Improving performance:
what does “Pay for Performance”
have to do with it?
FICSA Council
Turin 2008
What are they talking about?
PAY FOR
PERFOMANCE
Performance
management!
performance
appraisal
Performance Management
The process of creating a work environment or
setting in which people are enabled to
perform to the best of their abilities.
Performance management is a whole work
system that begins when a job is defined. It
ends when the employee leaves the
organization.
Performance appraisal
Employee assessment:
1) The assessment of an employee’s
effectiveness, usually as undertaken at
regular intervals
2) A face-to-face discussion in which one
employee is discussed, reviewed and
appraised by another, using an agreed and
understood framework.
Performance Management- what
determines performance?
Politics, budget, procedures
Organization
Work Unit Individual
Leadership
Division of tasks
Ambition
Competencies
Links between individual and
organizational performance
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To what extent is the performance of an
organization the result of the performance of
the staff?
To what extent is the performance of a unit
the result of the performance of an
individual?
Can we fairly measure the impact of an
individual?
Performance of individuals
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Clear terms of reference, work plan, guidance
Level of responsibility corresponds with
skill/experience/authority
Tools, time and budget to carry out work
Environment of the staff member
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Appropriate supervision and relations with colleagues
Morale, motivation, ambition
Personal factors (health, family, etc.)
Staff ideas about motivating factors
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Interest and enjoyment of job itself
Belief in the purpose of their organization
Environment of their workplace
Respect/recognition for their work
Salary and benefits
Staff ideas about demotivating factors
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Lack of respect and
recognition
Lack of fairness and
integrity within organization
Low image of the
organization
Boredom – unchallenging
work
Stress – too much work
Pay and benefits insufficient
Performance appraisal
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ICSC,HR and staff reps
believe performance
appraisal crucial to
improving performance
Managers, supervisors,
staff avoid performance
appraisal
Current performance
appraisal systems have
little credibility
UN trends in performance appraisals
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Appraisal of managers by staff and clients
Grading on the curve – ratings of staff must fit
a preconceived pattern
Strict enforcement of link between step
increase and appraisal
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Poor appraisal leads to denial of step
Strong appraisal leads to accelerated step or
bonus
Pay for performance focuses on one
factor: Motivation
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Assumes that high performers will be
motivated by more money (but they may be
performing at their maximum capacity
already)
Assumes that poor performers will be
motivated to change if they are punished (but
they may be demoralized by the appraisal,
leading to a downward spiral)
Rewards: who, what and how?
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Who decides who gets
award: supervisors or
peers?
How do they decide?
What is appropriate:
exceptional
performance (one time)
and consistently high
performance
(permanent)
Rewarding high performers
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Who gets the credit for good performance – teams or
individuals?
Does this foster cooperation or competition?
What are the rewards?
Visible non-monetary (e.g. certificates,
awards, ceremonies)
Invisible non-monetary (e.g. trips, training)
Monetary (e.g. bonuses - one time, nonpensionable) and step increases or
promotions (permanent and pensionable)
Hurting or helping poor performers?
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What happens when a person has a low
appraisal?
Rebuttal system for disputed appraisal?
How does HR know if the supervisor’ s
appraisal is fair?
If fair, is staff member helped to improve
performance?
Pay for performance – should the UN do
it?
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Is this the right strategy to improve
performance of UN organizations?
Is this the right strategy to improve the
performance of UN staff?
Can this work in a non-profit, multi-cultural
organization?
Zero sum game when budgets constrained
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Assumes that the number of rewards is fixed
Assumes that rewarding some means taking
away from others
Zero sum game will demotivate staff and
undermine teamwork
Pay for performance could have the opposite
effect that it is intended to have
Conclusions based on UN experiences
Question: What does pay for performance have
to do with improving performance?
Answer: The positive effect, if any, will be very
minor considering all the other factors that
affect performance. There is a risk of a
negative effect. Many supervisors believe
that the benefits of pay for performance are
not worth the risks.
FICSA: What now?
1.
2.
3.
Staff representatives should support
improvements in management of
performance
Staff representatives cannot avoid
performance appraisal and should fight for
fairness
Staff representatives should oppose pay for
performance – it is not the solution.