SECTION 9.70 PERFORMANCE APPRAISAL AND MANAGEMENT 1980 11th ...

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SECTION 9.70 PERFORMANCE APPRAISAL AND MANAGEMENT 1980 11th ...

  1. 1. ICSC Section 9.70 Compendium Page 1 SECTION 9.70 PERFORMANCE APPRAISAL AND MANAGEMENT 1980 11th session (February/March): ICSC reviewed a comprehensive study on performance appraisal techniques used by the organizations of the UN common system and some other international organizations, by selected national civil services and by some private sector enterprises having operations international in scope. ICSC, in noting that effective performance appraisal was essential if the efficiency of the international civil service was to be improved and if proper career development measures were to be introduced, identified a number of principles which should be followed when determining performance appraisal systems [A/36/30, annex 1, para. 26]. 1980 12th session (July/August): ICSC considered that the development of effective performance appraisal systems was essential if the efficiency of the international civil service was to be improved and if proper career development measures were to be introduced. Consensus was reached on certain underlying principles and general considerations as well as on the objectives of performance appraisal. As regards the principles to be borne in mind when developing performance appraisal policies, ICSC affirmed that: (a) appraisals should be made on the basis of work done by the staff member and not on personality traits; (b) peer appraisal and subordinate appraisal should be discouraged. However, second-level supervisors should be involved in the appraisal process, both to ensure greater objectivity and as a control for consistency in the application of appraisal criteria among several immediate supervisors; (c) the problem of lack of time, interest and will on the part of supervisors to distinguish differences among staff members' performance called for serious attention; (d) the institution of appeals machinery was an important aspect of performance appraisal, especially in a multicultural environment such as existed in common system organizations; (e) with regard to the confidentiality of performance appraisals, the staff member should be given a complete copy of the appraisal, but the report should be given to future employers only with the agreement of the staff member [A/35/30, para. 269]. It was recognized that performance appraisal systems should not cause any surprise on the part of those being appraised. Appraisal was a continuing process. The appraisal process needed to be open if it was to be effective. Annual performance reports should summarize the appraisal communication which took place throughout the year [A/35/30, para. 271]. Performance reports should be an instrument of positive motivation by both stressing good performance and (while identifying not-so-good performance) trying at the same time to assist in developing means of improving it. Thus, while the appraisal discussed past performance, it should be forward-looking in trying to build for successful performance in the future [A/35/30, para. 272].
  2. 2. ICSC Section 9.70 Compendium Page 2 1980 ICSC identified the following 4 categories of performance appraisal objectives: (a) Work-related objectives provide a control for work done; improve productivity; improve efficiency; help in assigning work; determine if the objectives of the job are met by the staff member; plan future work assignments. (b) Career development objectives identify training needs; provide an opportunity to indicate career goals and aspirations; identify career possibilities within the organizations; identify strong and weak points and encourage finding remedies for weak points; determine career potential; plan developmental (promotional or lateral) assignments. (c) Objectives of communication permit a dialogue between the supervisor and the subordinate; provide adequate feedback on performance; clearly establish what is expected of the staff member in terms of performance and future work assignments; provide motivation and job satisfaction through open discussion of performance; let employees know where they stand within the organization in terms of their performance. (d) Administrative objectives check if the job description is up-to-date; serve as a basis for allocating merit awards; determine if an annual increment is to be awarded; serve as a basis for determining transfers; determine successful or unsuccessful completion of probationary assignment; serve as a basis for promotion or demotion; serve as a basis for extension or termination of contract in case of satisfactory or unsatisfactory service; serve as a basis for termination in case of reductions of staff; provide information for future employers
