After the pay freeze: 5 ways to keep performance up

Don’t blame government managers if they aren’t feeling totally chipper about the start of the new year. With President Barack Obama signing legislation that includes a two-year freeze on federal pay and an incoming Congress that appears to be more hostile to government employees, the squeeze is on.

Having an agency full of insecure and disgruntled employees isn't a manager’s dream scenario for tackling all the new challenges presented by the year ahead. So what are managers to do?

For one, they shouldn’t expect help from any kind of overhaul of the General Schedule federal employee compensation system. The GS system has been around for about 60 years and has been criticized for nearly that long for tolerating subpar performance.

The last concerted attempt to change to a more modern system that could be better aligned with agencies’ strategic goals and missions was the National Security Personnel System. But the Defense Department’s controversial pay-for-performance program got tough opposition from unions and little support elsewhere, and it was dumped in 2009.

The energy seems to have gone out of the push for any governmentwide change, at least for the foreseeable future, which leaves the GS system. And that seems to please no one.

“At the end of the day, the GS system was designed mainly for clerks and typists and non-college-educated people,” said Jon Desenberg, senior policy director at the Performance Institute, expressing a view shared by many of the people contacted for this article. “It just doesn’t make sense for today.”

However, that doesn’t mean managers are powerless to motivate their employees and create challenging and rewarding work environments.

According to some workplace and productivity experts, managers can use a number of ways to improve the workplace feng shui without touching a single piece of furniture or waiting for an act of Congress — though that might help, unless it makes the situation worse. The ideas might not be news to some, but given the circumstances, it’s worth thinking anew about ways to make the government a better place to work and making it work better.

1. Make stronger links to pay using the existing system.

Here’s some not-so-shocking news: Only one in four federal employees thought pay reflected an employee's performance, and nearly half said it didn’t, one of the strongest negative responses in the Office of Personnel Management’s 2010 Federal Employee Viewpoint Survey.

So it seems that pay isn't closely linked to performance in the GS system, at least in the eyes of employees. For example, although step pay increases within GS grades are supposed to be contingent on performance, they are generally seen as automatic.

“The problem is that if a supervisor denies a step increase with a performance-based judgment, they often have to go through a fairly lengthy review of that decision,” said James Thompson, an associate professor of public administration at the University of Illinois. “Most don’t want to do that."

The prevailing system has therefore become pass/fail, which leads to other perceived problems. Employees need to perform very badly not to get an increase in pay. As a result, good performers and poor performers end up with more or less the same pay increases. In the OPM survey, fewer than a third of the respondents thought poor performers were adequately dealt with.

There are ways to link some elements of performance to increased pay that are short of scrapping the GS system. In the military, there’s a recognized need for incentive pay through bonuses for recruitment, re-enlistment, hazardous duty and so on, said Beth Asch, associate director of the Forces and Resources Policy Center at Rand’s National Security Research Division. But that option hasn’t been as readily available for civilian agencies.

“OPM says the GS system has that flexibility, but [bonuses] are not widely used,” Asch said.

It might also be that pay is not the greatest performance promoter, an idea some research supports, said John Palguta, vice president of policy at the Partnership for Public Service, a nonprofit organization focused on improving government performance.

“Even when a bonus is given, sometimes it’s the recognition that bestows rather than the dollar amount that is the motivator,” he said.

2. Get serious about nonmonetary rewards.

It might be a cliché, but it does appear that many people go into government for reasons beyond the specific job or the pay. Managers should keep that in mind when looking for ways to motivate employees.

“People come to government to make a difference,” said Mark Hunker, chief of staff and director of policy and communications at OPM during the Clinton administration. He is now CEO and executive vice president at Catapult Technology, an IT and management consulting firm.

It is clear that you need something more than pay to motivate government employees. That boils down to providing a sense of achievement and a realization that they are doing a worthwhile job and making a difference. And that requires a system for recognizing good performance.

There is a lot of flexibility in the GS system to recognize employees for performance, said William Dougan, national president of the National Federation of Federal Employees. Meaningful ways to reward employees can be as simple as paying for a parking space or assigning them a plum parking spot for a month.

