Call for civil servants to reach higher performance rating for increment

THE GOVERNMENT has proposed that staff in the Civil Service should have to reach higher performance standards in future before they qualify for incremental pay increases.

In a discussion document, marked confidential, which was prepared for trade unions last week, the Department of Public Expenditure and Reform suggested that in future civil servants should have to obtain a rating of three or higher on a five-point scale from their line manager, under the performance management development system (PMDS) to receive an incremental increase.

As part of options for changing the system, the department also suggested a system of “forced distribution” under which mangers would effectively have to rate a set percentage of staff at levels below those which would qualify for the payment of an incremental increase.

The existing PMDS system has been criticised in that too many high ratings and too few low ratings were being awarded.

The department’s paper said this meant that underperformance was not being dealt with, high performance was not being rewarded and a genuine differentiation of performance was not being recognised.

The department proposed that in future staff would have to obtain a PMDS rating of three to qualify for an increment. At present a rating of two is required.

Under the current system, a rating of five is considered “exceptional”, four deemed to be of “very high standard”, three represents “good standard” while two means “needs improvement” and one is classified as “unsatisfactory”.

“It is impossible to justify that less than fully acceptable performance, ie less than a rating of three, can still attract an increase in pay. Also, there is a disconnect between the measures that have been introduced to deal with underperformance – that a rating of two denotes – and the payment of increments in that context.

“The effectiveness and credibility of PMDS as a performance-management tool is being undermined by facilitating the payment of increments in cases where performance is less that the fully acceptable standard. It is imperative that this is reformed with immediate effect.”

In its options for reform the department suggested that managers could retain responsibility for rating their staff, that assistant secretaries could be tasked with ensuring the consistency of ratings, that forced distribution be introduced, that performance calibration (where managers meet to discuss the performance of their staff to ensure similar standards apply) could be put in place, or that a system of forced distribution aligned with performance calibration could be drawn up.

It is understood unions consider the introduction of a “forced distribution” system to be the most controversial. Under this option all staff would be assessed with a view to strict alignment to the original expectation as to how the level of ratings would be distributed among personnel being assessed.

The original expectation was that up to 10 per cent of staff would receive a rating of one, that between 10 and 20 per cent would receive a rating of two, that between 40 per cent and 60 per cent would receive a rating of three, that between 20 and 30 per cent would receive a rating of four, and up to 10 per cent would receive a rating of five.

The department said such a system of forced distribution would create and sustain a high performance culture and would identify those who were top performers and those who were under-performers. However it warned that it could lead to satisfactory employees being misidentified as poor performers. It said “this could arise where a section or unit consists of staff who are essentially similar in performance”.

“The long-term impact should ideally be higher performance. Consistency of rating will also result. However, there is a danger that forced distribution will result in a culture shift, creating a more competitive atmosphere and decreasing morale”.

In a statement this weekend the department said: “Forced distribution would not work or be perceived as fair across a small population size or group of people.”