  3. 3. ICSC Section 9.70 Compendium Page 3 [A/35/30, para. 275]. 1980 ICSC considered that the following conclusions needed to be drawn if appraisal systems were to achieve the four major objectives: appraisal content should include work-related and career-related components; appraisal forms should provide a section on each of these: appraisal process should stimulate communication of appraisal content; follow-up action was required after appraisals to ensure that appraisal results were taken into account in administrative decision-making; and, finally, appraisal systems should be evaluated from time to time to determine if the four major objectives were being achieved. Consensus was also reached with regard to the confidentiality or otherwise of performance appraisals as well as on appeals mechanisms. ICSC considered that the appraisal should not be kept confidential from the staff member and that appeals should be permitted but only in those cases where it was believed that adverse discrimination, improper application of the appraisal procedures or other forms of unfair treatment had occurred. The appraisal itself should not be the subject of negotiation between the supervisor and subordinate, but rather the result of the responsibility of the supervisor to report accurately and objectively on performance. ICSC concluded, therefore, that while consensus had been reached on several issues, further study was required both on certain aspects of performance appraisal policy as well as on the forms to be used [A/35/30, paras. 278 and 280]. 1981 13th session (March): ICSC resumed consideration of the type of performance appraisal form and other policy questions which had been postponed pending the receipt of further views of CCAQ and FICSA [A/36/30, para. 217]. Performance appraisal within the multicultural context of the international civil service must, of necessity, be based as far as possible on objectively measurable data. Expectations of behaviour brought about by ignorance of the cultural values of others and personality conflicts resulting from differing behavioural norms were pitfalls to be avoided in international organizations. ICSC decided that the approach least vulnerable to such problems was that in which the objectives that needed to be achieved in a given job were identified and communicated to the incumbent in advance of the appraisal period. It identified several other benefits accruing from such an approach, including a strengthening of the links between performance objectives of individual jobs and the objectives of the organizational unit and identification of individual development objectives contributory to job objectives. ICSC considered that levels of job performance should be among the means of determining career advancement and that organizations, in applying performance appraisal systems, would achieve best results by striving to provide positive rewards for performance that excelled the norm and deterrents for substandard performance. It recommended that organizations should study means for providing appropriate awards within the current steps and range of the salary scale. It considered the role of the supervisor in the performance appraisal process as that of full responsibility for
  4. 4. ICSC Section 9.70 Compendium Page 4 1981 measuring the staff member's performance against work-related objectives and a shared responsibility with the staff member to develop the staff member's knowledge, potential and ultimately, career, and thereby, the potential of the organizations workforce. The performance appraisal of managers should include an evaluation of the manager's effectiveness in carrying out appraisals. Staff members should help their managers to set work-related performance goals and play a major role in defining career objectives. The role of the Personnel Department included primary responsibility for ensuring that the performance appraisal system was fully understood by all parties, appraisals were carried out properly and within the appropriate time, appraisal results were taken into account when administrative decisions affecting the workforce were made and the appraisal system was evaluated periodically to ensure that it was adequately achieving its objectives [A/36/30, paras. 220-222]. ICSC also affirmed that performance appraisal systems quickly became meaningless if they did not differentiate among different levels of performance and that objective criteria for differentiation were those related to the work of the position. Ideally, supervisors should each be given the liberty to identify differing levels of performance by reference to established objective criteria, without restrictions on the frequency with which different evaluations were to be employed. However, the experience of virtually all organizations was that, given such leeway, differing levels of performance were not identified. ICSC concluded that steps had to be taken to ensure that supervisors differentiated between levels of performance and that the most appropriate means of achieving this in the common system would be to require the use of a distribution by quartiles, according to four levels of evaluation, of those staff members who had met performance objectives during the appraisal period (those who had not met most objectives would be placed in a fifth level of evaluation) [A/36/30, paras. 