Performance management workshop for managers
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COMMERCE ALTERNATIVE PERSONNEL SYSTEM (CAPS). PERFORMANCE MANAGEMENT WORKSHOP FOR MANAGERS. Pay for Performance System. Key Questions What is a pay for performance system? What are the key drivers for a pay for performance system? What are the benefits of a pay for performance system?

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Pay for Performance System

Key Questions

What is a pay for performance system?

What are the key drivers for a pay for performance system?

What are the benefits of a pay for performance system?

What can managers/supervisors do to make the pay for performance system a success?

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Definition of a Pay for Performance System

Pay for performance systems are systems in which pay decisions are based on defined performance levels rather than entitlement, tenure, or other non-performance related factors

Pay decisions include:

  • Merit-based pay increases

  • Lump sum bonuses

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Drivers of Pay for Performance Systems

Pay for performance systems emphasize achieving greater individual and organizational performance results

Need for more flexible compensation practices to Agency specific needs

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Benefits of a Pay for Performance System

Rewards high performers

Allows greater flexibility for recruiting and hiring top talent

Provides opportunities for developing poor performing employees

Increases employee motivation

Contributes to employee retention

Deals more effectively with marginal employees

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Pay for Performance Guidance

Make the pay for performance process transparent

  • Managers/supervisors can ensure that employees are informed about the pay for performance system, understand how the system will impact them, and what employee and management roles and responsibilities are under the new system

    Provide training for managers/supervisors

  • While managers/supervisors cannot necessarily control the extent to which training is adequate, you can actively pursue information about the new system to make sure that you have the resources, tools, and skills needed to be successful

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Pay for Performance Guidance

Provide accurate assessments on employee performance

  • Ensure success of this system by providing honest, accurate assessments of employee performance based on articulated performance objectives and performance benchmark standards to truly distinguish employee performance

    Evaluate employees solely on performance elements

  • A responsibility to clearly articulate individual performance expectations to employees and to only evaluate them on those expectations

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Understanding the CAPS Performance Appraisal Process

Key Questions

What is the performance appraisal process?

What are the responsibilities of Rating Officials, Pay Pool Managers, and Employees?

What other pay-related interventions (other than performance-based pay) are available to managers/supervisors to reward employees for good performance?

How can managers/supervisors acclimate new employees to the performance appraisal process?

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Intent of CAPS Performance Appraisal System

Encourage high performance

Encourage continuous dialogue between supervisors and employees

Provide a basis for performance-related decisions (e.g., pay increases, bonuses, PIPs)

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Performance Management

1. Planning

Set goals and measures

Establish and communicate

elements and standards

2. Monitoring

Measure performance

Provide feedback

Conduct progress review

Five Key Components

5. Rewarding

Recognize and reward

good performance

3. Developing

Address poor


Improve good


4. Rating

Summarize performance

Assign the rating of


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Non-Monetary Ways to Reward Your Employees

  • Recognition

  • Acknowledge employee ideas

  • Acknowledge significant contributions in writing

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Components of the CAPS Performance System

Performance Indicators

  • “E” for Eligible, “N” for Not Eligible, “P” for Pending, or “U” for Unsatisfactory

    Performance Plans

  • Prepared by rating official with employee input

  • Approved by Pay Pool Manager

  • Critical elements only – minimum of 2/maximum of 6

    Performance Standards

  • Benchmark standards

  • Supplemental standards

    Performance Scores

  • 100-point scale using benchmark standards

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80 – 100




60 - 79

40 - 59

0 - 39

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Summary Guidance for Benchmark Performance Standards

  • Assists managers in evaluating employees with benchmark performance standards

  • Used to help make distinctions between different levels of performance

  • Helps ensure greater consistency in the analysis and evaluation of performance ratings

  • Approved by the CAPS Board in 2005

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Summary Guidance

for Benchmark



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Supplemental Standards

  • Defined in terms of results – “what” and “how”

  • Expressed in terms –

    • Quality

    • Quantity

    • Timeliness

    • Cost Effectiveness

  • Written at the “Eligible” Level

  • Use of Supplemental Standards is Optional

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Responsibilities of Rating Officials

