2/1/08: The firsthand experience of NTEU debunks claims made in a recent Office of Personnel Management (OPM) report that pay-for-performance systems in various federal agencies are a success.

“This report shows a patchwork of pay systems across the government that cannot collectively, or individually, be characterized as successful,” said NTEU National President Colleen M. Kelley, in the wake of the OPM status report on alternative personnel systems in the federal government, including performance-based pay systems.

The report dealt with such systems at a number of NTEU-represented agencies, including the Federal Deposit Insurance Corporation (FDIC), Internal Revenue Service (IRS), Transportation Security Administration (TSA), Bureau of Alcohol, Tobacco, Firearms and Explosive (ATF), Tax and Trade Bureau (TTB), Securities and Exchange Commission (SEC); National Credit Union Administration (NCUA) and Department of Homeland Security (DHS).

“NTEU has extensive front-line experience with alternative pay systems at these agencies and that experience is characterized by a slew of grievances, arbitrations, litigation, high attrition rates and rock-bottom employee morale,” President Kelley said.

“The problems may differ from agency to agency,” President Kelley said, “but the reality is that each of these programs is terribly flawed.” At the FDIC, for example, the program found so little acceptance among employees, only 12 percent in a recent survey said they believed it reflected accurately their performance.

These are among the other problems: IRS managers, who are the only ones covered by the performance management system, have not embraced the changes and a 2007 report by the agency’s inspector general found serious deficiencies and indicated it hinders the IRS’s ability to recruit, retain and motivate skilled leaders; at TSA, the Performance Accountability and Standards System (PASS) is widely-disliked and distrusted by employees and has done nothing to stem the agency’s outrageously high attrition rate; the SEC system was found by an arbitrator to be discriminatory in its implementation; at ATF, an arbitrator forced the agency to reverse its unilateral decision to direct half the performance pay into a lump-sum payment rather than into base pay, which is more favorable for employees; and at DHS Congress has limited funding for a new personnel system.

“The key to these kinds of compensation systems rests on a trilogy of ideas,” said President Kelley. “They must not only be fair—they must be seen by employees as being fair; they must be credible; and they must be transparent, particularly in communicating to employees how they must perform to achieve a given level and in communicating why various decisions have been made.” Moreover, she said, “without assured funding on a continuing basis, they will fail. It is as simple as that.”