New Pay for Performance Project at Agriculture

Performance pay plans are continuing in the federal government. A recent example: A pay-for-performance demonstration plan has been approved for about 2800 non-bargaining unit employees of the Food Safety and Inspection Service of USDA.

The Department of Agriculture’s Food Safety and Inspection Service (FSIS) and OPM have announced final approval of a project to test a results and competency-linked pay-for-performance system that will change the way employees are compensated, rewarded, and recognized.

The purpose of the demonstration project is for FSIS to attract a diverse and well-qualified applicant pool, and to retain and motivate its current workforce. The program has now been announced in this final Federal Register notice. While some experiments such as this have been well received, there is a general apprehension among federal employees about pay for performance. Some of the problems are highlighted in a series of articles on this site by Robbie Kunreuther. See, for example, his article on The Future of Pay-for-Performance in the Federal Government.

The Public Health Human Resources System (PHHRS) is a pay-for-performance project that will include approximately 2,800 FSIS employees; jobs will be placed in broad career paths utilizing flexible pay settings based on qualifications, local labor market factors and performance ratings. This demonstration project will involve all General Schedule (GS), non-bargaining unit employees within FSIS, including public health veterinarians.

In May 2008, the FSIS Demonstration Project proposal was approved by OPM and in June 2008, a public meeting was held to discuss the proposal. FSIS received approximately 150 comments.

One key change that was made as a result of comments was the adding a “grandfather clause,” for employees in career ladder positions (i.e. positions with promotion potential to a higher pay band). The purpose of this is to allay fears that pay under the new system would be less than the pay under the general schedule system. This provision provides special in-band pay increases to ensure the base rate for these employees under the new system is equal to base rate under the general schedule pay system.

According to FSIS Administrator Al Almanza, “This is an important initiative for FSIS as it will offer a number of flexibilities that will greatly enhance the Agency’s ability to recruit and retain its most valued resource — our employees. In addition the new flexibilities will allow FSIS to further support our workforce with a more modern human resources management system that enhances and protects our critical role in public health, food safety, and food security.”

The pay for performance project starts on July 19 and includes a pay-banding classification and compensation system. The demonstration project is to last for five years under the supervision of OPM to determine if the pay-for-performance system will work to improve the agency’s personnel management system.

More information is available from Laurie Lindsay, Director of Human Resources Demonstration Project, Office of Management in Washington, DC.

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