223 and 224]. ICSC also approved and recommended a common system performance appraisal form (see A/36/30, annex X), which it believed most closely followed the policy principles it had established. Each organization would formulate instructions regarding the use of the appraisal form in conformity with other internal procedures and in consideration of other factors, such as the timing of appraisals throughout the calendar year and the size of the organization unit to which the quartiles would apply. It recommended that the new appraisal system and form be put into effect on 1 January 1982 and requested organizations to report at the 19th session (spring 1984) on their experience after two years' operation of the system [A/36/30, para. 226]. 1986 24th session (July): ICSC considered a report by its secretariat on a number of aspects of performance appraisal and recognition of merit, as well as on the discussions of a tripartite working group convened by ICSC in April 1986. Existing performance appraisal systems and common areas of agreement among the organizations on improvements to be considered were reviewed [A/41/30, para. 210]. ICSC reaffirmed 1986 the general principles and objectives of performance appraisal as identified in its sixth and
  5. 5. ICSC Section 9.70 Compendium Page 5 seventh annual reports and requested its secretariat; (a) to develop a broad framework of principles, providing organizations with general objectives and guidance for performance appraisal, for consideration at its 26th session; (b) to identify consequences for staff of different levels of performance, including appropriate recognition of merit, to provide guidance for staff to improve performance and to recommend sanctions for unsatisfactory performance, for review at the 26th session; (c) to examine the application of performance appraisal within the broader context of human resources planning (for consideration at the 28th session) [A/41/30, para. 217]. 1987 26th session (July): ICSC considered a document prepared by its secretariat proposing a set of 11 principles and associated guidelines for performance appraisal and considerations that should guide recognition of merit (A/42/30, annex XV). It recommended that: (a) the organizations should take into account the performance appraisal principles and associated guidelines and regularly appraise the performance of all staff members at least up to and including staff at the D-1 level; (b) the organizations should also take into account the principles and associated guidelines concerning appropriate consequences for different performance levels; (c) where necessary, the organizations should actively set targets to have their performance appraisal systems consistent with the performance appraisal principles and guidelines as soon as reasonably possible, but in any event no later than 1 July 1992; (d) the organizations should send their performance appraisal and recognition of merit plans, systems and forms to the ICSC secretariat for appropriate consultations [A/42/30, paras. 297 and 305]. ICSC recommended that appropriate action should be taken by organizations to deal with different levels of performance. Cash awards was one of the methods suggested for staff where performance over a single appraisal period on all the important elements of the job exceeded expectations [A/42/30, annex XV, para. 28 (b) (iv)]. By resolution 41/213, the GA requested the SG to transmit a number of recommendations of the "Group of 18" to ICSC for advice. In response to recommendation 50, ICSC recommended that the UN should take into account the framework of performance appraisal principles and guidelines adopted by ICSC at its 26th session [A/42/30, para. 45 (f)]. By resolution 42/221, the GA took note of ICSC's recommendation.
  6. 6. ICSC Section 9.70 Compendium Page 6 1989 30th session (August): After reviewing the report of the Working Group established to assist in carrying out the comprehensive review (see section 2.1.90) in the area of motivation and productivity, ICSC decided to reiterate its previous (1987) recommendation that cash awards be used to reward one-time performance with a single payment involving no permanent costs. Such awards might, for example, be considered for staff whose performance over a single appraisal period exceeded expectations on all (or exceptionally, some) of the important elements of the job. Repeated awards could be used for sustained superior performance if organizations had no other means to recognize such performance. ICSC also recommended that organizations: (a) ensure that groups, as well as individuals, were equally eligible to receive such rewards; (b) introduce, as appropriate, non-monetary awards such as service pins, plaques and certificates of achievement in line with its earlier recommendation; (c) introduce, to the extent possible, environmental motivators in the areas of security, health, education, and briefing, and other work-related conditions. ICSC also decided to monitor the granting of cash awards and requested the organizations to report on action taken thereon to the 34th session [A/44/30, vol. II, para. 357]. By resolution 44/198, the GA invited the organizations to introduce the ICSC's recommendations in respect of non-monetary awards and environmental motivators, and asked ICSC again to review performance evaluation systems in the organizations with a view to ensuring that such systems were objective and transparent and to tying within- grade step increments and promotions to merit rather than primarily to longevity. 