The Right Stuff

The Bush administration may be determined to shift the federal workforce to a pay-for-performance structure, but wanting it and doing it right are two different things, panelists said at a performance-based pay forum Tuesday.

"We're going to have to demand demonstrable results for this to work," said Dan Blair, deputy director of the Office of Personnel Management. "Agencies are going to have to be held accountable for this-not everyone can be rated outstanding, if an agency is not outstanding," added Blair, who was one of four panelists at a forum hosted by the National Academy of Public Administration and 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.

Earlier this year, the Bush administration pitched a plan to hold the annual across-the-board pay raise to 2 percent in 2004 and create a $500 million Human Capital Performance Fund from which managers could withdraw extra money to raise the salaries of their best performers. Administration officials said the performance fund is the cornerstone of its plan to move to a performance-based pay structure where outstanding performers are recognized for their efforts. The House approved Bush's pay-for-performance plan in May as part of the 2004 Defense authorization bill.

"The federal government is on the verge of becoming a results-oriented organization," said Clay Johnson, deputy director for management at the Office of Management and Budget. "It can become this, and it must become this. Our reluctance to do this as a government, is way inconsistent, way out of line with reality."

The proposal immediately drew fire from federal union leaders and some members of Congress, who complained that the performance appraisal system did not show meaningful distinctions between poor, average, good and excellent performers, making it difficult to pay employees based on performance. The General Accounting Office also cautioned administration officials and agency heads to ensure that sufficient safeguards are in place so the process is transparent and fair.

"Employees need to help design it, implement it and refine it," said Gene Dodaro, chief operating officer at GAO. The watchdog agency is currently seeking legislation that would give it more flexibility in setting salaries, including some freedom from the annual across-the-board pay raise. Employees who are rated less than satisfactory would forego their automatic annual pay increase under GAO's proposal. The House Government Reform Subcommittee on Civil Service and Agency Organization approved the bill in late July. The Senate Governmental Affairs Committee on Wednesday approved a similar bill.

But forum moderator Paul Volcker, who serves as chairman of the commission, pressed panelists to come up with a template agencies and Congress could use to craft a performance-based environment in the federal workplace. OPM's Blair pointed to the process under way at the Homeland Security Department, where Secretary Tom Ridge and OPM Director Kay Coles James created design teams made up of department employees, OPM human resources experts and representatives from employee unions to come up with options for the department's personnel system.

"I still think there are a lot of obstacles," Volcker said. "We want to get it right."

Comp Time

On Wednesday, the Senate Governmental Affairs Committee approved the Federal Workforce Flexibility Act (S. 129), which included a measure that would allow federal employees to get compensatory time for work-related travel outside of their normal work hours. Sen. Daniel Akaka, D-Hawaii, and the bill's sponsor, Sen. George Voinovich, R-Ohio, introduced the comp time measure as an amendment to the personnel bill.

"This provision addresses a long-standing concern of federal employees who travel on official business, but are not paid for time spent traveling," Akaka said. "While federal employees may receive per diem for their nonwork travel expenses, the travel time itself-even though required as a condition of employment-is generally not compensated. This amendment takes into account the increased travel demands on today's federal employees."

According to the two senators, current rules severely limit federal employees from being compensated for travel time outside work hours. The amendment would prohibit employees who receive compensatory time for travel from receiving cash payment for any unused compensatory time earned while on travel status.

Retirement Modernization

A plan to modernize the federal government's retirement system will not involve employee layoffs, an Office of Personnel Management official confirmed Wednesday.

OPM officials plan to automate the "paper heavy" retirement system over the next two years or so, according to Steve Benowitz, associate director of OPM's division for human resources products and services.

"[We're] working with a legacy system from more than 20 years ago," Benowitz said.

The agency will issue a request for proposals and a plans to license off-the-shelf software that will link and streamline the various parts of the federal retirement system, including the retirement calculation system, health insurance system, life insurance system and retirement information office.

"If we try to develop our own technology to automate our own system, it probably won't be completed till 2008 and 2010," Benowitz said. "We believe one vendor could handle it all. We will look for a vendor that has a proven product."

None of the employees who currently work with the systems would be laid off, Benowitz said, and implementation of the process would take up to two years after the procurement process ended. The current system services more than 2.4 million people.