“Good Old Boys” and Pay for Performance

Are you fearful of a pay for performance system in your agency? Here are some of the arguments in favor of such a system offered by the Merit Systems Protection Board.

What is the "good old boy" network and when did it exist in the federal government’s human resources system?

It is the example used by a large number of readers to describe their fear of a pay for performance system. The comments usually read something along the lines of: "This new proposed system will be nothing more than a return to the ‘good old boy system’ in the federal government."

No one has ever said when the "good old boy" system was used in the federal government but there seems to be two schools of thought. One is that the system will return from the distant past immediately upon implementation of a new pay system and that the reader anticipates he or she will be harmed by the new system. Under this theory, the reader will get lower pay raises, fewer promotions, etc. because the supervisor will have more authority to reward people he likes and ignore the hard-working, long-suffering reader who is now receiving regular within-grade increases and yearly salary increases (but will not receive them under the new system).

The other school of thought is that the "good old boy" system now exists in the federal government because the supervisor of the person submitting the comment perceives that her supervisor is using existing authority to reward people he likes and ignores the hard-working, long-suffering reader by giving promotions and better work assignments to others.

The common denominator in both scenarios is that something is or will be wrong with the system and that other people will benefit or are benefitting from the "good old boy" system.

The underlying fear seems to permeate the work force in government. It has come to the surface recently because of proposed changes to the Department of Defense and the Department of Homeland Security. And, once new human resources systems are in place for these agencies, other agencies are likely to follow. The adminstration has been advocating a pay for performance system as part of these changes. Some in the federal workforce foresee a collapse of the system that has rewarded them reasonably well and they fear their work and efforts will go unrecognized and unrewarded under a new system.

No doubt, there are some readers who like the idea of a pay for performance system. We hear from a few who cite advantages of a pay for performance system but they generally don’t weigh in on the comments to articles on the subject.

The Merit Systems Protection Board is now weighing in on the issue with its latest Issues of Merit newsletter. The April 2005 issue of the newsletter makes an argument in favor of a pay for performance system.

The lead article is entitled "Using Pay for Performance to Support Merit." The author(s) of the lead article somehow managed to avoid using the term "good old boy" system but expressed the fear of employees described above. Here is a quote from the article: "…[S]ome employees believe that although the current system has its faults, at least it treats everyone the same. They fear that providing supervisors with the discretion to evaluate individual performance and base pay increases will result in favortism for the ‘in-group,’ while ‘cheating’ the others out of pay increaes they they would have otherwise received."

The MSPB says that a pay for performance system may result in a more equitable distribution of pay increases and a better "alignment" of the pay system and merit principles.

Here’s how. A merit system should value equal pay for equal work. The existing pay system does not emphasize the value of a person’s work to the organization. Instead, it provides equal pay bases on the series, grade and tenure of the employee performing the work.

Under a performance based system, an employee who contributes more to the agency’s mission would make more money than those that do not contribute as much.

Secondly, a pay for performance system will provide incentives and recognition for excellent performance. "Pay for performance provides agencies with the ability to monetarily recognize achievements–not just with token cash awards, but with pay increases that are limited only by the agency payroll budgets and statutory limits."

The third advantage of a pay for performance system is that it will give agencies the ability to vary starting salaries for new employees so that the government can compete with the private sector to attract the best people and obtain critical skills that may be lacking in the agency’s workforce. The system will also enable agencies to retain its best employees.

No doubt these arguments will fail to sway readers fearful of losing pay increases and promotions to others. But there is no doubt that changes to the existing system that uses "series, grade and tenure" to determine a person’s pay is going to change to reflect systems that are quite common in private industry.

You can download the latest issue of the MSPB’s Issues of Merit newsletter right here.

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