Department of Human Resources Employee Performance Evaluation Audit

Executive Summary

The objective of the audit was to determine whether DHR ensures that City departments evaluate their employees as required by Personnel Rule XIV and, if so, whether the evaluation process aligns with best practices recommended by the U.S. Office of Personnel Management (OPM).

The Municipal Code of Chicago (MCC) grants DHR the power to create and the duty to implement the City’s Personnel Rules. Personnel Rule XIV provides that all City employees “shall be evaluated periodically” and that DHR “shall develop performance evaluation systems.” Federal best practices require a governmental body’s central human resources department to approve and monitor other departments’ evaluation policies and procedures.

A. CONCLUSION

OIG concluded that DHR does not enforce the requirement that City departments conduct performance evaluations of their employees. We found that DHR has not taken responsibility for approving and monitoring departmental policies and procedures, and vast disparities in departmental evaluation practices exist. Notably, nearly 30% of City employees work in departments that report conducting no employee evaluations. Another 17% work in departments that do not require evaluations for all their employees. Of the remaining Departments with policies requiring annual performance evaluations, there is significant variation in compliance.

B. FINDING

OIG found that DHR does not fully exercise its authority to secure departmental compliance with the periodic performance evaluation requirement. In addition, DHR does not meet federal best practices, which recommend the creation of clear evaluation expectations, as well as approval and monitoring of departmental evaluation policies and procedures. Instead, DHR provides paper-based evaluation forms for departments to use if they wish and ad-hoc assistance to departments that inquire about performance evaluations. DHR does not hold departments accountable for failure to comply with Personnel Rule XIV.

As a result, some employees have never received a performance evaluation. Currently, more than 10,000 employees work in departments that report they conduct no evaluations and approximately 6,000 more work in departments that do not conduct them for all employees. In addition, DHR can provide no assurance that the departments that have performance evaluation policies adhere to them. For example, despite a policy requiring annual evaluations of all employees, the Chicago Police Department (CPD) reported that only 490 out of 1,700 supervisors, or 27.7%, received their 2018 performance evaluations by the due date.

Without consistent performance evaluation practices across the City, personnel decisions are often determined solely through management discretion. This heightens the risk that the City’s employment actions will be perceived as improper, unfair, or discriminatory.

C. RECOMMENDATIONS

OIG recommends that DHR develop a Citywide performance evaluation system with standardized procedures to ensure that required periodic employee evaluations occur, while still allowing for customization across City departments. In addition, DHR should revise Personnel Rule XIV to clearly define performance evaluation expectations and responsibilities, and report on departmental compliance to the Mayor’s Office.

D. DHR RESPONSE

In response to our audit finding and recommendations, DHR stated that it will make clarifying revisions to Personnel Rule XIV. Because revising a rule is a lengthy process, in the near term DHR will issue a Citywide performance evaluation policy requiring departments to designate the date of each employee’s annual evaluation and track on-time completion rates. DHR will also provide departments with performance evaluation systems, as well as guidance on to obtain approval for customized systems, monitor their completion of evaluations, and provide periodic reports to the Mayor’s Office.

The specific recommendations related to each finding, and DHR’s response, are described in the “Finding and Recommendations” section of this report.