Prepare for performance-based pay (2023)

The new local employee performance management program offers many benefits for employees and managers.

POR ELIZABETH LAMONTAGNE

Quelle: US-Außenministerium, Office of Human Resources, Office for Employment Abroad.

Have you ever managed a great local employee who is no longer eligible for a raise because they are at the top of their grade? Or did you have to encourage a local team member to "retire local" at the top rung? An exciting development for supervisors in the US and LE is the new performance management program for LE personnel in US missions called Merit-Based Compensation.

By the end of 2019, nearly 50% of US missions worldwide will have implemented MBC's new pay-for-performance system tools. Today, in 66 embassies around the world, supervisors and local officials recognize the many benefits this method of performance management offers. The Office of European and Eurasian Affairs fully adopted the CBM for all positions in 2016, and other offices have begun to implement the post-a-post program.

This is an important initiative that all American managers should be well informed about. Here's a short tutorial on the history of MBC, its many benefits, and what US direct employees and overseas local managers need to know about this inspiring program.

What is MBC?

Merit pay plans, incentive pay or performance pay as they are sometimes called, reward employees with raises, bonuses or other forms of financial compensation. Instead of tying performance bonuses to time on the job, employers reward top performance in the form of annual variable compensation. In 1995, the London Embassy launched a performance management program called Performance Related Pay. Jon Lloyd, HR Specialist on the LE team at Embassy London, led the initial effort to create the new performance pay scheme to shift the mission to a performance pay system consistent with prevailing practice at the time.

Embassy London was specifically seeking to develop a more contemporary methodology for managing, recognizing and rewarding LE employee contributions to US government work. The goal was ambitious and the territory disputed; Many stakeholders were highly skeptical and the chances of success were assessed as low. But, as the saying goes, "fortune favors the brave" and the HR team in London made progress. More than 20 years later, London and many other LE officials around the world are praising the show that came to be known as MBC.

MBC gives managers the ability to link employee performance directly to section and mission goals. Managers can create specific goals and prioritize them based on importance, not time spent. A numerical rating system (0-3) combined with more specific goals allows managers to differentiate team performance over a period of time, rather than having to give employees a general overall rating. At the end of the cycle, eligible employees receive a performance-related monetary reward based on total points. High-performing workers have the opportunity to receive a higher reward than they would with the current serial or level-up system. They also have the opportunity to move through the salary range more quickly than in the tiered system.

MBC gives managers the ability to link employee performance directly to section and mission goals.

Employees already at the top of their category are also eligible for an award under the MBC. They can't increase their base salary, but they are entitled to a lump sum reward for their hard work. In many positions, a significant percentage of employees have already reached the highest level, and the MBC will allow these employees to receive a performance bonus for the first time in many years. Many of these employees are high achievers who want to stay on mission. MBC can be an additional tool to help managers retain top performers.

In addition, MBC is working towards an annual cycle for all LE team performance reviews. Under MBC, supervisors are not required to track and complete employee performance reports at random times throughout the year based on each employee's hire date. MBC operates on a fixed annual benefit cycle, much like permanent direct hires in the US. Most positions use the February 1-January 31 evaluation cycle, and all LE team evaluations are due on the same date. Consequently, all LE team assessments are completed on time!

The crucial role of the supervisor

MBC creates the opportunity to improve communication between managers and employees. Because employee annual work plan criteria can include specific projects and items, such as teamwork and supervision, managers and employees need to communicate with each other more frequently to better assess employee progress. Since the MBC results in a variable monetary reward, both the employee and the supervisor have an interest in doing well.

Employees and managers take more ownership of the process and regular feedback is essential to the program. John Lloyd says: “Pride in shaping the future success of the mission has always been at the heart of our oversight body and the MBC program is the perfect platform for overseers to demonstrate the critical role they play in managing the resources that play in the best interest of the United States government".

MBC offers managers the opportunity to focus employees on mission objectives and the most important aspects of their individual work. For example, embassy leadership may require all departments to focus on a specific goal or objective proposed by the ambassador during the evaluation period. Because MBC allows for custom criteria in the evaluation, a manager can also have more control over how to instruct the employee to focus on a specific weighted objective.

Additionally, managers can use MBC to help employees improve and develop in specific areas. The flexibility of the program even allows supervisors to identify important jobs that fall outside of an employee's normal duties, such as: B. temporarily filling in for a colleague who has left the company.

But this has been tried (and failed) before...

It is true. The US government tested the benefits for civil servants and eventually went back to the tiered system. There are a few things that set MBC apart from other shows that have tried and failed. Under the MBC, public servants are placed in a performance group with other public servants of similar functions and grades (eg, grade 8 consular performance group). MBC adds an additional layer of review through the role of Group Supervisor, a senior employee hired directly from the US who is responsible for reviewing and approving employee reviews in their department or agency. Nicknamed the "gatekeeper of fairness and consistency," the group supervisor helps maintain the credibility of the program by ensuring that supervisors justify their scores.

Another aspect of CBM that other versions of pay-for-performance programs lack is the extensive analysis and evaluation that occurs at the end of each performance cycle. Missions can evaluate the data to determine if additional training is needed or if other adjustments are needed.

CBM represents a major transition for HR employees, supervisors and managers, therefore, when an entity decides to adopt CBM, the implementation is carefully orchestrated with subsequent specialized training. All HR assistants complete a one-week FSI course to ensure they are ready to implement the program and gain the tools they need to answer questions from their colleagues at work. Each mission also receives an in-depth visit from a subject matter expert who works with management to ensure that all mission personnel are fully briefed on the new program.

Many fear that a show like MBC will not work in certain regions or countries. In fact, pay for performance is very common (ie mainstream practice) around the world. An augmentation system is rare; it is usually only found in government organizations. Most of the organizations that US missions compare compensation and benefits with to make sure they are a competitive employer have used similar performance management systems for many years.

Will my next post include MBC?

In November 2017, the results of a survey sent to all agencies that have implemented pay for performance for a year or more were overwhelmingly positive for the program. 70 percent of those surveyed agreed that the CBM promotes additional meaningful communication between managers and employees and is an effective target identification tool. In addition, 56% of all employees felt that the start of the program at their workplace was well organized.

The experience in San Salvador is significant. There, the Human Resources team overcame misinformation and skepticism to successfully implement the CBM. With broad support from head office, they developed a highly effective marketing plan that included public meetings, presentations by US experts, and 34 informational sessions with 544 participants.

As CEO Holly Peirce explains, “The campaign delivered an easy-to-understand, fact-based message centered on three compelling points: (1) CBM is not a cost-saving measure; (2) the new system will result in higher compensation throughout an employee's career; and (3) all money budgeted for salary increases goes to employees (which was not the case previously).' The campaign, Peirce reports, has turned negative perceptions into cautious anticipation.

As of this writing, 66 stations worldwide have implemented or are in the process of implementing the program, so there is a good chance that US monitors will find MBC at their nearest station. All Office of European and Eurasian Affairs positions were moved to MBC, and at the regional level they were taken over by the Offices of Western Hemisphere Affairs and East Asia-Pacific Affairs. By the end of 2019, the Departments of Middle Eastern Affairs and South and Central Asia will have implemented the CBM in two locations, and the Bureau of African Affairs has initiated a trial and implemented the program in one location.

Overall, almost half of all foreign agencies will take over MBC by the end of 2019.

More information about MBC

Quelle: US-Außenministerium, Office of Human Resources, Office for Employment Abroad.

See more information...

• "Performance-Remuneration and Motivation of Employees in Federal Organizations"
• "The Pros and Cons of Merit Pay"