House chairmen want to stop performance pay

Senior Democratic House members have asked the Office of Management and Budget to stop any further advancement of pay-for-performance systems across the federal government. OMB should also evaluate how to proceed to improve performance management while at the same time maintaining merit principles, the committee chairmen said in an April 3 letter to OMB Director Peter Orszag.

In March, the Defense Department stopped further conversions of employees to its National Security Personnel System while it reviewed its effectiveness and also that of the Defense Civilian Intelligence Personnel System. The combined review will take several months, DOD has said. In October, the Homeland Security Department dropped efforts to implement its pay-for-performance system, MaxHR.

A Government Accountability Office report in September 2008 found that many employees do not trust these systems to compensate them fairly, according to the House committee and subcommittee chairman who signed the letter.

The House members who signed included Reps. Edolphus Towns (D-N.Y.), chairman of the Oversight and Government Reform Committee; Ike Skelton (D-Mo.), chairman of the House Armed Services Committee; Bennie Thompson (D-Miss.), chairman of the Homeland Security Committee; and Silvestre Reyes (D-Texas), chairman of the Permanent Select Committee on Intelligence.

“The discretion given to managers to set performance metrics and to pay employees accordingly means these systems lack transparency and accountability,” the letter said.

The traditional General Schedule pay system has added personnel flexibilities over the years to compete with the market yet retain the fairness and transparency of the merit-based civil service system, the chairmen said.

“A well-designed performance management system can recognize and reward high performance without a linkage to compensation,” the letter said.

The number of pay-for-performance systems has increased as agencies develop their own unique versions, including multiple systems in a single agency, the chairmen said. This hinders reciprocity and establishes competing cultures, “both of which undermine federal government performance,” they said.