Public and Commercial Services Union

Systems for monitoring performance are not new. Reviewing how well the organisation and individual employees carry out their work is central to good management.

Performance appraisal systems can help managers recognise and build on successes and strengths and take action to address weaknesses.

But much of the time, money and energy devoted to performance management is not cost effective and does not have a real impact on the effectiveness of individual employees or organisations, particularly in public service organisations.

There are questions about how fair performance appraisal schemes are. Research has consistently shown a cultural bias which disadvantages certain groups of workers, in particular those from black and minority ethnic (BME) groups, part-time workers and those in the lower grades.

Some ways of assessing performance and rationing rewards - such as relative assessment, team based pay and quotas for box markings - further reduce transparency and fairness.

PCS believes that performance appraisal can help individuals to flourish in their work - but only if

• the organisation values its workers and the jobs they do
• the system is designed and implemented to support development
• managers are given the skills and resources to implement the system properly.

Whilst PCS is willing to work with employers to improve performance appraisal schemes, it is completely opposed to linking performance to pay.

What employers want from performance and appraisal

The Modernising Government agenda of the late 1990s introduced systems which were intended to

• link individuals’ objectives to business objectives
• incentivise people to seek more challenging responsibilities, develop their competences and demonstrate leadership
• encourage continuous improvement
• offer significant rewards for excellence (rather than for time served)
• help confront poor performance
• support the development of the workforce and be non-discriminatory.

Despite the known problems with performance related pay (PRP) and opposition from the unions, the Treasury continues to believe that pay should reflect output, results and performance with the best performers (both individual and/or teams) and those who contribute the most receiving the highest reward.

Does appraisal and performance related pay (PRP) really improve performance?

The introduction of appraisal systems and PRP to the government sector is a result of the view that what works in the private sector will be equally effective when applied to the public sector. This assumption is basically flawed and studies have shown that these systems do not necessarily work well even within the private sector. There is some evidence that they may actually undermine the intrinsic motivation of public sector workers.

The PCS view of performance and appraisal

PCS recognises that managers must manage the performance of individual staff, their teams and the organisation. We accept that:

• individual work objectives must be linked to business objectives
• individuals should be encouraged to develop their skills 
• contributing to the success of the organisation is a less discriminatory basis for reward than length of service.

We know that poor performers have a detrimental impact on their colleagues and on service users and we expect managers to solve such problems. We also believe that opportunities should be created for people to build on their strengths.

What we want employers to do

• Break the link between performance appraisal and performance related pay
• Concentrate instead on investing in improvements that reinforce the factors that genuinely motivate people working in the public sector – such as resources to allow them to do their job well, and terms and conditions that are stable and secure
• Carry out equality impact assessments on current and new systems and follow up with regular monitoring and review
• Consult with staff and trade unions when introducing changes
• Redesign performance targets and indicators to reflect quality and effectiveness in service delivery
• Ensure that all staff are given induction and follow up training that allows them to understand their work
• Enable managers to encourage and support their staff in striving for excellence
• Provide training for managers that encompasses diversity awareness
• Empower managers to manage individual staff appropriately, taking into account their individual capabilities
• Allow managers to access resources for individual adjustments where necessary
• Make serious efforts to understand why individuals experience problems in performance and address such problems sensitively
• Encourage all staff to take up learning opportunities that build on their strengths and address areas of weakness
• Provide opportunities for advancement or alternative work to meet training and career development needs
• Continuously review the effectiveness of the systems.

The government should look honestly at resources that it devotes to designing and implementing appraisal systems and negotiating pay deals based on these systems. We think these resources could be invested to meet the aim of improving performance far more effectively.