The Heritage Foundation and others argue that the typical fed is overcompensated when compared with the typical worker in industry. The Defense Department Business Transformation Agency Director David Fisher, writing in Federal Times, suggested that tying performance bonuses to team performance is the answer. Consultant Howard Risher, also in Federal Times, argued that managers should have input into designing the pay-for-performance system for a new agency.
We are spending a lot of resources and mental energy to solve problems that, so far, have not been well-articulated. Pay for performance, specifically, is a solution in search of a problem.
Is the typical fed overcompensated? Are agencies not achieving their objectives because they cannot acquire the proper mix of knowledge, skills and abilities? Are too many federal workers simply poor performers?
I disagree with the assertion that the typical fed is overcompensated. Although there are pockets of excess — such as inside the Beltway, where you cannot throw a rock without hitting a member of the Senior Executive Service — I believe this claim to be based on apples-to-oranges analyses. Show me a single agency head who receives a CEO-like salary.
Should the fed be subjected to an austerity program and forced to experience the same degree of pain that the current economy has inflicted upon the general work force? I cannot argue no, but am convinced that pay for performance will not reduce total personnel costs.
Does pay, by itself, motivate the typical fed? I looked at this specific question in my doctoral project in which I surveyed 132 senior federal employees across all agencies. My conclusions: While pay does have some motivating effect, the effect is insignificant. Total compensation ranked 18th on my list of positive motivators. This is consistent with other similar studies in recent decades examining the private sector, Great Britain and some Scandinavian counties, in which pay never ranked higher than eighth (there is no empirical research directly on point with respect to feds).
In my study, the leading positive factor was "belief in mission." The leading negative factor was "insufficient resources." The typical fed, if I may be so bold as to generalize, is internally motivated to perform well and will do so if given sufficient resources and if the leadership gets out of the way.
Not every fed is typical. Frankly, some are not internally motivated — or at least their internal motivators are not aligned with the agency mission. We call these poor performers. So is the problem we are trying to solve the elimination of poor performers? If so, how big is the problem?
The number of feds who were rated below "fully successful" in fiscal 1996 was less than 1 percent, according to a 1999 Merit Systems Protection Board report. In another 1999 report, the Office of Personnel Management estimated the proportion of poor performers in the federal work force to be 3.7 percent. Based on my own anecdotal evidence and 35-plus years of federal service, I believe the range to be 8 percent to 10 percent.
Even using this higher estimate, the federal work force is not out of line with industry. Opinions vary, but using the axiom of Jack Welch, the former head of General Electric, as the standard — fire the bottom 10 percent each year — around 10 percent of the general work force performs below expectations.
If this assertion is true, why are we spending hundreds of millions of dollars to change a pay system to solve a problem that does not really exist and arguably will not significantly decrease the number of poor performers? At best, pay for performance will encourage some poor performers to seek opportunities elsewhere, but I do not foresee the mass exodus that pay-for-performance proponents suggest.
Admittedly, the federal government has challenges in acquiring specific specialty skills. Unfortunately, the range of federal salaries is simply inconsistent with the expectations of those in these specialties. Furthermore, the specialist who is motivated by pay will find better alignment of personal and organizational goals in a for-profit activity. Pay for performance, even with perfect implementation, cannot solve these inconsistencies. These skills can be acquired by contract, but this solution fuels the excessive-cost-of-contractors debate. The specialist who believes in the mission will invariably accept lower compensation as the cost of serving the greater good.
Jim Collins, author of "Good to Great," accurately encapsulated this argument in one statement: Efforts to motivate people are a waste of time.
Pay for performance, as an effort to motivate high performance in the federal work force, is a waste of time. I cannot speak to its appropriateness as solutions to other problems, but our first task should be to describe the problem to be solved. Then we can put the right cart behind the horse.
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David Frick is a Defense Department employee. The opinions contained in this work are his and do not reflect those of the Defense Department.







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