Candidates hint at how they’ll tackle pay issues

Where presidential candidates John McCain and Barack Obama stand on federal pay for performance is not a hot-button issue for most voters. But for many federal employees, the power of the next president to change their pay and benefits radically could play a role in how they cast their votes.

"Now all that remains is to elect a president that will repeal [the National Security Personnel System] in its entirety," commented one employee in an e-mail to GovernmentExecutive.com.

The eight years of the Bush administration have resulted in aggressive overhauls of the federal pay system, most notably the Pentagon's National Security Personnel System, which currently covers 200,000 nonbargaining unit workers. Many federal employees wonder how the next commander in chief will manage pay and whether he'll choose to start over, tweak current efforts, or abandon them altogether.

McCain has expressed his support for the concept of pay for performance in the federal sector, but has not been clear on whether his plan would depart from or build on the current systems at federal agencies.

In a May 2007 speech to the Oklahoma legislature, McCain said a "new bargain" with federal employees would include expedited firing, a typical practice in the private sector. He also described the civil service as a "no-accountability zone, where employment is treated as an entitlement, good performance as an option and accountability as someone else's problem." He also characterized the government's General Schedule pay system as "not fair to the many good workers who must pick up the slack of those who aren't doing their jobs."

The Republican also has pledged to use the projected federal retirement wave as "an opportunity to reorganize the federal workforce." This would involve making government pay scales more competitive with the private sector to attract the best and brightest to public service.

Obama has been vague on how he would manage federal pay, though he has criticized NSPS. In a Sept. 16 letter to the International Federation of Professional and Technical Engineers, Obama expressed concerns with NSPS, specifically with the system's restrictions on bargaining rights, and what he called "the disconnection between pay and performance despite what employees have been told, the requirement that performance ratings be pushed into a forced distribution, or bell curve, the suppression of wages by permitting bonuses to be paid instead of base salary increases, and the virtual elimination of merit consideration in the promotion process."

"I want to assure you that if I am elected president, I will substantially revise these NSPS regulations and strongly consider a complete repeal," he wrote.

While Obama has registered his support of pay for performance for teachers and health care professionals, he's strayed from taking a definitive stand on federal pay for performance. In an Aug. 20 interview in The Washington Post, Obama pledged to work with federal employees to improve performance with "quality leadership, effective training and career development, and honest information." He also vowed to ensure that federal pay was fair and transparent so the government could attract and retain talented workers.

Additionally, Obama unveiled a government reform agenda in September in which he promised to fire managers of poor-performing programs and appoint a White House "SWAT team" made up of government professionals to review programs for waste and inefficiency.

"In many areas of the federal government there is too much Washington bureaucracy -- too many layers of managers, and too much paperwork that does not contribute to directly improving the lives of the American people," he said. "At the same time, there are too few workers on the front lines in local offices around the country."

The Democrat also pledged to experiment with allowing government managers to work with their teams to establish goals and to give bonuses to employees when those goals are met. These steps, he said, would be guided by performance measures and would be transparent to the public and Congress.

Darryl Perkinson, president of the Federal Managers Association, said aspects of Obama's reform plan signaled a performance-based system, noting that such a system, if implemented properly, could be an effective means of firing underperforming managers. But that would require a performance management system that was fair and transparent, he said, pointing out that employee performance ratings under current systems often are pushed into a forced distribution, or bell curve, and are not always indicative of performance.

"The reflection of poor performers is what we're seeing with these distribution systems," Perkinson said. "One of the fallacies in government that everyone has bought into is there is a significant number of people who are poor performers, but it really comes down to a funding issue."

Max Stier, president of the nonprofit Partnership of Public Service, said any plan to fire underperforming managers would require the government to have a better system of appraising performance. "I don't believe there are a lot of people that ultimately do need to be fired, and if you had a system that more effectively identified what good performance was, you would end up having everyone do better," he said.

Stier recommended the next president not let performance management fall by the wayside, but added that properly implementing such standards first would require a "serious sit-down" with employee unions and associations to determine a fair approach.

"We can't simply ignore this; if we want the government to do better, we need to make sure there are tools, like performance management systems," he said. "And we have to have a better understanding about good performance and communicate what is good performance to employees."

Stier also cautioned against talking about pay for performance in a vacuum, stating the most effective way to improve the federal workforce would be to implement solid performance management systems at federal agencies.

"It's hard to look at pay in isolation," he said. "Part of the problem with the GS is the classification system. It was designed when you could really look at the work public servants were doing and imagine categorizing them in a very rigid system. Today, that's a much more challenging proposition because you're dealing with knowledge workers who are much more fluid."