Performance Pay: Home Run or Sticky Wicket?

The Supreme Court has handled some very tough cases: The Dred Scott Decision was groundbreaking. Marbury v. Madison set a precedent, U.S. v. Klein is real important but I forget why. And more recently there was Bush v. Gore, 531 U.S. 98 (2000).

We know how that worked out.

But regardless of what it’s had and handled in the past, the Supreme Court is about to be tested as never before. It may take on the issue of pay-for-performance for federal government employees.

A coalition of unions has opposed the plan, known at the Defense Department as the National Security Personnel System. Unions have battled it in court and lobbied Congress to stop it. The Bush administration says it (and counterpart programs at FAA, the IRS and Department of Homeland Security) will make government more efficient while allowing it to reward top performers and punish bottom feeders.

If it takes on the case, the court will decide whether to let the program proceed or not. But to do that it must, one presumes, understand NSPS. Lotsa luck. By now millions of words, in the form of interviews, testimony, legal briefs and Q & A’s have been used to explain it. Short example: Frequently Asked Questions.

Next year Defense expects to have 185,000 civilians under NSPS (there are 130,000 now, and this year 120,000 of them will get pay raises based on the new system) next year. Bosses will rate employees, who are in pay bands, based on their performance. Their raises (if any) will come from several sources including money in the pay pool for regular statutory raises and the old WIG (longevity) raises, a locality pay award and one-time bonuses worth 1 to 1.5 percent of pay. Some people will get more than others, some (few) will get little or nothing.

The Supreme Court can pick and choose its cases, so it doesn’t have to take this one. Most members of the court have lived rather privileged lives. Few have walked in the shoes of your typical GS 7 working stiff. Also the court doesn’t have a pay-for-performance system. Justices who nod off during an oral argument or frolic while their clerks do research get the same pay as those who take their jobs very seriously.

I don’t know who picks cases for the court but if I did, and he/she asked, I’d go for one that wouldn’t destroy as many brain cells.

NSPS Pay Tables

For an updated version of the 2008 NSPS pay tables, click here.

Retirees and the TSP

Monday’s column listed the 2007 returns for all of the Thrift Savings Plan funds. You can review it by clicking here.

The column prompted a number of retirees to ask if they can participate in the TSP. Typical was this question from Vijay Alsi. His asks:

Can retirees participate in these funds? Or is it, like the Health Spending Account, a privilege and monopoly of those who are in service?

Good question. The answer is a qualified “yes.” Retirees can continue to participate in the TSP if they had accounts when they retired. They can continue to make interfund transfers but they can’t add tax-deferred money to their account. Thousands of retirees have stuck with the TSP because of its lowest-in-the-business administrative fees and the super-safe G-fund.

Nearly Useless Factoid Update

Yesterday’s factoid about the one legged stool prompted a reader to point out that it’s been around in Scotland and England for hundreds of years. “They are for boring jobs where inattention causes loss. The oldest example I am aware of is charcoal makers who had to watch a smoldering fire inside an earthen mound for over 30 hours. If the fire did more than smolder they lost all of the fruits of their efforts.” When asked if she’d like to fact check this, my editor pointed to the reader’s signature line in his e-mail and declined without batting an eye. His title reads “Employee Development Specialist.”

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