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 the author of 'Planning Wage and Salary Programs.'
When the House subcommittee on the federal workforce held its hearing on July 15, the statements from witnesses had a new tone. Normally the statements are predictable and positive, but this time there was a subtle difference. No witness defended the General Schedule system. Reading between the lines, they see the replacement of the system as inevitable.
In contrast, the statements at a similar hearing on the viability of the Senior Executive Service were much more positive. The statements were laudatory as usual—SESrs are dedicated, diligent, etc.; here again, however, no one defended the pay and performance system. The Senior Executives Association is on record supporting pay reform. There are few today who oppose it.
MORE ABOUT THE HEARING
Katherine Archuleta, OPM’s director, summarized her agency’s work to meet government’s human capital needs. She came closest to defending the GS system, stating that “It is possible to recognize what the General Schedule does well, such as providing consistency, internal equity, and transparency.” She concluded by arguing for the importance of understanding the system’s “strengths and weaknesses”, which implicitly acknowledges change is on the horizon.
As OPM’s Director, she of course cannot undermine a system her agency is responsible for administering. However, no other employer would defend a pay system by saying what it “does well” is provide “consistency, internal equity and transparency”. Critics might argue that is no longer the case.
David Cox, AFGE’s president, rightfully decried the attacks on the federal workforce and disputed the studies of federal pay by “think tanks” and news outlets, but said very little that defended the GS system.
Former OPM director Donald Devine had a very different orientation. He strongly condemned the civil service system, arguing that “the present organizational morass, program irrationalities and slow and costly personnel procedures make no sense.” But he offered no alternatives other than privatization and outsourcing.
The president of the Federal Managers Association, Patricia Niehaus, made the most interesting argument. She focused in part on the reactions of her members to their experience in the China Lake demonstration project who “cited multiple advantages of this system, including: more latitude in identifying employees not meeting agreed upon objectives; opportunities for supervisors to reward merit; and, the ability to review performance goals and demonstrate how accomplishments were met or exceeded. Our members who worked under this demonstration project called this merit-based pay system a ‘rewarding experience’ . . .”
Niehaus also acknowledged that “the federal civil service no longer reflects the standards today’s job seekers expect. The current General Schedule pay and classification system is antiquated. FMA supports changes that establish increased flexibilities, accountability and performance results.”
The most extensive statement was provided by Robert Goldenkoff, GAO’s director of strategic issues. GAO has reports going back years that argue, as Goldenkoff does, that human capital management “[p]lays a critical role in maximizing the government’s performance . . .” The statement goes on to emphasize that human capital management “has been a high risk area since 2001” that contributed to a number of “operational and other problems at various agencies.” The first that he lists is Veterans Affairs.
One sentence stands out: “Serious human capital shortfalls are eroding agencies’ capacity and threatening their ability to cost-effectively carry out their missions.” His message is clear— the shortfalls are contributing to performance problems.
He lists eight key attributes of a “modern, effective classification system”. Here I disagree. There are no modern classification systems. Classification is essentially the same today as it was in 1949. Working down Goldenkoff’s list, the GS system fails on each attribute. It’s not transparent; it’s not flexible; it’s not adaptable; it’s not simple, etc.
A related problem is that OPM is no longer able to police the classification of jobs. The number of Classifiers is down to six; in the 1980s their numbers supported a professional society that had an office, a secretary and annual conferences. Today OPM cannot confirm jobs are correctly graded.
Archuleta mentioned the president’s proposal to create a Commission on Federal Public Service Reform. That would no doubt serve a political purpose, but it’s unlikely to generate ideas that have not been tested in the demos or discussed in reports. There is broad agreement a new system will need to be more responsive to labor market realities, more flexible, more transparent, and more adaptable – to use the GAO attributes. And there is undeniable pressure to link salary increases to performance.
Niehaus should be congratulated for her support for policies reflected in the China Lake salary system. Few if any employees paid under the GS system would argue it’s a “rewarding experience.” But the fact is that employees in other sectors would undoubtedly agree. Many would not work in an organization where performance is not rewarded.
There is an important difference between the private and public sectors. Elected leaders frequently dwell on the few poor performers, arguing that they should be denied pay increases. In contrast, the focus in successful pay for performance systems is on the better performers. The difference means employees see the policy as a positive practice.
Replacing the GS system promises to be the largest and unquestionably the most complex organizational change initiative ever undertaken. Unfortunately federal agencies do not have many people with proven change management expertise. Employees will be anxious until they know how the change will affect their careers. Communication will be critical. Leadership will also be essential.
The hearing focused on the GS system, but the real key to the acceptance of a new pay system will be the managers and supervisors responsible for managing staff salaries. The development of requisite people management skills should be a priority. Coaching should be provided. Senior leaders will need to make that a priority. Ineffective managers will undermine acceptance of the policy change.
My prediction: Improved government performance will not be realized until the GS system is replaced.