The Administration has developed draft legislation that will more strongly link individual employee performance to agency missions. The bill will likely be sent to Congress in September, with hearings expected in October. The proposed Working for America Act would implement a "pay-for-performance" system through which each employee's performance influences a significant portion of their annual pay raise. The system will also base an employee's annual pay increase on factors reflecting changes in national and local market rates and will consider the rate of pay for a specific occupation in a specific region.

Additional information can be found at Results.gov website at: www.whitehouse.gov/results/agenda/working.html

Purpose

The Working for America Act would establish a Federal human resources management system that incorporates four fundamental principles:

1. Employees should have clear goals for their performance, as well as opportunities for professional growth and managers who help them succeed. Pay increases for individual employees should be based more on performance than on longevity.
2. Any human resources management flexibilities available to Federal agencies must be exercised in accordance with core values, principles, and protections of the American civil service, including (a) the merit system principles set forth in Chapter 23 of title 5, U.S. Code; (b) laws and regulations barring discrimination and reprisal against whistleblowers, and shielding employees from political influence and personal favoritism; (c) the right of employees to due process in actions taken against them on performance or conduct; (d) veteran's preference; (e) the right of employees - subject to the provisions of the bill - to organize, bargain collectively, and otherwise participate (through labor organizations of their own choosing) in decisions affecting them.
3. Employees at all levels must be accountable for their performance.
4. Agencies must be accountable for meeting standards for effective human capital management in carrying out their missions.

Guiding Principles

• The goals of individual employees must be tied in a meaningful way to agency missions. Individuals deserve to know how their performance contributes to that mission.
• Individual employees should be provided: clear performance goals, managers who can help them be successful, and pay based on merit and market.
• A system that values performance and potential must also ensure accountability. The Federal Human Capital Survey reveals that only 27 percent of Federal employees believe steps are taken to deal with poor performers and only 29 percent believe differences in performance are recognized in a meaningful way.
• Reform can be accomplished while fully preserving core principles and protections. Making needed enhancements promotes merit system principles by extending them to how pay decisions are made.

Implementation

Under the proposed legislation, not all agencies would implement the new system at exactly the same time. The legislation provides for a phased implementation through January 2010. To administer the new system, the Department would need to be certified by the Office of Personnel Management as meeting a rigorous set of statutory standards and safeguards.

Improvements in human resource management that have been undertaken at the Department of the Interior over the last several years will enable a smoother transition to the new system once Congress passes the legislation. In particular, the effort we have invested in creating an employee performance appraisal system that makes meaningful distinctions between levels of employee performance will make it easier for us to move to the improved "pay-for-performance" system contemplated by the legislation.