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The Veterans Affairs Department is launching a pilot project that will replace the decades-old General Schedule pay system with one that more closely ties pay to performance.

On June 18, VA announced that it would place 150 employees at the Veterans Health Administration under a pilot pay-for-performance system for at least the next five years. The plan will cover employees in the health systems administrator job series at the GS-14 and 15 grade levels, with the first performance-based pay adjustments awarded in January 2010.

The Office of Personnel Management said in the Federal Register that the General Schedule has limited options for recognizing superior performance, and that VA would like to use the human capital accountability and assessment framework to tie annual increases directly to job performance.

The process would eliminate the fixed steps that give automatic pay raises to employees and instead make annual pay adjustments performance-sensitive, according to the OPM notice. Like other alternative pay experiments across government, pay pool adjustments would be funded from a kitty with money that would otherwise be used to fund the annual GS pay adjustment, quality step boosts and within-grade increases.

"By regularly rewarding better performance with better pay, the participating organization will strengthen the results-oriented performance culture," wrote OPM. "Among other things, they will be better able to retain their good performers and recruit new ones."

Lawrence Bifareti, director of workforce planning and organization development at VHA, said in December that the agency already had implemented a five-tiered performance management system instead of the pass-fail systems many agencies use. At the time he said tying such ratings to pay was the agency's next step.

According to OPM, federal agencies have the authority to place up to 5,000 employees in pay-for-performance demonstration projects. OPM must approve the projects and cannot manage more than 10 at any one time.

Currently, pay-for-performance pilots are active in three federal agencies -- the acquisition component at the Defense Department, and the Commerce and Energy departments. The Agriculture Department announced in May that it planned to test pay for performance for 2,900 employees at the Food Safety and Inspection Service.

Written comments on the proposal must be submitted by July 18, and can be sent by e-mail to demoprojects@opm.gov. A public hearing on the plan is scheduled for Aug. 5 at VA headquarters in Washington.

COMMENTS

• NSPS is far too time intensive for management personnel, to make it a practical business choice for a personnel system. In addition, many of the supposed benefits to management are being dismantled. For example, Pay Bands are now being subdivided into "pay lanes" that very much resemble the old GS pay grades. Originally the concept was that a manager would have a "vision" for his/her organization and would draft work objectives to dove-tail into that vision. What is really happening is that the workers are drafting their own work objective, generally without regard to any "vision" from the manager. Systems such as these are best developed by the people who must implement them, rather than by conceptual program design staff who don't have to use what they design. t. Perham Posted June 24, 2008 7:49 PM
• The GS schedule provides limited opportunities to reward peope? What?! There is everything from time off awards to cash, quality step increases and the like. Manager and supervisors need to be willing to step forward and actually MANAGE performance. Hold folks accountable. Few things are more DEMOTIVATING than when I get lined up like a graduation ceremony along with every other employee and given a "certificate of appreciation, for all you do". I got a cash award last year and you know, it just doesn't last that long - in terms of feeling good and motivating me to perform better. What lasts is when I know that my hard work and busting of my behind is recognized, valued, and appreciated. I also need to know that the poor performers are being dealt with and removed. HR HAS to support the managers when they move forward to remove and or discipline poor performers, as poor peformers do more to damage good performers than anything else. But when your own supervisor is incapable of explaining the performance standards he sets out and then announces it is his subjective evaluation, and he is comfortable evaluating you on 10% of what you do. HOw about trying 360 degree feedack for supervisors? Why not allow the field folks to submit evals on their supervisors? Kid2 Posted June 24, 2008 1:29 PM
• The idea that if everyone "strives" to be a top performer then everyone "deserves" an increase is juxtaposed to the premise of the system. Pay for performance is based on solid metrics that are linked to performance; individual performance linked to organizational-->linked to Agency performance. The goal is to reward those who contributed most to the success of the organization, and not to anyone who tries hard. That is the premise of the GS, get rewarded for being there, exactly the oppositee is true of PFP, get rewarded for contributions that are grounded in and linked to performance. Next Gen workers are not going to be attracted to Fed service by antiquated systems based on merit. This is the future wheter we embrace it or not. Time to change Posted June 24, 2008 11:14 AM