OPM Issues SES Performance Appraisal Regulations

Performance appraisal for the Senior Executive Service (SES) is changing. New OPM regulations, effective November 13, 2000, aim to "help agencies hold their senior executives accountable by: reinforcing the link between performance management and strategic planning; requiring agencies to use balanced measures in evaluating senior executive performance; and increasing agency flexibility to tailor performance management systems to their unique mission requirements and organizational climate."

Why OPM changed the SES regulations

The revised regulations were a direct outcome of our Draft Framework for Improving the Senior Executive Service, circulated in 1998 to gather stakeholder views on preparing the SES for the leadership challenges of the new century. Discussions with executives and stakeholders indicated:

• agencies need to strengthen performance management and make it more meaningful;
• performance appraisal tends to focus on procedures and paperwork and is time-consuming;
• systems should be streamlined to focus on results, emphasize accountability, and improve the links between pay and performance;
• agency leaders need to do a better job of managing their SES performance management; and
• there needs to be a culture change that fosters an appreciation for the importance of managing performance on an ongoing basis.

Two other factors influenced the development of the regulations:

• the old regulations have been completely overhauled to organize the material more logically and to simplify the language.
• the President's Management Council (PMC) has taken considerable interest in performance management, especially at the senior executive level. A PMC report and workforce improvement goals issued in February 2000 made specific recommendations about communicating expectations, establishing accountability, and using balanced measures to assess and reward SES performance.

Changes include:

• paring back many of the current requirements to those in statute to give agencies more flexibility to design systems more in line with their missions and organization cultures;
• broadening the focus from the annual summary rating aspects of performance appraisal to managing performance on an ongoing basis and shifting the emphasis from process to results;
• requiring agencies to align senior executives' performance plans with agencies' strategic and performance planning initiatives; and
• requiring agencies to evaluate senior executive performance using measures that balance organizational results with customer satisfaction and employee perspectives.

The reaction to the regulations

When the new regulations were proposed, the general reaction was positive. Most of the questions and comments related to balanced measures–not objecting to the requirements, but asking for a definition of balanced measures and how to use them. Some agencies, such as the Internal Revenue Service and the Department of Veterans Affairs, already have sophisticated performance management systems that incorporate balanced measures. Other agencies, like OPM, are starting with more modest approaches. Joyce Edwards, Director of OPM's Office of Executive Resources Management (OERM), observes, "The important thing is to start the conversation with your executives about how to broaden their views of performance management to address organizational results, customer satisfaction, and employee perspectives. Starting the conversation is key to changing the culture." We are already working with agencies to gather and share information, tools, and best practices about performance management and balanced measures. 

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