Senator reintroduces pay for performance measure

A bill reintroduced Thursday in the Senate aims to alter the implementation of pay-for-performance systems across the government.

Instead of linking pay raises directly to performance appraisals as championed by the Bush administration, the bill (S. 1045) would deny annual raises and within-grade increases to employees who do not meet satisfactory performance levels. It also would link bonuses to ratings and require managers to receive training in conducting appraisals. Managers would be required to give annual written evaluations according to specific guidelines monitored by the Office of Personnel Management.

"Effective performance management is fundamental to building a results-oriented culture," said Sen. George Voinovich, R-Ohio, sponsor of the bill. "By requiring supervisors and employees to have regular conversations about expectations and job performance, every employee will understand how their job performance is perceived by their boss and, more importantly, how individual work contributes to the agency's mission."

Voinovich introduced a similar bill in the last congressional session, but it failed to make it out of committee. In a departure from the previous measure, the new legislation does not include provisions that would allow agencies with OPM-certified performance systems to pay their senior level, non-Senior Executive Service employees up to Executive Schedule II, the second highest level of pay. Instead, those positions would remain capped out at Executive Schedule III.

The bill's prospects this session are unclear, as some lawmakers are becoming increasingly skeptical over the implementation of federal personnel reforms at the Defense and Homeland Security departments.

On Wednesday, the House Homeland Security Committee passed legislation that would repeal portions of DHS' personnel system, formerly known as MaxHR. And at oversight hearings earlier this month, lawmakers discussed whether to intervene in disputes over personnel reforms.

But according to Thomas Richards, executive director of the Federal Managers Association, Voinovich's measure has a better chance of passage this session. Richards compared the senator's move to that of Sen. Daniel Akaka, D-Hawaii, who recently introduced a bill aimed at improving training for federal managers. He said the goal by both lawmakers was to offer the bills with the expectation of compromise. "I am certain they are going to come to some sort of agreement," Richards said.

Richards added that FMA has some concerns over the legislation, however, particularly in terms of funding. Though FMA supports mandatory training for managers, he said, the bill does not include any provisions on how to pay for it. "Unfunded mandates can be very difficult for agencies to deal with," he said.

He also expressed concern over the added workload the legislation would give managers who would be required to conduct more rigorous performance reviews. "With a more in-depth performance review process, it makes it all the more difficult for managers to balance their workloads and normal duties," he said.

National Treasury Employees Union President Colleen Kelley argued that employees' pay raises are "a critical factor in addressing the continuing gap between public and private sector pay" and play an important role in an agency's ability to recruit and retain a high-quality workforce. She said that tying such raises to performance, as proposed by Voinovich's bill, would undermine efforts to reach those goals.

"Rather than legislate an effort to limit the pay of federal employees in this manner," Kelley said, "NTEU believes Congress should move aggressively not only to fully fund the personnel flexibilities agencies already have -- including such steps as recruitment and retention bonuses and student loan repayment programs -- but to require federal agencies to make far greater and more effective use of these vital tools than they have in the past."

Meanwhile, Voinovich introduced two additional measures on Thursday pertaining to federal employees.

One bill (S. 1046) would authorize agencies to implement pay for performance systems for senior level and scientific and professional personnel, giving them an opportunity to earn higher salaries. Congress approved a similar pay system for the Senior Executive Service in 2003.

The other bill (S. 1047) aims to strengthen agency efforts to recruit employees through student loan repayment incentives. Under current law, federal agencies pay student loans up to $10,000 per year with a cumulative cap of $60,000, but the incentive is taxed. Voinovich's bill would allow such repayment programs to be offered on a tax-free basis.