1991 By resolution 46/191, the GA recalled its previous requests in the area of motivation and productivity of staff, and invited ICSC to pursue, as a matter of priority, its review of merit systems and performance appraisal in the UN system as a vehicle for enhancing productivity and cost-effectiveness. 1992 35th session (March): In addressing the above requests, ICSC reviewed a note prepared by its secretariat (ICSC/35/R.15) containing the outline of a study in the area of performance recognition, and evaluation both within and outside the UN common system. It endorsed the outline of the secretariat's study and looked forward to receiving a comprehensive report (ICSC/35/R.17, paras. 164-169) at its 36th session. Note: In reviewing the draft agenda for its 36th session, ICSC decided to defer consideration of this item to the 37th session. 1993 37th session (March): ICSC reviewed: (a) an overview of performance appraisal and merit recognition systems in the UN common system, along with an analysis of certain key issues in this area, some general conclusions and a proposed timetable for the development and introduction of reward and recognition programmes in the organizations; (b) a chronological summary of prior consideration by ICSC of the areas
  7. 7. ICSC Section 9.70 Compendium Page 7 1993 of performance appraisal, recognition of performance and the enhancement of motivation and productivity. This documentation prepared by the ICSC secretariat, is found in ICSC/R.15 and Add.1; a summary of the documentation was also made available. ICSC noted that the documentation before it was in the nature of a stock-taking exercise; specific outputs would be before it at the next session. It took note of the information presented and requested its secretariat to prepare for the 38th session revised/updated guidelines for performance appraisal, a framework for reward/recognition programmes in common system organizations, and a generic performance evaluation training module, together with a timetable for implementation [ICSC/37/R.18, paras. 191-198]. 1993 38th session (July): ICSC examined a proposed package of performance management measures developed by the secretariat along the lines indicated above. Noting that studies would be undertaken in 1994 with regard to the application of the Noblemaire principle which would not be limited to the area of remuneration but would encompass complementary human resources management aspects, ICSC concluded that it would be more appropriate to bring that package forward in the context of those studies [A/48/30, paras. 207 and 208]. The GA, in resolution 47/216: (a) recalled its requests in resolutions 45/241 and 46/191 that, as a matter of priority, ICSC resume active consideration of the substantive areas covered under articles 13 and 14 of its statute and, notably, review merit systems and performance appraisal in the UN common system; (b) noted, inter alia, the inclusion of studies on performance appraisal and the recognition of merit in the work programme of ICSC for 1993 and 1994; (c) urged ICSC, as a complement to studies being undertaken in the remuneration area, to give equal attention in its work programme to measures designed to promote sound personnel management in the international public service, including recruitment forecasting, human resources planning, performance management and staff development and training. 1994 40th session (June/July): ICSC had before it a performance management package consisting of: revised principles and guidelines for performance appraisal and management and for the recognition of different levels of performance; a framework for reward and recognition programmes; measures to deal with unsatisfactory performance; and a series of generic training modules for performance appraisal. In considering the different elements of the performance appraisal and management package before it, ICSC formulated the following conclusions:
  8. 8. ICSC Section 9.70 Compendium Page 8 1994 Principles and guidelines for performance appraisal and management and for the recognition of different levels of performance The 1987 principles and guidelines had been well received by the organizations, and with a few exceptions, the design of organizations' performance appraisal systems conformed to them. But it was equally clear that significant problems remained in the application of a number of systems. The principles and guidelines had therefore been updated with a view to underscoring the continued importance of properly functioning appraisal systems, focusing on problems of application and reflecting emerging trends in a rapidly evolving field. The major new elements introduced were: (a) a stronger focus on the importance of a performance-related management environment in which senior management set the tone