The Merits of Merit Pay

Depending on the next Congress, the next President, the current Supreme Court and the speed at which Washington, D.C. is submerged due to global warming, the way you get paid could be in for some big changes.

Currently tens of thousands of federal workers at half a dozen agencies are either under some kind of pay for performance system, or are scheduled to make the change. Some (in the Navy and Commerce) have been around a long time. Some, like FAA and IRS, have their own systems. So does the Government Accountability Office which faced a mini in-house revolt when the first round of raises was announced for a large group of workers. Defense already has a large number of people under its National Security Personnel System (NSPS), and plans to have 180,000 in it next year.

FAA has already made its payouts and many, many folks are unhappy even though the acting big boss said that, overall, most are doing a bang up (as in great) job. Many Defense civilians, scattered across the world, are getting their first full raises under the NSPS system. If it is as good as it is complicated, things should work out well. If…

Last week we ran a cross-section (virtually all negative) of reader comments on pay for performance in general and the NSPS in particular. It couldn’t have been fun reading for executives charged with making the programs work. But bad news can be educational.

Today some more about PFP, then back to the grind:

From Germany this comment: “…Apparently NSPS pools in the US get (even with a rating of ‘2’) some part of the old annual cost of living increase. I thought this was the RUS rate. But apparently as I look at the mess the poor IT folks are going through here in the Fatherland, only a 1.5% increase would be the rate in the USA for a ‘2’. In any case a NSPS rating of less then 3.0 here in Germany in the future will result in ZERO pay or bonus the following year as they do not apply the base amount to us indentured servants because we have no elected officials, union, federal labor protection or voice (this is a hint Mike).” G.P.

  • “Various research and development places with the Navy (in particular, NAVSEA) has used a demonstration Pay for Performance system for over 10 years now (we call it ‘DEMO’). Very few gripes overall. In fact, things work out well in many cases. However, the upcoming NSPS pay for performance program is quite different and in many ways worse than the demonstration program that NAVSEA uses currently.

    “The pro of demonstration Pay for Performance that NAVSEA has is that the pay bands are wide enough that you don’t ‘max out’ as fast. In fact, the banding that the vast majority of scientists and engineers fall under is equivalent to a GS-12 and GS-13. In theory, you can go up to the maximum step of a GS-13 in a relatively short amount of time. This is a far cry of the old system where you’d max out at a GS-12 step 10 after a set number of years and stagnate. The demo banding system is flexible enough that if you work hard you really do get a good pay raise (hence pay for performance). So PFP can work well *IF* if is implemented correctly. Whether or not NSPS will be similar is still up in the air.

    “Since NAVSEA already has a PFP program, we will be the one of the last groups to convert over to NSPS. Hopefully by then (if the time ever does come), the bugs will have been worked out of the system, much as the DEMO program has been relatively bug free for several years now at NAVSEA.” Dave

  • “I am happy with my NSPS payout. I got a total of 3.8%, and a ‘4’ (out of ‘5’) rating. 24% was paid out in a bonus, while the remaining 76% was added to my base salary. I have been on Save Pay since my base closed in 2001, which means I have only been getting 1.1% – 1.5% raises (no step increases, only half the January raise) since 2002. And being in the lowly ‘RUS’, where the value of our work is deemed less worthy than work performed elsewhere in the nation, 3.8% is a big deal here.

    “The problem is how they define the pay pool. We have doctors here on base who are very highly paid in comparison to the rest of us. They were placed in a separate pay pool than the rest of us. To me, the same standard ought to be applied to the pay pool as is applied to the metropolitan areas. In other words, the entire region that is in the ‘RUS’ ought to have one pay pool, not 3 or 4. San Francisco ought to have one pay pool that encompasses janitors, doctors, engineers, clerks, etc., not 7 or 8.

    “All in all, NSPS gets my vote, if they change the pay pool definition to encompass the haves AND have nots.” Call Me R

  • “One of the major problems with Pay-for-Performance is that it is very time consuming. We have to work with our supervisors to develop standards, create a self-appraisal, wait for our supervisor’s appraisal to be appraised by his/her supervisor, and then wait until our supervisor’s supervisor’s supervisor reviews that. Before our supervisors can review our appraisals, they must develop their own self-appraisals. All this takes place before a board review, and while all this is taking place, very little mission related work is being performed. And in the end, most of us received a very favorable rating which amounts to less than $100 a paycheck. This performance based pay increase doesn’t come close to keeping up with inflation. In future years, a pay-for-performance increase will amount to a de facto pay cut.” M.F.
  • “They talk about appeals for the PFP but unless you have a legal knowledge of the system – how do you appeal or argue anything – there’s no unions where I am & even if there was the reps aren’t legal brains so there’s no help for the low grade worker in this area – the army has JAG-trained lawyers for reviews. Who do I have? Am I supposed to pay a lawyer $150 an hour …” B.K.

    From the Nearly Useless Factoid E-mails

    “How many people have been President?” asks Peter at OPM. He points out that nearly everyone will say 43, “based on GWB being the official 43rd President of the United States. But actually, only 42 people have ever held the office. There weren’t two different Grover Clevelands, but as we know, he was the 22nd and 24th President.” Thanks Peter and happy Monday!

    And from Stanley at VA comes of another Turkish wedding tradition. “They consider opals bad luck as wedding gifts. You give your bride diamonds, emeralds or rubies, but…” (brace for punning speed again) “in Istambul they can’t stand an opal.”

    Great, Stan. Thanks for that. Now that you have that song stuck in your head too, you can reach me at:

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