‘Human Capital Performance Fund’ Backed

Legislation (HR-1836) approved by the House Government Reform Committee authorizes creating a government-wide “human capital performance fund” to reward their “highest performing and most valuable employees.” Before using the authority, an agency would have to submit to the Office of Personnel Management a plan that includes: adherence to merit principles; a “fair, credible and transparent” employee performance appraisal system; a link between the pay-for-performance system, the employee performance appraisal system and the agency’s strategic plan; a means for ensuring employee involvement in the design and implementation of the system; adequate training of employees, managers and supervisors in how the system works; a process for ensuring ongoing performance feedback throughout the appraisal period; and safeguards to ensure that management of the system is “fair and equitable and based on employee performance.” Those provisions are designed to address criticisms of the performance fund concept, proposed earlier this year by the Bush administration, that agencies do not currently distinguish employees well according to performance and that they fail to properly train those doing the ratings.