The Pay for Performance Proposal

 

 

Federal workers continue to be affected by the many policy changes that are being introduced on a regular basis. Some of the proposals raise a lot of questions as they appear to be very controversial or do not in any way add something new. For instance, there are reports that President Trump has plans to introduce the ‘Pay for Performance’ policy for all government employees. However, this does not seem to be something new as good performance by employees has always been rewarded by government.

 

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Currently, there exists pay for performance systems for federal employees at high levels or senior executives. In fact, senior executives receive an average 2% salary increases based on ratings in 2016. Apart from that, there were also cash awards for good performance, and the government gave out an average $12,000 in cash awards for each senior executive. The performance-based average wage raises during the same year was $4,000 for each employee. It is estimated that over 81% of senior executive received cash awards for their performance.

 

Pay for performance can be compared to “quality step increases,” and it is important to point out that such raises are not a preserve of senior executives. Other categories of employees are also entitled to the performance-based raised.  In fact, employees in lower ranks can rise through the ranks to higher positions within a short period through performance-based raised. Such raises usually are $1,700 on average. However, less than 3% of employees in lower ranks receive performance-based raises.

 

Although federal employees in lower grades rarely receive performance-based salary raises, most of them are normally considered for cash rewards. In fact, almost 50% of federal employees in lower grades earn an average of $1,000 as a rating-based cash award. Apart from rating-based cash awards, federal employees in lower grades also receive other types of performance-based awards that include group performance awards, suggestion awards, and time-off awards. A recent study revealed that 25% of federal employees in lower ranks have already received an average of 19 hours in time-off awards for their exemplary performance.

 

Trump’s administration is yet to demonstrate how its new pay for performance proposal will work. So far, the White House has declared the need to reduce regular step increases and in the process slow their frequency. Also, the government has set aside $1 billion to help in retaining high performers through pay incentives. The performance-based raises suggested by the government are meant to replace in-grade increases.