District Mayor Anthony A. Williams yesterday cast his plan to give bonuses to 6,500 city workers as the first step toward persuading labor unions to consider his proposals to reshape the D.C. government work force through performance-based rewards and competition with the private sector.

But labor leaders representing the unionized employees eligible for the $1,700 lump-sum payments said they were not ready to go along completely with the mayor's ideas, signaling what could be difficult negotiations ahead.

There also was uncertainty yesterday over how the city would pay for the more than $10 million in bonuses, which are scheduled to be paid by Dec. 15. The mayor said the money would come from reserve funds, and his chief of staff said unspent money from several city accounts could be used. The D.C. Council and the presidentially appointed financial control board would have to approve the bonuses.

It would be difficult for the council or the control board to stop the momentum of what would amount to holiday bonuses for the union workers. Just ask the city employees who wore green shirts--"the color of money," one said--and filled a room at One Judiciary Square, where Williams (D) held a news conference yesterday.

"This is wonderful," said Angela Perkins, a city social worker. "We've given the city so much back with pay cuts, furloughs and you-name-it. It's a blessing to know it's being noticed."

Flanked by the city's top labor leaders, Williams said the bonuses were part of the price of securing "a new partnership to change the way the city does business and delivers services."

"By reforming this city's relations with labor, we can now consider new options and approaches that are working in other cities," he said.

He was referring to a concept called "pay for performance," or "gain-sharing," in which workers who meet specific goals are paid bonuses as a reward for saving the city money and making government more efficient. The other cost-saving measure Williams hopes to try is known as managed competition, a program in which government workers would compete against private firms for D.C. contracts.

Labor leaders, while praising Williams for the $1,700 bonuses, said they could not embrace pay for performance or managed competition until they have further talks with D.C. officials. Such discussions are planned by Jan. 15.

David J. Schlein, vice president of the American Federation of Government Employees, said Williams has "a long sales job" before he persuades the unions to support managed competition. And George Johnson, the unions' chief negotiator and president of Council 20 of the American Federation of State, County and Municipal Employees, said "nothing was carved in stone" on performance bonuses.

Williams countered that the agreement on the bonuses, reached late last week after a final marathon session between city and union negotiators, was the start of better long-term relations with labor that he is confident will result in changes.

"You shouldn't judge our relations based on a snapshot," Williams said of the agreement. "This is a movie. You have to watch the whole movie."

Under the agreement, the two sides agreed "to develop performance outcome measures, which will include a gain-sharing component." The document said the city and unions will produce and implement "as soon as possible" a pay-for-performance plan that includes "indicators and benchmarks."

The union leaders interpreted that section as a willingness to discuss pay for performance in general, while Williams flatly said the agreement would link future pay to performance. Labor leaders don't believe it is possible to set fair performance standards for all employees. A sanitation worker can be expected to pick up a certain amount of trash each day, they say, but setting a standard for a procurement secretary is more difficult.

CAPTION: Mayor Anthony A. Williams held a news conference on the bonuses.

CAPTION: Mayor Anthony A. Williams proposed bonuses for 6,500 city workers as a way to persuade labor unions to consider other proposals.