GovernmentExecutive.com

Experiments in changing the way federal employees are paid are everywhere. There's the National Security Personnel System; pay for performance for the Senior Executive Service; and pay reform in the intelligence community, the Securities and Exchange Commission, and the Internal Revenue Service. There's plenty of fodder for conversation. But missing amid all the sound and fury of compensation experiments is an overarching plan to determine what's working and what's not.

To some extent, letting agencies consider what's best for their workforces and designing separate pay systems for executives, managers and rank-and-file employees make sense. Different agencies have different needs. Different employees might be best evaluated by different systems and best motivated by different economic triggers. Agencies can use pay and performance systems to effect specific changes to their culture and to reinforce the effectiveness of other reforms.

The National Intelligence Directorate's new performance evaluation system is a perfect example of this kind of thinking: Chief Human Capital Officer Ron Sanders said he hopes common evaluation criteria will remove barriers to the intelligence agencies' joint-duty system and foster integration.

But changes to one pay system could affect how generous or fair another pay system seems.

"Departments and agencies have ...undertaken other efforts to increase GS-15 managers' pay by taking advantage of certain flexibilities or requesting new authorities," Carol Bonosaro, president of the Senior Executives Association, said at the organization's conference in Washington on Tuesday. "The SES pay ceiling has not kept pace."

Because these changes are going on simultaneously, it's difficult to determine which ones are working best, and which systems hold promising solutions for the entire government. The federal pay system seems like a lumbering Frankenstein monster, with the torso drawn from the General Schedule and performance-based extremities crudely tacked on.

And that awkward image doesn't even include the decades-long efforts to bring public sector salaries in line with salaries in the private sector, or at least make them competitive. Locality pay has failed to narrow the gap. In fact, the conversation about locality pay seems to center more on preserving parity among federal employees than it does about catching up to the private sector.

It's not inappropriate to insist that reforming a pay system that covers millions of employees should be done carefully and with consideration of all the alternatives. But infinite delay is inexcusable, and the proliferation of pay system risks creating a permanent grass-is-always-greener mentality among employees who look to other agencies' programs when they are dissatisfied with their own compensation.

The Government Accountability Office plans to release an interim report on the SES pay and performance evaluation system across four agencies this summer, with a final report to come in the fall. That study will be a step in the right direction, taking a more holistic look at the impact of pay reform in one important area.

But the next president will inherit a workforce badly in need of an overhaul, as hundreds of thousands of baby boomers retire and the private sector competes hard for a small pool of millennial job candidates. Whoever next occupies the Oval Office should put serious pay reform, accomplished in a timely manner, near the top of the Office of Personnel Management director's list. The job will be difficult, but not unmanageable. After all, there will be lots of examples to examine and choose from.

COMMENTS

• Dan must be joking with his "the private sectors mantra has always been equal pay for equal work" comment. People in New York and California make far more money than people in Texas for doing the same work. There were several articles in the local paper this week talking about how workers in these high cost of living areas would be willing to move to Houston for less pay, and these usually involved promotions for them. And there is no point in bringing up "equal pay for equal work" for women. Dan probably doesn't believe this problem exists. If you really want to see the private sectors views on performance pay, look at the severance packages the CEO's and CFO's at Bear Stearns and other firms that ran their companies into the ground, then left with millions of dollars in pay and benefits. Marty Posted June 17, 2008 1:20 PM
• Frankenstein's New Pay Systems NSPS=FNPS? We are hired to work as civil servants with a system in place that protects veterans and is a fair system. We even might have taken a test and scored higher than others competing to get in. Then everybody decides "CHANGE" is better. What happened to the promises we were hired under? We endure a "DEMO" pay for performance (PFP)structure at Point Mugu and China Lake. Most of the workers scream "UNFAIR" "RIDUCULOUS" because it allows the good 'ole boys to reward one another, cheats your retirement benefits, and worse yet, allows veterans to be RIF'd--yet they now implement NSPS patterned after DEMO which was such a 'success'!! What an injustice to those who served our country to lose their jobs near the end of their career. Yes, under DEMO, veterans got RIF notices with 25 dedicated years just because of age discrimination. Why try to fix a system that isn't broken? The GS system has been the best so far, not rewarding of kissing up to the boss, young age, personality or looks. Just rewarding on a combination of longevity, perserverance and performance. All the so called "PFP" systems lend themselves to subjectivity, not objectivity. Would I recommend a civil service career to anyone now? No way. Jason Posted June 17, 2008 11:18 AM
• NSPS is a well intentioned pay for performance rating system. Whether we like to admit it or not NSPS is actually a type of remedy for the “Peter Principle (‘In a Hierarchy Every Employee Tends to Rise to His [or Her] Level of Incompetence.’)". Properly and honestly implemented, every employee rated under NSPS will eventually, some sooner and some later, obtain the dreaded rating of: “Valued Performer”! That being said, the flipside of that same coin is that NSPS does not typically allow for the adequate recognition of those superior employees that are content with their current grade and salary, with no desire to be promoted to a level of increased responsibility or expectations. It should be possible to be a “role-model” without exceeding expectations? Some employees are happy, content, hardworking and hard-hitting “GS-?? Equivalents”, and yet they have no desire to serve at the next higher level. There should still be a way to hold these high-performing employees up as “role models” and recognize them with a commensurate bonus, without promoting them to an immediate or eventual level of mediocrity. Otherwise, once “penned” with the rating of “valued performer” any hope for making “cert lists” for lateral hiring actions or outside employment is all but lost. M.C. McGhee Posted June 17, 2008 8:33 AM