Intelligent Design

Does higher pay motivate federal employees to work harder?

"I may be a maverick," said Ron Sanders, chief human capital officer at the Office of the Director of National Intelligence. "Our system is not based on the premise that people are going to work harder if we pay them more money. Our system doesn't make any assumptions with regard to how people are motivated."

Director of National Intelligence Mike McConnell announced two weeks ago that in the course of the next year, 10 out of 16 intelligence agencies will begin implementing a pay-for-performance system. That system will complement new performance evaluations that agencies are putting in place for both rank-and-file employees and senior executives.

Both components were designed to shore up the sense among employees that intelligence agencies recognize the strongest performers. In addition, adopting common criteria for evaluating and rewarding performance were aimed at making interagency moves easier for intelligence employees. The expectation is that they won't have to worry about complying with different standards of excellence, or see their opportunities for promotion stymied.

Sanders, however, was reluctant to say that the possibility of higher pay will inspire new feats of excellence among intelligence employees.

"We know for a fact that our employees are motivated by sheer patriotism," he said. "They like their work; they know it's important. Sanders pointed out that the agency's system is designed to reward average and outstanding employees accordingly. "We've told people, no one is going to get rich on this."

The question of what amount of pay motivates employees to do excellent work, or what increase in performance correlates to a percentage raise or a dollar amount in bonuses is almost impossible to answer. The average pay increases and bonuses distributed for the first time in January under the National Security Personnel System totaled 7.6 percent of salary. That figure is above what's considered average for motivating employees, said Jason Kovac, a compensation specialist from the nonprofit organization WorldatWork, who helped train managers to perform NSPS evaluations.

In fact, the federal government might not be able to design a pay system that guarantees big pay increases to outstanding federal employees.

Congress might not always appropriate funds for significant pay raises. Efforts to narrow the gap between public and private sector salaries will remain complicated by market fluctuations and the policymaking process. Most federal jobs aren't structured in such a way that agencies can pay employees based on the number of cases they process or research projects they finish, or how quickly they complete tasks. It's also hard to imagine that, given the federal government's reputation as a stable employer, most employees would embrace a system in which pay is based entirely on benchmarks.

But the ODNI's approach to its new pay-for-performance system could hit a sweet spot. As Sanders said, it doesn't promise riches, but strong, successful pay-for-performance systems can restore employees' faith in the integrity of their agencies, providing them with a tangible reminder that excellent work is valued, and that employers do recognize distinctions in performance.

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