Performance Pay: Here Today, Gone Tomorrow?

I once worked for an outfit that decided it needed a pay-for-performance plan.

Prior to the change, we all got the same percentage pay raise each year. Obviously that meant that higher paid people got bigger pay raises, but hey, that’s life! We all got the same percentage which, we thought in our ignorance, was all that mattered. People could and did make side deals for more money, but by-and-large we all got the same raise each year.

Until…

A newly-arrived MBA, who knew nothing about our business but everything about business, said that giving everybody the same raise each year was stupid. A fellow MBA concurred and you know what that means.

This person (notice I cleverly disguise his/her sex, because you never know where I will be working next!) implemented a merit pay system in which people were to be paid based on, duh, their merit. I think. Thought.

The first year it was a resounding success. I got a bigger raise.

Years two and three I didn’t get one of the bigger raises. Clearly the program was a failure. I first suspected the vast right wing conspiracy was holding me back. Later I thought maybe it was the not-quite-as-vast left wing conspiracy that was drilling into my wallet.

After a couple of years in which only easily identifiable suck-ups got the big bucks, we went back to the old ways. That is where everybody-got-the-same raise. But that was also a problem because the uneven distribution of merit raises to some pets or, uh, very close friends of certain bosses, meant they would always be ahead of those of us who had been hard-working plus pure of mind and body.

That’s why many people in the private sector were surprised when the government began to adopt what was billed as pay for performance. They were surprised because one of the reasons cited by backers of PFP is that “everybody in industry is doing it” when in fact many places that tried it, like my old shop, quickly dropped it like a hot, smelly potato.

Ironically it was the Bush administration which gave the big push for PFP, considering PFP was one of the unfulfilled dreams of the Carter administration. It, and the Reagan administration, found the idea of WIGS (automatic within grade raises) to be absurd. Somebody during the Carter years dubbed them “being there” raises (after the Peter Sellers movie Being There). Critics said that in order to get the automatic 3 percent WIG every one, two or three years, all you had to do was show up, be there, and not murder anybody on company time.

Some people think (hope) that PFP is here to stay. That the bugs will be ironed out, management training will get better and that more money will be pumped into the merit pay pools. They say it is working well in many programs, and will get better as people grow accustomed to it.

Others hope that the next President and the next Congress will halt the spread of PFP programs to other agencies, and to parts of major Departments like Defense. And that Congress will gradually scale-back (as in defund) existing programs.

For the pros and cons of the program, and a possible peek into the future of PFP, check out the Senate hearings this week as reported by Federal News Radio’s Max Cacas. You can do that by clicking here.

If you have any thoughts you’d like to share with fellow feds, your bosses and Congress pass them on. We’ll make sure they get both ink and air time.

Nearly Useless Factoid

The very first two Medicare cards, according to MentalFloss, were presented by President Lyndon Johnson when the law was enacted in 1965 to former President Harry Truman and his wife, Bess.

To reach me: mcausey@federalnewsradio.com

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