Develop performance plan with employees

Conduct progress reviews with employees

Modify performance plan with employees as needed

Conduct performance review meetings to discuss accomplishments

Recommend ratings, scores, payouts, and bonuses to Pay Pool Manager through any intervening higher level supervisor(s)

Conduct evaluation feedback meetings with employees

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Responsibilities of Pay Pool Managers

Pay Pool: A grouping of employees who are combined together for performance-based pay decisions

Approve performance plan/plan modification

Manage the pay pool

Ensure consistency across rating officials

Discuss with rating officials any discrepancies and/or the need for score adjustments

Render final decision on ratings, scores, performance increases, and bonuses

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Responsibilities of Employees

Create performance plan with Rating Official

Modify performance plan with Rating Official

Clearly, concisely, and accurately document accomplishments over past year

Seek out performance feedback throughout year

Respond to performance feedback

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Pay for Performance Flexibility

Pay increases upon promotion

  • Managers/supervisors may recommend employee’s salary anywhere within the band when promoted. Minimum of 6% pay increase.

    Performance bonuses

  • Rewards high performers, with intent to motivate performance

    Supervisory performance pay

  • Managers/supervisors at band’s pay ceiling max may receive up to six percent higher through performance

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Comparability Increases

All employees will receive the annual comparability increase except:

Employees with an “Unsatisfactory” rating

Employees on a PIP at time of comparability increase

  • Employees on a PIP will receive comparability increase at the time they successfully complete a PIP

  • Payment of ACI not retroactive

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Acclimating Employees to the Performance Appraisal Process

Employees must have a clear understanding of performance expectations

Employees will do well if they understand how performance is linked to success

Feedback provides employees with an understanding of level of performance

Employees want to understand if their performance is meeting management expectations

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Managing and EvaluatingEmployee Performance

Key Questions

How can managers/supervisors identify the linkage between organizational goals and work unit/team goals and objectives?

How can managers/supervisors help employees establish performance elements that are linked to organizational goals?

How are performance plans created?

How can managers/supervisors effectively evaluate performance?

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Linking Individual Performance to Organizational Goals

Identify overall organizational goals and discuss how they are linked to your work unit/team objectives

Discuss the work unit/team objectives and/or specific products or services and how they are linked to performance plan critical elements

Explain the rationale of how each critical element is weighted; the activities under each element; and the relationship of the elements to the work unit/team objectives

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Components Of A Performance Plan





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Brainstorm Task List

Consider the whole job

Look to the coming year for new assignments, resources, priorities, policies

Teamwork makes up part of the organization’s fabric:

  • Helping others work

  • Information sharing

    Use active verbs – e.g., manage, develop, plan, etc.

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S M A R T Tips






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Choose Measurements





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Effectively Evaluating and Documenting Employee Performance

Provide employees with tips for writing a good accomplishment statement

  • Keep records of accomplishments during rating cycle

  • Summarize all accomplishments for the year by Critical Element

  • Do not understate or overstate accomplishments

  • Establish a format for accomplishment statements to maintain consistency and quality (e.g., bullets vs. narrative)

  • Discuss the desired format

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Evaluating and Documenting Employee Performance

Evaluate the employee’s performance

  • Accurately and objectively

  • Use specific language to describe key achievements or deficiencies (e.g. work examples, address the critical activities under each element, use positive wording when appropriate)

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Rating Eligibility

An Employee is Ratable if:

  • Occupies a covered position as of Sept 30 AND

  • Has worked at least 120 days in one or more covered positions

An Employee is NOT Ratable if:

  • Does not meet conditions stated as Ratable

  • Employee has been placed on an approved Performance Improvement Plan (PIP)

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Concept of Intervals

Each pay band is divided into 5 intervals. Intervals 1-3 are for non-supervisory positions and intervals 4 & 5 are for supervisory positions.

Pay progression potential is faster at lower pay bands and lower intervals in pay bands.

Based on OPM statistical study of Federal employee occupational salary histories.

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Payout Rules

Highest scored employee receives highest relative percentage payout (% of %)

Lower scored employees cannot receive a greater relative percentage payout

Tied scores might not receive same relative percentage payout

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Providing Effective Performance Feedback

Key Questions

How can feedback improve employee performance?

What are strategies that managers/supervisors can use to provide effective feedback?

What are the ramifications of providing inadequate, poor, or untimely performance feedback?

