11/16/11: The Union has received a substantial number of questions and comments from SEC employees about the November 10, 2011 email message from Chairman Schapiro to the staff concerning the SEC’s new performance management system.

Many employees have raised questions about management’s apparent decision to shift all of the performance ratings down this year, and its message that most employees should now be satisfied with a “3” rating. Aside from concerns that management seems to be veering perilously close to an illegal forced distribution of ratings, employees are expressing increasing frustration with the constantly shifting messaging emanating from senior management regarding how they should view their performance ratings. Enforcement and OCIE employees who participated in the same system last year are also expressing concerns that their ratings will now drop to satisfy management's latest views. Others are continuing to object to the inherent subjectivity of the new performance system, which will allow managers to "justify" whatever rating they want to give, without regard to objective factors.

The Union shares all of these concerns, and we have communicated them repeatedly to management. Unfortunately, the Union's suggestions have fallen on deaf ears. It is now necessary to allow the "pilot run" of management's new system to move forward so that we will be able to assess it.

A number of employees have also asked about the “two previous employee surveys” concerning performance management that are cited in the email message as somehow supporting management's new system. In fact, SEC employees have not been surveyed regarding what would constitute “adequate” distinctions between performance levels at the SEC. Nor has the staff been surveyed regarding expectations about how an effective performance management system should be structured, nor about just how such a system should be linked to pay. Although the annual Federal Employee Viewpoint Survey asks some questions that relate generally to employee views on issues such as whether performance appraisals fairly reflect employee performance and whether promotions are based on merit, no survey has covered these issues in any truly meaningful fashion. Accordingly, we are puzzled by the suggestion that the new system reflects employee views as reflected in “surveys.” It clearly does not.

In fact, the Union has repeatedly expressed to the Chairman’s senior leadership performance management team its concern that the SEC is failing to take into account staff concerns about performance management. During focus group sessions on the performance management system, scores of frontline employees have provided constructive criticism about the system. Their comments and suggestions, however, have been disregarded by management.

SEC management's failure to integrate employee input into the design of its performance management system is one of the reasons why the Union signed an agreement with the SEC a few months back requiring an independent study of the system by an outside expert after the pilot run this year. This independent study will include valid surveys and other metrics designed to identify the views of all of the key stakeholders at the agency. 

Employee feedback and involvement is a critical driver of success in any performance management system. A good example is the experience at the FDIC, another NTEU-represented financial regulator. At the FDIC, management closely partnered and collaborated with Union officials to design and implement their performance management and performance based pay systems. And they were highly successful. Indeed, in today's Best Places to Work rankings, the FDIC was ranked number one, as the best place to work in the Federal Goverment. The SEC, by contrast, has now plummeted to 27th place. The same NTEU compensation attorney who led the successful performance management effort at the FDIC is now handling the performance management and pay system discussions at the SEC. What is different? The management culture and approach to these issues at the SEC.

The Union will continue to keep you updated on new developments in connection with management’s new performance management system. We are hopeful that the independent study that is scheduled to occur in the early part of 2012, and the expert feedback it will provide, will provide a basis for future constructive discussions with SEC management on ways to get the SEC on the right track in connection with performance management.