Workforce Wonk

By Alyah Khan

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Could pay for performance make an unexpected comeback?

When President Barack Obama announced during his recent State of the Union address his proposal to freeze annual domestic spending for the next five years, many were likely wondering what this means for the federal workforce. Could pay for performance gain renewed traction in light of the urgency of cost savings?

The administration has already implemented a two-year salary freeze for all federal civilian employees. And House Republicans have introduced legislation to reduce government spending that includes cutting the federal workforce by 10 or 15 percent over a period of years, and extending the halt in salary increases.

In addition to the five-year freeze on domestic spending, Obama is proposing a reorganization of the government to reduce duplication and streamline federal agencies' processes. 

“In the coming months, my administration will develop a proposal to merge, consolidate, and reorganize the federal government in a way that best serves the goal of a more competitive America,” the president said in his speech Jan. 25. “I will submit that proposal to Congress for a vote – and we will push to get it passed.”

While it’s unclear at this point if feds will be subject to workforce cuts or a longer pay freeze as part of the administration’s overall belt-tightening, it will be interesting to see if the idea of implementing a pay-for-performance system resurfaces as a way to lower costs and improve the government’s efficiency.

Federal agencies have experimented with pay-for-performance systems, but they have not formally taken root anywhere. It’s important to note that implementing pay for performance might be a hard sell, even if it is proposed by lawmakers or the administration, because of Congress’ decision to eliminate the Defense Department’s National Security Personnel System.

However, conventional wisdom says that a properly designed and managed pay-for-performance system will provide added motivation to talented, hard-working federal employees and pressure dead-weight employees to step up their game or get out. (See FCW’s October 2009 story on this issue.)
Do you think pay for performance is going to show up in future legislation or be proposed by the Obama administration? How would you feel if it did?

Posted by Alyah Khan on January 28, 2011 at 8:29 AM

Reader comments

Wed, Nov 30, 2011

Pay For Performance NOW IN PLACE in the Federal Judiciary. A poor performance means NO step increase. Discretionary steps can be awarded for superior achievement by the Court Administrator (Clerk of Court).

Tue, Mar 8, 2011

I have worked at a Navy lab with pay for performance since 1984. It is not that different from NSPS, although less bureaucratic & requires less detailed paperwork. Now that NSPS is over, we are switching to something similar to our old performance pay system. It's true that ratings are always somewhat subjective and there will be some favoritism. That's still far better than treating everyone the same regardless of performance.

Fri, Feb 4, 2011

I work under a Federal pay for performance demonstration. Our Managers regularly abuse the system by giving higher ratings based on gender, ethnicity, and cronyism. They use the system to punish those that stand up for themselves. I believe in pay for performance but such a system should require outside independent performance evaluation with names removed from the 2-page performance sheet.

Mon, Jan 31, 2011 RayW

In our group of 40+ engineers, it is about 50% for, 25% against, and 25% undecided. For the 75% who are not against, the biggest anti factor is the lousy way that the annual evaluations were set up. For those who worked the Real Life equivalent of NSPS (like most people outside of the Gov), it looked like it was a government created mess that was designed to overload the system and fail.

(Note: the statistics mentioned are a rough guestimate and are not from a scientific or controlled survey, and can vary depending on the mood of the person speaking)

And if the government is to be 'competitive' then a lot of rules have to change, ranging from hiring and firing to parts procurement and over to politicians. And that is about 10 pages of writing and beyond my ability to expound upon.

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