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When House lawmakers passed the fiscal 2004 Defense authorization bill late Thursday, they included a provision to create a $500 million fund managers can use to bump up the salaries of high-performing employees.

The Human Capital Performance Fund was part of the Bush administration's fiscal 2004 budget proposal, offered in conjunction with a plan to hold the annual across-the-board federal pay raise to 2 percent next year.

House Government Reform Chairman Tom Davis, R-Va., included the measure in "The Civil Service and National Security Personnel Improvement Act"(H.R.1836), which was approved by his committee on May 8. The House Armed Services Committee merged a portion of H.R. 1836, which gave Defense Department officials authority to craft a new civilian personnel system, into the authorization bill (H.R. 1588), but did not include the fund. On Wednesday, Davis succeeded in adding the language about the fund to the authorization bill as an amendment.

"This is a critical step that will enable agencies to reward their best employees and will instill a culture of achievement in the civil service system," said David Marin, a spokesman for Davis' committee. While the measure is included in a Defense-related bill, it applies to all federal agencies.

The Human Capital Performance Fund would be administered by the Office of Personnel Management and allow agencies to give performance-based raises in 2004. The raises would be permanent salary increases that would also increase employees' pensions and their agencies' Thrift Savings Plan contributions.

Agencies would be required to submit plans to OPM that include details about how the money would be used to improve agency results, as well as reward high performers. Administration officials say the fund will help with retention and recruitment efforts.

However, during a joint Senate and House hearing in April, key lawmakers voiced skepticism about whether performance management systems in agencies could accurately identify top performers. Several General Accounting Office studies have pointed out flaws in the federal performance appraisal system.

"Agencies should have to demonstrate that they have modern, effective, credible and validated performance management systems," Comptroller General David Walker told lawmakers.

On Friday, House Minority Whip Steny Hoyer, D-Md., voiced support for the measure, but called for higher across-the-board pay raises to close the gap between federal and private-sector pay.

"I view this fund as a supplement to providing pay parity, and not as a replacement," Hoyer said. "Our federal employees are hard-working, dedicated public servants, who deserve to be more fairly compensated for their efforts, their commitment and their service to our nation."

COMMENTS

• Why do we need new systems of any kind. We already have new systems in the government. What we lack is someone who has the backbone to enforce the laws we already have concerning civil service issues. I offer the Federal Employees Pay Comparability Act (FEPCA) of 1990. This was passed during the Bush (41) administration. Not a word about following that law. Then the Clinton administration and again nothing about following the law, he thought it was flawed. Now we have Bush (43) and again nothing about following the law. All we hear is we need new ways of doing business. When Americans want some new law for guns, the administration says "we already have laws on the books" let's enforce them before we do new ones. Why do we not want to follow the laws we already have? The president swears to uphold the constitution, does that mean he doesn't have to follow the laws? Would it be that our government only follows the laws they like and ignores the laws they don't like? Civil service personnel deserve better than they are getting, unfortunately there is nothing a current or past administration is willing to do for us, they wish to do something for themselves and don't care what it does to damage our image or ruin peoples careers. We have some bad eggs but who doesn't, treat us like real people and we will respond in kind. GovExec.com reader Posted June 25, 2003 10:12 AM
• I read the article and the attached comments. The comments ought to tell "you" something. I too, have been dissapointed in the distribution of awards. I am not holding my breath that these performance awards will ever get down to the man or woman in the trenches. If they get past the SES level, I'd be surprised. I have seen cases where the base SES said there was no funds to send anyone TDY for a job related conference, but there was enough money for him to go the DC to get a $20,000 award for executive of the year or something like that. mikey Posted June 11, 2003 11:10 AM
• I am a federal employee for almost 19 years now. Pay for performance would be fantastic if it could be meted out fairly. Unfortunately that word, fairly, is not one to be used in connection with my place of employment. I would love to see the ones who work rewarded but am afraid only those who buddy up to management would profit. Maybe the people who don't work could be charged just for being at work? GovExec.com reader Posted June 6, 2003 8:03 PM