On Tuesday House and Senate lawmakers voiced skepticism about the quality of the government's performance measurement systems and a Bush administration push to create a pay-for-performance civil service compensation system.
The Bush administration wants to overhaul the antiquated federal pay system and tie employee performance more closely to pay. To do so, administration officials decided to veer away from the 2.7 percent base pay raise set by the formula they used to determine the civil service pay raise in its fiscal 2004 budget proposal. Instead, the administration proposed giving federal employees a 2 percent across-the-board pay raise next year and creating a $500 million pay-for-performance fund to give outstanding employees an additional salary boost.
Congress would have to approve the performance fund, but during a joint House and Senate hearing Tuesday, lawmakers said it wouldn't happen any time soon given the poor state of the federal government's performance appraisal system.
"I almost feel like we're putting the cart before the horse," said Rep. Jo Ann Davis, R-Va., who is chairwoman of the House Government Reform Subcommittee on Civil Service and Agency Organization.
Union leaders argue that the current pay system already allows for performance-based pay.
"If performance is found to be especially good, managers have the authority to award 'quality step increases' as an additional incentive," Jacqueline Simon told Davis' subcommittee on April 1. Simon is public policy director for the American Federation of Government Employees. "If performance is found to be below expectations, the step increase can be withheld."
In the two months since the proposed pay-for-performance fund was unveiled, some federal employees have expressed wariness about pay-for-performance measures:
"I agree that until an effective evaluation system is in place, that process will never work properly," said one Navy employee. "What it would do is make performance budget driven. In other words, the agencies would not be properly funded to apply pay for performance in a fair and equitable manner. The budget would set levels for any performance awarded pay and any degree of performance would not change that budget number. So in practice all employees in an activity could meet the performance goals established for the year, but adequate budget dollars to reflect that performance in the pay received would not be there to compensate those employees."
"The president's pay-for-performance fund sounds and looks great on paper, but when handled by most upper-level managers it would result in complete failure as far as pay for performance going to the GS-12 level and below," said one federal retiree. "I'm a retired military . . . and career civil servant . . . and have either been part of, or have seen this pay for performance at many bases. The results are the same, with upper-level management getting the T-Bone steak, and throwing a few of the steak bones to the chosen few GS-12s." "In my opinion 'pay for performance' will create more problems than it solves," said one Army employee. "I feel that they are trying to replace a window that is not broken, and in the process create a great deal of discontent and mistrust, and possibly increase the number of complaints and lawsuits. I do not believe that it is a good idea."
National Treasury Employees Union President Colleen Kelley would rather see administration officials close the gap between public and private sector pay.
"Funding for this new gimmick comes at the expense of the 2004 federal pay raise," she said. "Rather than putting this $500 million toward a more appropriate pay raise, the administration would give managers unfettered discretion to give incentive pay to a fraction of the federal workforce. The only thing this is likely to accomplish is a further decline in employee morale."