Some Thoughts On Pay Reform

Obviously, the big news of yesterday is Office of Personnel Management Director John Berry's announcement that he, with the support of the President, intends to pursue a reform of the federal pay system, with the aim of finding a comprehensive solution that will improve the quality of employee appraisal and its connection to compensation. I think there are a couple of things to keep in mind as this effort moves forward:

1. There are a HUGE number of conditions that need to be met for Title V reform to become a reality: The conditions Berry laid out in our meeting yesterday were as follows: the performance evaluation and management system needs to be credible and effective, but Berry said he doesn't think there is a private-sector model that exists that anyone would hold up for emulation, meaning reformers may be starting from scratch. There needs to be funding appropriated for a truly comprehensive management training system that probably would involve substantial curriculum development. The administration needs to be able to build public support for the concept of pay comparability. And the system that's designed needs to be able to function in a wide range of different agencies. Every single one of those things will be difficult to accomplish, and without any one of those elements, it seems extremely unlikely that reform will move forward.

2. Employee engagement will be critical: This is true for a number of reasons. First, if the performance appraisal system is going to be successful, both managers and employees will have to trust it and be willing to participate in it fully. The term "pay for performance" has become so electrified that it makes conversations unnecessarily difficult. The administration will have to find a way to diffuse that tension before it even begins serious negotiations. And beyond the simple workability of the system, employee groups have clout in Congress. A lot of lawmakers are convinced that employees have been wronged in the National Security Personnel System, and they will look to employee groups for signs that they trust any comprehensive pay reform before it passes.

3. We have no idea what a reform bill would look like. No one does. And until we do, it's impossible for anyone to judge the merits of such an effort on policy grounds. But Berry's primary points yesterday, that the federal pay system is balkanized, and that it makes sense to look at the systems out there to figure out in a methodical, serious way, what is effective and what isn't, seem uncontroversial.