By Steve Kelman

Blog archive

Obama and HR reform

To the surprise of many observers, the Obama administration's director of the Office of Personnel Management, John Berry, seems to be promoting an ambitious agenda of human resources reform. His efforts so far have included  hiring practices and, quite amazingly, a call for pay for performance in the federal government. Berry says the driving force behind that call is President Obama himself, who believes pay for performance must be part of any package of HR improvements in the government.
 
That sets the stage for an interesting battle, especially if the president himsellf is really behind this -- which is plausible, given the political pressures for improving government performance in the context of the large Recovery Act (and possibly health care reform) --related deficits.
 
Pay for performance was a big Bush administration push, and ran into an enormous firestorm of opposition from federal employee unions.  I think the universal assumption around town was that a Democratic administration would just drop the idea, so this statement by Berry is fascinating. Already, the unions have expressed worry about such an effort. One union leader was quoted as saying that any pay for performance couldn't be "just a reward system for star performers."
 
Pay for performance is a complicated issue, more complicated than its advocates often suggest. Individual (as opposed to workgroup) pay for performance may encourage lack of cooperation at the workplace and even sabotage of the efforts of others, which can be counterproductive if production is significantly a workgroup rather than an indivdual product. Objective performance measures are often necessary to counteract perceptions of favoritism that can also hurt workplace morale.
 
Having said that, one of the things that makes the federal government a less attractive workplace than others for bright young people is the perception that it doesn't reward talent and energy sufficiently. The lack of any relationship between performance and pay is one specific complaint along those lines. I have been surprised by the vehemence with which many of my students express this opinion.  Surely, the federal workplace should be a welcoming place to other than star performers, but if we don't have a "reward system for star performers," we're not going to get enough of them in government.  And that's a bad thing.
 
Thus, I find myself welcoming John Berry's statement and wishing him luck.  And I find myself wondering when federal unions will start worrying seriously about improving the performance of government, rather than simply being apologists for the status quo.

Posted by Steve Kelman on Jun 11, 2009 at 12:08 PM


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