OPM’s new performance management rules are (mostly) spot on

The Office of Personnel Management has just issued detailed new requirements for agency performance management systems, and while I will take issue with some of the details on technical and policy grounds—especially anything that even hints at political partisanship—I think they’re a step in the right direction, especially insofar as they take on things like the perennial problem of inflated, “everybody gets a medal” annual performance ratings. 

Yes, those new rules are incredibly detailed, particularly if they’re intended as the “be all and end all” of federal performance management. As promulgated, they leave little to no room for federal agencies to field systems that are equally rigorous but better reflect their different missions and cultures. Thus, the new rules may be construed as “one size fits all” in that regard. I hope I’m wrong, because if they work as clearly intended—that is, by setting a governmentwide floor for this year’s performance cycle and beyond—they needn’t be. 

More agency realism and the ‘floor’ established by OPM

If the new standards are intended as “the minimum daily adult requirement” for performance evaluation—one that brings sorely needed rigor and realism to a critical management activity that unfortunately, has lapsed—then they’re a net positive. And I would argue that like a spoonful of castor oil, they’re necessary. Too many agencies have surrendered when it comes to the real burdens and return on investment of performance management, opting to make the process so simple as to become largely irrelevant, a necessary evil required by law, as in, “Okay, if we have to do it, let’s make it as painless as possible.”  To me, that looks too much like waving a white flag.

Take so-called “pass-fail” systems. OPM’s new rules ban them, and that couldn’t come fast enough. Under such systems (and they’ve proliferated), almost no one fails and virtually everyone passes. I don’t know if our civil servants are that good, but I do think that most employees don’t really like pass-fail, as they allow managers to avoid making often-difficult distinctions in employee performance. Even though everyone knows they exist (especially the employees themselves). 

The fact is that employees perform at different levels, the result of a whole host of factors like training, fit, ability, motivation, work habits, distractions at home (and work) and yes, just plain old bureaucracy...inefficiencies that have festered over the years. But that doesn’t mean surrender. Just the opposite!

Maybe we’ve lapsed because the stakes are so low. When it comes to pay, an employee’s compensation is basically on automatic pilot (even the Government Accountability Office says so!), a function of the time clock and a pulse. Seniority and survival prevail over high performance, at least to date. And while OPM’s new standards attempt to use current law to reward that high performance, the fact is that the decades-old General Schedule was just not built to do so. 

Requiring (often hard) performance distinctions is a good thing

Or maybe it’s because we don’t invest in and support our managers when they make those difficult distinctions. That too needs to be addressed, but at the agency level. With some exceptions, like the now semi-permanent Acquisition and Lab “Demonstration Projects” in DOD, performance distinctions made by managers have no real consequences, so it’s no wonder that many of them just don’t bother to make those distinctions. 

I don’t blame them—we’ve given them too much to do and not enough training to do it—but at the same time, that doesn’t mean we need to accept that everyone’s performance is the same and should therefore receive the same (typically inflated) rating. That’s just not true and getting real when it comes to annual ratings is worth tackling. 

That also applies to retention, and OPM gets credit for tilting at that windmill too. Today, retention is pretty much automatic. Non-probationary employees almost always get a job for life and then receive as much as a 35% increase in salary—from Step 1 to Step 10 in the GS system—just by virtue of patience, pulse and an “acceptable level of competence” (whatever that means). 

Some (hopefully many) employees may really be motivated by public service and do not care about performance, pay and/or retention distinctions, but my own experience says otherwise.

Equity theory says performance distinctions matter 

You see, I’m a proponent of ‘equity theory’ when it comes to motivation. It says that one pays close attention to the efforts of one’s co-workers, what they “give” on the job and what they “get” for it in return. It suggests that employees will adjust their efforts up or down to ensure “equity.” But in my cynical experience, if an idealistic, high performing “baby” civil servant sees more seasoned co-workers just punching the time clock, that person will eventually do the same. After all, it’s just not worth the extra effort, at least so says equity theory.

Of course, I’m generalizing, as workers are motivated by a whole host of things. But the decades-old GS system generalizes too. When its rules explicitly say that time-in-grade matters above all else, many employees will behave that way. That does not mean that they or their peers do not (or did not) have what Jim Perry calls “public service motivation” but the weight of that system, permeating every aspect of one’s working life, may eventually dull if not destroy that intrinsic motivation.

Among other things, one way to combat that resultant apathy is to focus on performance management, both day-to-day and over time, and OPM’s attempt to control ratings inflation, as well as to ban pass-fail systems, are both good. Not easy. But good. Many of today’s performance appraisal systems just ooze mediocrity. They implicitly (and unintentionally?) encourage and reward it, and while that mediocrity may be okay for some, I think American citizens, as well as most federal civil servants, have soundly rejected that notion. 

Thus, I think employees actually want managers to make performance distinctions (their own, as well as peers’), so long as they’re seen as fair and accurate. Achieving that has always been the challenge, but that’s a problem worth spending some time on. What’s not are pass-fail systems that simply give up and say all employees are alike when it comes to their performance, when everyone knows that they are not. 

We need more accountability, not less  

A quick word about my friend Erich Wagner’s excellent story in Government Executive on this subject, in which an anonymous HR director is quoted as saying the new rules ignore two harsh realities: the current system’s lack of pay consequences, and its impact on RIFs. I agree with that assessment, but in contrast to that unnamed source, I think that impact is a net positive. 

I’ve already talked about the need to make individual performance and pay distinctions matter, but there are problems with the governmentwide system that need fixing too. Thus, while governmentwide pay “comparability” has been a problem for the federal civil service almost since its inception (for example how do you value tangible benefits like pensions?), tackling that problem—perhaps by modernizing the Federal Employees Pay Comparability Act—is also something we seem to be avoiding. 

I didn’t do so when I chaired the Federal Salary Council, but my efforts to “reform” that law (and fully fund those government agencies that implement it) largely fell on deaf ears. It’s just too convenient to rail in the media about the seemingly intractable but in my view, mythical “pay gap” between federal and non-federal employees, rather than try to reduce it through methodological fixes like more occupational differentiation (something the labor market does as a matter of course), vs. paying some far more than the market says they deserve...and some far less. 

Erich’s unnamed source also suggested that the new rules will have an impact on RIF. I agree, but for good reasons, not bad. The performance management system should make more performance distinctions when we run a RIF, not less! Indeed, I think performance distinctions, if meaningful, ought to be determinative when an agency retrenches. But like so many other things, that too has become irrelevant. We should want to retain our best, highest performers—not our most senior ones—when we RIF and I hope the “new” OPM encourages agencies to do so. 

Bottom line: Give OPM an ‘A’ for effort...but with some caveats

The bottom line here is that OPM’s new standards are pretty good, especially if you 1. shed any hint of political partisanship—we haven’t talked about that, but I’d refer you to Erich’s article, as it does a good job of pointing those out in order to preserve a nonpartisan civil service—2. back off of any plug for forced ratings distribution, in favor of more realism and—3. allow for more stringent, agency-based systems that better reflect government’s variety of missions and measures.  

But as I said above, I’m old school in that regard, as well as a naively optimistic “glass half full” person, and I will always argue that we should keep and reward our very best civil servants, even if that’s hard! So, the new OPM rules, especially if clarified as I hope, are a step in the right direction. Now, if only there are people still willing to come work for the federal government, after all the DOGE carnage and talk about “throat slashing.” But that’s another matter.