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Problems with employee rewards need to be addressed

Jun. 28, 2013 - 06:00AM   |  
By HOWARD RISHER   |   Comments

The Partnership for Public Service confirmed a long-standing problem —government’s management of rewards is ineffective. Only four out of 10 federal workers believe they will be rewarded or promoted for doing good work.

In my consulting and writing, I am a strong advocate; I cannot imagine working in an organization where exemplar performance is not recognized and rewarded. In high-performance organizations, financial and non-financial rewards are pervasive. But I also know that, when rewards are not well managed, the practice is difficult to defend. A poorly managed rewards policy can contribute to low morale and, if ignored, contribute to deteriorating performance.

The Merit Systems Protection Board highlighted the importance of rewards in a January report, “Federal Employee Engagement: The Motivational Potential of Job Characteristics and Rewards.” The report focused on two conclusions. First, employee motivation is influenced by job design. The second, not surprisingly, is that “Federal agencies can make better use of rewards, both monetary and non-monetary.”

Engagement is the commitment an employee has to the organization and its goals. Engaged employees put forth that extra, discretionary effort. They are willing to work overtime when needed, without being asked. Engaged workers are more productive, take fewer days off, file fewer grievances, and are more satisfied with their personal lives. It’s a win-win for everyone.

Employees want to be treated fairly. That’s obvious. They look for confirmation that their work effort is valued. In a supportive environment and with effective supervision, employees will perform at significantly higher levels — as much as 30 percent to 40 percent higher. The potential gains have been confirmed in numerous studies of employee engagement. Conversely, as engagement levels fall, there is a decline in performance.

The government of the United Kingdom made increasing engagement levels a national priority by launching a new portal called Engage for Success. It’s dedicated to the belief that there is “a better way to work, a better way to enable personal growth, organisational growth and ultimately growth for Britain by releasing more of the capability and potential of people at work” that is designed to help managers. Prime Minister David Cameron has been a vocal supporter.

The lists of the “Best Places to Work in the Federal Government” confirm the importance of rewards. Those agencies rated highly as the best places to work also scored high on “satisfaction with performance-based rewards and advancement.” NASA is first on both lists; the Federal Deposit Insurance Corp. is first among medium-sized agencies. The Homeland Security and Veterans Affairs departments are at the bottom on both lists. The pattern is true for the small agencies as well.

Agencies that initiate the changes to improve reward practices should expect better performance to follow. Employees obviously know there are problems. They want to know their leaders are concerned about the problems and committed to resolving them. They want the assurance their organization is well managed.

There have been too many situations involving bias and favoritism. Performance ratings are known to be unreliable and inflated. Managers have had far too much autonomy.

The freeze on discretionary bonus awards makes this an ideal time to address these problems. It would be good to wipe the slate clean and start over. It was reported this week that Ginnie Mae improved its score on the Best Places Index list by 50 percent. It relied on an Employee Advisory Board to design an awards program. Relying on employee groups to articulate existing problems and recommend solutions is a proven strategy.

We actually know a great deal about planning and managing effective reward practices. The goal should be simple — to make certain the best performers are rewarded.

Federal employee engagement is deteriorating and will get worse. Unfortunately the problems with measuring productivity in government agencies mask the impact, but there is a wealth of evidence from other sectors that employee performance declines when engagement levels fall.

It’s not clear what words should be used to describe employee views of the current work environment. Words like alienated, embittered, disillusioned, and disaffected come to mind. The words are not as important as the impact — deteriorating employee engagement has a cost that more than offsets the payroll savings. The freeze and sequestration has also cost agencies the loss of talent.

When the freeze ends, it will take months and possibly years for agencies to return to normal performance levels. The impact on the caliber of job applicants could go on for a decade or more.

Several weeks ago the Government Accountability office was asked by Congress to report on "the attributes of a modern, effective classification system.” That is only a slice of the problem.

Howard Risher is a consultant and writer on federal pay and performance issues. He was the managing consultant for the studies leading to the 1990 Federal Employees Pay Comparability Act and is author of "Planning Wage and Salary Programs."

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