Willie O'Dea (Limerick City, Fianna Fail)
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To ask the Minister for Public Expenditure and Reform if he will subject the reformed Performance Management and Development System within the Civil Service to ongoing external monitoring and review; and if he will make a statement on the matter. [43411/12]

Brendan Howlin (Wexford, Labour)
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My Department is engaged in the ongoing review and reform of the Performance Management and Development System (PMDS) in the Civil Service.

A major external review of PMDS was carried out in 2005 by Mercer Human Resource Consulting (Mercer). Using best practice in the review and design of performance management systems, the Review of PMDS was a comprehensive evaluation that provided baseline information on how PMDS was working in 2005. The evaluation comprised feedback from a system-wide PMDS survey and a series of focus groups, interviews and workshops.

Since the Mercer evaluation, my Department reviews PMDS on an ongoing and comprehensive basis using both the survey instrument designed by Mercer and other methods of evaluation.

My Department ran a survey again in 2010, using the instrument designed by Mercer, across all staff in the Civil Service and the results of this survey - The Evaluation of PMDS Survey 2010 - are available on the Department’s website.

Other monitoring carried out by my Department on an ongoing basis includes:

- a review of the annual compliance with PMDS and the distribution of performance ratings across the Civil Service – also available on my Department’s website;

- feedback from the Secretaries General and HR managers on their perceptions of PMDS;

- focus groups and workshops on aspects of performance management including the management of underperformance.

The analysis of the results from The Evaluation of PMDSSurvey 2010 and other reviews carried out by my Department identified that there are serious deficiencies in the approach taken to performance management in the Civil Service. In general, PMDS is not seen as an effective tool in the management of performance. It is seen as overly bureaucratic, with an emphasis on form-filling, lacking in fairness and consistency, with too many staff getting high ratings. The feedback also highlights that there is a widespread belief across the system that underperformance is not being managed.

The operation of the PMDS system has very recently been subject to independent scrutiny by the Comptroller and Auditor General and the 2010 Report contained a Chapter on Performance Management and Development in the Civil Service. The C&AG’s audit highlighted issues such as the consistency and quality of the PMDS assessment process; the extent of timely compliance with PMDS; whether increments are effectively linked to appraisal results and how well the system is contributing to competency development and performance improvement.

The conclusions of the C&AG were in line with the findings of my Department’s analysis of the failings of performance management in the Civil Service. I have on previous occasions stated that PMDS is not working well but that we are addressing the issues in a structured and coherent way. My Department has used the findings from The Evaluation of PMDS Survey 2010 and the C&AG’s Report to improve the design and operation of PMDS. Significant changes to PMDS have now been agreed between management in the Civil Service and the unions under the Croke Park Agreement.

In 2011, an initial phase of changes was introduced aimed at improving the operation of PMDS. This involved streamlining the paperwork associated with PMDS primarily to create space for more discussion about performance between staff and managers. Critically we have also increased manager accountability for managing performance by giving a low rating to managers who do not manage the performance of their staff proactively.

In July of this year, my Department, alongside management of the Civil Service and unions, agreed further changes to address the more fundamental issues that were identified in both The Evaluation of PMDSSurvey 2010 and the C&AG Report in 2010 and, in particular, a perceived lack of fairness and consistency in the application of the system. These changes are:

- a new grade-based Competency Framework;

- a revised rating scale with improved descriptions of performance levels;

- reviews of performance will be decided by a process of calibration. This process is commonly used in many public and private sector organizations to assist managers in delivering a realistic and consistent approach to the assessment of performance;

- a more comprehensive process of internal review of ratings, with access to external review;

- a rating of ‘Fully Achieved Expectations’ will be required for the award of an increment.

A key challenge is for senior leadership across the Civil Service to demonstrate their own commitment to delivering a high performance culture and to fully engage line managers in the management and improvement of performance. My Department will continue to review how we mange performance in the Civil Service and on the basis of this we will continue to make changes aimed at improving PMDS as it is the primary tool for managing performance in the Civil Service.