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Whither Federal Pay-for-Performance?

Leonard Gilroy
April 8, 2009, 1:28pm

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."

Leonard Gilroy is Director of Government Reform


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