Within a year or two, the Departments of Defense and Homeland Security will move tens of thousands of employees into pay-for-performance systems. Making those systems work will not be easy, if past experience is any guide.

For several decades, federal supervisors have been able to assess employee performance and reward the best workers with pay raises and bonuses under the General Schedule, the white-collar pay system built around 15 grades and 10 steps per grade.

But the GS hasn't been used to single out good work or tag mediocrity, according to a report in the current "Issues of Merit," published by the Office of Policy and Evaluation at the Merit Systems Protection Board.

One of the biggest problems is rating inflation and a reluctance to make tough personnel decisions. Supervisors typically rate less than 1 percent of federal employees as below "fully successful" and rarely deny within-grade increases, which are contingent upon satisfactory performance, the MSPB report said.

"Is the federal workforce truly this good?" the report asked. "Or have supervisors devalued the term 'fully successful' through reluctance to document performance deficiencies and discuss them with under-performing employees?"

In fiscal 2003, supervisors denied within-grade increases to only 0.09 percent of employees, the report said. "Interestingly, this appears to represent a growing trend as WGI denial has gradually and consistently decreased government-wide in the past six years."

Supervisors also have not shown much interest in using another incentive, the quality step increase, to recognize sustained high performance by employees. The MSPB report said less than 5 percent of employees received such a raise last year.

More than likely, the quality step increases provided only modest income to employees because there is not much money in agency budgets for such awards.

"It appears unlikely that the monetary value of these awards would provide substantial motivation," the MSPB report said. "This is especially true when rating a substantial percentage of the workforce in the top level means the money will have to be spread very thinly."

The low rates for denying within-grade increases and granting quality step increases, combined with rating inflation, suggest that supervisors will have their hands full when expected to more rigorously distinguish how well their employees perform, the MSPB report suggests.

"Agencies must understand these issues and correct them before attempting to implement pay for performance within the federal government," the report said.

"Otherwise, agencies risk exchanging one pay system for another without correcting the root of the problem."

Retirements

Bob Buchanan, chief information officer and chief of information resources management at the Secret Service, retired Oct. 1 after 34 years of government service, including jobs with the CIA, Naval Security Group and other agencies.

Jerry Krum has retired after 31 years at the Internal Revenue Service, where he served as an agent and manager examining tax shelters. He also coordinated several hiring and training programs.

Robert McCoy, a member of the mail delivery staff for the Health and Human Services Department in Rockville, will retire Nov. 1 after 36 years of service.

Frances Sundine, an accounting technician at the Internal Revenue Service center in Kansas City, Mo., retired Aug. 2 after 56 years and 9 months of federal service.

Talk Shows

Judith L. Wheat and Thomas M. Sullivan, lawyers at Shaw, Bransford, Veilleux & Roth, will be the guests on "FEDtalk" at 11 a.m. today on federalnewsradio.com.

Kimberly Nelson, chief information officer at the Environmental Protection Agency, will be the guest on "The Business of Government Hour" at 9 a.m. tomorrow on WJFK radio (106.7 FM).

"Best Workplace for Commuters?" will be the topic for discussion on the Imagene B. Stewart call-in program at 8 a.m. Sunday on WOL radio (1450 AM).

E-mail: barrs@washpost.com