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Last updated: 19 September 2001

Performance management in the APS: A strategic framework

MAC

The Management Advisory Committee (MAC) is a forum of Secretaries and Agency Heads established under the Public Service Act 1999 to advise the Australian Government on matters relating to the management of the Australian Public Service

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Employment, Workplace Relations and Small Business Performance Management

Overview

DEWRSB has been actively developing a performance management framework over the past two years. This framework has four key elements:

'Our Directions' (the Department's Corporate Planning document)
The DEWRSB Outcomes and Outputs structure (including key performance indicators)
Business planning (this integrates business directions and priorities with resource allocation, change management and risk management throughout the Department and cascades down to individual action plans or performance agreements for all staff).
Performance review and feedback (structured quarterly performance review process has been introduced for both organisational and individual performance).

Key features

Integration:

A very close linkage has been developed between organisational performance planning and review and individual performance planning through the use and promotion of the integrated performance management framework.
Business Planning has closely linked resource allocation, change management, risk management activities across the Department - directions and priorities for Group, States and Teams Business Plans cascade into individual action plans/performance agreements.
Individual Action Plans/Performance Agreements include values and behaviours identified within the Department's 'Our Directions' Corporate Plan - performance assessment gives 50% weighting to values and behaviours and 50% weighting to achievement of business objectives.
Business Planning and the development of Individual Action Plans/Performance Agreements are closely linked to the APS budget cycle.

Structured Performance Review and Reporting:

During 2000/2001 particular emphasis has been placed on the introduction of formal quarterly performance reviews covering organisational performance - individual performance feedback has to date been occurring biannually but will also move to a quarterly basis.
DEWRSB uses balanced scorecard performance reporting arrangements through an Executive Information System (DOORS) that reports on performance against:
- Business plan key performance indicators (kpi's)
- Financial resources (departmental and administered)
- People management kpi's (using HRM Inform)
- Client satisfaction indicators.
The Department has recently introduced a 'DEWRSB Dashboard' which presents an on-line view of performance across all four performance quadrants with 'drill down' capability.
During 2000/2001 360 degree feedback processes against the SES capabilities were also introduced for all SES and EL2 staff.

Performance Agreements/Individual Action Plans

Feature both business objectives and values and behaviours with assessment of 'what is done' and 'how it is done' given equal weighting.
Development plans for individual staff are a key component of these documents - these are linked closely to the Department's Organisational Capability Framework.

Organisational Capability Framework

This defines the key things that DEWRSB must do well to perform at it's best. The skills and knowledge required to do these things is also identified as part of this Capability Framework.

History of Changes

The DEWRSB Performance Management Framework is under ongoing development. During the past twelve months, major developments have been made in the following areas:

Integrating organisation and individual performance planning and review;
Establishing the Capability Framework to better align people management strategies with Departmental business requirements;
Introducing 'balanced scorecard' concepts to performance review and reporting;
Undertaking extensive training of staff in feedback and coaching associated with performance agreements/individual action plans;
Strengthening the Department's mobility, rewards and recognition and managing under-performance policies;
Implementing the HRM Inform software which provides extensive information on people management kpi's benchmarked against other organisations; and
Refinement of key performance indicators used throughout the Department.

How Well Does it Work?

Integrated Business Planning has been well received at managerial levels throughout the Department.
Performance Agreements/Individual Action Planning processes are generally well regarded by staff - although there is clearly room for improvement in the effectiveness of these processes and the quality of feedback provided.
The use of formal performance review processes and balanced scorecard concepts have resulted in issues being identified and follow up action being taken (eg Management of Administered Budget, Expense Budgeting, Absenteeism, Use of Temporary Staff)
The use of the Organisational Capability Framework has been particularly valuable resulting in a number of new directions in people management strategies for the Department.

Key Messages

An integrated approach is essential.
Implementation of better performance management practices is an ongoing process which evolves as the organisation's performance focus and management practices and systems mature.
Feedback, coaching and managing under-performance are areas requiring particular attention.
The use of Organisational Capabilities can be vital in better aligning people management strategies with business directions and needs.

Treasury Performance Management

Overview

The Treasury Performance Management framework applies equally to all employees in the Department whether they are on an AWA or covered by the CA. It provides:

Context setting processes to ensure consistency
Open, two way feedback
Upwards feedback on managers in Treasury
The basis for skills development
System controls to facilitate transparency and fairness
Reporting of organisational performance outcomes
Provisions for addressing under-performance

Performance appraisals are conducted six monthly, with regular feedback and coaching being provided on an ongoing basis. Two performance schemes operate within the Treasury Performance Management Framework: the non-SES appraisal scheme based on the behaviours in the work value matrix and the SES appraisal scheme based on the Leadership Capability Framework.

