A Fresh Start

Earlier this week as the Securities and Exchange Commission's old pay-for-performance system faded into history with the settlement of a labor complaint, the agency's top personnel official offered an unusually frank assessment of its downfall.

"You can go force things, but they're not going to work if you don't involve … key stakeholders," Chief Human Capital Officer Jeff Risinger said.

SEC is trying not to repeat that mistake. Agency officials are collaborating with the National Treasury Employees Union -- the labor group that successfully argued the previous pay scheme was unfair to some African-American employees and older workers -- to craft a new performance management plan. They also are teaming up with the union to expand some of SEC's diversity initiatives.

The project still is in the early stages, but it is worth watching, especially in light of recent developments at the Defense and Homeland Security departments that underscore the difficulties of enacting personnel reforms without union buy-in.

Last week, the Defense Department announced it would not move current union members into the National Security Personnel System. And the Homeland Security Department acknowledged it would no longer move forward with its performance management system, once known as MaxHR, because the continuing resolution to keep agencies running through March contains language forbidding the department from funding the system.

As Mark Roth, general counsel for the American Federation of Government Employees, put it, "Without being patronizing or in any way bragging, the unions have had the last laugh. [The agencies] have gotten nothing through of any lasting nature…. If they had come forward with legitimate programs that were good government programs that included the unions, they probably would have gotten those programs into effect within a year."

The arrival of a new presidential administration may provide a chance to do just that.

Both John McCain and Barack Obama have been clear about their desire to hold government as a whole, and individual employees, more accountable for performance. Compensation reform also is high up on the agendas of good government nonprofits such as the Partnership for Public Service, which calls the General Schedule system "inflexible, antiquated and [lacking] market sensitivity."

GS pay scales may live on in some form, but this criticism, combined with debates about locality pay, bonuses and market competitiveness, virtually guarantees that some kind of pay reform will be attempted again.

When that time comes, SEC's partnership approach may be worth exploring.