Pay for Performance Evaluating Performance Appraisal and Merit Pay (1991) / Chapter Skim
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2 The History of Civil Service Reform
2 The History of Civil Service Reform
Pages 13-33
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From page 13... ...
As we approach the yew 2000, the questions surrounding pay for performance in the public sector have assumed a new importance indeed, a central position—in new proposals for federal civil service reform. Many of the questions raised in the debate about the 1978 reforms are being raised again.
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From page 14... ...
Despite the clarity of the problem and fairly widespread consensus on the need for action, the reality of the Pendleton Act was modest: only 10 percent of the federal work force at that time was covered by the initial legislation. Congress granted the President authority to add federal employees to the merit system as he saw fit.
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From page 15... ...
Until the time of the New Deal, most of the new provisions, with their emphasis on economy, efficiency, and standardization, reflected the scientific management principles in vogue in the business and public administration communities. One such effort was the creation, in 1912, of the skeleton of a performance appraisal system.
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From page 16... ...
The Performance Rating Act required agencies to establish a performance appraisal system with the prior approval of the CSC. This system established three summary rating levels: "Outstanding," "Satisfactory," and"Unsatisfactory." Employees were permitted to appeal ratings to a statutory board of three members consisting of representatives from the agency, one selected by employees, and a chairperson from the CSC.
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From page 17... ...
Federal Management Strategies and Civil Service Reform Federal management strategies provide another set of influences that were important to the context and development of civil service reform. At least since 1937, when the Brownlow Commission issued its report on the Executive Office of the President, appropriate theories and structures for federal management have been debated by academic analysts and elected officials.
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From page 18... ...
THE CIVIL SERVICE REFORM ACT OF 1978 Civil service reform was central to President Carter's election campaign and he selected an adviser to spearhead the effort shortly after his announcement to seek the office. One of Carter's first acts as President was to create the President's Personnel Management Project (PMP)
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From page 19... ...
Major provisions included the creation of the Senior Executive Service, a rank-in-person system for top executives, performance appraisals for all employees, merit pay for middle managers, delegations of specified personnel management authorities to the line agencies, formalization of the federal labor management relations program, and modifications in procedures for dealing with poor performers. The Senior Executive Service The Senior Executive Service (SES)
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From page 20... ...
This emphasis on responsiveness to political direction can be read, in the context of pay for performance, as an effort to more closely link individual managerial activity to organizational objectives. Performance appraisal and pay for performance were important parts of the concept of a Senior Executive Service.
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From page 21... ...
The merit pay provisions represented a break from the long tradition of essentially automatic salary increases based on length of service. Borrowing from private-sector practices, Title V of the Civil Service Reform Act contained provisions intended to motivate midlevel managers to perform at higher levels by tying performance to financial incentives.
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From page 22... ...
A crucial point is that the legislation provided that the Merit Pay System would be revenue neutral, so that if some employees benefited, others would of necessity be less well off than they would have been under the General Schedule. Federal Employee Expectations About the Reform It is difficult to identify the attitudes of federal employees toward performance appraisal, pay for performance, and other reform provisions prior to the Civil Service Reform Act because of the lack of baseline data.
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From page 23... ...
The negative expectations resulted from the punitive tone—the "bureaucrat bashing," as it came to be known that accompanied descriptions of the need for reform. New whistleblower protections were said to be necessary to ferret out waste and fraud; greater managerial flexibilities were needed to eliminate deadwood; performance appraisal and pay for performance were necessary because federal employees were not productive and did not measure up to their private-sector counterparts (see Ingraham and Barrilleaux, 1983~.
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From page 24... ...
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From page 25... ...
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From page 26... ...
The Record The record of the Civil Service Reform Act has been turbulent. The orderly implementation of the act envisioned by the Carter administration was interrupted by the election of Ronald Reagan in 1980.
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From page 27... ...
Because it was the first to be implemented, the SES performance appraisal and bonus system was carefully watched by most federal employees. It did not serve as a positive model.
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From page 28... ...
The reported successes of the Merit Pay System in motivating employees emanated primarily from the performance appraisal requirements of the Civil Service Reform Act. Gaertner and Gaertner (1984)
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From page 29... ...
An upper limit of 1.5 percent-of-payroll for all performance awards was placed on agency payout under the system. PMRS also created Performance Standards Review Boards, modeled after the Performance Review Boards in the Senior Executive Service, to review performance standards within an agency to ensure their validity and to perform other oversight functions.
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From page 30... ...
However, no such relationship was found between turnover and performance ratings in an earlier study by the General Services Administration (Perry and Petrakis, 19871. IMPLICATIONS This brief account of civil service reform is a record of modest changes and frequently conflicting objectives, accompanied perhaps by unrealistic expectations about the effects of the reforms on the performance and productivity of federal personnel.
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From page 31... ...
We have described the centrality of the principle of neutral competence to the modern civil service. In turning away from the spoils system, the founders of the merit system in the late nineteenth century envisioned federal employees as dispassionate servants to the body politic who, to function properly, needed to be shielded from invidious political influences.
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From page 32... ...
Moreover, revenue-neutral provisions for merit pay programs have resulted in small or modest bonuses. The General Accounting Office and the Merit Systems Protection Board report that employees do not perceive the link between performance and reward to be strong—or even present in some cases (U.S.
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From page 33... ...
We turn now to an examination of the scientific and clinical evidence on performance appraisal and pay for performance and an assessment of the implications of this evidence for a merit pay system for federal managers.
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