Common to each scheme, employees and their managers:

Agree job statements linked to business plans
Identify skills development linked to current roles
Discuss performance to date

Key features

Staff are assessed against a matrix of behaviour based performance criteria relevant to their level (including Output Management, Communication, People Skills, Conceptual and Analytical and Judgement). In the case of SES, the PSMPC leadership dimensions are used. In addition, staff responsibilities (eg as Managers, Specialists or Analysts) are defined by a Role Accountability matrix.

For the non-SES, six monthly performance appraisals provide base salary, salary progression within broadbands and temporary loading, prospective and retrospective, based on work performed at the next level.

For the SES, six monthly performance appraisals provide base salary; performance ratings based on a quintile ranking, performance bonuses and salary progression for sustained longer-term performance.

All appraisal outcomes are subject to a review panel process, comprising managers in the respective Division or Group and chaired by the Manager-one-Removed, to ensure consistency and fairness. A dispute resolution process is also available to any employee who is not happy with the either the appraisal process or the outcome.

In Treasury context setting meetings are held prior to each appraisal cycle to ensure relevant and consistent information is cascaded down the organisation. The senior management team meets to discuss strategic management issues relating to the context for the next appraisal cycle with outcomes disseminated to all staff. Further context setting meetings are held at group and divisional level to reinforce key messages and enhance consistency.

Briefings on the Performance Management System for new staff and skills training for all staff in giving and receiving feedback are offered prior to each appraisal cycle.

To ensure transparency of the system all employees will be able to view job statements and aggregate data is distributed throughout the Department following each appraisal cycle.

Senior management is committed to continuous improvement of the performance management framework and consults regularly with staff on enhancements to the system. A commitment to formally audit the Performance Management System was given to staff as part of the negotiations for the second Certified Agreement and will be completed in June 2001.

The Performance Management Framework together with the Career Development System underpin the Treasury Management Model which introduced improved corporate planning processes, a streamlined organisational structure, enhanced people management systems and leadership development (Figure 3).

Treasury's Career Development System provides mentoring guidance for staff. Employees and managers-one-removed meet annually to discuss longer-term development for future roles including changes in role, work placements and job rotation. The Career Development System facilitates dynamic operational and resource planning and articulates to Treasury's recruitment, development, and succession planning and retention strategies.

Figure 3

Elements of the Treasury management model

Public Service and Merit Protection Commission Performance Management

Overview

The PSMPC's Corporate Performance Planning and Management Framework links its Corporate Plan, team business plans and individual performance agreements.

The PSMPC's approach to performance management:

Is located within an overall corporate performance planning, management and accountability framework;
Relies on an achievements and values based performance appraisal;
Articulates a desired culture through organisational and workforce characteristics; and
Links individual development planning with corporate level planning.

PSMPC performance management

Key features

A key element is the Performance Appraisal Scheme, which is aimed at further fostering a performance culture and contributing to achieving corporate outcomes. The Scheme operates on an annual business planning and management cycle and its key features are:

All employees, except those employed for very short periods, participate;
Individual performance agreements articulate expected achievements and are linked to Team business plans;
Individual development plans feed into an annual corporate training calendar;
Mid-cycle and end-cycle feedback and reviews of performance; and
Use of a five point rating scale; with performance based salary increases and payment of bonuses to superior and outstanding performing employees; and
Initiation of action and a process for addressing poor performance.

The Scheme promotes the APS Values through their inclusion in all performance agreements.

It is complemented by 360 degree feedback processes. These are not directly linked to appraisal ratings or remuneration, but do contribute to individual development plans.

Team Leaders are responsible and accountable for their management of the Scheme. The Executive, as the Remuneration Committee, determines salary increases and the allocation of bonuses in consultation with Team Leaders.

The Scheme is included in the PSMPC Certified Agreement 2000-03 and all AWAs.

Broader Performance Management Context

Performance expectations and planned use of resources are set out in the Corporate Plan and Portfolio Budget Statements, with corporate performance and use of resources accounted for through the Annual Reports.

Team Business Plans are developed annually to support the achievement of agreed outputs and provide the basis for agreeing team priorities, allocating internal budgets and accounting for team performance and use of resources through the appraisal of Team Leaders' performance.

