Pay for performance? Yeah, right.
- By Michael Hardy
- Jul 22, 2011
The federal government’s spotty record with pay-for-performance systems doesn’t seem to keep the idea from popping up with some regularity.
This year, the instigator is freshman Rep. Dennis Ross (R-Fla.), chairman of the House Oversight and Government Reform Committee’s Federal Workforce, U.S. Postal Service and Labor Policy Subcommittee. In March, he announced a series of hearings that could lead to new legislation aimed at implementing a performance-based pay system for federal employees.
Proponents say pay for performance rewards good work and penalizes laziness and that the General Schedule system provides no incentive for employees to work hard or take risks. But opponents say pay for performance makes cronyism too easy by benefiting employees who befriend managers and penalizing those who do good work but aren’t in the right clique.
Readers have reacted to recent Federal Computer Week stories about Ross’ proposal and pay for performance in general with comments that reflect those divided opinions. Here are some of those comments, which have been edited for length, clarity and style.
A reader calling himself Ted America advised linking managers’ pay raises or bonuses to the performance of the people they promote. He said that approach would minimize cronyism because managers would suffer for promoting less-than-competent friends.
Private-sector companies don’t tolerate managers who promote unqualified people because it costs the company money, he added.
“The problem in the federal sector is that we've all seen instances of cronyism and nepotism, and if anybody tries to bring it to the attention of higher management, that person gets labeled as a whiner and complainer,” Ted America wrote. “So pay for performance ends up doing nothing more than providing managers with a structure for rewarding their buddies.”
Many readers pointed out that government work differs from private-sector work in some crucial ways, notably the lack of a profit motive. In the private sector, "being buddies with the boss only goes so far when the bottom line is eroding," a reader said. But that sort of concern typically doesn't affect federal managers.
Furthermore, pay for performance works only when managers are capable of assessing the performance of employees, and many federal managers are not up to the task, some readers said.
“Many are sadistic and persecute employees more intelligent and capable than they are,” one commenter wrote. "If competent people are unlucky enough to have a bad manager, all the positive performance in the world will not get them recognition, monetary or otherwise.”
Another reader reflected on 40 years of experience in the government and concluded that there are no poor performers. “I cannot recall any new employee coming aboard with the attitude of doing as little as possible for the most pay possible,” the reader wrote. “No! They come aboard wanting to make a positive contribution to the mission, make an impact on the nation's security.… They become discouraged, disenchanted and even disenfranchised. Not through lack of wanting to be the best, but through poor management.… There are no poor performers, just poor managers!”
An effective motivator?
Some readers question whether pay for performance actually motivates better performance. One big drawback is the secrecy that it brings to pay levels: Employees don't know who got raises or how much they got, which makes it hard to know what kind of performance constitutes a good example, those readers said.
The ratio of managers to employees also affects the value of pay for performance as a motivational tool, wrote a reader who works in a group with 29 employees and two overworked managers.
“These two individuals are so swamped with work generated from above and below that they really have no time to keep track of individual employee performance,” the reader wrote. “If they do have a problem employee who creates an incident, it takes months for any kind of action to take place. So, in turn, discipline is a joke. If you can't have swift and sure punishment, then the discipline is lost on the employee and his/her peers.”
Erich Darr echoed that sentiment. “First-line supervisors have been required to supervise more and more employees,” Darr wrote. “This ignores ‘span of control.’ A first-line supervisor in a technical job series can't lead 17 to 24 employees. Personnel management suffers, mentoring of new employees suffers, and documentation is neglected, among other things.”
Managers have to take the system seriously, other readers told us. To avoid playing favorites, some managers might overcompensate by giving everyone good ratings, deserved or not, and thereby end up rewarding poor performance and undermining the ability of performance-based pay to motivate better work.
Furthermore, some of our readers don’t buy the argument that the GS system can’t motivate good performance. When within-grade increases and promotions are contingent on performance, the system can be effective, they said.
However, “the problem is that many managers cannot articulate the practical differences between pay grades and, thus, do poorly at defining performance elements and standards,” one reader said.
Another reader suggested that linking raises to performance might be too subtle to serve as a motivator for better work. “The only way to bring performance is one word: competition,” the reader wrote. That means identifying work suitable for outsourcing and putting it out for bid. The employees affected would be motivated to work harder to win the competition or, if they lose, to be considered for a job with the winning contractor, the reader added.
Unions: Help or hindrance?
Federal employee unions have resisted efforts to institute pay-for-performance systems, including the now-defunct National Security Personnel System (NSPS). The unions say their resistance stems from a desire to protect employees from favoritism, but their critics paint them as defenders of mediocrity.
“NSPS did not fail. It was killed by the [unions] via Washington,” wrote one reader. “It was the best motivational tool I have seen during my 29 years of federal employment and seven years as [a] supervisor.”
