Department of Human Resources Employee Performance Evaluation Audit Follow-Up

The City of Chicago Office of Inspector General (OIG) has completed a follow-up to its October 2020 audit of the Department of Human Resources’ (DHR) management of the City’s employee performance evaluation process. Based on the Department’s responses, OIG concludes that the Department has partially implemented two, and not implemented four, of the six corrective actions related to the audit findings.

The purpose of the 2020 audit was to determine whether DHR ensured that City departments evaluated their employees as required by its Personnel Rules, and, if so, whether the evaluation process aligned with national best practices. Our audit found that DHR did not ensure that departments evaluated all employees. DHR did not clearly define the roles and responsibilities related to periodic evaluations required by Personnel Rule XIV, nor did it ensure departmental compliance with the rule.

As a result, 13 departments—comprising more than 6,000 City employees—reported they did not conduct annual performance evaluations of all of their employees, and another 7 City departments—comprising more than 10,000 employees—reported they did not conduct any performance evaluations whatsoever.

Based on the results of the audit, OIG recommended that DHR develop a Citywide performance evaluation system with standardized procedures to ensure annual evaluation of all employees, while still allowing for customization across the various departments. We further recommended that DHR consider implementing an automated evaluation process and conduct a staffing assessment to determine the number of staff needed to administer the evaluation system. Finally, we recommended that DHR revise Personnel Rule XIV to define performance evaluation expectations and responsibilities in a clear manner, and report on departmental compliance to the Mayor’s Office. In its response to the audit, DHR described corrective actions it would take.

In May 2021, OIG inquired about corrective actions taken by DHR in response to the audit. Based on DHR’s follow-up response, OIG concludes that the Department has not implemented four of the six corrective actions, and partially implemented the remaining two. Specifically, DHR has identified ways to use existing City data systems to monitor departments’ completion of annual evaluations, but has not yet created or implemented a Citywide evaluation policy. The Department attributed this to technical issues and operational changes in response to COVID-19, and stated it intends to issue a policy by the end of 2021. Once fully implemented, OIG believes the corrective actions identified by DHR may reasonably be expected to resolve the core findings noted in the audit. We urge the Department to fully implement the recommendations by issuing a Citywide policy that requires departments to conduct annual evaluations for all employees, approving departmental evaluation policies and procedures, monitoring departments’ completion of the evaluations, providing periodic reports to the Mayor’s Office, and conducting a staffing assessment to determine what resources would be needed to administer a Citywide evaluation system.