in reinforcing the credibility of performance appraisal and management; (b) greater emphasis on the need for full transparency and understanding of the system at all levels; stronger insistence on the need for objective and rigorous appraisal of performance at all levels; introduction of the concept of competencies (i.e., generic standards of knowledge, skills and abilities applicable to job groups) as a complement to task-based performance appraisal schemes. ICSC emphasized, however, that the publication of those principles and guidelines would not, in itself, produce viable performance appraisal and management systems: that much was evident from the experience with the 1987 guidelines. If real headway was to be made, organizations had to be firmly committed to changing the way they recognized performance and prepared to dedicate the necessary resources to that end. Measures for dealing with different levels of performance ICSC recalled that, in 1987, its principles and guidelines had been accompanied by a recommended series of consequences for different performance levels. It reaffirmed, as a principle, the need to recognize different levels of performance, including meritorious performance. The question was how that should appropriately be done in the international civil service. ICSC noted that merit recognition was a useful human resources management tool because it sent a message to the workforce as a whole that the organization placed a premium on quality and excellence in performance and thus motivated all staff to perform better, thereby improving morale and productivity. Merit systems were, however, no substitute for a fair and adequate compensation system and should not be considered as compensating for salary levels that were perceived as inadequate. ICSC analysed extensive information regarding the use of merit-based pay and merit awards, both within and outside the UN system. It noted that merit recognition schemes of various kinds, ranging from award systems to full-fledged pay-for-performance, were now in widespread use by employers in both the public and the private sectors. Compensation- setting approaches varied from totally seniority-based systems to merit-based pay systems (also known as "performance pay" or "pay for performance") whereby
  9. 9. ICSC Section 9.70 Compendium Page 9 1994 a proportion of the employee's pay was placed "at risk" to be granted on the basis of an assessment of merit. That assessment might be arrived at through a comparative ranking or forced distribution or by granting merit pay awards to all staff achieving certain performance levels. ICSC noted that the current UN system pay structure provided for a scale of grades, through which a staff member progressed by means of promotion; salary progression within a given grade was by means of predetermined increments, granted subject to satisfactory performance on an annual (in some instances, biennial) basis. While nominally performance-based, the system was in practice more seniority-driven than official policies and provisions would indicate; the performance of only a minuscule proportion of staff was rated unsatisfactory and this had resulted in the within-grade increment becoming a quasi-automatic right, as opposed to a reward for satisfactory performance. ICSC noted that merit-based pay had the potential for forging more performance-driven overall organizational behaviours. However, experience had shown that unless merit- based pay was introduced in the right environment, it did not achieve the intended results. A prudent approach was therefore necessary. ICSC concluded that the approach that would best meet the needs of the common system as a whole at the current stage would be the introduction of recognition and reward measures for outstanding performance, coupled with appropriate measures for dealing with cases of underperformance and poor performance. It was of the view that performance management programmes should be based on a forced distribution approach. The core assumption of any ratings distribution should be that the majority of staff were rated at a level corresponding to satisfactory performance/full performance or the like. It was essential to remove the prevalent perception that "satisfactory" was synonymous with "mediocre": staff performing "satisfactorily" were conforming to the standards of the Charter of the United Nations and could expect a normal career progression. In that context, ICSC noted again the linkage between performance appraisal, merit recognition and human resources planning, and the need to put in place career management systems that would take the weight off the performance appraisal process and respond to the concerns expressed by staff about career stagnation. Performance appraisal rating systems should provide for at least three levels of performance: full performance, above full performance and underperformance. Whether organizations wished to introduce refinements of the latter two categories would depend on their individual circumstances. Assuming a five-level system, a distribution of performance levels was suggested [A/49/30, annex VIII).
