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The Performance-Based Bonus (PBB):

Relevance, Improvements and Future

Direction

Presented by

Magdalena L Mendoza

DAP/AO 25 Technical Secretariat

October 20, 2016

Outline of Presentation

• Performance Challenges in the Public Sector

• Results-Based Performance Management

• Performance-Based Incentives

• Highlights of Implementation, FY 2012-2015

• Enhanced PBB for FY 2016

• Gains, Lessons and Future Directions

It’s RESULTS that matter

“If you don’t measure results, you can’t tell success from failure

If you can’t see success, you can’t reward it

If you can’t reward success, you’re probably rewarding failure

If you can’t see success, you can’t learn from it

If you can’t recognize failure, you can’t correct it

If you can demonstrate results, you can win public support.

Source: Osborne and Gaebler, 1993

Performance Challenges in the Public Sector

Performance Challenge #1: Results that matter to citizens

Performance Challenge #2: Cascading & aligning goals

GOAL GOAL

Performance Challenge #3: Changing culture and mindsets

Across-the-board incentives

“Skewed” performance evaluation

“Penalty for poor performance is something the bureaucracy is avoiding”

Performance Challenge #4: Monitoring and reporting accomplishments

Office of the President

Oversight Agency

Oversight Agency

Department Attached Agency

Department

Regional Office

Provincial/Field Office

Agency

Inter-Agency Body

Oversight Agency

Oversight Agency

Oversight Agency

Oversight Agency

Oversight Agency

Oversight (branch)

Field Office

Results-Based Performance Management System

Administrative Order No. 25, s.2011

Creation of the Inter-Agency Task Force on the Harmonization of

National Government Performance Monitoring, Information and

Reporting Systems

Executive Order No. 80, s.2012

Adoption of a Performance-Based Incentive System for Government

Employees

Executive Order no. 99, s.2012

Reconstitution of the Office of the Cabinet Secretariat to Cabinet

Secretary

Executive Order no. 201, s.2016

Modification of the Salary Schedule for Civilian Government

Personnel

Legal Bases

Sub-TWG

on Outreach and Change Management

Sub-TWG

on Research and Planning

AO 25 Inter-Agency Task Force

Secretariat

Sub-TWG

on Implementation and Monitoring

• DBM • NEDA

• OP • PMS

• CSC • CESB • COA

• Ombudsman • NCC • GCG

• CHED • LWUA • DILG

• DAP

Partner Agencies

• DOF Principal Agencies

Putting together the system Aligning Societal, Sectoral, Organizational down to Individual Goals

PDP Results

PDP Results

OPIF OPIF

Key Results Areas/Prioritie

s

Balanced perspective

CESPES

Statutory Requirements

SPMS

Probity & Legal Reqts

Performance-Based Bonus (PBB)

– top-up bonus based on delivery

unit’s/individual’s contribution to the

accomplishment of agency targets

Performance-Based Incentive System

PBB

PEI Productivity Enhancement

Incentive (PEI) – across-the-board

bonus of P5,000 per employee

* For FY 2015, the amount of PEI was equivalent of one month basic salary. For FY 2016, the PEI is reverted to P5,000 since the 14th month pay is already granted per Executive Order No. 201, s. 2015.

PBB Criteria and Conditions

Good Governance Conditions

Physical Targets

2012 & 2013

Performance-Based Bonus:

Eligibility Criteria and Conditions


Physical targets

Transparency Seal, PhilGEPS posting, Citizen’s Charter (ARTA), Report on

CA, SALN (*2013)

KRA targets

MFOs: 3 Strategic Indicators per MFO

STO: 2 most

significant indicators

GASS: 2 most significant indicators, COA FS, Budget

Utilization Rate (*2013)

Transparency Seal, PhilGEPS posting, Citizen’s

Charter (ARTA), SALN

KRAs, OP Planning Tool, EODB targets

STO: QMS milestone or Opn Manual, ISO (*2015)

and 2nd STO indicator

GASS: COA FS, Report on CA, BFARS, BUR, Annual

Procurement Plan, APCPI (*2015)

2014 & 2015

MFOs: All MFO targets based on GAA

Performance Rating and Ranking

Delivery Units

Individuals

FY 2012 FY 2014-FY2015

Rank Distribution

Best 10%

Better 25%

Good 65%

Rank Distribution

Best 10%

Better 25%

Good 65%

Rank Distribution

Good (Better/Best)

Best 10% (15%)

