OPM director discourages move to pay for performance at hearing

One serious hurdle to bringing a large-scale pay-for-performance system to the government is evaluating employee performance, Office of Personnel Management Director John Berry told lawmakers today.

Berry, one of several witnesses who testified at a House Oversight and Government Reform federal workforce subcommittee hearing, said the Chief Human Capital Officers Council has created a working group to improve the federal government’s method for evaluating employee performance. Understanding and measuring performance is a crucial component of rewarding performance, he said.

Berry said two senior executives chair the group in order to keep politics out the discussion. Once the working group deliberates on performance, then “we can have a discussion about pay,” Berry said.

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Rep. Dennis Ross, (R-Fla.), convened the hearing, which he titled,"Are Federal Workers Underpaid?" While Ross has said he wants to implement pay for performance in the government, Rep. Stephen Lynch (D-Mass.), the ranking member of subcommittee, was the first to broach the issue, by mentioning the Defense Department’s failed National Security Personnel System.

Berry noted that Congress repealed NSPS and said that, in his two years as the head of OPM, he has tried to learn from that experience. As a result, he said he thinks the government’s performance evaluations should be based on aligning organizational mission and goals to individual performance, as well as managers and employees having regular conversations about whether they are off- or on-track to meet their goals.

At the hearing, Ross cited figures that put the average salary for federal employees in 2010 at $74,311, while the average private sector worked earned $50,462.

“Current federal salaries and benefits are not in line with the marketplace when compared to private workforce compensation,” Ross said in his opening statement.

However, Berry disputed the Republican congressman’s numbers, saying that they don’t compare like jobs to like jobs. Private sector jobs include retail and service-oriented positions which the government doesn't have. In studies that compare federal employees to private-sector workers in very similar jobs, the federal employees earn significantly less.

However, other witnesses representing conservative think-tanks disputed Berry's view. James Sherk, senior labor policy analyst for the Heritage Foundation, said the General Schedule system rewards longevity, not performance. And a generous benefits package adds to the total compensation of feds without being obvious in their salaries, he said.

Ross and Rep. Darrell Issa, (R-Calif.), chairman of the full committee, used the hearing to argue that the president’s two-year pay freeze for federal employees is not really a freeze because it does not affect workers’ step or within-grade increases.

Issa, who unsuccessfully tried to attach an amendment to freeze within-grade increases to the House’s continuing resolution bill, asked Berry if he would support a freeze on such increases. Berry said halting within-grade increases would greatly hurt employee retention.

Colleen Kelley, president of the National Treasury Employees Union and a witness, noted that the government’s attempts to use alternative pay systems have failed to help agencies recruit and retain high-quality employees.

“I don’t know of a single so-called pay-for-performance system that is showing progress on either of those goals,” Kelley said in her testimony. 

Max Stier, president and CEO of the Partnership for Public Service who also testified on the panel, agreed that there is not an existing pay-for-performance model in the government that works. Echoing Berry’s earlier comments, Stier said the government should “get a handle on what the performance is and reward it accordingly.”