Playing Up Performance

There seems to be a developing consensus among federal human resources executives that scrapping the decades-old General Schedule pay system is a necessity.

"I fear that if we don't move forward with [a pay-for-performance system] at a brisk pace, the folks we've brought into the federal service and invested heavily in as our future will leave us," said Ron Sanders, chief human capital officer for the Office of the Director of National Intelligence, last week at an event sponsored by the Partnership for Public Service.

And more than half of respondents to a survey given 55 human resources officials across government said they believed pay for performance should be a long-term goal, the Partnership noted in a recent report. But the officials cautioned that such a system will require small, measured steps and that credible performance management systems and appraisals must come first.

The idea of pay as a management tool, rather than an administrative function, is hardly new. In 1978, a major civil service reform law laid the foundation for many of the pay reforms that federal employees see today. And while many government officials have touted performance-based pay as critical to agencies' ability to compete with the private sector, there seems to be a new category of competition emerging -- other government agencies with new pay systems already in place.

"Professionals are leaving for higher-paying agencies, and then they don't want to come back," said Michele Pilipovich, chief human capital officer for the Pension Benefit Guaranty Corporation, at last week's event. "Our [pay] system doesn't allow them to come back."

Human resources leaders seem to be heeding the voice of the younger generation of employees, which demands more mobility and less rigidity in pay.

According to David Marin, Republican staff director for the House Oversight and Government Reform Committee, a move away from the General Schedule and to pay for performance is inevitable over time, especially with much evidence that shows a large number of federal employees favor a culture of achievement over a system that primarily rewards seniority.

"That's not a partisan position," he said. "It's basic human nature."

Many veteran federal employees, of course, are content with the General Schedule. Combine that with federal labor unions disputing the lack of employee rights under new pay systems, and lawmakers stripping funding for the implementation of such systems at key agencies, and the process of transformation may take awhile.

Marin said that the current controversies associated with pay for performance at the Defense and Homeland Security departments will have to abate before any system can be fully successful. "Whatever system is created to implement pay for performance must have employee input and buy-in," Marin said. "Clearly recent wounds will have to heal before we take another shot at this."

Marta Perez, chief human capital officer at Homeland Security, said last week that pay and rewarding employees for good performance is the easier half of the equation. "Pay for performance is not rocket science," Perez said. But she added that the difficult part is ensuring an agency has well-trained managers, proper resources and commitments from top leadership to the concept.

Colleen Kelley, president of the National Treasury Employees Union, said the government already has tools to consider performance in pay decisions. She argued there really is no reason to scrap the General Schedule, largely because the system already is supposed to be market- and merit-based. Managers are not obligated under the GS system to give automatic raises to employees who have not performed well, she said.

"If they cannot [deny raises] under a structured system, the idea that they would use that authority under something that is unstructured is unacceptable," Kelley said. "This administration has done everything it could to dismantle the GS system and replace it with something else, and there's no evidence that these kinds of systems work."