PART 801—BALANCED SYSTEM FOR MEASURING ORGANIZATIONAL AND EMPLOYEE PERFORMANCE WITHIN THE INTERNAL REVENUE SERVICE Authority: 5 U.S.C 9501 et seq.; Source: T.D. 8830, 64 FR 42835, Aug. 6, 1999, unless otherwise noted. § 801.1 Balanced performance measurement system; in general. (a) In general. (2) Modern management practice and various statutory and regulatory provisions require the IRS to set performance goals for organizational units and to measure the results achieved by those units with respect to those goals. To fulfill these requirements, the IRS has established a balanced performance measurement system, composed of three elements: Customer Satisfaction Measures; Employee Satisfaction Measures; and Business Results Measures. The IRS is likewise required to establish a performance evaluation system for individual employees. (b) [Reserved] [T.D. 9227, 70 FR 60215, Oct. 17, 2005. Redesignated and amended by T.D. 9426, 73 FR 60628, Oct. 14, 2008] § 801.2 Measuring organizational performance. The performance measures that comprise the balanced measurement system will, to the maximum extent possible, be stated in objective, quantifiable, and measurable terms and will be used to measure the overall performance of various operational units within the IRS. In addition to implementing the requirements of the Act, the measures described here will, where appropriate, be used in establishing performance goals and making performance evaluations established, inter alia, under Division E, National Defense Authorization Act for Fiscal Year 1996 (the Clinger-Cohen Act of 1996)(Public Law 104-106, 110 Stat. 186, 679); the Government Performance and Results Act of 1993 (Public Law 103-62, 107 Stat. 285); and the Chief Financial Officers Act of 1990 (Public Law 101-576, 108 Stat. 2838). Thus, organizational measures of customer satisfaction, employee satisfaction, and business results (including quality and quantity measures as described in § 801.6T) may be used to evaluate the performance of or to impose or suggest production goals for, any organizational unit. [T.D. 9227, 70 FR 60215, Oct. 17, 2005. Redesignated and amended by T.D. 9426, 73 FR 60628, Oct. 14, 2008] § 801.3 Measuring employee performance. (a) In general. (b) Fair and equitable treatment of taxpayers. (c) Senior Executive Service and special positions. (d) General workforce. (1) Establish one or more retention standards for each employee related to the work of the employee and expressed in terms of individual performance; (2) Require periodic determinations of whether each employee meets or does not meet the employee's established retention standards; (3) Require that action be taken in accordance with applicable laws and regulations, with respect to employees whose performance does not meet the established retention standards; (4) Establish goals or objectives for individual performance consistent with the IRS's performance planning procedures; (5) Use such goals and objectives to make performance distinctions among employees or groups of employees; and (6) Use performance assessments as a basis for granting employee awards, adjusting an employee's rate of basic pay, and other appropriate personnel actions, in accordance with applicable laws and regulations. (e) Limitations. (i) For purposes of the limitation contained in this paragraph (e), employee (ii) For purposes of the limitation contained in this paragraph (e), evaluate (A) Any required or requested performance rating. (B) A recommendation for an award covered by Chapter 45 of title 5; 5 U.S.C. 5384; or section 1201(a) of the Act. (C) An assessment of an employee's qualifications for promotion, reassignment, or other change in duties. (D) An assessment of an employee's eligibility for incentives, allowances, or bonuses. (E) Ranking of employees for release/recall and reductions in force. (2) Employees who are responsible for exercising judgment with respect to tax enforcement results in cases concerning one or more taxpayers may be evaluated on work done on such cases only in the context of their critical elements and standards. (3) Performance measures based in whole or in part on quantity measures (as described in § 801.6) will not be used to evaluate the performance of any non-supervisory employee who is responsible for exercising judgment with respect to tax enforcement results (as described in § 801.6). [T.D. 9227, 70 FR 60215, Oct. 17, 2005. Redesignated and amended by T.D. 9426, 73 FR 60628, Oct. 14, 2008] § 801.4 Customer satisfaction measures. The customer satisfaction goals and accomplishments of operating units within the IRS will be determined on the basis of information gathered through various methods. For example, questionnaires, surveys and other types of information gathering mechanisms may be employed to gather data regarding customer satisfaction. Information to measure customer satisfaction for a particular work unit will be gathered from a statistically valid sample of the customers served by that operating unit and will be used to measure, among other things, whether those customers believe that they received courteous, timely, and professional treatment by the IRS personnel with whom they dealt. Customers will be permitted to provide information requested for these purposes under conditions that guarantee them anonymity. For purposes of this section, customers may include individual taxpayers, organizational units, or employees within the IRS and external groups affected by the services performed by the IRS operating unit. [T.D. 8830, 64 FR 