What communication barriers may arise and what can managers/supervisors do to overcome them?

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Performance Feedback Is An Ongoing Process

Reviewing Work

Conducting Progress Reviews and Annual Appraisals

Addressing Performance Issues

Maintaining open lines of communications

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Performance Feedback Strategies

Provide continuous constructive feedback

Prepare the employee for the discussion in advance

Be clear on the purpose of the meeting

Have a clear message

Be specific

Emphasize the positive

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Performance Feedback Strategies

Be timely

Focus on accomplishments

Respect the individual

Leave communication lines open

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Consequences of Ineffective Feedback

Employees may not focus on performance goals and expectations.

Employees may lose motivation

Employees may become disgruntled

Low employee morale

Unexpected turnover


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Communication Barriers

Communication styles

Use of verbal and non-verbal language

Lack of trust

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Overcoming Communication Barriers

Familiarize yourself with communication styles of your employees

Understand what motivates your employees

Become aware of your communication style and modify as necessary to be effective

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Providing Feedback

Establish a relaxed environment

Engage in a 2-way dialogue

Highlight positive or good behavior

Keep the conversation focused on performance issues

Maintain control of the conversation

Offer constructive criticism

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Providing Feedback

Don’t be confrontational

Don’t be accusatory

Don’t only focus on faults or mistakes

Don’t bring personal issues into the discussion

Don’t become agitated or angry

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Managing Marginal Performance

Key Questions

How can managers/supervisors successfully identify a marginal performer?

How can managers/supervisors help marginal performers become high performing employees?

What options do managers/supervisors have for managing marginal performance?

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Identifying Marginal Performance

Missed deadlines

Decreased productivity

Lack of dependability

Lack of proficiency

Failure to perform current work assignments

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Understanding Causes of Marginal Performance

Ask Yourself:

What is it about the person’s performance that has a negative effect on the work being done?

What are things I actually see and hear that indicate there is a problem?

Does the employee know that there is a performance issue?

Have I clearly communicated performance objectives and expectations ?

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Understanding Causes of Marginal Performance

What aspects of the employee’s performance needs to change in order to convince me that the employee has improved?

Are there obstacles or barriers to the employee performing well (e.g. work environment, training)?

Is the problem marginal performance or misconduct?

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Marginal Performance

The failure of an employee to do the job at an acceptable level.


The failure to follow a workplace rule (whether written or unwritten). Examples of misconduct include tardiness and absenteeism, insubordination, and failure to follow instructions.

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Managing the Marginal Performer

Address marginal performance early

Document all evidence relating to that employee’s low performance level

Schedule performance review meetings with the employee

Be prepared to take appropriate action

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Tips for the Meeting

Avoid referring to the situation beyond the impact it has on the employee’s performance

Engage the employee in the discussion to obtain their perspective on the matter

Limit the discussion to job related issues

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Managing Continued Marginal Performance

Readdress the issue with the employee and discuss the causes for lack of progress

Continue to work with the employee to address and overcome performance issues

Determine whether or not the employee is still a good match for the position

Explore alternative options for managing the employee

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Managing Marginal Performance Under CAPS

Managers/supervisors have more options available for managing a marginal performer (e.g., developing a PIP, tailoring responsibilities, little or no pay increases)

Employees have a more vested interest in their performance throughout the year

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Helping Employees who are Failing

Develop and set specific expectations and standards

Closely monitor performance

Assign the employee a “mentor”

Give specific and timely feedback

Consider training, where appropriate

Provide work assignments that build confidence

Help employee plan and prioritize their work

Determine if the performance problem is a result of a non-work issue

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Grievance Procedures

15 calendar days to file a request for reconsideration (informal grievance)

15 calendar days to formally respond to informal grievance

10 calendar days to file formal grievance with WFMO

15 calendar days for WFMO to review grievance

45 calendar days for Deciding Official to respond to formal grievance

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Grievance Rights

  • Grievable

    • Performance Score

    • Rating

    • Pay Increase

  • Not Grievable

    • Performance Plan

    • Bonus Decisions

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Additional Information

For further information or questions, please contact your Servicing Workforce Management Office Representative

WFM website – A-Z, C for CAPS Information

DOC CAPS Resources Page