Chapter 6: Pillar Two: Performance Management Through a Knowledge Management Lens

OVERVIEW

One of the key four pillars of a human capital strategic plan is knowledge management, as discussed in the last chapter. The second pillar of a human capital strategy is performance management. As expressed in GAO's reports, performance management systems help create a results-oriented culture. In the September 2002 GAO Report (GAO-02-966) entitled, "Results-Oriented Cultures: Using Balanced Expectations to Manage Senior Executive Performance," several key points were highlighted:

• More progress is needed to link executive expectations for performance to organizational goals.

• Greater emphasis should be placed in fostering the collaboration within and across organizational boundaries to achieve results.

• Senior executive performance expectations to lead and facilitate change could be a critical element as agencies transform themselves.

• Selected initial implementation approaches for balancing expectations include providing useful data, requiring follow-up action, and making meaningful distinctions in performance.

In order to gain insights for U.S. agencies from other countries' performance management initiatives, GAO's report (GAO-02-862) in August 2002 looked at performance management systems of governments in Australia, Canada, New Zealand, and the United Kingdom. GAO found that these countries were creating a "line of sight" between individual and organizational goals; using competencies to provide a fuller assessment of individual performance; linking pay to individual and overall organizational performance; and fostering organizationwide commitment to results-oriented performance management.

From these studies and others, it is clear that performance management plays an important role in developing a human capital strategy. According to Hamilton Beazley, chairman of the Strategic Leadership Group and lead author of the book Continuity Management: Preserving Corporate Knowledge and Productivity When Employees Leave (John Wiley, 2002), it is estimated that in 2010 someone will turn 65 every seven seconds. Beazley believes that preserving knowledge continuity between incumbent and successor employees creates the requisite balance. In Anita Bruzzese's article, "Retaining Job Knowledge after Employees Exit Helps Workplace" (Wisconsin Rapids Daily Tribune, November 25, 2002), Beazley is interviewed and states that the key is preserving and continuing the network of relationships. Preserving, enhancing, and increasing the network of relationships is the very core of what knowledge management can offer. Knowledge management helps to connect people to people, and to connect people to critical organizational knowledge.

Fortunately, there is some hope in terms of interest in pursuing a job in the public sector. According to the 2002 graduates of Harvard's Kennedy School of Government, more than eight out of ten new public policy graduates are now working in the public sector, either in government or at nongovernmental organizations (The Chronicle of Higher Education, November 29, 2002). This is an increase of 35 percent from a year ago. In 2000, 58 percent of Harvard's Kennedy School graduates with master's degrees in public policy took posts in the public sector; in 2001, the proportion was 61 percent. In 2002, it was 83 percent (The Chronicle of Higher Education, November 29, 2002). Perhaps, some of this interest stems from increased American loyalty after the September 11 tragedy and from the increased interest in Homeland Security.

Let's review a few notions about how knowledge management can assist human capital management, and then we can see how knowledge management processes can add value to the performance management pillar of a human capital strategy. David Walker (Comptroller General of the U.S.), in his April 12, 2001, talk "Connecting People to Information," stated that knowledge management can assist human capital management in the following ways:

• It supports matrix management (i.e., with mechanisms to bring the right people with the right skills together to maximize the value and manage risk involved with any undertaking).

• It aids coordination across borders, sectors, agencies, levels, and boundaries.

• It helps leaders and employees embrace needed cultural transformations.

• It helps leaders manage change.

• It helps managers plan their IT efforts to support employees' knowledge sharing needs.

• It helps employees identify their efforts for their organization's strategic plan by assisting in building expertise, enhancing professional development, improving recruitment, and improving retention.

Certainly, bringing the right mix of people to form teams, promoting increased coordination among functional silos, and aiding leaders and employees in organizational transformation are important attributes of how knowledge management affects performance management in positive ways.

The Office of Personnel Management's "Handbook for Measuring Employee Performance" (PMD-013, September 2001), describes performance management as the systematic process of:

• Planning work and setting expectations

• Continually monitoring performance

• Developing the capacity to perform

• Periodically rating performance in a summary fashion, and

• Rewarding good performance.

In the next section, we take a look at how knowledge management processes can enhance these performance management processes.