management practices to find what drives what activities, and how well these align with the research evidence of what works.  From this we hope to contribute to the continued development of performance management as a practice.

Here are some of our preliminary results based on what we have heard so far:

• Mundane day to day management gets in the way of performance management – Many managers say they do active listening and coaching, but in reality there is a lot of routine management that is a higher priority and which makes the softer aspects of performance management a nice to have. Interviewees mentioned the lack of time that they have to do performance management after, for instance, checking someone’s pay is correct, dealing with workflow interruptions caused by someone’s sick kid, or a dying dog. Performance management often gets squeezed out. There needs to be a mutual understanding between the organisation and people leader of what the expectations are and the practicalities of their roles. People leaders often protect their teams from the tensions of expectations, workload and capacity yet the same is not done for them. They are squeezed in the middle, dealing with problems from both above and below.
• Performance management systems are weak – Formal “performance management” systems still mean human resource bureaucracies that involve an annual review, reflection on goals that were set 12 months’ prior, followed by forms and checklists to complete. These formal systems do not match the nature of public sector knowledge work, were not well spoken of, and had often led to the neglect of poor performance for many years (until perhaps a new manager comes along). For instance, they assume work and goals are static, when they are in fact dynamic and changing, with increased cross functional work between teams, and projects stood up and down with increased frequency. Instead of focussing on task goals, performance management systems could value more the competencies and behaviours needed in this environment, and recognise some of the soft skills (relationship management, communication styles and team behaviour) that are arguably as important. Also, modern performance management comes with development, support and accountability for the managers conducting it, which seemed to be missing. 
• Support from Human Resources is limited – Most of the participants said they were experienced and managed day to day team activities well. Outliers, however, cause problems. Really high performers need to be kept interested and engaged, while “exceeding expectations”. Really low performers are also a bugbear. When things get difficult with low performers Human Resources will step in and help increase the heat, set expectations and create audit trails. Support in these situations is great, but the support is only there when things get tough and they need back up to start the formal ‘low performance’ process. Many said they would like more support and development around how to manage top performers better; and earlier support from HR business partners to help mitigate the need for the dreaded formal management of low performance.
• It is hard to dismiss low performers – People-leaders with private sector experience commented how hard it is to dismiss employees in the public sector. From their experience, in the private sector there is an understanding that employees need to be performing at a competitive level and meeting KPI’s, otherwise their job is at risk and leaving is best for both the organisation and the employees. Whereas, in the public sector, there is an understanding that “you can’t get rid of people” or that people “have a job for life”. People with private sector experience commented on the hidden costs of holding on to underperforming employees to the organisation, the team, and the employee themself. They also commented on the roles that trade unions play in stopping people being paid out.
• The purpose of public servants’ work matters so, financial incentives matter less –Employees have a strong connection to the purpose of the work they do and the citizen outcomes. Several participants mentioned the strong service culture of the organisations and the close line of sight to customers. Whether working in the corporate environment or the front-line, employees were motivated by seeing the tangible results of their work which seems to reflect positively on employee performance and often creates an enjoyable team culture for people-leaders to manage in. Because of this public service motivation, financial rewards are less of an incentive than elsewhere - there is limited flexibility in the public sector anyway. Developmental rewards are perhaps more important to employees. People-leaders talked about what motivates their teams. They said they attempted to align rewards accordingly.

These initial insights offer a glimpse into what our public service people-leaders are saying. We look forward to sharing more to help make modern performance management real, not a bureaucratic chore.

The author and researcher is Kendra Hill. You can contact Kendra at hillkend@myvuw.ac.nz