NTEU: No Value In 'Performance Pay';

System Too Subjective
NTEU: No Value In 'Performance Pay'


National Treasury Employees Union President Colleen M. Kelley lashed out against pay-for-performance systems in Federal agencies Feb. 12 before a U.S. House of Representatives subcommittee.

The Chief-Leader/Sara Hassan SYSTEM FAILURE: National Treasury Employees Union President Colleen M. Kelley testifies before a U.S. House of Representatives oversight subcommittee, arguing that the Bush administration's merit-based pay systems for Federal employees were lowering worker morale.

Ms. Kelley told the House Oversight and Government Reform Subcommittee on the Federal Workforce, Postal Service and District of Columbia, that the General Schedule for paying Federal workers was sufficient and that alternative merit-pay systems, which the Bush Administration supports, were failing.

Cites Inconsistencies

Calling such alternatives "subjective," Ms. Kelley cited in her testimony a survey of agencies currently experimenting with pay-for-performance systems the Office of Personnel Management released earlier this year.

"If anything, the report demonstrates how inconsistent, arbitrary and problematic the differing pay systems are throughout the government," she said. "While the report lists a hodgepodge of systems at various stages of their development, and includes a number of surveys, it lacks hard data on the parameters of the surveys and the numbers of people who participated in them."

Ms. Kelley spoke of the pay-for-performance system that was recently suspended at the Federal Deposit Insurance Corporation, where the NTEU represents 3,200 employees. She explained that it consisted of a forced distribution systems where only the top quarter of the ranked employees would be eligible for raises.

"This system of forced rankings and pay distributions had demoralized and angered FDIC employees," she said. "Our members report that the system was divisive and discouraged teamwork. It was discouraging employees from taking risks, and sending the message that three-quarters of them could never be considered to be top performers, regardless of how well they perform."

A Suspended 'Success'

She continued, "At FDIC, for example, the pay-for-performance program was so flawed with only 12 percent of employees finding it viable, the entire program was just suspended. Yet, FDIC is one of the agencies included in the OPM report of pay-for-performance success stories."

She said the merit-pay system at the U.S. Transportation Security Administration, where her union along with the American Federation of Government Employees was trying to organize workers, was also causing high attrition rates in that agency.

Just hours after the testimony, the union learned that the U.S. Securities and Exchange Commission was temporarily suspending its pay-for-performance system.

"This is a welcome decision by the agency," Ms. Kelley said in a statement. "It has been clear for some time that the SEC system, as it has been designed and implemented, needs to be significantly revamped so that it is fair, credible and transparent."