Pay for performance

There is widespread agreement that the basic approach to federal pay is flawed because it is not truly performance-based. Successive administrations, Republican and Democrat alike, have wrestled with this issue. Now the Bush administration is attempting to base the federal pay system more firmly on performance.

As readers of this column know, I am skeptical of any effort to implement a performance-based pay system for feds because I have seen so many previous efforts fail.

The General Accounting Office believes that "pay for performance" requires agencies to have effective performance management systems and adequate safeguards, including reasonable transparency and appropriate accountability mechanisms, to ensure the system is fair, effective and responsible. That sure doesn't sound like the federal pay system.

Indeed, in companies where pay-for-performance systems are working, modern performance management systems are the centerpiece of these safeguards and accountability measures.

But GAO says most federal agencies are a long way from meeting this requirement. All too often, GAO says, agencies' performance management systems are based on episodic and paper- intensive exercises that are not linked to the strategic plan of the organization and have only a modest impact on the pay, use, development and promotion potential of federal workers.

Anyone who has ever supervised employees (or been supervised, for that matter) knows that prompt feedback benefits the organization and its employees. But in the federal government, trying to find instances of effective performance management is like looking for a needle in a haystack.

The Office of Personnel Management's recently released 2002 Federal Human Capital Survey found that better performance management systems are needed in federal agencies. The survey results show that although 80 percent of feds believe they are held accountable for results, most are not satisfied with the recognition or the rewards they receive for a job well done.

Specifically, less than half of those surveyed think the awards/rewards that are distributed in their work units depend on how well employees perform their jobs, and less than a third of employees believe that their organizations' awards programs provide them with an incentive to do their best.

Imagine how much better the federal government could perform if the right incentives were in place.

What's more, less than a third of the employees surveyed by OPM thought that adequate steps are taken to deal with poor performers. Maybe that's why most feds will not hustle like the UPS guys do: because there won't be negative consequences if they don't. Any pay-for-performance system worth its salt has to have both rewards and punishments.

We certainly have a long way to go.

Zall is a retired federal employee who since 1987 has written the Bureaucratus column for Federal Computer Week. He can be reached at milt.zall@verizon.net.

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