Better 25% (30%)

Good 65% (55%)

FY 2013

Same

Rank Distribution (OPPT/EODB)

Best 10% (15%)

Better 25% (30%)

Good 65% (55%)

Rank Distribution

Best

DU

Better

DU

Good

DU

Best 20% 15% 10%

Better 35% 30% 25%

Good 45% 55% 65%

* Delivery units that did not meet at least 90% of targets are excluded from ranking

* Individuals with less than “Satisfactory” rating excluded from ranking

Interim-PBB for GOCCs under GCG:

Criteria and Conditions

Physical Targets

• Achieve a weighted-average score of at least 90% in its Performance Scorecard

• Certified Quality Management System (QMS) for at least one core process or Operations Manual covering selected core processes or areas of operation


• GG conditions common to national agencies

• Conditions set by GCG – Payment of applicable taxes

– Time-bound action plans on COA Notice of Disallowances and AOMs

– Manual of Corporate Governance

– Posting of required information in the GOCC website

Interim-PBB Ranking & Rates of Incentives

For Profitable GOCCs

Percentile Multiple of monthly

basic salary

Top – Maximum 10% 2.5

Next – Maximum 25% 1.5

Remaining – Minimum 65%

1.0

For Losing GOCCs

Percentile

Amount (in pesos)

Top – Maximum 10% 25,000

Next – Maximum 25% 15,000

Remaining – Minimum 65%

7,500

Note: Provided, that the total cost of the PBB shall not result in a net loss for CY 2015 computed before subsidy and unrealized gains/losses, and after taxes.

PBB for Local Water Districts:

Criteria and Conditions

Physical Targets

• Achieve at least 90% of each one of its performance targets for the delivery of MFOs, STO, and GASS for the year

• Compliance to PFM reporting requirements of COA and DBM

• Compliance with LWUA reporting requirements

• Adoption and use of the APCPI System

• Submission of APP


• GG conditions common to national agencies

– Transparency Seal

– PhilGEPS Posting

– Citizen’s Charter

• Payment of applicable taxes

PBB Ranking & Rates of Incentives - LWDs

Performance Category of

Delivery Unit

Individual Personnel

Best Performer (Outstanding)

Better Performer (Very Satisfactory)

Good Performer (Satisfactory)

Best Delivery Unit P35,000

(20%) P20,000

(35%) P10,000

(45%)

Better Delivery Unit

P25,000 (15%)

P13,500 (30%)

P7,000 (55%)

Good Delivery Unit P15,000

(10%) P10,000

(25%) P5,000

(65)

Poor Delivery Unit - - -

The ranking of delivery units shall be based on the average rating of all the Individual Performance Commitment and Review (IPCR) within the delivery units using the Office Performance Commitment and Review (OPCR).

Highlights of Implementation

Initiation Phase

Harmonization Phase

Stabilization Phase

Institutionalization Phase

2012

2013

2014

2015

P

I

E

P

P

I

I

M

M

E

E

Phases of Implementation

2016

Refinement

P

I

M

E

M

Participation Rate

DQ - 21% DQ - 19% DQ - 8% DQ - 12%

FY 2015 Compliance with QMS, APP and APCPI

Compliance with Good Governance Conditions

Number of Disqualified Agencies FY 2012 to FY 2015

FY 2012 FY 2013 FY 2014 FY 2015

DEP’Ts

COs & Others

OEOs

GOCCs covered by DBM

SUCs

TOTAL

0%

14%

38%

27%

21% (41/191)

9%

0%

19%

27%

22%

19% (37/192)

4 % 9%

0%

11%

27%

7%

8% (17/192)

7 %

3%

11 %

7%

20%

12% (36/298)*

* In FY 2015, attached agencies were evaluated separately; 8 agencies with pending assessment

Result of I-PBB for GOCCs under GCG

FY 2013 FY 2014

Total GOCCs Covered

Total Non-PBB-Participating GOCCs

Total PBB-Participating GOCCs

> Approved and Authorized

> Denied Authority to the Grant of IPBB

> GOCCs that No Longer Apply

> GOCCs Unable to Join

124

46

78

62

10

6

0

107

17

90

57

15

4

14

The FY 2015 validation process is still ongoing.

The results of FY 2015 will be available

as soon as the validation process is completed.

