Government Executive examines the shifting landscape of federal pay-for-performance systems:
Federal agencies are shaping their responses to a request by Democratic lawmakers that the Obama administration suspend the implementation of all federal pay-for-performance systems pending a review, while employee groups are lining up in support of a broad evaluation of performance management systems. [...]
Democratic leaders of several House committees and subcommittees sent an April 3 letter to Office of Management and Budget Director Peter R. Orszag urging him to halt the implementation of pay-for-performance systems across government pending an interagency review, as the administration decided last month with the Defense Department's National Security Personnel System.
"A well-designed performance management system can recognize and reward high performance without a linkage to compensation," said the letter, signed by Towns and seven other committee and subcommittee leaders. "We urge you to put on hold further advancement of any pay-for-performance measures in the federal government and conduct a governmentwide review to determine the best way to improve performance management while preserving merit principles."
I'd posit that an even better-designed performance management system would include a linkage to compensation, if the goal is to actually incentivize performance. But I digress:
Leaders of groups representing managers and employees, even those who have been supportive of linking compensation and performance, said such a governmentwide review of pay-for-performance systems could help determine more effective performance management techniques. [...] They said, however, that a governmentwide review should not introduce additional complications into the personnel system or dismantle systems altogether. [...]
Paul Weatherhead, a program manager at the U.S. Postal Service who has analyzed that agency's pay for performance system, said it would be a mistake to dismantle it during the review because data and experience would be lost.
Max Stier, president of the nonprofit Partnership for Public Service, which has called for wide-ranging reform to the federal pay system, said: "The problems we see are more about our ability to identify good performance in a fair and transparent way than about the pay piece. You do not solve the problem simply by getting rid of these efforts to create pay for performance systems."