  10. 10. ICSC Section 9.70 Compendium Page 10 1994 Recognition and reward measures ICSC noted that measures granted in recognition of meritorious performance were basically of two types: non-cash awards and cash awards. ICSC took note of the statements by organizations as to the current status of their efforts to improve their performance management systems, which seemed to confirm that emphasis was being placed on establishing sound performance appraisal systems as a sine qua non for merit recognition programmes. In order to move forward the process of performance management reform, ICSC concluded that it would be appropriate to make more specific recommendations for recognition and reward programmes for those organizations that wished to introduce them. In that connection, it noted the statements by several organizations that they did not envisage introducing merit awards, particularly of a cash nature, in the near future. ICSC therefore agreed to recommend parameters for organizations wishing to introduce recognition and reward programmes. In so doing, ICSC reiterated its earlier recommendation that cash awards should be lump-sum, non- pensionable bonuses, rather than additional within-grade increments and recommended that organizations that currently granted merit increments should discontinue them in favour of lump-sum bonuses. ICSC noted that the formula it was recommending would yield a uniform amount for staff in the P and higher categories, irrespective of duty station. For the GS and related categories, the amount would vary by location. ICSC recommended that the amount of awards should not exceed that for the P and higher categories (i.e., where application of the formula would lead to a higher amount for GS and related category staff, a cap should be set at the amount for P and higher category staff). The system of awards should be introduced on a trial basis for two years. Experience with the system should be reviewed thereafter. ICSC requested its secretariat, in consultation with the CCAQ secretariat, to develop a mechanism for monitoring and reporting on the operation of performance management systems, including recognition and reward programmes. It considered it desirable that reports on the subject should include feedback from the staff. It emphasized that initiatives in the area of performance management should be developed in close consultation with the staff representatives of the organizations. ICSC emphasized that the awards should reflect the team approach which it saw as particularly beneficial in a multicultural workforce like the UN system and strongly recommended that it be a major focus of both monetary and non-monetary awards. ICSC further noted the value of incentive-type awards, both individual "suggestion" type schemes and group incentive schemes. Group incentive plans must, however, be carefully designed and administered and should be integrated within a broader process of management improvement and reform. It should be possible to use part of the savings generated from successful group incentive programmes to fund reward and recognition programmes as a whole. ICSC also noted the value of special contribution awards. As to the use of personal promotions in that context, ICSC recalled that in 1993 it had reaffirmed the possible use of personal promotions in certain specific circumstances. It did not,
  11. 11. ICSC Section 9.70 Compendium Page 11 1994 however, in general advocate the use of personal promotions, and felt that the introduction of reward and recognition programmes could reduce the need for personal promotions. ICSC noted that, under its recommendations, awards of any type, whether to individuals or teams, would be limited to a maximum of 5 per cent of an organization's workforce. In the light of experience with similar schemes outside the system, ICSC noted the need for overall management control of such programmes and recommended that an annual ceiling on their cost should be set at 0.1 per cent of total standard costs. ICSC wished to emphasize that, unless organizations were contemplating a major reform of their human resources management and performance management systems, they should not embark on merit award systems. Consequences of unsatisfactory performance ICSC emphasized that performance appraisal systems were not designed to punish poor performers but rather to optimize performance at all levels. The fact remained, however, that there would always be a small minority of staff whose performance was not up to standard. ICSC concluded that the introduction of new procedures for dealing with cases of unsatisfactory performance was unnecessary; the problem lay with the application of existing procedures. Crucial to the proper treatment of underperformance was early detection and corrective action. Supervisors should not wait until the end of the appraisal period to inform staff that their performance was not up to scratch but should provide them with corrective feedback, counseling and coaching on a regular basis. The most effective cure for underperformance was prevention. The application of rigorous recruitment procedures, including structured interviews, would tend to lessen recruitment errors; conscientious monitoring of performance during the probationary period was also essential. The fewer poor performers that were recruited