Austere budget environments appear to have had an unexpected consequence: More bosses are cracking down on poor performers in the federal workforce.
Federal managers are now denying General Schedule step increases at the highest rate in at least nine years, according to statistics from the Office of Personnel Management. And in fiscal 2012, the Merit Systems Protection Board considered more appeals of performance actions and step-increase denials than anytime in recent years.
Experts interviewed by Federal Times said the data show that managers are finally getting tougher on slackers, after being urged to do so for years. They say that with budgets and staffs already shrinking — and likely to fall even further this year, especially if sequestration goes into effect — managers can’t afford to have employees who aren’t carrying their weight.
“Managers are getting tougher, out of necessity,” said John Palguta, vice president for policy at the Partnership for Public Service. “When times are good and you’re getting a budget increase and perhaps even expanding the workforce a bit, as they did in the beginning of the Obama years, you can have a little slack in your organization and manage it. But when you’re really straining, workloads are increasing and your staff is not, then you need to have employees who are fully contributing. And managers, because they’re under pressure to get the job done, are more willing to bite the bullet and get the job done.”
Managers especially cannot afford to allow their best workers to become disheartened and stop putting in as much effort when they see poor performers skating by, said Ron Sanders, the intelligence community’s former chief human capital officer.
“They have to worry most about the folks who come to work every day and do a decent job,” Sanders said. “They don’t want high performers discouraged by a lowest-common-denominator approach to performance management.”
Federal employees report widespread dissatisfaction with how poor performers are held accountable. In OPM’s 2012 Federal Employee Viewpoint Survey, less than 30 percent of respondents said their work unit took steps to deal with a poor performer who cannot or will not improve. Almost 43 percent said the opposite was true.
OPM Director John Berry, in recent years, has pushed for improved performance management. In June 2011, Berry sent agency heads a memo reminding them that step increases cannot be awarded automatically, and that they should not be given to poor performers.
“The payment of within-grade increases should never be viewed as automatic or routine,” Berry said.
Each grade under the GS system has 10 steps, and every one, two or three years, employees are eligible for a step increase and accompanying pay raise until they reach their grade’s top level. Raises vary between 2.6 percent and 3.3 percent. Each year, roughly 53 percent of the GS workforce is eligible for a step increase. And for the last two-plus years, as federal pay scales have been frozen, step increases have been the only way some federal employees have gotten pay raises.
Federal Times previously reported that, in 2009, 0.06 percent of GS employees had their step increases denied — the highest rate in recent years. In 2011 — the year Berry urged managers to crack down on step increases — that denial rate ticked up to 0.07 percent, where it stayed in 2012.
When only GS employees who are eligible for step increases in a given year are considered, the denial rate increases, but is still minuscule. The denial rate in that case was 0.11 percent in fiscal 2009, and went up to 0.13 percent in fiscal 2011 and 2012.
“It’s not a huge movement of the needle, but it’s a step in the right direction,” Palguta said.
Former OPM executive Henry Romero thinks Berry’s 2011 memo on step increases may have succeeded in prompting some managers to be more discerning. Romero also credited initiatives such as OPM’s Goals-Engagement-Accountability-Results, or GEAR, program, which is intended to improve performance management in the federal government.
But the dire fiscal situation was probably the biggest factor, Palguta said. “It was the tipping point, the forcing mechanism to incentivize managers to do what they should have been doing already,” Palguta said. “They shouldn’t be tougher just to be tougher. But the conventional wisdom in this case is probably true: Federal managers too often let performance problems — and sometimes conduct problems — slide because they can.”
Palguta said that private-sector firms, which are driven by profit, often have a financial incentive to crack down on people who aren’t doing their jobs well. Federal agencies haven’t had a similar incentive, he said — until now.
“You don’t like being the bad guy,” Palguta said. “You don’t like confrontation. But managers are finding they have to do that, or their performance suffers as a manager.”
In its annual report, released Jan. 31, MSPB said the federal budget crunch — which has already brought pay-scale freezes and restrictions on performance awards — may be driving the increase in employee appeals of poor performance actions and step-increase denials.
“Constraints on pay and awards also may shift employees’ attention to the application of performance appraisal systems and ratings, which could in turn increase performance-based appeals to MSPB,” the report said.
And the threat of furloughs or layoffs could prompt disgruntled federal employees to file many more appeals, MSPB said.
“Historical trends indicate that increasing [reductions in force or layoffs] would lead to potentially large increases in the number of appeals filed with MSPB,” the report said.
MSPB also said that pay freezes, hiring freezes and training cuts may cause long-term harm for the federal workforce’s efficiency and effectiveness. That could mean fewer or poorer-trained managers in the federal workplace, and managers who are left may not know how to uphold merit systems protections and avoid prohibited personnel practices.
“It could take years for federal agencies to recover from these issues,” MSPB said.
Martin Baumgaertner, chief administrative judge for MSPB’s Central Regional Office in Chicago, said that denying step increases can sometimes be a first step toward firing a poor performer. And while the number of firings has not yet increased — terminations for discipline or poor performance fell in fiscal 2012, from 10,403 to 9,945 — Baumgaertner wonders if managers are waiting to fire poor performers until serious budget cuts hit.
“Maybe if they’re going to have a leaner workforce, they need to clear out employees that aren’t able to produce as effectively,” Baumgaertner said.
“But agencies anticipate that if there is sequestration or any major cutbacks, they want to have the maximum number of FTEs [full-time equivalent employees] as a base starting point from which to whittle. They don’t want to fire a bunch of people now, and then have to get rid of another 4 percent.”