The Certified Agreement and AWAs articulate the characteristics of the type of organisation and the workforce we are seeking to foster.

History of the Scheme

A Performance Appraisal Scheme was introduced on a six-month trial basis in 1996, with indicative remuneration outcomes provided but not delivered. Minor modifications were made as a result, with the Scheme then authorised through the PSMPC's Certified Agreement 1997-99.

The rating scale and its impact on remuneration and poor performance were included in the Certified Agreement, but the Appraisal Scheme Guidelines were not included in the Agreement. The guidelines were revised for clarification during the term of the Agreement.

Some substantive changes were made in the PSMPC's second Certified Agreement 2000-03:

Replacement of the four point rating scale with a five point scale;
Adoption of bonuses, in the place of accelerated salary advancement, for superior and outstanding performing employees;
More clearly establishing responsibilities under the Scheme;
More clearly setting out the links between the Scheme and other dimensions of performance planning and management within the PSMPC; and
Discontinuing a team recognition and reward scheme criticised by staff as being potentially divisive and focusing on high profile work.

Effectiveness of the Scheme

From a corporate perspective the Scheme has proved to be an appropriate means for linking Team performance to overall corporate outcomes, for better articulating individual responsibilities in relation to Team Business Plans and providing the basis for twice yearly feedback on performance. It has also proved to be an effective mechanism for assessing employee's performance and managing salary advancement in a broadbanded environment.

Staff surveys conducted in 1997 and 2000 indicate generally positive views of the scheme and the nature of feedback processes.

Transport and Regional Services Performance management

Overview

The Performance Exchange process is the last part of the performance management process that begins with the development of the Portfolio Budget Statement and the Corporate Plan and then cascades down through Divisional and team business planning processes to the individual's Plan on a Page.

Performance management workshops are conducted regularly and involve skilling in feedback to staff and to supervisors. All employees are encouraged to attend.

The Performance Exchange is a twice-yearly dialogue between supervisor and employee on work performance and development. It includes a comparison of results with objectives set out in the previous exchange. It also includes a discussion about how results were achieved and their contribution to organisational goals and a review of any factors hindering achievement and how these might be addressed. The results of the discussion are recorded on the

Results on a Page form. A new Plan on a Page document is then prepared for the following six-month period.

Supervisors aggregate development information for collation at divisional level. This data then contributes to divisional and corporate development planning processes. The on line development booking and evaluation system will (from April 2001) require employees to record development and related costs on-line and to provide feedback on the suitability of the training. This information will be an additional source of data to help assess the cost effectiveness of training and development strategies.

The Department has a credo of Results through Peoplewhich links together what the Department does and how it achieves it. A Results through People Taskforcewas formed in July 1999 from a cross-section of staff. The Taskforce actively assists in implementing strategies aimed at fostering organisational excellence. The Taskforce also acts as a reference group for new policy initiatives.

Key features

Distinctive features of the performance management system (PMS) currently in use within the Department are:

Improved linkages between the Portfolio Budget Statement, Corporate Plan, Divisional and individual plans

The issue of better aligning performance measures at all levels across the department is currently being addressed. We are working to develop an integrated performance management framework for DoTRS. The performance exchange process and forms have been redesigned to focus on: DoTRS purpose and values; work performance goals and measures; and aligning development with the Secretary's Statement of Future Skills Requirements.

A framework for the business planning process has been developed which facilitates clear linkages between the Portfolio Budget Statement, Corporate and Divisional plans. The new Plan on a Pageformat includes linkages between individual, corporate and divisional outcomes.

Strong development focus

The current arrangements require employees to agree on developmental needs with their supervisor and work towards agreed developmental goals during the six-month review period. In 1999, the Department was accredited under the Investors in People Standard in recognition of the high quality of its development strategies and its people management.

High level of employee acceptance

A recent review of the Performance Management System revealed high satisfaction with the current system, which is seen as encouraging positive dialogue between the employee and the supervisor.

User-friendly documentation

The individual performance management form is in one page. It is called Plan on a Page. The Department will soon be trialing a new one-page form called Results on a Page, which will take the total documentation to be completed to two pages. The wording is simple and there are no ratings scales or requirements for assessment.

Links to pay arrangements

The Plan on a Page is one of the elements taken into consideration by supervisors, when confirming salary progression for staff under the terms of the Certified Agreement. The Secretary also takes it into consideration, when considering allocation of bonus payments under individual performance agreement arrangements agreed through the AWA process.