But the recognition and rewards must be timely. “Agencies typically wait until the end of the year to make awards, but if the performance happened in January and you wait until October to recognize it, people forget what the award is for,” Dougan said.

Although it sounds corny, Palguta said, gestures such as certificates of appreciation or an agency pin or medallion can be incredibly motivating.

Team awards also offer better recognition and motivators than individual awards, especially if members of a team could be in competition with another team for an award.

3. Boost the skills of accidental supervisors.

Supervisors are essential to any functional performance management system, whatever shape it takes. They make the appraisals and recommend awards, and they should be the ones who intercede with poor performers.

In the private sector, employee performance is considered central to a company’s ability to do business, and supervisors are hired accordingly and given the appropriate authority and tools to do their jobs. But in government, being a supervisor is just a necessary rung on the career ladder. You can’t become a GS-15 if you don’t become a supervisor.

“In business, people have an orientation early in their careers about what’s needed for them to become successful executives,” said Howard Risher, a consultant who specializes in pay and performance who has been involved with government pay reform efforts since 1990. “In government, they don’t have that same orientation, and when they do become managers, there’s no incentive for them to do better, there’s no established training or support systems.”

Having good supervisors is essential to any improvement in performance based on the GS system. For example, under the pay freeze, the only pay increases available to employees are through the step process. That requires a better way for managers to rate performance, which in turn requires better supervisory skills and capabilities.

There is an urgent need to get back to formal training for supervisors, said Patricia Niehaus, national president of the Federal Managers Association.

“That used to happen every quarter, and there are flexibilities within the GS system to allow supervisors to do that,” she said.

However, others think the time has come for government to take a page from the private sector’s performance management book and create a supervisory specialization. Rather than promoting people into supervisory positions regardless of their desire or talents, the government would hire, groom and promote individuals based on their interest and skills in managing people.

“Traditionally in government, people management skills have taken a back seat to technical skills,” Dougan said. “It’s time to rethink that, and we should be thinking about hiring people specifically as supervisors.”

4. Raise the standards.

However, no matter how skillful the supervisors are, there’s no chance of any real improvement in performance if the people they’re supervising don’t trust their appraisals. That is seen as a big problem with the existing system because there are no formal standards for rating performance.

Too many performance plans are subjective and lack specifics, Dougan said, which negates the effect the meetings supervisors have during the year with employees. Those meetings should be opportunities for managers and employees to work together, but they often end up being an uncomfortable experience.

“It’s easy to tell people they are doing great work, but most people have a hard time when they have to tell someone they are not doing such a great job,” he said. “A lot of that comes from expectations of performance not being written down.”

People distrust their managers and believe they show favoritism when it comes to promotions and awards because they see managers basing their decisions more on opinion than factual evidence, Risher said.

“That will be reversed when we have measurable goals,” he said. “Supervision needs to be based on well-defined goals, and government needs to have performance ratings that people trust.”

5. Get leaders to care.

In private industry, good performance is seen as a strategic necessity for the organization, so performance management has the attention of the CEO all the way down to the supervisors who are responsible for applying performance-based policies. That’s often not the case in the public sector.

“My sense is that in government, performance management is seen more as a human resources issue and as little time as possible is spent on it,” Risher said.

That’s not conducive to good performance, Niehaus said, because the human resources department should only be involved in an advisory capacity, if at all.

“It’s not HR’s responsibility for deciding whether an employee is performing satisfactorily or not because they are not face to face with the employee on a daily basis,” she said. “Performance management needs to be regarded as a management problem, and it does need to be a part of an agency’s strategic approach.”

Dougan said that unless the top executives at an agency embrace and champion an issue or need, people at the supervisory level don’t know what they need to emphasize.

“Unfortunately, given all the other things that executives have on their plate, performance management often takes a back seat,” he said. “A lot of the time, they also fail to see the link between good performance and performing the mission.”

It would help if the executive-in-chief got involved with those issues, Niehaus said. She would like to see the Obama administration make performance management a priority and even go as far as issuing presidential memos and directives.

“Those are what seem to have the most impact for people at the agencies,” she said.