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Pay-for-Performance program hits the dustbin of history

October 19th, 2009  |  Matt Pavich


Another day and another Bush administration program goes out the window.

Congress has decided to repeal the National Security Personnel System as part of a compromise between the House and Senate in their negotiations over the Defense Department authorization bill. Under the bill, the Department of Defense would have six months to start transferring affected employees back to whatever pay system they originally fell under, with the system finally ending on January 1, 2012. The Department would also have to submit proposals for any new pay-for-performance system to Congress for approval.

In true Washington style, the bill calls for the institution of a system that would determine bonuses and other performance-based actions for all Defense employees. Of course, it doesn’t offer details on how that system might work. Don’t worry, though, federal employee unions are ready to assist. American Federation of Government Employees President John Gage, who said he was “elated” over the program’s end, said he would work with the Pentagon to create the new system.

George W. Bush’s administration strongly advocated for NSPS, and Congress approved the system for Pentagon employees in 2003. Roughly 30 percent of the Defense Department’s civilian employees now fall under NSPS jurisdiction, according to the Pentagon.

The belief was that the program would improve government efficiency. But, as is so often the case with government programs, especially those designed to increase efficiency, the devil was in the details. The kind of details found in, say, agency budgets.

Federal managers found it nearly impossible to truly link pay to performance because their personnel budget cupboards were bare. A manager with 15 employees doing excellent work might only have had money to pay five the raises they deserve.

Other employees complained that the system favored cronyism and punished competence. Some managers were accused of using the system to reward friends, while others were accused of not even knowing how to use the system.

While analysts suggest various options for the Pentagon, John Berry, the OPM director, has said he prefers a single, government-wide pay system, but acknowledges that creating such a plan could be difficult.