Sixteenth Annual Report to the Prime Minister on the Public Service of Canada

Annex E: The Deputy Minister Performance Evaluation Model

Table of Contents

Objective

Context

The Results

Conclusion

Objective

A key element of effective management in large organizations is rigorous processes for objective-setting and performance evaluation for senior executives. In 2006-07, as part of our public service renewal priorities, we focused on a major restructuring of our approach to senior level performance evaluation in the federal public service. Our goal was to put in place a best-in-class performance evaluation and feedback system. To realize this goal, a fundamentally revised system for deputy ministers and associate deputy ministers was finalized for the 2007-08 performance management year. It is now being extended to all executive levels beginning in 2008‑09.

Why is this so important? Clarity of objectives, rigour in evaluation of how well these objectives are achieved, specific accountability for results, and clear and respectful feedback are the core elements of an effective performance management system. Such a system not only enhances the management capacity of any organization, but it particularly strengthens the ability of large, complex organizations to focus on common corporate objectives and, for the Public Service of Canada, it sends a clear signal about the accountability of our senior executives and the importance we place on results.

Context

Best practice in performance objective-setting and evaluation has evolved considerably in recent years. Informality has increasingly given way to formality; subjective measurement of objectives and results has become more quantitative and specific; and ad hoc, conversational feedback has shifted to structured feedback systems and interactive discussions with executives on objectives and results.

Given this, we felt a fundamental restructuring of the performance management and evaluation system for executives was required as a core element of public service renewal, beginning with deputy ministers and associate deputy ministers. In the Public Service of Canada, a performance management system already existed for deputy ministers and associate deputy ministers (approximately 85), assistant deputy ministers (approximately 400), and other executive levels (approximately 5,800). The revised system is intended to provide clearer signals and incentives to senior executives for results, promote corporate priority-setting and ensure clearer feedback and executive learning.

At the heart of our strengthened performance system are two elements: a performance agreement, which embodies a clear statement of concrete objectives for the year; and a performance evaluation process relative to that performance agreement, which is rigorous, quantitative and transparent. The performance agreement is a mutual understanding of what is expected during the performance period; for deputy ministers, their agreement is with the Clerk of the Privy Council, for associate deputy ministers, theirs is with their deputy minister. The commitments in the performance agreement, accompanied by performance measures, reflect the organization’s priority areas of focus for the year, as well as corporate and leadership objectives. The commitments must be result-oriented, measurable and challenging, but achievable within the executive’s span of influence and control.

For each performance agreement, there are three basic categories of commitments:

• Policy/Program Results: These commitments are consistent with organizational business plans and broader government objectives as set out in the deputy minister’s mandate letter and in the business plans for the department/agency.

• Management Results: The management expectations are set out in the Management Accountability Framework (MAF) from the Treasury Board Secretariat and serve as benchmarks for expected management performance of all senior leaders, including their management of human resources.

• Leadership Results: These commitments reflect the expected demonstration of key leadership competencies for all senior leaders, including values and ethics, strategic thinking, engagement, and commitment to management excellence.

The evaluation process equally needs to be rigorous and credible, providing a comprehensive and objective picture of the performance of each deputy minister and associate deputy minister relative to their performance agreement, and the context in which they operated during the year. There are four basic elements of the restructured evaluation process:

• Self-Appraisal: Deputy ministers are required to evaluate their own performance against the objectives and performance measures set out in their performance agreement. In addition, a retired deputy minister has been engaged to meet individual deputy ministers to discuss their self-appraisal, seek the views of selected colleagues, and provide this perspective on each deputy minister and associate deputy minister to the peer review committee (see below).

• Management Assessments: Management Accountability Framework assessments are provided by the Treasury Board Secretariat for each deputy minister and are the mainstay of evaluating management performance in departments/agencies. These structured assessments provide a qualitative and quantitative evaluation of the management of each organization including whether MAF measures have improved, deteriorated or stayed the same compared with the previous year. These are supplemented by the views of the Official Languages Commission, the Human Rights Commission, the Public Service Commission and the Privy Council Office on their areas of intersection with each organization. Evaluation of human resources management will be strengthened by an annual, on-line survey of employees due to begin in 2010.

• Peer Review: A Committee of Senior Officials, composed of deputy ministers and chaired by the Clerk of the Privy Council, reviews all evaluation input and provides its own comments on the individual performance of all deputy ministers and associate deputy ministers. The committee is charged with collectively arriving at both the performance evaluation rating and the narrative feedback to be provided to each individual. These evaluation ratings are then recommended to the Prime Minister.

• Feedback: Following this peer review, the Clerk and Associate Secretary meet with all deputy ministers to provide structured, 45-minute feedback on their evaluations, with a clear identification of strengths and weaknesses and suggestions for learning. The Associate Secretary provides similar feedback to all associate deputy ministers.

The Results

A sound performance management program relies on its ability to clearly identify and reward results, both individual and corporate, through “at-risk” performance pay. As in the private sector, it would be expected that most executives would receive some at-risk pay. However, in line with best practices in the private sector, the Advisory Committee on Senior Level Retention and Compensation has recommended that no more than 20 percent of the public service executive cadre be eligible for a bonus payment in any given year, that at least 5 percent receive no at-risk pay at all, and that the rest receive some at-risk pay according to their evaluation rating. This recommendation has been incorporated into the strengthened executive performance management system.

As the table below indicates, the performance management system for deputy ministers and associate deputy ministers has certainly achieved this distribution of evaluation ratings for the last several years. This is a reflection of the increased rigour and integrity in the assessment process, as well as the reservation of the bonus rating for truly outstanding performance.

Conclusion

Major structural changes have been implemented to strengthen the performance management system for deputy ministers and associate deputy ministers. These changes have significantly improved rigour and transparency and, in so doing, the integrity of the senior executive performance management system. Furthermore, it has also made the performance management system a more effective tool for achieving corporate objectives and encouraging executive responsibility and accountability.

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