Evaluation of Effectiveness of the PMS

The PMS is widely accepted by people at all levels of the organisation, however, as with many systems, compliance is patchy in some areas. Feedback from employees and also the 2000 Staff Survey results, indicate that the only area of the system which causes slight unease is upward feedback

The supervisor is required during the Performance Exchange process to solicit upward feedback from the employee. Some people have indicated they have difficulty in providing this, due to the perceived imbalance in power in the relationship. Anecdotal evidence also suggests, however, that there are many areas of the Department where this process is working increasingly well, and that the barriers are gradually being overcome.

Future Initiatives

The Department will be introducing 360 degree feedback as a development tool over the next six months, and it is expected that this will further encourage a culture of feedback and open discussion of performance expectations.

Agriculture, Fisheries and Forestry - Australia performance management

Overview

Performance management is the main element of AFFA's Performance through People Program and a key priority for people management in the Department. It is about all employees understanding the planning framework, priorities, directions and the job to be done, possessing the right skills, achieving results to the required standard and getting feedback and recognition for good performance. Its aim is to improve the management of individual and team performance and increase morale and job satisfaction, and thereby, the productivity, efficiency and effectiveness of AFFA.

AFFA performance management chart

The Department recognises that all involved need to devote time and effort to giving fair, considered and continuous feedback to their staff as a large part of the AFFA performance management system involves self-assessment.

AFFA's commitment to people management and its integrated approach to planning and performance management has assisted in achieving Investor's in People accreditation within the Bureau of Rural Sciences (BRS).

AFFA Planning Framework

AFFA has implemented a comprehensive planning process that cascades down from the AFFA Corporate Plan through to Business Plans to the individual performance agreements of AFFA officers.

Key features

The scheme operates on a 12 month planning cycle, its key features are:

Managers and employees jointly develop, maintain and regularly review a work plan and learning agreement
Managers and employees receive and provide ongoing and constructive feedback
Managers assist employees to identify their learning and development needs in the context of skills that will need to do their job effectively
Performance management outcomes are used to determine advancement through pay points within work levels
Employees' conduct a self-assessment that is used as the basis for regular (quarterly or six monthly) feedback discussions.

All staff in the department have a Performance through People folder that contains:

AFFA Corporate plan and relevant Business/Group plans
Client service charters
AFFA Performance through People plan
Individual Work Plan
Individual Learning agreement
Diversity program.

Defence performance management

Overview

Defence has three performance schemes in operation for civilian employees: the Research Scientists' Performance Management Scheme (RSPMS); the Legal Performance Management Scheme (LPMS); and the Civilian Performance Framework (CPF). The SES Performance Framework complements the schemes.

15,000 or so civilians, and their military supervisors, participate in the CPF. The following information refers to the CPF only, as it is the main scheme operating in Defence. The principles of the CPF are found in the Defence Employees Certified Agreement 2000-2001.

The Civilian Performance Framework (CPF) aims to:

Provide a clearer link between individual performance and organisational priorities and plans;
Improve communication and trust between supervisors and employees;
Provide opportunities for employees to participate in formal exchanges about their performance;
Determine learning and development needs; and
Define supervisor and employee responsibilities and expectations.

The CPF has a web site for access to all supporting documentation and hard copies are made available where electronic access is limited. The Civilian Personnel Policy Group supports the CPF, by the strategic HR managers in each Group and by the Recruitment, Organisational Management and Field Case Management Directorates within the Defence Corporate Support Centres. The CPF is introduced to all new starters at induction and is part of probationary reporting.

The CPF is made up of two elements: the Performance Exchange and the Plan on a Page(PoP).

The Performance Exchange is a formal meeting between the employee and their supervisor to review what the employee has achieved over the past months; how the achievements have been met, in terms of values and behaviours; what support the supervisor has offered the employee; to evaluate any learning and development activity undertaken; and to establish key expected results and learning and development for the forthcoming period. The PoP is a one page record of the Performance Exchange.

PoP should be developed or amended when ever necessary, but at a minimum, each August and February to follow the SES PoPs with the Secretary in July and January. Each PoP should reflect the Defence Plan as it cascades through the organisation and should help people understand how they contribute to Defence's outputs.

The CPF is an integral part of developing and maintaining effective performance and addressing under-performance. Effective performance is acknowledged through participation in a supportive workplace that encourages personal and career development, including an annual 4.5% progression through the salary band for each classification, until the top of the salary band is reached. Performance bonuses are not a feature of the CPF.

