Perform or Else

At the Government Accountability Office next year, employees who don't meet expectations won't get a pay raise, not even an inflation increase. And that's exactly how Comptroller General David Walker wants it. He won the ability to deny raises to poor performers in July when President Bush signed into law the 2003 GAO Human Capital Reform Act, for which Walker lobbied vigorously.

GAO, a prestigious agency that analyzes executive branch management for Congress, will remain a premier career destination only if the agency rewards its top performers and gets rid of poor ones, Walker says. "We want the primary factor in pay to come down to the skills, knowledge and performance of our people rather than just the passage of time," he says.

Starting a year from now, the legislation will free GAO from the annual across-the-board pay increase provided by Congress, and allow the agency to set all raises purely on performance. But Walker can immediately deny raises to employees who don't meet performance expectations. In 2003, 30 employees out of more than 3,000 would not have received raises, the agency reported.

GAO has hired consulting firm Watson Wyatt to conduct a market-based study of salary levels in professions akin to those at GAO. It will help guide GAO's future pay increases. The bill will allow GAO to continue to offer early retirement to some workers, but Walker can turn back requests from employees he doesn't want to lose.

Nearly four months after the bill's passage, GAO is putting the final touches on regulations that will implement new vacation leave and exchange program rules. As a result, GAO employees may find themselves working side by side with a university professor or an investment banker. And experienced new hires will be able to negotiate the amount of vacation time they'll earn. Walker says additional leave will be necessary to help GAO hire experienced managers, which is essential as many of the agency's leaders approach retirement. The exchange program, he says, will provide an infusion of talent and new ideas from the private sector and academia, and will cost GAO nothing.

The new law is the latest in a series of human resources reforms at GAO over the past 25 years. The 1980 GAO Personnel Act gave the congressional watchdog authority to implement broader salary ranges and pay-for-performance programs. A 1989 bill set up a pay-banding system for lawyers and analysts. But after taking over as agency head in 1999, Walker found that the average rating for an analyst, GAO's core career position, was high-4.6 on a 5-point scale. And even the worst performers continued to receive Congress' annual across-the-board increase.

Ultimately, Walker decided to discard process-oriented rating areas such as data gathering and documentation, data analysis and job planning in favor of outcome-oriented competencies such as thinking critically, collaborating with others and achieving results. GAO set measurable goals in each area. To counter ratings inflation, these targets were aligned with four rating levels: role model, exceeds expectations, meets expectations, and below expectations. The meets expectations rating became a 1.5; exceeds expectations a 3; and role model a 5. In 2003, the average analyst rating was about 2.30.

Walker's the first to acknowledge that grading employees is anything but a science. But, he adds, "We are in a period of constrained resources. It's likely to be a long period, and we need to allocate whatever dollars we have as intelligently as possible."