Pay-for-performance faces new scrutiny

Federal agencies are shaping their responses to a request by Democratic lawmakers that the Obama administration suspend the implementation of all federal pay-for-performance systems pending a review, while employee groups are lining up in support of a broad evaluation of performance management systems.

Days after eight lawmakers, including House Oversight and Government Reform Chairman Edolphus Towns, D-N.Y., wrote to request the review, the Agriculture Department said it still plans to launch its pay-for-performance system this summer.

Bryn Burkard, a public affairs specialist at the Food Safety Inspection Service, confirmed on Tuesday that the agency will kick off as planned a five-year pay-for-performance demonstration project covering 2,900 nonbargaining unit FSIS employees in July.

Previously, FSIS has expressed concern about the shortages of public health veterinarians and scientists, noting the average age of its mission-critical employees ranges from 50 to 53, depending on the occupation. The agency is spending more than $1 million annually on recruitment and retention incentives, but said these efforts have not been adequate.

By contrast, Ron Sanders, the chief human capital officer at the Office of the Director of National Intelligence recently told the Washington Post that he was considering a review of the intelligence community's pay-for-performance system, independent of the lawmakers' request.

Democratic leaders of several House committees and subcommittees sent an April 3 letter to Office of Management and Budget Director Peter R. Orszag urging him to halt the implementation of pay-for-performance systems across government pending an interagency review, as the administration decided last month with the Defense Department's National Security Personnel System.

"A well-designed performance management system can recognize and reward high performance without a linkage to compensation," said the letter, signed by Towns and seven other committee and subcommittee leaders. "We urge you to put on hold further advancement of any pay-for-performance measures in the federal government and conduct a governmentwide review to determine the best way to improve performance management while preserving merit principles."

OMB spokesman Thomas Gavin said the agency had not yet finalized its response to Towns and the other lawmakers. Michael Orenstein, a spokesman for the Office of Personnel Management, said the agency could not comment on the letter.

Leaders of groups representing managers and employees, even those who have been supportive of linking compensation and performance, said such a governmentwide review of pay-for-performance systems could help determine more effective performance management techniques.

Colleen Kelley, president of the National Treasury Employees Union and an advocate for returning employees in pay-for-performance systems to the General Schedule pay scale, said she welcomed the review. Darryl Perkins, national president of the Federal Managers Association, which does not oppose pay-for-performance systems in principle, said multiple personnel systems within individual departments, and even within single agencies, make it difficult for managers to effectively oversee and evaluate their employees and "complicate the discussion of pay for performance across government."

Carol Bonosaro, president of the Senior Executives Association, whose members operate under a pay-for-performance system already, allowed that any review should address the patchwork of personnel systems and rely on hard data.

"I agree that there is in fact little hard research that I've seen about the impact of these systems, particularly whether they actually accomplish what was intended," she said.

Kelley, Perkins and Bonosaro agreed that federal employees at all levels could benefit from the clearer and more consistent performance expectations and management techniques that a review could uncover.

They said, however, that a governmentwide review should not introduce additional complications into the personnel system or dismantle systems altogether.

Bonosaro said a suspension of pay for performance could plunge employees into unfamiliar pay systems.

"What do you do with the people who are in those systems? How do you move them back to another system?" she asked. "With regard to the Senior Executive Service, there are a number of executives who have come into the corps who have only been in this pay system. They don't necessarily have anything to compare it to."

Paul Weatherhead, a program manager at the U.S. Postal Service who has analyzed that agency's pay for performance system, said it would be a mistake to dismantle it during the review because data and experience would be lost.

Max Stier, president of the nonprofit Partnership for Public Service, which has called for wide-ranging reform to the federal pay system, said: "The problems we see are more about our ability to identify good performance in a fair and transparent way than about the pay piece. You do not solve the problem simply by getting rid of these efforts to create pay for performance systems."