4 approaches to pay for performance

Experts suggest various ways the Obama administration could move toward pay for performance without repeating the mistakes made with NSPS

Management experts say there are various ways that the Obama administration could move toward a governmentwide pay-for-performance system without repeating the mistakes of the National Security Personnel System. Here are four basic ideas they have suggested.

Begin with performance management.

The Obama administration should not repeat the Defense Department’s mistake of implementing a pay-for-performance system before its performance management system was ready, said Matthew Biggs, legislative director at the International Federation of Professional and Technical Engineers.

“You can’t come in and put in place a system when people don’t know what they are being measured by,” Biggs said. “Work out all the problems with that first, then move forward with linking pay to it.”

Take a hybrid approach.

Some experts believe the federal government should create a system that combines features of pay for performance and the General Schedule system. For example, the administration could replace the GS grades with a smaller number of pay bands. As with the GS system, employees would move through the pay bands based on seniority, plus receive annual raises. However, the size of the raise would be tied directly to performance ratings.

Adopt a market-aligned pay policy.

The typical company policy is to pay their full-performance employees at market levels, said consultant Howard Risher. Newly hired or recently promoted employees are paid low in their range, but they can expect larger increases as they learn the job.  Only above-average performers can expect to be paid above market, and only the best performers progress to the range of maximum pay. Companies rely on a 'merit matrix to manage increases.

Build a template and allow tailoring.

Some experts say numerous agencies have had success with pay-for-performance demonstration projects because they developed the systems with their particular workforces in mind. Creating one system that could be applied governmentwide is another matter altogether.

However, the Obama administration could take a cue from the Office of the Director of National Intelligence and the intelligence community, said James Thompson, an associate professor of public administration at the University of Illinois at Chicago. ODNI designed a basic pay-for-performance system that each intelligence agency can use a model for its own system, within a certain set of parameters.

“That is probably the way the government has to go,” Thompson said. “It almost has to be done agency by agency.”

About the Author

John S. Monroe is the editor-in-chief of Federal Computer Week.

Reader comments

Tue, Oct 12, 2010

NSPS was a disaster. I'm not opposed to PFP, but every system I've seen is more flawed than the maligned GS system. 1) PFP should not be zero-sum, or you create a negatively competive environment that destroys teamwork. We don't work on sales teams, so taking money from one worker to give to another is poisonous to teamwork. 2) They are highly subjective, with a mgr playing favorites among staff and one mgr interpreting the rules differently than another. It's like when you get the old school professor who says, "A C is an avg grade", while everyone else is getting B+ for avg work. 3) The time burden was ridiculous. Between objectives, mid-term reviews, final reviews, the review board, challenges, etc., the costs of NSPS were enormous. If productivity balanced that cost it would be worth it, but most people seemed to get the same $ with lots more paperwork. 4) The overly broad paybands made differentiating workloads difficult, especially when different responsibilities fell in the same payband. It seemed like 2/3 of the workforce was YA-02. Come up with a better system before imposing it on thousands of workers. NSPS may have discredited PFP for a long time.

Fri, Nov 6, 2009

The only performance measurement that my agency was able to come up with for my work was work hours per regular shift hours. That is, penalize me for any training or annual leave or sick leave I took and reward me for getting assigned to tasks where overtime was approved by management. With that metric, everyone loses with a perormance-based pay system.

Thu, Nov 5, 2009 RayW

From many of the comments against NSPS, I get the impression that MOST places did not correctly implement NSPS. My super (who is in my office) evaluates each of my group with our input and his input, that goes to the next level where it is reviewed and returned for changes as needed, then it went to the third level (probably the one WoundedNSPSvictim is talking about) who looked across the several pay pools that are in their groupings. I do not see where the lack of a degree affects this feature, just how valuable YOUR supervisor thought you were to the mission, and which subgroup in each pay pool the top level thought was the most valuable to the overall group. One thing NSPS did for us, it got the lazy GS "I get a pay raise anyway" boat anchors to actually do some work to get a pay increase. And the folks that complained the objective bullets were unfair, my super tasked me outside of my objectives, but I got a good rating because he documented that I did that work and was willing to extend myself BEYOND the objectives. Now as far as getting a promotion, it does not matter which system you are in, your lack of the 'politically correct' papers will affect you no matter if you are GS or NSPS. Yes, any evaluation system that crosses groups is unfair, especially where one has good people and the other is a dumping ground for the GS mentality types. But I saw that in 18 years of working in the civilian world before I hired on to the GOV.

Mon, Nov 2, 2009 WoundedNSPSvictim California

QUOTE:ODNI designed a basic pay-for-performance system that each intelligence agency can use a model for its own system, within a certain set of parameters.“That is probably the way the government has to go,” Thompson said. “It almost has to be done agency by agency.”
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NSPS allowed agencies to set up parameters, and it didn't work. Why? Those parameters were still based on funding the salaries of professionals verses support administrators. No Masters or Doctorate, good luck. DoD has a profile of military and civilian. Either you come in with rank or graduate degree which virtually ensures your promotions in the future, or you claw your way up the ladder from the enlisted or entry level ranks of support. Neither institution has or ever will recognize the contributions of the lower feeding pool as long as the ones evaluating the work of the lower ranks are in the higher echelons. Projects managers, the ones who actually see some lower worker bees work, were never on the pay pool committees. Just the fact that a higher echelon manager's selection to the pool was considered a perk in upper managment. Ding-dong, the wicked witch NSPS is dead. May it and all its misguided compoents and any other traits or remnants of it in the future, rest in pergatory.

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