The Future of Pay-for-Performance in the Federal Government

A decision needs to be made as to whether pay-for-performance for federal employees should be expanded or concluded.

This is the last in a series of three articles. They concern the challenged faced by the new Democratic administration as they assess ongoing experiments with pay-for-performance (PFP) in the Federal sector.(See Sizing Up Pay-For-Performance In The Next Administration and The Future of Pay-For-Performance Under Pres. Obama.)

A decision needs to be made as to whether such models should be expanded throughout the Executive Branch or concluded with employees being rolled back into the General Schedule (GS) or some similar pay system. A continuing patchwork of pay systems within the Executive Branch (from DHS to FAA to DoD and so forth) is not a good long-term option, if flexibility and movement among agencies is considered a virtue.

The remaining areas of concern, articulated in the first of these articles, are these:

  • Relying on pay incentives as the primary motivator of Federal employee job performance may be not grounded in the realties of government workplaces. While those with private sector experience and perspectives see PFP as inevitable, they may be assuming their own beliefs are universal.
  • Preparing agency management to evaluate and compensate employees based on their annual performance reviews involves more than developing regulations and a few days of training. PFP demands leaders for whom leadership is a priority. Is that yet the case in government?
  • Assuming Federal jobs lend themselves to metric appraisals has proven to be a losing proposition. For decades, employees have been told they would be evaluated objectively, only to learn later that wasn’t the case.
  • If objective measures are not the principal means of determining who is good, better, and best, then how can management help employees understand performance appraisal and, therefore, pay. This system has to be transparent to be credible.

Where’s the carrot?

I, for one, didn’t apply for a government job to get rich. I didn’t have a clear notion of a career at age 24, but I knew I wasn’t cut out for graduate school or military service. I found a great job with Social Security, with a good salary ($8,500/year) and great benefits.

As soon as I began working at the Asheville, NC Social Security Office, it was clear that most of my coworkers were dedicated to public service. Most led respectable middle-class lives. Not everyone cared about helping the elderly and disabled, but most of us really did. Despite a chaotic workplace, a few difficult coworkers, some over-stressed management, and a demanding public, I knew I was making a small difference in people’s lives and the well-being of the United States.

Members of the uniformed services aren’t paid based on annual evaluations nor have I ever heard it suggested. It’s unclear to me why civil servants should be view so differently. Both populations serve their country – for various reasons. A recent Merit Systems Protection Board study referred to this sense of service or meaning as “engagement”.

No doubt about it – pay and retirement matter. So do benefits, job security, patriotism, and the occasional “thank-you” from a boss or our nation’s leaders. Pay is found by the Board and other studies to be down the list of motivators.

I recently came across this excerpt from one of president Obama’s campaign speeches:

“Our country is in a sense continually at war against the ramparts of liberty, equality and justice on which our Republic is founded. Surging constantly are the evil forces of greed, or materialism, of selfishness, headed by those who cynically deny that there is any prosperity that cannot be expressed in dollars and cents, or happiness except in bank balances.”

As a Harvard Law School graduate, Mr. Obama chose community organizing over more lucrative opportunities. Accordingly, he may not have much difficulty understanding the difference between monetary motivation and employee engagement. PFP in the absence of commensurate efforts to acknowledge public service and patriotism may come off as myopic, if not cynical, to the very people it presumes to affect. If our new president looks at PFP through his own lens (and not just that of consultants, experts, and his processor) he may get a better perspective on this issue.


I have been lucky. Not only was I pretty tolerant of the shortcomings my bosses may have had, but most of my supervisors were good ones. A spate of comments posted to this series, and to previous articles I’ve written, indicates others are pickier and/or less fortunate. Many appear to be forgiving of a caring/concerned boss who, in turn, is subject to the whims of middle management – especially where PFP pay pools are involved.

What most Feds have in common is a belief that the Peter Principle is alive and well in government and that the development plan for supervisors and managers in most agencies is unclear, inadequate, or both. I encounter supervisors and managers with years of experience who have never read a book or article (other than newsletters) on employee motivation. Many receive their first class in supervision after occupying a leadership role for a year or more.

