TOPICS
TOPICS
An Unfunded Fund
In 2003, the White House and lawmakers came up with the bright idea of creating incentives for hard work through a special set-aside fund. The fund was to be reserved for rewarding the top-performing federal employees with permanent pay raises.
Hence was born the Human Capital Performance Fund--an account slated to hold $500 million a year.
"The purpose of this is to promote ... greater performance in the federal government," the law establishing the account stated. "This fund will offer federal managers a new tool to recognize employee performance that is critical to the achievement of agency missions."
But two years later, no employees have pocketed raises from the fund. It's not because agencies couldn't find a single high-performing employee. It's because the fund was never funded.
According to the Office of Management and Budget, Congress provided money for the fund only for fiscal 2004. That year it appropriated a meager $1 million, which, after a mandated across-the-board rescission, left $994,100 for the program.
As a result, the Office of Personnel Management, which was charged with managing the fund, was never able to do so and the small amount placed in the account was allowed to lapse.
In Nov. 17 testimony before the Senate Homeland Security and Governmental Affairs Committee regarding the Pentagon's wide-reaching pay-for-performance system, Comptroller General David M. Walker reminded Congress of this failure to follow through on promises of personnel reform.
"Congress established the Human Capital Performance Fund to reward agencies' highest-performing and most valuable employees," Walker said. "According to OPM, the provision was never implemented due to lack of sufficient funding. We believe that a central fund has merit and can help agencies build the infrastructure needed to implement a more market-based and performance-oriented pay system."
A spokesman for OPM said the infrastructure for the fund remains and that Congress could provide the money to make it work.
"It was insufficiently funded to reward top performers and therefore is not sustainable as envisioned by the Bush administration," an OPM spokesperson said. "Congress could still come back with increased funding."
That might not be true for long, however. The Bush administration has been floating draft legislation known as the Working for America Act that would bring all domestic agencies under a performance-based pay system.
"Due to lack of sufficient funding, [the Human Capital Performance Fund] has never been implemented," an OMB analysis of the draft Working for America Act stated. "Given the significant pay-for-performance provisions ... added by this act, the [fund] is no longer needed."
OMB spokesman Alex Conant said the act, if formally transmitted to Congress and passed into law, would go far beyond the capability of this fund.
"WFAA would allow agencies to allocate a portion of each individual employee's raise based on performance, not just the highest performers, as the Human Capital Performance Fund would have," Conant said.
As stabs at personnel reform go, the Human Capital Performance Fund probably wouldn't rate as one of the highest performers.
COMMENTS
- Okay, Taxpayer and I have agreed to disagree on certain subjects (such as the military), but ... I have to admit that personnel costs are the largest slice of any business operating cost these days; including the government's. I do not profess to know the answers but changing the system to nepotism and politics (please read performance pay and pay panel pools) is not the way to go. I do agree, as I’ve seen expressed elsewhere in these responses, that this administration will continue to modify the proposal only enough to pass the bar (please read judiciary). Evidently they cannot see the basic flaws in their logic, as often happens with management and labor; military officers versus enlisted comes to mind. They just don’t have the experience or the perspective. I think most “feds” try to do a good day’s work for a day’s pay. One can actually have a rewarding career without having to push and shove his/her way to the top, just to be able to afford a decent retirement. Back to the subject of this article, and what I perceive to be the main flaw in the proposed system; if the version of performance-based reward system mentioned in this article didn’t get funded, why should the next? If it has to be congressionally debated, and hopefully funded, then it will be the first to suffer the ax come crunch time, even before they, Congress, take a cut. How did that saying go? “A camel is a horse built by a committee.” As for, “Performance is periodic and never should be rewarded with a permanent pay raise.” I firmly agree. That’s why we currently have step-increases and cash awards now. As for the NSPS being used to recruit the top performers: 1. Do they really believe that those newly recruited will be better than are now in place? I thought that was one of the main reasons for the military-to-civilian conversion. 2. Why was the system changed from the CSRS to FERS, which offers only 1 percent for non-participatory contributions? This truly gives the impression that the government is less willing to pay for good people. Bottom line: Dubya, just ‘fess up that costs are out of control and this is the only solution your think tanks can come up with. Try again. Tip off. Tip Posted March 2, 2006 12:14 PM
- Dear Mr. Taxpayer, Walk a mile in my shoes before telling the world that feds run a poor railroad. Taxpayers expect a huge amount of services and don't really want to pay for anything -- and then gripe when expectations are not met. If you want a world class civil service you have to pay for it or otherwise stop complaining. Federal HR Specialist GovExec.com reader Posted January 19, 2006 12:24 PM
- "The fund was to be reserved for rewarding the top-performing federal employees with permanent pay raises" Performance is periodic and never should be rewarded with a permanent pay raise! This is just another way for the political appointees to get money forever! Stop taking my grandchildren’s money to pay these government people -- I thought we defeated the communist ideas. Also, isn't it time to look into the military mission and structure of the United States? We have not won a war since World War II (maybe Desert Storm but some of us think that is still going on in Iraq today). Maybe it is time to return to the draft! A volunteer military is a power out of control and reaching deeper and deeper into our pockets every day! Congress uses them to get money to their home districts to assure re-election and military personnel do nothing to piss off the leadership or they will never get ahead in the military. What a way to run a railroad - oh yes the feds do a bad job at that also! Taxpayer Posted January 19, 2006 6:24 AM
