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The Securities and Exchange Commission is moving more cautiously before using employees' performance reviews as a basis for pay decisions, the agency's executive director said Tuesday.

Diego Ruiz told a House subcommittee that the SEC is putting a fresh face on its controversial personnel system, and vowed to implement a completely new performance management system as a first step.

"This will allow the commission to focus all of its efforts on effectively implementing all aspects of the new system before relying on it to provide performance information to support pay decisions," he testified.

In the meantime, Ruiz said, employees receiving an "acceptable" performance rating will receive an equivalent share of the funds the agency has available for merit pay increases.

The new performance management system at SEC was developed using best practices from other federal agencies and the private sector. It also addresses several performance-related recommendations from the Government Accountability Office, the Office of Personnel Management and the SEC's inspector general, Ruiz said.

Still, to ensure SEC is improving performance management, he added, the inspector general will perform another full audit of the program in two years.

"This is a welcome decision by the agency," said Colleen Kelley, president of the National Treasury Employees Union. "It has been clear for some time that the SEC system, as it has been designed and implemented, needs to be significantly revamped so that it is fair, credible and transparent."

In September, an arbitrator ruled that the SEC's pay-for-performance system was illegal because it resulted in discrimination against African-Americans and employees who are 40 and older. The grievance, filed by NTEU, covered the 2003 performance period; grievances are pending for every year since then.

The arbitrator did not rule on an appropriate remedy for the discrimination, but asked the SEC and NTEU to submit briefs on how to resolve the issue. On Tuesday, Ruiz said SEC proposed that, for all employees in the two affected categories, the agency would individually reconsider the merit pay awards for 2003, with retroactive pay adjustments for employees who received upgraded awards.

"NTEU would be provided a summary of the pay adjustments," he said, "and individual employees who remain dissatisfied would be permitted to file grievances in accordance with the collective bargaining agreement."

SEC's decision to scale back its personnel plans follows similar efforts at other agencies over the past year. The Federal Deposit Insurance Corporation, for instance, recently agreed to suspend a system that garnered little buy-in from employees. And last February, officials at the Homeland Security Department pledged to scale back the agency's pay-for-performance ambitions after determining that a new pay system was a great source of anxiety to employees.

A lack of clearly defined work and performance expectations is one of the most widespread and serious problems with alternative pay systems, including the one at SEC, Kelley said.

COMMENTS

• tipsy, maybe you should try the private sector, unfortunately you won't be paid to contemplate your navel. Your in your own world where job security is a given, pay raises are socialized and you unwilling to be objectively graded on performance. Yet I bet your the 1st 1 to compalin about your meal, car, hotel room. In must be great to be able to complain 24/7 and not have to deal with any blow back. Unfortunately for the great unwashed life isn't like that and its time to come off the high horse. dan ketter Posted February 21, 2008 10:58 PM
• “Gleen, just facts don't you understand?? I'll be happy to type real slow next time so you understand!!” Skeeter, your response speaks for itself. Changing your typing speed won’t help make your rants any more intelligible until you learn to use a spell and grammar checker. I don’t wish to speak for Glen, but I do want to say that your strong opinions bear little weight in facts; rather, they sounding reminiscent of a boozy radical-right talk show host (my advanced apologies to the group in general). If you were a part of our demographic, you could understand the fear we carry of our livelihoods being held to vacuous and diaphanous standards, our work histories being edited by an unseen and unknown cabal based on quotas and personalities with no recourse or explanation, our retirements being economically undermined after decades of dedicated service. If you were one of us, or even remember your high school history on Boss Tweed, the Spoils System, and several other topics you could make statements that made some sense and that we might actually consider. We, like most Americans, simply desire management that is consistent, clear, and understandable. But since you are not one of us, just like Dubya and most of our elected representatives, your remarks appear trite, uninformed, and based on hearsay. That is our concern with the legislative body and chief executive. We can understand a fear-based reactionary vote for a new system, temporarily suspension of our right to privacy, and much more… but that is only if it is temporary. With time should come reflection, with reflection should come understanding, with understanding… wisdom. Forget the “wis”, this system is just dumb. Tip off Posted February 21, 2008 1:01 PM
• This is probably just the tip of the iceberg and other P4P systems will have to be "tweaked" as well. The truth is that a group of people was told to build and implement the system despite evidence that P4P doesn't work unless it is implemented in an environment where you can count the widgets and decisions regarding who gets the pay out are absolutely objective. Example: employee A built 50 widgets, employee B built 40 widgets during the same time; both employees build the widgets to spec and no flaws were detected; the standard is 45 widgets in order to be fully successful. Guess what; easy decision - no arguments. As long as the determination of who gets a raise is subjective, and let's face it, the nature of most government work does not lend itself to objective evaluation, P4P isn't going to work. What I want to know is, where are the designers of the system? What kind of raises/bonuses did they get for developing P4P systems for use in the government. What do you want to bet they've moved on with glowing accolades, impressive resumes, and fat wallets. And for what? How much money has been spent on these worthless systems and what is the true cost, all things considered, to the American taxpayer? skeptical Posted February 21, 2008 2:47 AM