Senate panel questions pay-for-performance plans

The Office of Personnel Management's plan to put into a place a pay-for-performance system for senior executives is not going smoothly, and today members of a Senate panel asked why.

The hearing took place before the Homeland Security and Government Affairs Committee’s Government Oversight Subcommittee. Panel Chairman Sen. George Voinovich (R-Ohio) and ranking minority member Sen. Daniel Akaka (D-Hawaii) were the only subcommittee members to attend.

A recent survey by the Senior Executive Association of members of the Senior Executive Service suggested that many executives are feeling demoralized rather than motivated by the new system, in which they are supposed to be awarded raises and bonuses based on their job performance. Many executives believe their agencies are using quotas that cause high-performing leaders to be blocked from the highest rankings.

Another complaint is that because agencies using the new systems have greater flexibility in awarding pay increases, some high-scoring executives get no reward.

Carol Bonosaro, president of the SEA, testified that the survey showed that 15 percent of respondents who got the highest possible ratings at their agencies in 2005 received no increase in salary in 2006.

"All pay adjustments are permissible; none are required," she said.

Dissatisfaction with the ongoing changes to the pay structure is causing many in the SES to accelerate their retirement plans, Bonosaro said, citing the survey findings. About 90 percent of the federal employees in those positions will be eligible for retirement within the coming decade, she said.

Bonosaro submitted a proposal for a bill to the committee that she said would close the gaps that her organization sees in the current program.

In the three years the program has been active, OPM has fully certified the new pay system of only one agency, the Labor Department. Another 25 agencies have provisional certification and are working toward earning full approval.

OPM Director Linda Springer assured the subcommittee that the agency does not allow quotas. "If we find a quota, we will deal with it," she said.

She recognized that agencies might not implement the systems consistently. "We believe it is an execution issue, not a construct of the system itself," she said.

Voinovich voiced his support for bringing pay for performance to the government, but he urged Springer and OPM to move more aggressively to make the changeover happen smoothly.

"If this thing isn't done correctly in the beginning, its chances of being successful, becoming part of the system -- it isn't going to happen," he said.