Pay-for-performance praise

Ever since the Bush administration pitched its proposal to give civil service employees a 2 percent across-the-board raise in 2004 and create a $500 million fund managers could use to boost salaries of high performers, opponents of pay-for-performance measures have said it won't work in the federal workplace.

Employees say cronyism runs too rampantly in the federal workplace to risk giving managers free rein over salaries and pay raises. Union leaders say administration officials are avoiding the real problem, which is the gap between public and private sector pay. But administration officials say the time has come to tie federal pay raises to skills and performance.

The National Commission on the Public Service, a 10-member bipartisan group of former federal officials who spent last year studying the government's organization, outsourcing strategies and personnel systems, agrees with the administration's assessment. In January when the commission issued its report of 14 recommendations for improving the public service, linking pay to performance was on the list.

"As a result of the fact that federal pay is not based on performance, and the reality that performance incentives now in law are ineffective, the vast majority of federal pay increases have no relationship to performance," Hannah Sistare, the commission's executive director, told House lawmakers during a hearing on civil service pay reform earlier this month.

At the same hearing Max Stier, president of the Partnership for Public Service, a Washington-based advocacy group, testified that the federal workplace must become a place where "initiative, superlative effort and tangible results are rewarded."

According to Howard Risher, an independent consultant who has studied federal civil service issues for the National Academy of Public Administration and other groups, pay-for-performance has worked in the private sector and can work in the federal government, but it will require a culture change. Federal employees don't join the government to get rich, Risher said, but all employees want to be recognized for their value to the organization and the federal government does a poor job of rewarding and recognizing its employees.

"It's a hugely complicated problem, but it can be done," Risher said. "Everybody would like to have their value recognized, everybody would like to think that their employer appreciates them, everybody would like to think they are doing a good job."

The basis for performance management should be an agreement between a supervisor and an employee about what the employee is supposed to do, Risher explained.

"You tell me what to do, and if at the end of the year I did it well, I am rewarded," Risher said. "You have to agree what the criteria are, and we're talking about things that can be verified, measurable results. You either did it well or you didn't."

Some people will question pay-for-performance measures Risher said, but with manager training and support, a commitment from senior leadership and a modified performance appraisal system, it can work.

"Realistically it isn't an issue if the people that aren't meeting expectations are less than happy; it's not a system where everybody is happy," Risher said. "It's about the need to create an environment that enhances employee performance. That is good for government and for the employees who make that contribution. If it doesn't accomplish that, it's not worth doing."