Fedweek

The federal government has a checkered history in trying to more closely link pay to performance, although the success of some smaller programs suggests that “failure is not inevitable,” the MSPB has said.

Like simplifying disciplinary processes, pay for performance is an often-recommended feature of any potential reform in civil service law. The Trump administration has proposed it several times this year, although it has not detailed how such a system would work and Congress has not moved to approve it.

MSPB, in a publication on lessons learned from the most recent major overhaul of civil service law, in 1978, recounted that the law created a merit pay system for GS-13 -15 supervisors and managers. However, after only several years the program was revised and later was repealed.

Problems included that it “became operational before many agencies could pretest their appraisal systems, train employees on the merit process, or train supervisors on how to properly assess employee performance”; “lower-rated employees in one pay pool often received larger–sometimes much larger–increases than a higher-rated employee of the same grade in a different pay pool in the same agency” which “contributed to employee perceptions of unfairness”; and “constraints on dollars or ratings resulted in large effects on employee pay, contributing greatly to employees’ negative perceptions of the system.”

MSPB also cited a GAO report concluding that “as long as agencies must limit the funds available for merit pay programs, it is not apparent how they can completely overcome negative effects of those limits and associated practices on the system.”

It added that underlying merit pay programs is an assumption that “employee performance could be assessed primarily on measurable and objective dimensions. As the percentage of knowledge workers has increased, that has become more difficult to achieve.”

“The message to architects of future pay for performance programs seems to be that they should take care to validate any assumptions underlying those systems and to anticipate and address the implementation issues that plagued the CSRA’s merit pay approach,” it said.