History

The CPF started in August 2000 and replaced the Civilian Performance Management Scheme (CPMS) which had been in operation since July 1999. The CPMS introduced civilian employees to the benefits of working within an organisation that valued and acknowledged good performance. The PoP refined and simplified the process.

Effectiveness

The impact of the PoP after a life of only nine months is being monitored closely. Results to date show a high level of participation, which is no doubt linked to eligibility for salary progression. Comments on the effectiveness of the CPF range from seeing the PoP as being a formal record of current work place practices (and therefore not adding value), to being a tool that has encouraged people to discuss their work and to give feedback (and therefore has been of great value). The fact that the CPF does not result in performance ratings or performance bonuses and is not automatically linked to job selection, is seen by most people as a positive. However, the lack of performance bonuses is seen as a fault by some who are on the top of the salary range and who have limited prospects for promotion.

Key features

Key features of the CPF are:

Its simplicity in desired outcome and in its process - PoP is only one side of an A4 page;
No performance bonuses or pay as a means of recognition and reward;
No performance ratings;
Its integral connection to other Defence people issues - building effective performance, encouraging learning and career development, building an environment of communication, trust and leadership by example - which will result in Defence becoming an employer of choice;
Its integral connection to the broader Defence performance framework. This is articulated through 'Defence Matters', the Defence Business Model which defines our relationship with the Government; through the Defence Leadership Model which aligns the values, principles, capabilities and behaviours we need in order to create the sort of environment where people can give of their best; and through the measurement of overall performance using the Defence Scorecard.
The 'clear line of sight' from the PoP to the key priorities of Defence. The strategic objectives of the White Paper cascade down through the Defence Plan to the individual Group, Division, Branch and Section Plans to each employee's PoP.
The key features of the PoP are also its strengths. The scheme has been built on the lessons learned from previous experience - that is:
A scheme where performance is formally discussed and reviewed needs to be introduced in as simple a format as possible so that people are engaged and can see the benefits as they become more comfortable with the policy and processes;
A performance scheme should be a fundamental management tool; and
A scheme that measures performance with scores and ratings can increase anxiety in the workplace rather than build confidence.

Key Messages

Key messages that the CPF aims to send are:

That performance can be built through feedback and a developmental focus;
That performance can be rewarded by providing a vital, supportive workplace where people are encouraged to work towards their aspirations and potential; and
That it is not only what we achieve that is important, but how we achieve those results. Each employee has a mandatory Key Expected Result: to adhere to the Defence Values, APS Values and Code of Conduct, and to demonstrate behaviours consistent with those values and Code.

However, these messages will need demonstrated support over time before people have confidence in them. Defence needs to ensure that there is:

Significant investment in support of performance management to demonstrate its importance and to support people in its ongoing use;
Strong support and commitment to the CPF from the SES Band 1 and Executive levels;
Strong support and commitment to the CPF from Military Star Officers so that military supervisors understand their role in the PoP;
Action taken, and seen to be taken, in respect of poor performing managers and employees;
More attention given to providing non-financial rewards and recognition to high-performing employees.

Finance and Administration performance management

Overview

Finance's performance management system was established in 1997. It:

Applies equally to all employees - SES and non-SES, ongoing and nonongoing;
Is mandatory for all employees employed for more than 3 months;
Provides access to performance pay for any employee whose performance is rated competent or better;
Does not set predetermined distribution profile or limits to levels of performance pay to be paid;
Includes active management of under-performers to improve performance; and
Allows for ongoing monitoring of changes in performance at individual and group levels, which demonstrate effectiveness of the system.

Performance management benefits both employees and the Department by:

Aligning individual effort with organisational and Branch business plans;
Encouraging regular feedback on performance;
Monitoring, reviewing and evaluating performance;
Rewarding high performance;
Supporting job and career goals with development strategies; and
Improving working relationships between managers and employees and within Branches and Groups.

Key features

The process is an ongoing and cyclical one in which each employee and their manager:

Agree on the employee's key performance areas;
Identify outcomes for the period ahead;
Determine individual development needs; and
Discuss performance on a regular basis.

Performance agreements are developed on an annual basis for the forthcoming business cycle (which usually coincides with the financial year). Formal reviews of performance take place in the middle and at the end of each year, with regular feedback being provided on an ongoing basis.