FY 2012

125

45

80

46

20

3

11

• Online Monitoring System of Agency Compliance and Performance

Scorecards - http://www.dap.edu.ph/rbpms/agency-performance/

Agency Performance Scorecards

Enhanced PBB

Enhanced PBB beginning FY 2016

Harmonized implementation of the PBB

with EO 201

Priority programs based on the EO 43,

OP Planning Tool, EODB targets shall

be suspended for FY 2016 PBB only

PBB Rates of individuals shall depend

on the performance ranking of the

bureau/delivery unit where they belong.

Third level officials should receive at

least “Satisfactory” rating under the

CESPES

Eligibility Criteria for National Government Agencies

Achieved agency FY 2016 GAA performance

targets

Achieve targets for STO and GASS

Satisfy 100% of good governance conditions

set by AO 25 IATF

Use CSC-approved SPMS in rating First and

Second Level employees and officials holding

managerial and Director positions but are not

presidential appointees

Use CESPES in rating of CES officials and

incumbents of CES positions

Good Governance Conditions for FY 2016

Maintain/Update Transparency Seal (Sec. 99 of

GAA 2016); include FY 2016 APP, ISO QMS

Certification or ISO-aligned QMS documents

Maintain/Update PhilGEPS posting (ALL)

Maintain/Update Citizen’s Charter or its

equivalent, Service Charter

The assessment of agency compliance on GGC and other PBB

requirements shall start on October 1, 2016.

Performance Targets for FY 2016

MFO indicators and targets in the FY 2016 PIB

approved by Congress shall be the basis for

assessing eligibility for the PBB

In addition, agencies must accomplish two STO

targets and common GASS targets

Support to operations:

a. STO target set by Head of Agency

b. Establishment of QMS for at least one core

process certified by any international

certifying body or ISO-aligned

documentation of agency QMS

Performance Targets for FY 2016

GASS targets:

1. Budget Utilization Rate (BUR)

a. Obligations BUR

b. Disbursement BUR

2. PFM reporting requirements of DBM and

COA

a. BFARs

b. Report on Ageing of Cash Advances

c. Mandated financial reports (to COA)

3. Adoption and use of the FY 2015 Agency

Procurement Compliance and Performance

Indicators (APCPI) sytem

4. Submission of Annual Procurement Plan for

FY 2016 based on the approved budget to

the GPPB-TSO

Compliance with APCPI and APP

The APCPI Tool may be downloaded from the GPPB

website: www.gppb.gov.ph/apcpi/apcpi.html

Submit in Excel format AND printed copies on or before

December 1, 2016 to [email protected] or to the

GPPB-TSO front desk

APPs must be approved by HOPE using the format under

the GPPB Circular No.07-2015

Scanned copy of the APP may be sent ot GPPB-TSO;

[email protected]

For purposes of the PBB, the FY 2016 APP should be

submitted within one month from issuance of the PBB

Guideline

http://www.gppb.gov.ph/apcpi/apcpi.html

mailto:[email protected]

mailto:[email protected]

Ranking of Delivery Units for FY 2016 PBB

Bureaus, offices or delivery units eligible to the PBB shall be forced ranked

according to the following:

For purposes of PBB, agencies attached to a department or department-

level entity shall be treated as an agency separate from its parent

department and shall have a separate ranking of delivery units

Ranking Performance Category

Top 10% Best Bureau/Office/Delivery Unit

Next 25% Better Bureau/Office/Delivery Unit

Next 65% Good Bureau/Office/Delivery Unit

Ranking of Delivery Units for FY 2016 PBB

Delivery unit is the primary subdivision of a department, agency, GOCC, or

SUC performing substantive line functions, technical services, or

administrative support as reflected in the structure

Type of Government Entity

Department or Department-Level

Agency State Universities and Colleges

GOCCs

Intermediate Level Bureau Level

Delivery Units

Offices Bureaus Services Regional Offices, if any

Offices Bureaus Services Regional/Field Units, if any

Divisions Field Units, if any

Offices Services Campuses Colleges

Offices Departments

Departments/agencies may cluster the delivery units based on similarities of

functions and responsibilities, provided that the overall ranking distribution

for Best and Better delivery units shall not exceed 10% and 25%,

respectively, of the total number of delivery units in the department/agency.

