GovernmentExecutive.com

Last week, about 20 minutes into an interview with Government Executive about a bill introduced last year to increase the diversity of the Senior Executive Service, Rep. Danny Davis, D-Ill., changed the subject. The discussion had centered around the role that subjective judgments play in determining who gets SES appointments, and that have kept the executive corps less diverse than both the federal workforce as a whole and the general population.

"All these things are extremely important," Davis said, "because the administration has been pushing pay for performance, and pay for performance has less structure in it than the current system." That lack of structure means there is a greater role for individual decision-making and greater potential for ingrained biases to come into play.

"It's important," Davis said, "as these new pay for performance systems come on line [that we] note if minorities are being hindered by these. . . even more than they were before."

There are multiple ways to measure whether performance-based pay is a success. Unless employees are motivated to work harder for greater payouts, and unless they feel relatively satisfied with their compensation, the new approach won't work.

But pay for performance also will have to be judged on its legitimacy. Do the programs treat employees fairly? Do they exacerbate existing disparities? Establishing the moral legitimacy and inherent fairness of pay for performance isn't just necessary because it's the right thing to do. Perceptions of unfairness lie at the heart of many employees' objections to the systems, whether they're worried about cronyism, ageism, racism or sexism.

There already are some unfortunate examples that suggest Davis' fears may be justified. Ron Stroman, the managing director of the Office of Opportunity and Inclusiveness at the Government Accountability Office, found discrepancies between the performance evaluations of black and white employees, and reported that those discrepancies widened the longer employees stayed at the agency. Such patterns could prevent African-American employees from advancing into the SES.

Last September, a mediator ruled that the Securities and Exchange Commission's pay-for-performance system, adopted in 2003, was illegal because it produced discrimination against African-American employees and workers who were 40 or older.

At GAO, Stroman told Government Executive that he thought a key source of disparities in performance scores was that managers were unwilling to talk to their African-American employees. The National Treasury Employees Union, which filed a grievance against the SEC pay system, claimed the agency's evaluation process was based on overly vague criteria.

When the SEC system was struck down, John Palguta, vice president for policy at the Partnership for Public Service, a nonprofit that works to promote federal service, noted that "done correctly, a good performance system helps insulate a manager against claims of bias or favoritism."

But early pay-for-performance programs like those at SEC and GAO risk associating the concept with bias. Instead of being engines of opportunity, of lifting up employees whose performance might have been overlooked because of preconceptions about race or sex or age, pay-for-performance systems may come to be seen as tools to reinforce the status quo.

That perception is of no small importance: If employees refuse to buy into new systems, there won't be much performance to pay for.

COMMENTS

• Here is how NSPS works in reality. NSPS is a cost containment tool. It's not about performance , but in reality about containing payroll growth. You work harder for a lesser pay check. Anyway, it's wave of the future. The president proposes a 2.9% raise, 1.0% is taken to pay for all locality pays, leaving 1.9% for across the board raise in the GS system. Then NSPS will only allow 60% of the 1.9% or 1.14% across the board for NSPS with a 3 rating or higher. Then you'll get some performance bonus based on your rating, but at a fraction of what you'd expect from a STEP promotion (i.e. $1400 annual pay cut overall; with a 4 rating for me), and also some cash award amount, depending on how the board splits the money between pay adjustment and award. Here it was 50/50 split. The award $$$ for me was wiped out by the lack of a STEP promotion I was due under GS, basically a wash. Almost like a buyout, to reduce your pay over the long-run where it matters for retirement calculations. Pretty sneaky system, to manipulate the payroll and reduce the government's long-term expenditures. And nobody understands it here, not even the people teaching the classes. The leadership blows it off until the last minute, and only when something is required to be done today, does it get done at all or you the employee are screwed. It's very labor intensive program, and takes people away from there jobs, in-turn reducing productivity and performance. And this is just dealing with the computer software and administrative features, nothing is done with the employee that makes him a better performer. Just everyone panics to get the mandatory administative actions completed, so we all can go back to work. Bob Posted February 18, 2008 11:12 AM
• Skeeter, stop sucking at a gaping wound. Once more you show your gaping lack of knowledge. You specifically brought up the SES bonuses and the outrageous inequities of their bonus system. The SES are compensated separately from the CS but do participate in selected pay pools over CS. In 2006 and 2007, the VA and a number of other organizations were cited in these articles for the huge and inequitable bonuses given to the select SES and upper level CS few. In one article they also noted that OPM had to direct bigger cash awards directly to performance ratings. (“OPM orders bigger bonuses for better ratings”, 22 Jun 06) If you were ever open minded (or eared) enough to listen, numerous respondents (managerial representatives) herein have also spoken here of the inequalities of the pay pool system with SES and other high ranking members voting down worker evaluations but receiving a higher percentage of bonuses across the board. At least be consistent, if in not intelligible, Man. Tip off Posted February 12, 2008 4:37 PM
• Tipsy, nice pontificating just who were these people you were righting about?? Sounds as if they are all cerebal thinkers who love their fellow man and are saints. Unfortunately my input was about the CS folks, guess we're talking about 2 different groups dan ketter Posted February 11, 2008 4:26 PM