Performance Pay

Levels of performance pay are determined in accordance with the Certified Agreement or by the relevant General Manager for employees on AWAs. At the end of the performance cycle, Finance's Management Board considers the indicative outcomes recommended by each of the Groups to ensure that there is acceptable level of consistency between ratings across groups. This minimises the risk and impact of 'hard' or 'soft' assessments by managers.

Under-Performance

In cases where an employee's performance is rated borderline or unsatisfactory, a formal performance improvement plan is put in place. Employees rated as borderline are given a 6 month period to meet agreed improvement objectives or they are deemed to be unsatisfactory, and those employees rated unsatisfactory are given 3 months to meet agreed improvement objectives.

In 2000-01 only 1% of employees were rated as borderline and for the first time, no employees were rated as unsatisfactory.

In 1999-2000 less than 3% of employees were rated as borderline and one third of these have left the Department, others are still employed and are working with managers to improve performance.

In 1998-99, approximately 5% were rated as borderline. Of those rated borderline or unsatisfactory in 1998-99:

17 have improved their performance to a competent or higher standard in the following performance cycle;
29 have voluntarily found other jobs more suited to their skills, abilities and interests; and
None (0) have had their employment terminated following unsuccessful attempts to help them improve their performance.

Upward Appraisals

Finance's performance management framework incorporates upward appraisal processes. General Managers determine the process for formal upward feedback in their group. Options include:

Group feedback face to face with the manager and the manager's manager;
Group feedback to the manager's manager who then provides the feedback to the manager;
Use of a facilitator (e.g. someone with relevant skills in the Department or an external facilitator); and
Feedback on an individual and face to face basis.

Feedback discussions and written reports identify behaviours of the manager that employees:

value and find helpful;
would like the manager to use more to improve team performance and work home life balance; and
would like the manager to use less so as to improve team performance and work home life balance.

Dispute Resolution

The emphasis of the performance management framework is on open and ongoing discussion and agreement. In the event of disagreement between an employee and their manager on any matter relating to the framework, they are to make every effort to resolve the matter. If it is not resolved, it is to be referred to the manager's manager. If that fails, the matter can be taken up with the Branch Manager and if necessary the General Manager.

If an employee remains dissatisfied with the outcome, the disputes settling procedures of the Finance Certified Agreement, or relevant AWA are available to employees and managers.

How well does it work?

Overall, Finance's performance management system has proven effective in improving individual and organisational performance.

Outcomes for individual employees against the four rating categories used by Finance over the 4 years since the introduction of the performance management framework are set out below. The table indicates an increase in the levels of employees rated superior over the period and a decrease in the proportion of employees rated borderline or unsatisfactory.

Table 1

Percentage of employees in each performance category for last 4 years
Year	Superior	Competent	Borderline	Unsatisfactory
2000-2001	34.76%	64.21%	1.03%	0%
1999-2000	27.29%	69.78%	2.76%	0.17%
1998-1999	23.46%	70.26%	5.26%	1.03%
1997-1998	21.62%	72.68%	5.24%	0.46%

On an organisational level and using a ten-point scale, the overall aggregate performance rating for Finance has increased from 6.45 in 1997-98 to 6.61 in 1998-99 to 6.68 in 1999-2000.

Key Lessons

Successful performance management needs to be integrated into the culture and operations of an organisation and not be seen as something separate or disconnected with day-to-day business;
Performance management is an investment in the success of individuals and the organisation and, as an investment, comes at a cost;
Using the same system of appraisal for all employees provides for easier communication and understanding of the processes involved and a certain level of comfort that the system is fair, transparent and equitable; and
It is important to monitor changes in performance over time, at both individual and organisational levels, so you can evaluate the success of the program.

Attorney-General's Department performance agreement

Overview

At the commencement of each 12 monthly appraisal cycle, each employee and their manager enter into a performance agreement, which takes account of the work area's operational plan, the corporate plan, as well as individual job descriptions, work level standards and capability profiles.

Each agreement identifies between three and seven Key Results Areas (ie the employee's work objectives and outcomes for the coming appraisal cycle). They also agree on Key Performance Indicators and key aspects of the Generic Capabilities that are relevant to each Key Result Area.

The program includes two common annual performance appraisal cycles. The cycle for SES and Executive Level employees is from 1 July to 30 June and for APS Level 1-6 employees the cycle is from 1 August to 31 July. This allows for performance agreements for managerial staff to be formulated at a time when business plans and projected budgets have been determined for the coming financial year, and for those of other staff to be prepared in the light of agreements already made by their managers.