Ranking of Delivery Units

and Rates of Incentives for FY 2016 PBB

PBB rates of individuals shall depend on the performance ranking

of the bureau or delivery unit where they belong

Amount of PBB is based on the individual’s monthly basic salary

as of December 31, 2016

Or Php5,000 PBB if the 50% of monthly basic salary is lower than Php5,000

Performance Category

PBB as % of

Monthly Basic Salary

Best 65%

Better 57.5%

Good 50%

Eligibility of Agency Head

Depends on the eligibility and performance of respective

department/agency

Performance Criteria (Based on MC 2016-1)

PBB as % of

Monthly Basic Salary

Department/agency achieved all GGCs, and

its physical targets in all MFOs, STO and

GASS indicators

65%


with deficiency in some of its physical target/s

due to uncontrollable factors

57.5%


with deficiency in one physical target due to

controllable reasons

50%

Eligibility of Individuals (1/4)

Officials and employees of eligible agencies, regular plantilla,

contractual

and casual personnel having an employer-employee relationship.

Salaries are charged to the lump sum appropriation under PS, or

occupying positions in the DBM-approved contractual staffing pattern.

Receive at least a “Satisfactory” rating based on CSC approved SPMS.

Third Level officials should receive at least “Satisfactory” rating under

CESPES. Other officials performing managerial and executive

functions who are not presidential appointees are covered by agency’s

CSC-approved SPMS and should receive at least “Satisfactory”.


Personnel on detail to another government agency for six

(6) months or more shall be included in the ranking of the

recipient agency. Payment of PBB shall come from the

parent agency.

Personnel who transferred from G2G shall be rated by

the agency where he/she served the longest. If equal

months were served, he/she will be included in the

recipient agency.

Eligibility of Individuals (3/4) Minimum of nine (9) months government service during FY 2016

and with at least “Satisfactory” rating will be eligible to the full PBB

grant.

Minimum of three (3) but less than nine (9) months and with at

least “Satisfactory” rating shall be prorated corresponding to the

length of service.

Length of Service % of PBB Rate

8 months but less than 9 months - 90%







Being a newly hired employee

Retirement

Resignation

Rehabilitation Leave

Maternity Leave and/or Paternity Leave

Vacation or Sick Leave with or without pay

Scholarship / Study Leave

Sabbatical Leave

Valid reasons for not meeting

the 9-month service requirement

Submission of FY 2015 Financial Reports to COA

Posting of agency System of Ranking delivery units

Submission of Report on Ageing of Cash Advance

Liquidation (with November 15, 2016 as cut-off)

Submission of Form A, A1, and Form 1

Submission of BFARs to COA and DBM

Submission of FY 2015 APCPI Self-Assessment

Submission of FY 2016 APP

Validation of QMS Certification OR the ISO-aligned

QMS documentation

Validation of 2nd STO as identified by head of agency

Timeline for Implementation

On or before March 31, 2016

On or before April 30, 2016 (for Big Agencies)

On or before October 30, 2016

On or before December 1, 2016

On or before January 15, 2017

30 Days or one month after the end

of each quarter

On or before December 1, 2016

For purposes of FY 2016 PBB,

submit within one month

from the issuance of this Guideline



Submission of Reports

Submit two hard copies and e-copy of Forms A and A1, and other

supporting documents through the AO 25 Secretariat on or before

January 15, 2017

All forms and reports should be signed by the Head of Agency or duly

designated official

COA financial reports and Report on Ageing of Cash Advances to be

submitted directly to COA

DBM financial reports including BFARs shall be submitted directly to

DBM

Submission of Transparency Seal, ARTA and PhilGEPS COC are no

longer necessary. Oversight agencies shall start assessment on

October 1, 2016

The IATF shall conduct spot-checks to validate claims and certifications

made by agencies.

DBM-OCIO

PhilGEPS

CSC

OP, Office of the Ombudsman, CSC

DBM-BMBs concerned

OP-OES

DBM-BMB for Good Governance Sector & OP-OES

GCG

CHED and DBM-Regional Offices

DBM-BMB for Good Governance Sector & LWUA

DBM-BMBs concerned; OP-OES; CHED; LWUA

GQMC

DBM-BMBs concerned

DBM-Regional Offices

DBM

COA

DBM and COA

GPPB-TSO

Transparency Seal

PhilGEPS Posting

Citizen’s Charter

Submission of SALN of employees

Departments

OEOs

GOCCs covered by DBM

GOCCs covered by RA 10149

SUCs

LWDs

STO identified by Agency Head

QMS Certification or

ISO- aligned QMS Documentation

BUR of OEOs, GOCCs covered by DBM, NGAs

BUR of SUCs

Public Financial Management Report

Submission of Financial Statements,

Ageing of Cash Advances Report

BFARs

APCPI and Submission of APP

MFO Physical Accomplishments

STO Accomplishments

GASS

VALIDATING AGENCY PBB REQUIREMENT

Performance-Based Bonus:

