Performance pay for all feds

Posted by admin in News You Can Use on June 17, 2009
Performance pay for all feds
FederalTimes.com
By STEPHEN LOSEY
June 01, 2009
The Obama administration wants to institute a pay-for-performance system for all federal employees, the new Office of Personnel Management director said May 27.
“The president has made it clear to me that there will be no overall reform unless pay for performance is part of the deal,” John Berry told reporters. “He’s made it clear that it’s worth a try, and he’s willing to spend political capital to do it.”
The current federal pay system is “straining and … balkanized to the point that it risks failure,” Berry said, and must be replaced with a governmentwide system that takes employees’ performance into account when compensating them. Critics of the government’s main pay system, the 60-year-old General Schedule, say its regular step and grade increases only reward longevity and do not recognize employees’ performance.
Berry said the effort to replace the government’s multiple pay systems with a single, governmentwide system would take several years, though he did not put a deadline on it.

Pay for performance is one of six reform goals Berry outlined. He characterized three of those goals as long term: pay for performance, increased workforce diversity, and limits on health insurance premium increases.

 
Three of the goals, he said, are short term: hiring and recruitment reforms, increased federal employment opportunities for veterans, and expanded programs to improve work-life balance.
A new pay system
President Barack Obama’s performance pay goals are not very different from those of his predecessor. In 2005, the Bush administration unveiled plans for pay-for-performance systems at the Homeland Security and Defense departments, and said it eventually wanted to establish similar systems at all agencies.
But experts say Obama’s strategy of engaging unions and other stakeholders may allow his plan to work where Bush’s failed.
The Bush administration shut out unions when it crafted Homeland Security’s MaxHR system and Defense’s National Security Personnel System, which both sought to limit collective bargaining rights. Unions vehemently opposed the systems — they filed lawsuits challenging them and lobbied Democrats to eliminate funds for the programs. Unions successfully killed MaxHR and severely limited the scope of NSPS.
This time, Berry said, OPM will work with labor unions, management organizations, lawmakers, academics and other interested parties to “design a pay system that will last for another 50 years.”
“What derailed the Bush attempt was they put too much on the table,” said John Palguta, vice president for policy at the Partnership for Public Service. Limiting collective bargaining “is absolutely a red flag in front of the bull, and you know that bull’s going to charge. With the Obama administration, there’s a higher trust level. They want to do the right thing for federal employees because they know it will result in more effective government.”
But Berry and Obama can’t count on the unions to automatically support this effort.
“We’re quite certain pay for performance cannot be [established fairly in the federal government], and the record shows that,” said Beth Moten, legislative and political director for the American Federation of Government Employees. “NSPS has been a complete and utter disaster. We believe the General Schedule already includes a performance element — the within-grade step increase. If managers are properly trained and do their jobs, whether or not an employee gets that increase is totally dependent on whether they performed well.”
The National Treasury Employees Union was more open to Berry’s idea. “We are willing to listen to what Director Berry has to say,” NTEU National President Colleen Kelley said in a statement. “We are pleased he wants to work collaboratively with federal employee unions, and we look forward to working with him.”
Berry acknowledged that the pay proposal will be “the stickiest” of the six reforms he wants to institute. He said the new system will require training for managers at all levels and needs a performance appraisal system that doesn’t allow cronyism, that rewards hard workers and that “weeds out the dead wood.”
A pay-for-performance system will also help the government close the pay gap between federal employees and higher-paid private-sector employees with comparable jobs, Berry said. But he said the system won’t give agencies “a blank check to play Santa Claus” and hand out large raises indiscriminately.
“We need a system that makes sense for employees, managers and the public,” Berry said. “We need to be able to explain to the public that if someone’s not doing their job, they’re fired. Give them a chance to [improve] in a defined period of time, but if they don’t, get them outta here.”
Federal Managers Association President Darryl Perkinson agreed that a strong performance appraisal process is vital for a pay-for-performance system to be accepted by employees.
“We’ll need a rating system that’s fair and transparent, and has appeal rights,” Perkinson said. “Those are the core principles.”
Berry said that a review of NSPS that will be finished in early July could help OPM craft its new, large-scale system.
The review “is going to look at: Where did it succeed? Where can it do better? Where might it have failed?”
 
Berry said. “We need to know all of those things if we’re going to have a governmentwide system.”
Berry said OPM will have a better idea by late 2010 or early 2011 of how feasible it might be.
More reform plans
Berry also has appointed a team of OPM experts to recommend within a few months ways to improve the hiring process. He hopes to have significantly improved the process by next May.
Previous efforts failed, Berry said, because good ideas too often were introduced independently, when a coordinated effort to improve all aspects of the hiring process was needed. Berry also said OPM did not have enough clout to order agencies to adopt hiring changes.
But Berry thinks his effort will succeed because Obama has promised him the White House and Office of Management and Budget will throw their weight behind OPM.
“This is the rock that has sunk many a ship,” Berry said. “But I’m not going to do this by sweetly asking [agencies to adopt recommendations]. The president has said, ‘I want this fixed.’ We’re going to use the power of the presidency to effect true reform.”
Previous OPM recommendations — such as one idea to eliminate the lengthy, repetitive series of knowledge, skills and abilities questions job applicants must answer and instead to evaluate candidates based on their résumés — could be revived as part of the new strategy, Berry said.
Berry also wants to make OPM “a modern headhunting firm for veterans” and help them find federal employment. Agencies need to provide more help for veterans than simply giving them preference on their applications, he said. Berry wants OPM to work with veterans to identify their skills, career goals and disability assistance they might require and to find federal jobs that suit them.
Agencies also should build support networks so veterans can find one another and “don’t feel isolated,” Berry said.
“Right now, veterans go to Defense or the Veterans Affairs Department because they know there will be other vets there,” Berry said. “We need them to be comfortable everywhere.”