Trump’s Budget Will Push Performance-Based Pay for Feds

Making good on last year’s promise to remake government “starting from scratch,” the Office of Management and Budget signaled that Monday’s fiscal 2019 budget proposal will include a shift from “tenure-based” civil service system pay to performance-based bonuses.

The Associated Press reported that senior administration officials on Thursday said Trump will recommend restricting the pay system encompassing 1.5 million federal employees to cut as much as $10 billion in traditional tenure-based pay bumps over 10 years and redistributing the money as performance-based bonuses. “Much of the clerical work that has been the domain of the government can be automated,” AP reported the officials saying, “but there is a greater need for information technology workers and cyber security experts.”

The move toward greater performance-based pay would also mean some federal workers with poor reviews could be fired, the officials acknowledged. Major changes would require action by Congress, which last reworked civil service pay in 1978.

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The Trump administration is also looking into the prospects for recruiting qualified workers using a defined-contribution retirement plan, rather than a pension plan that rewards longevity in government, AP noted.

Importing private-sector approaches to paying for performance in government has been the holy grail of many efficiency experts for decades. The George W. Bush administration attempted to move Defense Department employees to performance-based pay under the short-lived National Security Personnel System, but it was controversial. The system drew opposition from unions wary of pay cuts and lawmakers wary of politicization of the nonpartisan Civil Service created in 1883 to replace the old “spoils system” of rewarding campaign loyalists with public office.

Reforms have remained a staple, however, of many Republican politicians, including Jeb Bush, who laid out a performance pay plan during his unsuccessful 2016 presidential campaign.

Pay analyst Howard Risher has written more recently of promising pay-for-performance practices in state governments. “The switch to pay for performance is essential to 'modernize' government,” he told Government Executive on Friday. “But it needs to be planned in conjunction with a broader strategy to focus on performance. The promise of money alone will backfire.”

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