Pay for performance “will always be the bane of the public unions,” wrote another reader, identified as a manager in Hawaii. “Unions are all about sustaining job security, maintaining status quo and defending mediocrity in the federal sector.”
Putting performance measures first
According to some — including John Berry, director of the Office of Personnel Management — discussions about tying pay to performance might be premature. The government needs to learn how to measure performance better before it even thinks about making pay raises contingent on performance, they say.
In a speech in March, Berry said performance reviews in the federal government are “infrequent and rote.” He also emphasized the need to learn how to measure and assess performance fairly before discussing basing pay levels on performance.
He went on to say, “They don’t have to be linked. There’s a lot of literature out there that says what drives performance really isn’t pay.”
Such statements can be interpreted as a coded argument for not offering pay raises, and some of our readers took Berry's comments that way.
“I think that too many government upper-management types like Berry have become isolated from what the people who really create jobs and wealth do,” one reader wrote. “I know that I have a very clear idea of what I am to do and what it takes to keep my supervisor happy with me.… While I and many others I work with have many motives to do a good job, extra pay/compensation is what gets us to do the little bit extra that we do not really have to do.”
However, another reader commented, “I would appreciate a system that gauges a person’s performance against what the position calls for — not whether they turned water into wine or some other extraordinary act.”
Others agreed with the argument that the government must first identify performance measures. Nebulous criteria enable favoritism and might explain why that particular complaint about pay for performance is so widespread. One reader told us of seeing federal workers rewarded for approving projects regardless of the cost or chances for success because that pleases the agency's customers.
“When you try to assure that our customers are happy, then you have introduced bias into a system that is supposed to be free of bias,” the reader said.
A General Services Administration employee in the Midwest said managers have inadequate training in how to write good performance standards and then use them to measure performance. “My current performance standards are inadequately written and have had no major rewrite for 10 years,” the reader said. “They are mostly subjective and cannot be supported. Since managers would be hard-pressed to prove that someone was performing below par, employees would always be successful.”
When employees don't know what is expected of them, it is difficult for even the best to excel. Some readers said they don't know what their goals are for a particular year until well into the year — if ever.
Whatever performance measures are applied to an employee, they must be meaningful to that particular individual, some commenters said. "Since my goals are designed to allow my boss to meet his goals and him to allow his boss [to meet his], by the time they get to me, they are not really what I need to be doing to improve my performance anyway," a reader commented. "It has become simply a task of placing the correct words on paper, nothing more.”
Obviously, the system by which employees are paid and promoted is enormously important. But there is a strong sense that neither the GS system nor pay for performance will work if managers don't apply it well and use clear metrics. On the other hand, well-trained managers can make either approach succeed.
"Managers are poorly trained in this regard and, in the end, the employees are as well," one reader wrote. "Until this central problem is fixed, pay for performance is not quantifiably feasible.”
In addition, employees need a way to rebut a poor review, wrote one reader who has worked under NSPS, the GS system and the Interim Performance Management System, “which is just NSPS with greater destructive latitude for management.”
“All these systems deny the employee any actual say in their performance review,” the reader added. “The supervisor's word outweighs the employee's 1,000 to one.”
But once again, the question of whether pay for performance is even necessary comes to the fore. If performance measures were better defined and followed, the current GS system would be fine, wrote a reader identified as AJ.
“The GS [system] is not broken and can be improved by improving the performance evaluation process, then directly tying it to every form of compensation and to holding a job in the federal government,” AJ wrote.
Missing the point?
Although many readers championed pay for performance and others opposed it, a few said it simply doesn’t matter. The problem of underperforming federal employees lies elsewhere.
Every office has underperformers, one reader wrote. “Until agencies equip supervisors with the tools to realistically ‘take out the trash,’ the real drain on our taxes will continue,” the reader added.
Pay for performance might ensure that those workers meet at least some minimal levels, the reader said, but added, “Then again, maybe not. How many underperformers have sued or threatened to sue and are [kept] at the status quo with their co-workers? Some fancy new pay-for-performance program isn't going to solve what is really a cultural issue.”
“The entire idea is misguided!” another reader wrote. “Employees need a selection process to [move high-performing] employees into internships, advanced training and progressive opportunities that, if successful, would lead to responsibilities with greater pay. No one should have to push less motivated and unwilling employees to perform any greater by incentivizing pay.”
And one reader noted that the discussion of pay for performance is coming at a time when Congress and the White House are proposing ideas to halt pay increases, freeze hiring and furlough employees.
“Pay for performance is too expensive because it involves — you guessed it — pay,” the reader wrote. “You don't want to give out overtime, and you don't want to give out pay increases! What they really need to do is pay everyone just enough so that they keep on coming back in to work, like they do in the private sector.”