Eligibility Assessment

Integrated Performance Assessment by Oversight Agencies

PMS

CHED

OP

CSC

OCS

AO 25 IATF

Departments

COA

Ombudsman

DBM

GPPB-TSO

GQMC CHED GGC LWUA

NCC

DILG

SUCs GOCCs LWDs

Executive Offices

Non-compliance list

NC list

LGU

PhilGEPS

Other Guidelines

• The Governance Commission for GOCCs (GCG) issues separate guidelines for covered GOCCs

• The Local Water Utilities Administration (LWUA) and the Department of Budget and Management (DBM) issue separate guidelines for local water districts

• The Department of the Interior and Local Government (DILG) and the DBM will issue separate guidelines for local government units.

EFFECTS OF NON-COMPLIANCE Agencies unable to comply with all good governance conditions shall be ineligible for PBB FY 2016. After due process by oversight agencies, an agency determined to have committed the following prohibited acts, shall be disqualified from the PBB in the succeeding year.

• Misrepresentation in submitted reports required for the PBB

• Commission of fraud in the payment of the PBB

• Evenly distributing the PBB among employees, violating the policy of paying the PBB based on the ranking of delivery units.

CSC or Ombudsman shall file the appropriate administrative case.

Gains, Lessons and Future Directions

Better understanding of agency roles and mandates

Improvements in quality of performance indicators

High compliance to governance standards

Improvements in management practices

Clear and measurable standards, as well as timely and accurate information, needed

Key Gains & Lessons Learned

Changes in Performance Indicators

• Emphasizing quality over quantity = focusing on the impact of the service

• Cascading of performance targets to delivery units = understanding roles and strategy

• Posting of agency performance scorecards = accountability and transparency

• Linking the bonus to agency and individual performance = fostering teamwork and meritocracy

53

PBB is improving performance

Source: “Republic of the Philippines- Improving Bureaucratic Performance: Assessment of

the Performance-Based Bonus Scheme” (World Bank, DBM & AO25 IATF)

Survey period: September 2013-March 2014

Respondents: Almost 4, 500 employees and officials from 7 national departments

Study on Pay

and Performance in the Philippine Civil

Service

In measuring the effectiveness of PBB to public sector employees, respondents answered:

70% agreed that PBB is a good idea.

PBB promotes team work.

Agency indicators and targets are clearer and

better with PBB.

Internal processes in agencies improved

through the help of PBB.

But …

One area of concern is that some staff in the lower performance categories view the PBB individual

rating process as not transparent

Feedback from Agencies

Q1: The PBB has contributed to the way

we monitor our organizational performance.


our employees perform.


we provide our service to the public.

Responses based on 5-point Likert scale:

(5-Strongly Agree, 1-Strongly Disagree)

*216 respondents participated for FY 2014 cycle survey

*356 respondents participated for FY 2015 cycle survey

Average Response

FY 2014 FY 2015

4.36 4.29

4.06 3.96

4.15 4.04

“ PBB reminded us of our

responsibility to the public”

“Performance now has a sense

of accountability”

“Now we have an accurate

reporting and evaluation

system”

“Now there is closer coordination

between delivery units”

“OPIF provided clear objectives and

measurable performance targets which operating units try to accomplish

‘Employees are aware of their performance”

What government employees say about RBPMS and PBIS…

Now we have an easier process of monitoring

programs because of it is more rational and

employees are more goal oriented

Future Directions

• Performance indicators sectoral outcomes

• Harmonization of individual performance evaluation

• Enhanced Performance-Based Bonus

• Using results for capacity development

• “paperless” system

Validation by Oversight Agencies

Final Eligibility

Assessment

Grant of Incentives

Posting of Performance Scorecards

Performance Feedback

Capacity Development

Agency

Reports

Agency

Postings

http://www.dap.edu.ph/rbpms

[email protected]

(02) 400-1469 / (02) 400-1582

(02) 400-1490

facebook.com/PBBSecretariat

twitter.com/PBBSecretariat

0920-498-9121 / (02) 631-2139 http://www.dap.edu.ph/rbpms/policies-issuances

http://www.dap.edu.ph/rbpms/downloads

IATF INFORMATION CHANNELS

THANK YOU.

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