Pay, Performance and Awards

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Pay-for-performance is on the minds of many federal employees these days as large numbers of employees are looking at the prospect of new pay systems in their agency.

The idea of paying people based on their success at doing work they are hired to do is a basic concept used throughout the country. In most companies, promotions, pay, etc. are determined or largely influenced by someone in charge of an organization who makes a judgment on which employees are the best performers and the most deserving of earning more money. No question, someone makes a decision about pay and compensation and most people work to make more money. In other words, it is necessary to make the boss happy to get paid more money.

But there is no question there is an underlying fear from many federal employees who are concerned they won’t get their fair share under a pay for performance system. From comments sent by readers, a number of federal employees don’t like having their performance judged by a supervisor with the power to decide how much money an employee will receive based on past performance.

The most common epithet leveled against the pay for performance proposals is that it will be a return to the "good old boy" system. In fact, the epithet is so widespread, one has to wonder if a flyer is going around federal agencies telling employees to use this phrase when offering opinions on the system.

In many, if not most private companies, pay-for-performance is part of the organization’s culture. But the federal government runs on a different system based in large part on treating everyone in a similar way. It is possible to fire a federal employee because of poor performance and it is possible to slow down regular pay increases based on seniority. But the reality is that few employees have a within-grade increase withheld because of performance problems and very few federal employees are fired based on poor performance. Annual pay raises are given throughout agencies and just about everyone gets a pay increase based on a percentage increase by virtue of being employed in the agency.

Multiple appeal systems make taking action based on performance difficult, time-consuming and expensive. Many managers who have gone through the process vow never to do it again. It is easier, cheaper, and less controversial to ignore the problem, transfer an employee or give a poor performer a desk in an out-of-the-way location where he can’t do much harm to the organization.

Conversely, the federal government is a large bureaucracy subject to political disputes and passions and in setting up the appeals process, Congress put a number of appeals processes in place to make it difficult to take action against an employee in order to protect the workforce against unjustified personnel actions.

People are generally resistant to change. Changes to a compensation program are often feared because no one is certain who will benefit and who will be harmed. From comments received in response to articles on the subject, it is apparent large numbers of federal employees are concerned they will be harmed with the implementation of a pay for performance system.

One aspect of a pay-for-performance system is likely to be an awards or bonus system based on the premise that the most productive workers get more money and recognition. Presumably, the supervisor will determine or have significant influence on who would get these performance awards.

Awards to recognize the achievements of the best performers are not new in government. Presidential rank awards can result in some senior federal employees receiving up to 35% of their salary in awards. These awards don’t go to everyone and recognize the achievements of those who receive them.

What are your views on an awards system based on performance? Should part of your salary be based on an incentive bonus? Are the current systems in place for giving awards fair in your opinion?

About the Author

Ralph Smith has several decades of experience working with federal human resources issues. He has written extensively on a full range of human resources topics in books and newsletters and is a co-founder of two companies and several newsletters on federal human resources. Follow Ralph on Twitter: @RalphSmith47