The appraisal cycle involves a mid term review, approximately six months from the commencement of the cycle and an annual review, which is completed within four weeks of the end of the 12 month cycle. Ratings are attributed as a result of both mid-term and final reviews and the rating assigned following the annual review may lead to salary progression for employees below SES level. For SES employees PPI ratings are used by the Secretary, in conjunction with the relevant General Manager, when deciding whether a performance bonus is payable.

A rating of 'does not meet performance targets' at the conclusion of an appraisal cycle will automatically result in under-performance procedures being initiated.

Personal development plans form an attachment to the agreement. Guidelines emphasise the need for employees, with their managers, to develop strategies in support of their job and career goals and, over the course of the appraisal cycle, to review progress in achieving those identified goals.

The emphasis is on constructive discussions and agreement, however, if disagreements do arise, the program provides for mediation by more senior managers to assist agreement to be reached. In the event that disagreements cannot be resolved by these means, the dispute settlement procedures in the Department's Certified Agreement or an employee's AWA may be employed.

The four General Managers must each appoint a 'Group PPI Manager', responsible for monitoring and reporting on the operation of the program in their Group, including identifying any apparent deficiencies in processes and outcomes and bringing these to the attention of the General Manager. The Group PPI Manager also collects summary information of planned training and development initiatives, compiled from completed personal development plans contained in performance agreements. The data collected by the Group PPI Managers forms the basis of an annual report provided to the Executive Committee by each General Manager on the operation of the PPI during the preceding cycle, and feeds into the annual review of the operation of the PPI across the Department.

Key features

The key features of the Department's performance management system, known as the Program for Performance Improvement (PPI) are:

It is part of an integrated performance management model, linking individual and corporate planning processes;
All employees employed for longer than three months, participate;
A strong focus on support for career progression and development opportunities;
Includes a focus on the management of under-performance.
Workplace skills and behaviours are assessed against a set of Generic Capabilities (with the exception of SES employees who are assessed against the SES Leadership Capability Frameworkitself).

History and changes

The PPI applies to all employees and was introduced in March 1999, through the agency of the Department's first Certified Agreement. The PPI superseded the Performance Management Program for SES, Senior Officers and Legal Officers that had previously been in use.

Following a review in March 2000, a number of improvements to the program were introduced via the Department's second Certified Agreement. These included:

Increased emphasis on support for career goals and the identification of training and developmental opportunities (50% of employees were at the top of pay bands and saw this as a real benefit aside from pay increases);
Changes to the performance rating descriptors, now described as: exceeds most performance targets; meets all key performance targets; meets most performance targets; and does not meet performance targets;
Inclusion in Managers' Performance Agreements of their responsibility to develop and maintain employee performance agreements;
Strengthening of the reporting and monitoring aspects of the program;
Incorporation of the AGD Capabilities into the PPI; and
Adoption of a standardised framework for PPI assessment cycles across the Department (rather than using employee increment dates.)

Evaluation of effectiveness

An independent evaluation concluded that the PPI was on track to meet its objectives, and was largely integrated with the Department's planning process, primarily through the use of Divisional planning objectives as a basis for employee Performance Agreements. However, those general findings were qualified by the need to address several key issues, and to make some improvements to the processes. The revised PPI has a stronger emphasis on reporting and monitoring, and future reviews of the program's effectiveness will be assisted by these more rigorous reporting requirements.

Key lessons

To be effective, a performance management scheme must be an integral part of an organisation's corporate planning and management processes.
If it is to be successful, staff must embrace the system, and if this is to happen it must be understood, both in terms of process, and of the benefits that flow to individuals and the organisation as a result of effective performance management. To this end well-targeted training and logically formulated procedures are vital.
A strong focus on the positive aspects of the system in improving communication between employees and management and assisting individuals to further their longer term career goals is particularly important in an organisation such as AGD, where a significant percentage of employees are at the top of their salary range.

Health and Aged Care performance management

Overview

The purpose of the Department's Performance Development Scheme (PDS) is to ensure staff are achieving outcomes and outputs deriving from the Corporate Plan (which embodies the Government's objectives and Minister's directions) and from consequential Business Plans. As well as measuring individual performance, the PDS identifies skills and skill and training needs of individual staff.

Principles and Objectives

The following are the key principles of the PDS:

Agreement between the team member and team leader;
Fairness, equity and consistency;
Flexibility;
Two-way communication;
Participative management;
Development; and
Joint responsibilities.