into, or retained in an organization, the easier it would be to apply sanctions in the rare cases that did occur. If an organization had reason to believe that it had a significant segment of staff performing below par, it might wish to take other measures to supplement those outlined above, e.g., attitude surveys. Training for performance appraisal ICSC considered a series of proposed generic modules for training in performance appraisal that had been developed in conjunction with the organizations. It endorsed the modules as an integral part of the performance management package it was recommending to the organizations [A/49/30, annex VIII]. ICSC: (a) invited organizations to assign high priority to the improvement of performance appraisal systems, as appropriate; (b) approved the modules for training in performance appraisal [A/49/30, annex VIII] and recommended their application in the organizations; (c) reaffirmed the importance of objective performance appraisal systems as a tool for performance management and improvement and, to that end, the need for performance to be evaluated realistically, objectively and rigorously, on the basis of accepted performance standards and competencies; (d) approved the revised guidelines
  12. 12. ICSC Section 9.70 Compendium Page 12 1994 for performance appraisal and management and the recognition of levels of performance [A/49/30, annex VIII, paras. 1-22] and recommended them for application by the organizations; (e) recommended that organizations wishing to introduce merit award schemes as part of their initiatives to enhance performance appraisal and management should do so within the following parameters: (i) merit awards should be limited to staff whose performance had been adjudged, on the basis of rigorous performance appraisal, to be truly outstanding; such staff should not exceed 5 per cent of an organization's workforce; (ii) merit awards might take the form of either a lump-sum non-pensionable bonus in a maximum amount of half a month's net base salary at the mid-point of the applicable salary scale or a non-cash award of up to the same amount or symbolic-type non-cash awards [ibid, paras. 33-49]; (f) approved the measures for dealing with cases of unsatisfactory performance [A/49/30, annex VIII, para. 50] and recommended them for application in the organizations; (g) decided to bring the results of its consideration of the matter to the attention of the GA at its 49th session, and of the legislative/governing bodies of other common system organizations, for appropriate action within the guidelines established by ICSC; (h) requested its secretariat: (i) to present a follow-up report on performance appraisal and recognition, including the application of recognition and reward programmes, at ICSC's 45th (spring 1997) session; and (ii) to continue in the meantime to study other merit-based approaches to pay-setting and to report thereon to ICSC, as appropriate [A/49/30, paras. 292-293, 347, and annex VIII]. By resolution 49/223, the GA reaffirmed the key importance of performance appraisal and management to enhanced organizational effectiveness; and urged the organizations of the common system that had not already done so to give high priority to the development of viable performance management programmes, including performance appraisal systems, in the broader context of personnel reform. 1996 In resolution 51/216, the GA: (a) requested the UN/SG to make operational proposals to the GA by 1 October 1997, for its consideration at its 52nd session, on the possibility of introducing a system of performance awards or bonuses, in the context of the performance appraisal system, to a limited number of staff in recognition of their outstanding performance and specific achievements in a given year; (b) invited the executive heads of the organizations of the UN common system to develop and submit proposals to their relevant intergovernmental bodies, as a matter of priority, on the possibility of introducing performance awards or bonuses to a limited number of staff in recognition of their outstanding performance and specific achievements in a given year, and to coordinate, to the extent possible, these proposals with those developed by the UN/SG; (c) requested ICSC to provide general comments on the concept of performance awards and bonuses to the GA at its 52nd session; (d) decided that the above requests should apply in respect of staff in both the P and higher categories and the GS and other locally recruited categories. 1997 45th session (April/May): ICSC reviewed the experiences organizations had made with