PFP is not designed for such a corps of managers. It requires more than good guesswork and compliance with regulations. Months ago I wrote an article titled Appraisals, Objectivity, and the Little Black Book. As one who teaches classes concerning performance appraisals and rating criteria, I am too-often disappointed to learn that supervisors do not maintain an ongoing log/diary of workplace observations – nor do their bosses.

Pay-for-performance should not be confused with pay-for-recent-anecdotal-memories or pay-for-politics. Incoming Obama appointees should consider the current lack of management training/skills when deciding on a PFP verdict. In doing so, they may move the proverbial horse ahead of its cart.

Widget wonk – get thee behind me

In yet another recent article (Goals, Objectives, and the Everyday Employee) I contend that many public-sector jobs are located far from the proverbial widget factory. This shouldn’t be construed to mean that metrics and measures can’t be applied to Feds – just that they often paint a very incomplete picture of what is valued at work.

Customer service and teamwork are as difficult to rate as acting and composing. Intangibles are inevitable. If performance appraisals were actually based on metrics, there would be no need for pay pool committees or the Academy Awards. Like school teachers, raters would simply check the arithmetic from their grade-books and apply the averages mechanically. As a movie fan and a former HR specialist, I’m glad they don’t.

Given management’s reliance on subjective factors at every level of some agencies, why do their directives insist that performance measures must be objective? This has been going on since the passage of the Civil Service Reform Act during the Carter administration. I know that goals and objectives are supposed to cascade down from the top just like some textbook diagram shows. They don’t. …and if I can say that, why can’t those who design PFP programs?

It’s time (in fact, way past time) to give Federal employees written performance appraisal criteria that actually reflect how they’ll be rated. If it’s willingness to take on additional work, tell me. If it’s handling workload pressure without complaining, I’ll try to remember that. Just tell employees which work habits that will lead to recognition and which will look like mediocrity. For those employees who don’t even make it to mediocre, get on with the documentation. Describing what failure looks like and then trying to match the employee to that description is more burdensome than necessary. Failure can be defined in performance standards as the consequence of not passing.

Let’s play grown-up

Bureaucrats can and should be treated as adults. While some may continue to act like children, the best among us prefer the honesty and respect that comes with real-world communications.

As with cases of unacceptable performance that go to hearings, management’s burden of proof in performance cases should continue to be “substantial evidence” – management’s conclusion is likely true. Supervisors won’t be able to win a case absent some evidence. After all, the absence of any evidence indicates management isn’t performing its function [see Why Have Supervisors?]. But, if pages of notes accumulated over the course of a rating year contribute to a rating based on impressions, subjectivity should acknowledged and accepted.

Pretending that metrics are driving our government – down to each individual’s annual evaluation is fiction. Maybe it could be true. Maybe it should be true. But from your agency head down, evaluation relies in large part (or entirely) on salesmanship, preconceived notions, and/or subjective impressions. If there is to be PFP in government, it’s time to tell employees (and that includes supervisors and managers) that ratings won’t be as objective as some would prefer.

I know this can lead to bias and, as a strong supporter of civil rights and EEO, subjectivity worries me. As the National Treasury Employees Union taught the Securities and Exchange Commission (SEC), purely subjective systems may lead to rating biases managers didn’t even know they had. The SEC should have been vigilant in evaluating its subjective PFP system in this light. The government’s response to this potential for illegal bias, however, should not be an appraisal structure built on the pretense of widget-like objectivity.

From the president down, our government needs to acknowledge that the impressions of supervisors and managers contribute to performance ratings. Such subjectivity increases the potential for favoritism and that should be taught to (and discussed within) management year after year. Otherwise, pretending PFP ratings result from unbiased objectivity is like parading an emperor without clothes.

Perhaps the comments posted to these three articles (most from Feds evaluated/evaluating under current PFP systems) would be a good place for the new administration to begin assessing this subject. Many are thoughtful and compelling.

Many thanks go to those readers who responded to them with sincere consideration.

About the Author

Robbie Kunreuther is the Director of Government Personnel Services (GPS). GPS provides 1 to 3-day seminars to Federal agencies in four subject areas: Dealing with performance and conduct issues; Developing sensible performance appraisal criteria; Fostering cooperative labor-management relations; and Applying mediation skills in the workplace. Over the years, Robbie has trained thousands of Federal supervisors, managers, HR specialists, and union officials. For more information about him and GPS, go to