Bill would block raises for underperforming federal workers

May 26, 2011

Federal employees whose job performance is rated as unacceptable would not be eligible for annual raises under provisions included in a House bill that passed Thursday.

The pay provisions are part of the annual defense authorization bill, which sets spending levels and policy for the Pentagon, the largest single employer of federal employees. Lawmakers regularly add government-wide personnel provisions to the bill despite its focus on military matters.

The Senate is expected to take up debate on its version of the measure later this summer, with both chambers hoping to pass a final bill in the fall. The Democratic-controlled Senate is unlikely to include similar personnel provisions in its bill, according to aides and close observers of the process.

News of the pay provisions surprised federal worker union officials and congressional aides who track government personnel issues, with several admitting privately Thursday that they did not know the provisions were in the bill. But House Republican aides said the proposal had been included as part of the massive piece of legislation for about a month.

Most federal employees have their performance rated annually, commonly on four- or five-level scales in which “unacceptable,” or a similar term, is the lowest rating. Those ratings are used in decisions such as promotions and awards, but annual raises typically are paid across the board regardless of performance ratings.

“Currently, all federal civilian employees, no matter how they are rated on their performance, receive the annual nationwide adjustment in January of each year,” a House committee report on the defense bill said. “Federal civilian employees who are rated as ‘below satisfactory’ still receive an increase in salary despite the fact that they are underperforming. An incentive is necessary to entice these employees to improve their job performance.”

The bill’s language would effectively be a moot point for 2012 because federal salary schedules will remain in place under a two-year pay freeze law enacted in late 2010. But moving forward, the language probably would affect relatively few employees — the report says that at Defense, for example, only about 1 percent of employees receive a rating of unacceptable.

The language reflects long-running criticism from congressional Republicans and conservative groups that the federal pay system provides largely automatic raises that do not reflect either especially good nor especially poor performance by an individual.

Rep. Darrell Issa (R-Calif.), chairman of the House Oversight and Government Reform Committee, is eager to enact a pay-for-performance system, but he failed earlier this year to have it included as part of the House GOP’s 2012 budget proposals.

“Americans believe in pay for performance,” Issa said in a statement issued late Wednesday. “The federal pay system is not a pay for performance system. This provision moves us in the right direction, because it stops rewarding non-performers.”

Colleen M. Kelley, president of the National Treasury Employees Union, disputed Issa’s assertions, saying the current system denies promotions, within-grade step increases and other merit-based awards.

“We believe it is appropriate and adequate to deny the performance-based increases due to unsatisfactory performance and that the system should not be changed,” Kelley said in a statement.

John Gage, who leads the American Federation of Government Employees, called the proposal “a morale killer” that “has no place in the public sector.”

“It is a scheme designed to depress overall pay,” Gage said, because it would provide managers with less money to reward eligible workers.

“It’s not fair; it can never be fair,” Gage said. “The current system needs some tinkering, but it’s worked for a long time, and it’s fair. Building some award measures for employees, and tightening up on bottom feeders, we’re fine with that.”

Surveys of federal employees also have shown dissatisfaction with how well pay raises reflect performance, as well as dissatisfaction with how agencies deal with poor performers. Workers have been skeptical of performance evaluations, arguing in some cases that bosses could manipulate results to promote certain colleagues over others.

A special system was created at the Defense Department during the George W. Bush administration that attempted to tie pay more closely to performance, but a 2009 law ordered its repeal, in part because of a lack of confidence in the performance ratings.

Ed O’Keefe is a congressional reporter with The Washington Post and covered the 2008 and 2012 presidential and congressional elections.
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