It has been designed to interact with other departmental strategies to encourage/provide:

Role clarity for team members and team leaders;
Staff participation in the planning and management of work activities;
Development opportunities for present job and future career;
Recognition and rewards;
Increased accountability for team members and team leaders; and
The effective assignment of tasks to team members and teams.

Key features

The PDS operates on a 12-month cycle and is comprised of a 3-step process.

Step One

Identify work goals and expectations and associated performance measures. Ensure a link is made to the business planning process and consideration given to position documentation, work level standards, and the Task Assignment Model.

Step Two

Identify the skills necessary to achieve at step 1
PDS Core skills; there are 9 Core Skills, each with 8 levels.
Business Units Statements of Knowledge and Abilities (BUSKAs) and jobspecific skills; list those relevant to the particular work area and note development needs

Step Three

Develop an Individual Development plan by identifying the skills strengths and gaps from Step 2, and identify development career goals.

A multi-source feedback option is available to staff on a voluntary basis. This system is a computer based system and has been developed to ensure anonymity of all respondents (except supervisor/team leader feedback which is identified).

Supporting Tools for PDS

There are a number of tools that are used in conjunction with the PDS on top of the Corporate Plan and Business Plans. These are:

Business Unit Statements of Knowledge and Abilities (BUSKA):
- The BUSKA has two parts, the first being the broad departmental knowledge and abilities that we need to meet our corporate objectives. The second part is comprised of Business Unit specific knowledge and abilities to achieve business objectives. These statements identify the specific knowledge and abilities required for people to perform effectively in each unit.
Management Matrix Model:
- To strengthen the role of managers throughout the department, a 'matrix' of accountabilities has been developed to clarify accountabilities from EL2 to Secretary level. These accountabilities fall under three broad headings/dimensions:
  - Business - ensuring that the specific technical outputs from divisions/offices achieve the department's outcomes for health and aged care.
  - Resources - planning, prioritising, organising, scheduling, monitoring and delegating work, ensuring effective use of time and resources, including staff, contractors, financial and other resources.
  - People - leading, coaching and developing staff, gaining the respect and trust of staff, (managing performance, career and employment relationships openly, fairly.
Task Assignment Model:
The task assignment booklet has been developed for use by individual staff and work units when assigning out or accepting significant work. Both projects aim to help both staff and team leaders be clear about our work and the skills required to complete it successfully.
Fair Treatment Policy
A number of areas of concern by staff have been identified, particularly around the accountability and trust of managers in relation to people management issues. The fair treatment process has been developed to:
- Complement the more formal review processes;
- Clarify the accountabilities of managers and next-level managers;
- Provide an avenue for building trust in the workplace; and
- Support the PDS in managing performance, career planning, training and development.
Performance Development Scheme Skills Planner
- The Planner incorporates information on the PDS and People Management Framework with the aim of improving links between learning and development activities and performance management in the Department. Learning and development activities are clearly aligned to the PDS core skills. The Planner also makes reference to the BUSKA.

Current Review of PDS

The impact of the PDS in terms of increased productivity and increased skilling of staff is very difficult to measure for the organisation. We are hopeful that the current internal review will form the basis from which these questions can be answered positively over time. It is anticipated from initial feedback received, that a simplification of some aspects of the PDS will result (e.g. documentation, core skills).

We are coincidentally looking at how we can test the performance or well being of the organisation, using measures additional to traditional ones such as exit data and recruitment rates. In the interim, we rely on anecdotal experience and the organisation wide implementation of the scheme to assert that its purpose is being achieved and that staff are benefiting from the opportunities it provides.

Key lessons

Performance Management at an individual and organisational level is of pervasive concern for the Department of Health and Aged Care.

The raison d'etre of Performance Management is to ensure that individually and collectively we are pursuing vigorously and successfully the agenda of the government and Minister of the day. Performance management tools are thus derived from the Corporate Plan, which reflects Minister's priorities.

In the broadest sense almost every action and behaviour in the organisation can enhance or dilute performance. We recognise this and therefore strive to achieve the greatest possible consistency across values, actions and decisions including recruitment and promotion decisions, performance pay decisions, and all rewards including expensive development opportunities. In other words we engender a culture where people are motivated and confident that overall governance is fair; where we strive continuously to narrow the gap between rhetoric and reality.

Performance Management is also enhanced by work systems including IT and it is crucial to make sure these are first class.

Given that the underlying purpose is the achievement of the Minister's objectives, it is important to demonstrate that good individual performance leads to good organisational performance. Currently we are trying to establish, through headline indicators, a 'line of sight' linking individual to organisational performance.