  13. 13. ICSC Section 9.70 Compendium Page 13 the performance management packages developed by ICSC in 1994. In resolution 51/216, the GA had invited ICSC to provide general comments on the concept of performance awards and bonuses to its 52nd session. In the same resolution, the GA had requested ICSC to "take the lead in analysing new approaches in the human resources management field so as to develop standards, methods and arrangements that will respond to the specific needs, especially future staffing of the organizations, inter alia, consideration of flexible contractual arrangements, performance-based pay, and the introduction of special occupational rates, and to report to the GA thereon at its 53rd session." ICSC requested its secretariat to develop a framework for performance management schemes in the common system, for submission at its next session [ICSC/46/R.10, paras. 167-191]. 46th session (July): Following a comprehensive review of the issue, ICSC decided to replace the recommendations on cash awards as contained in its 1994 annual report with the following: Cash awards to any individual for given performance period should not exceed 10 per cent of the mid-point of the base/floor salary for P staff and 10 per cent of the mid-point of the net salary for GS staff, with a cap at the amount for P staff in case the amount for GS staff would otherwise be higher. Performance awards and bonuses should not be payable to more than 30 per cent of the workforce. Non-cash awards should be subsumed within the ceiling; however, symbolic awards, letters of appreciation and the like could be considered in addition to the ceiling and should be granted in conjunction with non-cash or cash awards. The amounts of awards should be differentiated according to performance level, with higher amounts payable to those rated as outstanding. The overall cost of a recognition and reward programme should not exceed 1.5 per cent of an organizations's projected remuneration costs (i.e., net remuneration for P and higher category staff, salaries for the GS and related categories). The basis for determining who receives an award should in principle be the ratings deriving from the performance appraisal system. That determination might be supplemented by the findings of a merit review board, performance review group or similar body that would screen recommendations for merit awards. ICSC further decided that any pay-based approach to performance recognition should be introduced on a pilot basis and that such schemes should be developed in close consultation with the ICSC secretariat. On the basis of its review of the management of underperformance, ICSC considered that the identification and proper treatment of unsatisfactory performance should be part and parcel of an organization's performance management strategy. Performance improvement measures should be integrated more explicitly into performance management strategies. In the small number of cases where staff were not performing
  14. 14. ICSC Section 9.70 Compendium Page 14 1997 up to par, it was important to tackle the problem promptly and forthrightly in order to preserve the credibility of the system, the reputation of the organization and the motivation of the staff as a whole. Early detection and corrective action was crucial to the proper treatment of underperformance, while prevention was the best option. ICSC defined the roles and responsibilities of the different parties as follows: staff members bear primary responsibility for their on-the-job performance; individual staff members were expected to accept responsibility for tackling performance problems and should discuss with the supervisor/manager any factors impeding their performance at full capacity. Senior managers should show by their own actions that they take performance management seriously as an integral part of the organizations's human resource management strategy. Managerial and supervisory staff should model the behaviour they expect of their staff, ensure that tasks and standards are clearly articulated and provide constructive ongoing feedback and identify and develop options and strategies for positively influencing performance. ICSC further considered that performance appraisal should incorporate a predefined performance plan; that if the performance appraisal showed to be below the fully acceptable level described in the performance plan, the staff member's within-grade salary increment should be delayed or withheld. If, after a reasonable period of time (e.g., one year), the staff member's performance remained unsatisfactory, further action needed to be taken in the light of the circumstances of the case. Proper documentation of incidents of poor performance and corrective action recommended at every stage was crucial and ultimately, perhaps, was the key to the successful management of underperformance. Managers should be fully apprised of procedures and processes; information and training in that regard should be an essential component of managerial and supervisory training. ICSC strongly encouraged the use of procedures that involved performance ratings being assigned by others in addition to the staff member's supervisors. ICSC also considered that the use of multi-base assessment techniques could do much to foster a climate of openness, transparency and trust. ICSC requested organizations to present biennial reports on their performance management schemes, including the utilization of cash awards, using a format to be developed by the ICSC secretariat in consultation with the organizations. ICSC requested its secretariat to complete and circulate to the organizations and staff a portfolio of best practice in the area of performance management [A/52/30, paras. 167-219]. In resolution 52/216, the GA welcomed the comprehensive information provided by ICSC and invited the executive heads of organizations of the common system to develop their performance management programmes within the parameters set by ICSC in paras. 213 and 219 of its report [A/52/30].

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