“Less Anxiety” for Federal Employees?

A legislative proposal would implement a pay for performance system that would create “less anxiety” among federal employees.

Pay for performance may still become a reality in federal agencies if one key Senator get his way.

George Voinovich (R-0H) is chairman of the Senate Homeland Security and Governmental Affairs Subcommittee on Oversight of Government Management, the Federal Workforce and the District of Columbia. From the lengthy title, a reader can infer that the Senator has a role in developing policies for the executive branch of government.

The Ohio Senator likes the idea of performance appraisal systems and pay for performance for federal employees. He doesn’t want to make drastic changes such as those currently planned for the Departments of Homeland Security and Defense.

Instead, he wants to use stricter rules for performance evaluations while retaining the existing General Schedule. He is not proposing to use broad paybands or other more significant changes to the federal pay and performance system.

In a press release announcing the introduction of the Federal Workforce Performance Appraisal and Management Improvement Act of 2006, he says that he wants to “institutionalize the dialogue between employees and managers in order to foster a culture in the federal government of a high-performing, continually improving organization focused on achieving results for the American people.”

This is a mouthful and we can infer from the bureaucratic jargon that the author who wrote the press release has worked in the Washington bureaucracy for many years–perhaps for the Office of Personnel Management which supports the legislative proposal. (It seems unlikely the same author writes the speeches the Senator makes to the local Rotary when he is campaigning to keep his job.)

What the Senator is saying is that performance appraisal for federal employees is a good thing but it isn’t being done very well in federal agencies. He also says in his press release that this approach “will create less anxiety among federal employees.”

He also likes the idea of pay for performance. The legislation he is sponsoring would try to move the federal bureaucracy in the direction of giving rewards to the federal employees that do the best work. Here is how it hopes to do that:

  • All federal employees would receive a written performance appraisal every year;
  • The performance appraisal would be related to the agency’s strategic goals and be developed with the employee;
  • The performance appraisal system would try to make meaningful distinctions between different levels of employee performance;
  • The performance rating would be used in making decisions for training, rewarding, promoting, reassigning and removing employees;
  • The Office of Personnel Management would provide technical assistance to agencies and approve the system;
  • Managers would get training in judging performance of their subordinates, explaining their expectations clearly and telling the employee what he or she did well or did not do well.

If an employee does not achieve a successful rating under the appraisal system, that employee would be ineligible for the annual pay increase or a within-grade increase.

For some readers, this outline of the new legislation will sound very familiar.

For those readers who were involved in designing and implementing a pay for performance system for federal managers after the passage of the Civil Service Reform Act of 1978, it may be time to search through your agency’s attic of old policies and procedures and training manuals. If you can find the training course you used in 1980 to explain to federal managers and supervisors and personnel specialsts (since upgraded to human capital specialists) how to implement a pay for performance system, you may save a lot of time and trouble of redoing the work. In fact, if you can find a copy of Performance Standards Made Simple! or The Federal Manager’s Guide to Improving Employee Performance (previously published by FPMI), you may be well on your way. A few hundred thousand copies of these books were in circulation at one time and explained to supervisors and managers how to write and successfully implement a performance appraisal system and reward federal employees.

Pay for performance is a good idea that is popular with the American public. It was not successful under the CSRA even though many agencies worked hard and did a good job of putting a big change into place. One big problem: There is a strong preference in government to treat everyone the same. Treating everyone the same is smoother and easier. There are fewer grievances. There are fewer EEO complaints. Top managers in the agency don’t get upset when the process is working smoothly.

Even if there is less work being done and the most productive employees leave because they get the same pay as the less productive people, there is an inherent preference for treating everyone the same.

There are a lot of penalties in government for trying to reward good performers and punish the poor performers. There are not many rewards for a supervisor for telling an employee he is not doing a good job and withholding pay based on performance.

The “reward” for the supervisor is usually dealing with the grievances, complaints, and time consuming meetings. From the perspective of the federal supervisor, he is the one who has to contend with the results of a poor performance rating. The union will argue that the supervisor did not negotiate as required by law, the grievance will allege the contract and agency policies were not followed, and the EEO office will investigate to determine if the supervisor is really a discriminating moron who did not have the good sense to give everyone the pay raise they deserved.

By the time the dust has cleared, the supervisor often feels as though his reputation has been besmirched, the employee may win the case or at least it will appear to the employees as though that was the final result, and the productivity of the supervisor has probably dropped with the time and effort spent on one case.

There does not appear to be much to change this system in the legislation proposed by Senator Voinovich. To make it work, there will have to be a pay-off for the supervisors tasked with the job of writing and implementing a performance appraisal system.

In private companies, the reward is monetary–both direct and indirect. If a manager is given a budget, that manager can spend the money to pay people more (or less); hire the best people, fire the ones she thinks are not productive, and try to enhance the profit margin for the organization. The manager often gets a monetary reward for squeezing the most productivity out of the fewest number of people.

But that is not how the government works. Firing a federal employee can often lead to expensive and time-consuming litigation. The political appointees and senior executives do not want to give a mid-level manager control over a budget and to spend that money as the manager sees fit. And, of course, the pay system does not allow a manager to use judgment to quickly and easily give an employee a big raise with money withheld from another employee who did not get any raise at all.

Changing the federal government’s system to make meaningful distinctions between employee performance will not be quick and easy. It will not reduce the anxiety of federal employees. As can be seen in the most recent examples of DHS and DOD, changing the system will ensure litigation, complaints, negative press releases and backpedaling from Congressmen who thought change was a good idea until it became clear people don’t like to change.

It is likely there will be a pay for performance system in government. It is possible that Senator Voinovich’s system will become law. If that happens, there will be some success, at least in the short term. No doubt, the proposal will create less anxiety among federal employees than has been the case in the changes proposed for the Departments of Homeland Security and Defense.

As the Senator summarized his proposal: “This will require a significant commitment of behalf of managers and leaders. Instead of taking one giant bite at the apple, I believe it will be easier for federal agencies to implement enhanced employee appraisals first. By instituting a more rigorous performance management standard on top of the current general schedule, I am optimistic this will create less anxiety among federal employees.”

But, without major changes to the federal civil service system–including some that will create anxiety among the people that are affected–the long term prognosis for a significant pay for performance system in government is not favorable.

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