42835, Aug. 6, 1999. Redesignated by T.D. 9426, 73 FR 60626, Oct. 14, 2008] § 801.5 Employee satisfaction measures. (a) The employee satisfaction numerical ratings to be given to a Business Operating Division (BOD) or equivalent office within the IRS will be determined on the basis of information gathered through various methods. For example, questionnaires, surveys, and other information gathering mechanisms may be employed to gather data regarding satisfaction. The information gathered will be used to measure, among other factors bearing upon employee satisfaction, the quality of supervision, and the adequacy of training and support services. All full and part-time permanent employees of a BOD or equivalent office who are in pay and duty status will have an opportunity to provide information regarding employee satisfaction under conditions that guarantee them confidentiality. (b) This section applies to the reporting of employee satisfaction information that occurs on or after March 7, 2018. [T.D. 9831, 83 FR 9700, Mar. 7, 2018] § 801.6 Business results measures. (a) In general. (b) Quality measures. (1) Examination and collection units and Automated Collection System Units (ACS). (2) Toll-free telephone sites. (3) Other work units. (c) Quantity measures. (1) Cases started; (2) Cases closed; (3) Work items completed; (4) Customer education, assistance, and outreach efforts completed; (5) Time per case; (6) Direct examination time/out of office time; (7) Cycle time; (8) Number or percentage of overage cases; (9) Inventory information; (10) Toll-free level of access; and (11) Talk time. (d) Definitions Tax enforcement results. (2) Records of tax enforcement results. [T.D. 9227, 70 FR 60215, Oct. 17, 2005. Redesignated by T.D. 9426, 73 FR 60628, Oct. 14, 2008] § 801.7 Examples. (a) The rules of § 801.3 are illustrated by the following examples: Example 1. (i) Each year Division A's Examination and Collection functions develop detailed workplans that set goals for specific activities (e.g., number of audits or accounts closed) and for other quantity measures such as cases started, cycle time, overage cases, and direct examination time. These quantity measure goals are developed nationally and by Area Office based on budget allocations, available resources, historical experience, and planned improvements. These plans also include information on measures of quality, customer satisfaction, and employee satisfaction. Results are updated monthly to reflect how each organizational unit is progressing against its workplan, and this information is shared with all levels of management. (ii) Although specific workplans are not developed at the Territory level, Headquarters management expects the Area Directors to use the information in the Area plans to guide the activity in their Territories. For 2005, Area Office 1's workplan has a goal to close 1,000 examinations of small business corporations and 120,000 taxpayer delinquent accounts (TDAs), and there are 10 Exam Territories and 12 Collection Territories in Area Office 1. While taking into account the mix and priority of workload, and available staffing and grade levels, the Examination Area Director communicates to the Territory Managers the expectation that, on average, each Territory should plan to close about 100 cases. The Collection Area Director similarly communicates to each Territory the expectation that, on average, they will close about 10,000 TDAs, subject to similar factors of workload mix and staffing. (iii) Similar communications then occur at the next level of management between Territory Managers and their Group Managers, and between Group Managers and their employees. These communications will emphasize the overall goals of the organization and each employee's role in meeting those goals. The communications will include expectations regarding the average number of case closures that would have to occur to reach those goals, taking into account the fact that each employee's actual closures will vary based upon the facts and circumstances of specific cases. (iv) Setting these quantity measure goals, and the communication of those goals, is permissible because case closures are a quantity measure. Case closures are an example of outcome-neutral production data that does not specify the outcome of any specific case such as the amount assessed or collected. Example 2. In conducting a performance evaluation, a supervisor is permitted to take into consideration information the supervisor has developed showing that the employee failed to propose an appropriate adjustment to tax liability in one of the cases the employee examined, provided that information is derived from a review of the work done on the case. All information derived from such a review of individual cases handled by the employee, including time expended, issues raised, and enforcement outcomes reached should be considered and discussed with the employee and used in evaluating the employee. Example 3. When assigning a case, a supervisor is permitted to discuss with the employee the merits, issues, and development of techniques of the case based upon a review of the case file. Example 4. A supervisor is not permitted to establish a goal for proposed adjustments in a future examination. (b) [Reserved] [T.D. 9227, 70 FR 60215, Oct. 17, 2005. Redesignated and amended by T.D. 9426, 73 FR 60628, Oct. 14, 2008] § 801.8 Effective/applicability dates. The provisions of §§ 801.1 through 801.7 apply on or after October 17, 2005. [T.D. 9426, 73 FR 60628, Oct. 14, 2008]