1. Performance Assessment in Finland
MINISTRY OF FINANCE, FINLAND
Performance Assessment in Finland
Asko Lindqvist
Counsellor
Office for the Government as Employer
Personnel Department/AL

2. 1. What is performance management?
find the appropriate balance between the resources available and the results to be be achieved with them
balance resources and targets on the one hand and efficiency and quality on the other
the political decision maker sets the targets for the organization. The top management of the organization translates these targets into operational activities and delegates them down through the whole organization to the whole staff (organizational performance – individual performance)
Personnel Department/AL

3. 2. Enhancing performance management
Reform of budget legislation
performance management to become more strategic separating broad outcome targets (ministries) and operational performance targets (other entities) and connect these to the allocation of resources.
strategic outcome targets often quite vague while operational performance targets more precisely formulated and measurable
improved reporting and genuine accountability
to bring all the administrative sectors on the same level of development: in some sectors, PM is an advanced control tool while in others commitment has been low
Personnel Department/AL

4. 3. Basic performance criteria (1)
MINISTRY OF FINANCE, FINLAND
3. Basic performance criteria (1)
Outcome targets
Policy effectiveness: outcomes
Policy
effectiveness
How operations and finances have affected policy effectiveness
ACCOUNTABILITY
PERFORMANCE MANAGEMENT
Operational
performance
targets
Operational results: outputs (which can be influenced through management)
Operational efficiency
economy
productivity
profitability
cost-equivalence
Outputs and quality management
-goods and services
service capacity and quality
Human resource management
Personnel Department/AL

5. 4. Basic performance criteria (2)
MINISTRY OF FINANCE, FINLAND
4. Basic performance criteria (2)
Policy
effectiveness
OUTCOMES
ACCOUNTABILITY
PERFORMANCE MANAGEMENT
OUTPUTS
Goods an services, service capacity of the agency
Operational PROCESSES and their quality
RESOURCES
Appropriations, staff, intangible assets
Personnel Department/AL

6. 5. Individual performance
Performance and development targets discussions are conducted once a year at every level between the managers and foremen and their immediate subordinates.
The individual performance assessment is conducted as part of these discussions.
Every organisation has a set of criteria for assessing performance. Typically, the main criteria are “competence, effectiveness and co-operation”, with a set of sub-criteria for each main criterion.
Personnel Department/AL

7. 6. Individual performance (2)
The pay by individual performance is systematically linked with the performance rating given as the result of the performance assessment.
The rating is based on an analytical system of appraising the elements of the performances and combining the result into a rating.
The maximum pay has been agreed between 25 and 50 % of the basic salary, generally closer to 50 than 25 %.
The average amount of individual performance pay in relation to individual total pay is about 15 % according to latest statistics.
Personnel Department/AL

8. 7. Individual performance assessment and PRP
Measuring individual performance is one of the most crucial points of the PRP in terms of transparency and trustworthiness.
The transparency of the rating process consists of the publicity of the criteria and the detailed discussion on the performance that is included in the performance and development targets discussions.
This has meant a new and sometimes difficult role for the managers who give their estimates on individual performances.
Personnel Department/AL

9. 8. Individual performance assessment and PRP (2)
managers may not know adequately the contents of the work of their staff in order to assess their performance
managers may not be able to justify their assessments adequately
assessments have not been made regularly
individual targets have not been adequately explicit and clear
in expert work it would sometimes be better to assess teams rather than individuals
in conclusion: PRP calls for a reform of the entire management culture
Personnel Department/AL