Evaluate to grow: measuring individual performance in PA

One of the biggest challenges in human resource management processes is building an effective system for performance measurement and evaluation (SPME) for individual employees. And if this is true for the private sector, the issue is equally relevant for Public Administrations (PA), in particular if the aim is to reaffirm the transparency of the work of public servants and regain the trust of citizen-users.

But what characteristics make an SPME effective? And how does this effectiveness play out in daily practices, in light of the fact that the system needs to be perceived by personnel as both fair and motivating? Lastly, how do employee perceptions of an SPME translate into greater engagement, and indirectly, into better performance by the Administration as a whole?

To explore these questions, a recent study was commissioned and funded by the Department of Public Administration - Office of Performance Evaluation and conducted by SDA Bocconi. The findings offer, on one hand, a systematic look at how Italian SPMEs in PAs are structured in terms of assessment aims, method, process and outcomes. On the other hand, the study clarifies the perceptions of the people who are evaluated by these systems, in an attempt to pinpoint the biggest drivers of engagement among public workers.

From our analysis of a sample of 60 Public Administrations in communities throughout Italy, we got a snapshot of SPMEs, which on paper are oriented toward personnel development, but in actual fact serve almost exclusively to assign rewards or bonuses. In fact, only 28% of the public bodies in our study linked the outcomes of performance evaluations to training activities, and for the remainder evaluations were used to assign roles and responsibilities. All the administrations we studied use a hierarchical approach, where the boss is the person doing the evaluating; instead only two (3%) do evaluations “from the bottom up,” asking employees for their opinions on the performance of their bosses. We also discovered that limited time is dedicated to feedback between evaluator and evaluatee: 43% stated that they did ask for feedback, but often this was done on a voluntary basis, and so actually did not happen very often.

After this initial phase we saw the need to investigate whether these systems are perceived as being effective by the people who are the subjects of the evaluation. To do so we observed the aspects that academic literature traditionally associates with the question of organizational fairness. Along these lines we analyzed employee perceptions with regard to the distributed fairness of the systems, that is, the link between the evaluation and the consequences that can derive from that evaluation (assigning rewards, roles, or raises); the procedural fairness, in other words, respect for the procedures that led scoring the evaluation; and interactional fairness, that is, the quality of the relationship established between evaluator and evaluate. We also focused on the perception of the system’s clarity and its capacity to contribute to the development and professional growth of individuals by honing their skills and identifying any possible skill gaps to fill. So to explore the perceptions of evaluation systems among public workers, we gave a survey to 11 of the 60 administrations that participated in the first phase of the research, and obtained a total of 1,696 valid responses. Our second set of results highlight the need to:

• clarify more fully the characteristics of the SPME and how it works;
• give proper recognition to the differences that exist in terms of individual performance, and implement effective practices to support poor performers;
• ask for more input in defining aims and standards for activities;
• focus more squarely on revealing skill gaps;
• do better at communicating with employees on the progress they’re making.

Our next step was to analyze the correlations between employees’ perceptions and their level of engagement, which we used as a dependent variable. What emerged is that where there is more fairness in the evaluator-evaluatee relationship (interactional fairness), and a higher perception that the system is oriented toward personal development, there is greater engagement. What’s more, we find that more limited, but still appreciable, effects are contingent on the clarity of the system as well as the fairness of rewards distribution. But this last variable loses its explanatory power in our analysis when we factor in the system’s orientation toward personal development.

So the study underscores two key elements underpinning the perception of fairness and engagement among employees: a system that is tailored to each individual, in other words, oriented toward that person’s growth and professional development; and a good relationship with the evaluator.

Our findings also tell us that public servants feel involved in the organization and engaged in their work when evaluation systems are more focused on individual growth and development, as opposed to simply assigning bonuses or rewards. This confirms theories on the specificities of so-called Public Service Motivation. What’s more, when systems attempt to address both aims, what most influences engagement are not rewards but opportunities for personal growth.

Lastly, our analysis reveals the need to invest in trust within the organization and in the relationship between evaluator and evaluate. This can be done via constant, constructive communication. This essential mechanism in the proper functioning of any Human Resource Management System becomes even more vital in contexts where new work methods, such as smart working, limit the physical proximity between managers and employees.

The study provides useful insights for both policymakers, in terms of relevant reform measures to implement in the future, and for public organizations as far as rethinking their SPMEs.

From the perspective of innovating evaluation systems, what will become increasingly imperative is offering opportunities for improvement and skill development for evaluatees. At the same time, investments are needed in the people who liaise between individual employees and the organization (in other words, managers), through specific training interventions designed to support evaluators in their role as leaders. These are the key insights to rethinking not only how but also why evaluations are done, and how to communicate all this effectively to the people being evaluated.