Federal Diary: Pay-for-Performance Program Gets the Boot
Christmas came early for some federal employees and their unions Wednesday as lawmakers delivered one of the biggest items on their wish list, repealing a controversial pay-for-performance program.
The repeal of the National Security Personnel System came as part of a compromise House and Senate members announced in their negotiations over the Defense Department authorization bill. The Defense Department will maintain more performance management and hiring flexibility than other federal agencies, but it must halt NSPS by the start of 2012 and it cannot enact a new pay-for-performance system without submitting detailed proposals to Congress for approval.
George W. Bush's administration pushed for NSPS, and Congress approved the system for Pentagon employees in 2003. Roughly 30 percent of the Defense Department's civilian employees now fall under NSPS jurisdiction, according to the Pentagon.
But many employees, federal unions, outside experts and lawmakers of both parties have long argued that the program is ineffective, confusing and detrimental to employee morale.
"It's a big day for us," said John Gage, president of the American Federation of Government Employees. He thanked lawmakers for repealing what he called "a terrible idea."
"It was just bad for employees and bad for the country. It wasn't a motivator for federal employees. It wasn't fair or open. It was a gimmick," Gage said.
Lawmakers "could have punted on this issue," said William R. Dougan, president of the National Federation of Federal Employees. Instead, "the committee took bold action, and I believe it was the right thing to do."
"The system didn't work," said Rep. Stephen F. Lynch (D-Mass.), one of the lead House negotiators advocating for repeal. The new arrangement will ensure that Congress maintains a voice in how the Pentagon measures employee performance, he said.
Moving forward, the Pentagon has three options, said Robert Tobias, director of the Institute for the Study of Public Policy Implementation at American University. He was part of a task force that recommended NSPS reforms earlier this year.
"They can decide to roll everybody back [off NSPS], they can create something new and seek new legislation to get it passed, or they could work with [the Office of Personnel Management] and John Berry, who's interested in creating something government-wide," Tobias said.
Berry, the OPM director, has said he prefers a single, government-wide pay system, but acknowledges that creating such a plan could be difficult. His office would not comment on the NSPS decision Wednesday.
The compromise announced Wednesday includes several other important changes for current and retired federal employees.