Managers called key to successful performance pay systems

The success of performance-based pay systems ultimately rests with federal managers who will evaluate their employees, a senior official Office of Personnel Management said Tuesday.

Administration officials plan to begin implementing performance-based pay systems in the Defense and Homeland Security departments this year, and hope to extend the arrangements to cover most federal civilian employees.

According to Ronald Sanders, OPM associate director for human resources management, the federal government's personnel system is outdated and must be transformed to defend the country. Sanders spoke at the Federal Managers Association's national convention in Arlington, Va.

Lawmakers allowed Defense and Homeland Security officials to reform their personnel systems and performance pay is only one part of that overhaul. In their current form, the proposed Pentagon reforms would allow most civilian defense employees to continue to join unions, but an alternative system would be established for employees to contract with a union for temporary representation. Some Defense employees -- including accountants, intelligence personnel and attorneys -- would not be allowed to join unions. Additionally, Defense managers would be able to waive collective bargaining during national security emergencies and for personnel changes that they decide are insignificant.

DHS officials have proposed to allow more flexibility in workforce management, lower the standard of proof for disciplinary actions and streamline the appeals process. Federal workers unions have opposed both personnel overhauls, but they have saved the most vitriolic criticism for the Pentagon plan.

One conference participant said many federal civilian employees are concerned that civil servants with personal connections to management will garner the largest pay raises.

Preferential treatment is perhaps the "greatest fear," Sanders said, for employees as the government adopts performance pay principles. He said the federal government would spend "millions on training" to avoid the problem and "we're just going to have to pay a lot of attention to that."

Sanders argued that the current General Schedule pay system also contains examples of favoritism. He acknowledged that federal workers are concerned about bias, but he criticized the American Federation of Government Employees for harping on the danger of preferential treatment in the new system. Federal officials have been meeting with union leaders to gather input on the personnel overhauls, but Sanders implied that unions have been stubborn and unhelpful during efforts to implement performance pay.

"If I hear [AFGE President] John Gage use the word crony one more time, I'm going to leap across the table at him," Sanders said.

A senior Democratic lawmaker speaking at the same conference predicted that the proposed personnel reforms would only hurt federal workers. Rep. Danny Davis, D-Ill., a member of the Government Reform Committee, said that he fears many reforms are designed to replace federal workers with outside contractors -- potentially contractors with ties to the White House.

"If this is how President Bush thanks federal employees for working longer hours, then I say, don't do federal employees any more favors," Davis said.