Why can't government handle cascading goals?

Howard Risher is a private consultant who specializes in pay and performance.

The April 4 FCW.com article “How to link employee performance to organizational goals,” by Michael Hardy, discusses an important performance management strategy in summarizing points made by a speaker at the recent FOSE Conference.

The idea, referred to as cascading goals, has been illustrated in textbooks on management for more than 30 years. The idea is simple. It starts with executives who define their performance goals in the context of the organization’s goals. Then people at each succeeding level in the hierarchy define their goals to link to the goals at the level above.

Studies have shown that people are more engaged and motivated when they can see how their efforts contribute to achieving the goals of the organization. That understanding is referred to as line of sight. It’s a very powerful idea at organizations where performance is managed by tracking progress in achieving goals.

In the private sector, the approach is virtually universal for executives, managers and professionals. Many companies have monthly meetings to discuss progress and address performance problems. But what was not discussed in the FCW.com article is the problem government agencies have with goal setting.

In the past year, I looked on the Office of Personnel Management website for examples of Senior Executive Service goals and found that even OPM has trouble distinguishing between activities, outputs and outcomes — and, of course, the examples were supposedly relevant to executive positions. Based on my limited exposure to government job descriptions, it seems there is an almost obsessive focus on activities.

It’s well established that people with high, specific and self-accepted goals will perform better than employees who have no goals or “do your best” goals. Goals provide a focus to one’s efforts, and people respond to the challenge.

There’s also a connection to the recent focus on employee engagement. Gallup’s research shows that employees who understand what is expected of them are more likely to be emotionally engaged in their work. Simply performing the same activities day after day is not going to trigger a sense of engagement.

In the business world, the achievement of goals is commonly linked to financial rewards via a formula. That linkage is important. Bonuses are subjective and determined after the performance period, but incentives are explicitly linked to measurable performance. The payout for precisely achieving a goal — known as a guideline award — is expressed as a percentage of salary (say, 20 percent). Actual awards are reduced for performance that falls below the goal or planned level and increased when performance exceeds the goal. It is the potential swing in the payout — possibly from 10 percent to 30 percent of salary — that provides the incentive.

The understood but typically unstated reason for placing so much emphasis on goal setting and potential incentive payouts is that it is way to hold employees accountable but also give them the freedom to tackle work-related problems. They control how much they earn.

All of that works well in the private sector. I have managed such programs at two large corporations and know it’s virtually routine.

There is no reason to think it would not work just as well in government. The key is setting credible, meaningful goals for the organization. SMART — specific, measurable, attainable, relevant and time-bound — goals are essential if executives, managers and professionals are expected to align their goals accordingly.