Statement of Senator Daniel K. Akaka, Chairman

Committee on Homeland Security and Governmental Affairs

Subcommittee on Oversight of Government Management,

the Federal Workforce, and the District of Columbia

 

The following is Senator Akaka's opening statement as prepared for delivery:

I want to thank our witnesses for being here, especially Director Linda Springer. As many of you know, Director Springer announced that she will step down next month. I want to take this opportunity to thank her for her years of public service. I wish her the best of luck in the future.

Today, the Subcommittee will examine pay for performance systems across the federal government. We have a full hearing today, so I will try to keep my opening remarks brief.

Pay-for-performance systems have increased in the federal government out of a desire to improve the link between an employee's pay and his or her performance. Ideally, the better someone performs, the greater their pay.

Since the Department of Navy Demonstration Project at China Lake began in 1980, the federal government has tinkered with pay and performance systems outside of the General Schedule (GS). The authority to implement pay for performance systems have been given to federal agencies for employees in the Senior Executive Service (SES) and to the Internal Revenue Service, the Federal Aviation Administration, the Department of Defense, the Transportation Security Administration (TSA), the Department of Homeland Security (DHS), components in the Intelligence Community, the Government Accountability Office, and many other agencies.

When Congress granted federal agencies statutory authority to develop pay for performance systems, employee and management groups expressed many concerns with the ability of federal agencies to:

• design systems that are transparent,
• fairly evaluate employees' performance and provide a fair appeals process,
• include employees and their representatives in the design and implementation of these systems,
• provide sufficient training to managers and employees to implement these systems, and
• budget sufficient funds to properly reward employees for their performance.

I share many of these concerns, which, unfortunately, have become reality. Federal pay for performance systems have often been modified from those in corporate America to address budgetary constraints. I continue to hear from employees that their performance rating and pay awards depend not only on their performance, but rather on that of other employees they are in competition with due to limited resources to reward performance. If the federal government is serious about new and more rigorous pay-for-performance systems it must invest in those systems with enough money to provide a real performance incentive.

Part of this investment requires taking the extra time and effort to ensure that employees are involved in the development of these systems and have a clear understanding of how they operate. According to the latest SES Human Capital Survey, nearly 30 percent of respondents do not understand how increases in their salary and bonuses are determined. The 2007 DHS employee survey found that 55 percent of TSA employees do not believe their pay is based on their performance, and 48 percent do not believe their pay awards depend on how well they performed their jobs. If employees do not understand their pay system or think that it is unfair, it will not work.

Moreover, employee buy in is essential to the government's effectiveness and efficiency. If employees are not involved and their concerns are not addressed, morale will drop and hinder agency mission. A recent report from the DHS Inspector General on TSA's responsiveness to address employee concerns acknowledges that low employee morale at TSA continues to be an issue and can contribute to high attrition rates. The estimates for TSA's attrition rate range from 17 to 21 percent. This is too high.

The GS system is not perfect. However, there are clear rules on how employees will be paid and under what circumstances pay increases are awarded. I am worried that we are spending hundreds of millions of dollars to transition away from the GS into new pay-for-performance systems at the cost of employee morale and agency mission.

I look forward to hearing from our witnesses on the implementation of pay-for-performance systems in the federal government.

For more information on the hearing click here.   

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