Implementing Performance Measures
MoDOT's Pete Rahn used performance measures to create a more open and honest working environment.
Pete Rahn, director of Missouri's Department of Transportation and a 2009 GOVERNING Public Official of the Year, worked to improve New Mexico's and Missouri's transportation departments by using performance measures to improve management, creating a more open and honest culture. What he learned as the transportation director in New Mexico about including all managers in the program development process helped pave the way for an easier implementation when he took the job in Missouri.
Rahn shared his best practices for establishing this type of workforce in a recent telephone interview. His edited remarks appear below.
What did you learn in New Mexico about managing your workforce?
When I started in New Mexico, I explained that I believed that the leadership's role is to point the direction of the organization. We then have to create a safe playing field -- that comes from our shared values. Then we need to empower employees. Lastly, we have to have accountability through performance measures to ensure we're headed in the direction that the leadership has pointed. Throughout this, we need to make sure we have an open, honest conversation about the issues we're facing. Then we invest in our employees through training and providing them tools to be successful.
I developed this direction and explained it to our employees. At one point during a discussion, a gentleman stood up said that I was really going to screw this place up. He said I would be gone in four years, and that the employees would still have the managers that they had been challenging to have this open, honest communication. Over the course of the next 45 minutes, this gentleman kept raising his hand and saying that I didn't know what I was doing.
A light bulb went off: He was doing exactly what I said had to happen. That is when I said, "What's your name?" Everyone said "Ooooh." They're expecting me to come down on the employee. He gave his name, and I said, "Because you had the courage to tell me what you think, I'm going to give you a day off with pay."
The room went silent. A gentleman in the front row raised his hand and said, "I don't like you either."
Using that method (to point direction, create a safe playing field, etc.), eight years later we had truly become the star of state government. We were the first agency to win the highest quality award in the state, and it really did work.
What I was able to bring from New Mexico to Missouri was really a lesson that I had learned the hard way, that this model [of working only with senior managers to develop performance measures and management techniques] was flawed. [In New Mexico] my executive team and I crafted the results we wanted to achieve and measures to focus on, and then we announced it to the department. Middle managers leaned back in their chairs with their arms folded, and it took me two years to overcome resistance by not having involved middle managers in this process.
When you came to Missouri, how did you put this lesson into practice?
One of our first activities as a senior management team was to go through that process as a group, and we redefined the mission. We chose our tangible results. We defined those shared values. And then we were able to go out and create the measures that go with that process. Using the same model as in New Mexico, but implementing it in a more open way to involve middle managers as well.
Within three months, we had our first tracker document. We had people changing the way they were making decisions. It really did make a difference. Now, as I talk to other states that are implementing performance management systems, I tell them that in the end, there might be little difference in the results chosen and measurements chosen. But having done it collaboratively - versus issuing a management edict - makes all the difference in the world of how quickly you can advance.
What has this management-involved model meant for performance?
Using that model in Missouri, we won the state's quality award after three years - not eight. It's a model that works extremely well. It's focused on empowerment. If you let people use their own talent and intuition to move you in the direction you've pointed, you produce far more than a micromanaged organization.
How have you measured your own performance?
Every year I have my senior management team evaluate me as a manager, anonymously. All 45 senior managers fill out a 51-question survey of my performance. The results are forwarded to me at the same time they are forwarded to the commission, so my bosses get to see how my staff has evaluated me at the same time I do. Each year, my evaluation is compared to the previous years. I believe in being held accountable myself. You put yourself at risk every year, but I really do believe it is leadership. Every one of my managers has the same activity go on with a shorter survey for their employees. Then beyond that, our entire organization evaluates their managers and supervisors as to whether they're an empowering manager or not.
Have you used the results of these surveys to weed out managers that don't work well within this type of program?
Yes, we have. We have a relatively high involuntary separation rate at our department. We have, for the last two years, been at two percent. We very much want to hold our employees accountable. As an organization, I don't believe we can afford to retain poor performers. We can't afford to have poor managers. We have to have mechanisms to identify those people.
By involving managers from the beginning in Missouri, did you still get pushback from them?
I was surprised how little pushback we got. Having experienced this in New Mexico, I thought it would take a long time. I was pleasantly surprised at how quickly this was implemented. To be fair to New Mexico (and I clearly take blame for the way we did this the first time through), we also were creating something for the very first time. Around the country, no one had a performance measurement system at a DOT. Our expectations of what you can learn from performance measures and even the benefits were unknown when we went into it. So I was able to bring that experience here. Just having the experience of going through it once, and having realistic expectations, better prepared me for my job here in Missouri.
Do your employees have greater job satisfaction? Do they feel comfortable in this environment coming forward to address problems with managers?
There are pockets. You will hear periodic comments that they just don't believe the process is confidential and they're not willing to say what they think. But, if you look at organization-climate surveys every year, when we ask how happy they are, the measures of satisfaction and overall engagement in their job have increased every single year for the last five years. We release these surveys to all employees because we have to be open and honest in our communication and not keep secrets.
Has the public responded positively?
Absolutely. One thing we've correlated is the public satisfaction survey and we're at 85 percent right now. We have increased our satisfaction over the past few years. We were at 47 percent in 1998-1999. Now, the correlation is generally related to the condition of the roads.
Other numbers we look at: [Twenty-four] percent of Missourians are very satisfied with MoDOT. But the one that blows that away is, for the first time, we asked the question last year "Do you trust MoDOT to do what it says it's going to do?" [Almost 90 percent] said "Yes, they trust MoDOT to do what it says it's going to do."
What is your number one suggestion to managers implementing a performance management system?
My number one suggestion is: Understand that performance measures are not performance management. Measures are a tool - no different than a compass. Performance management is where you take the information from measures, analyze, make decisions, change your behavior and then start all over. It's that cycle. That's performance management and that is what is different from performance measures. If all you do is measure and you don't analyze, you're wasting your time.