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Modernizing the Federal Government

Paying for Performance

by Silvia Montoya, John D. Graham

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Enhancing the performance of the civil service has been a central objective of the United States since the Civil Service Reform Act of 1978 authorized a performance-based component to federal salary structures. In 2003, the National Commission on the Public Service, also known as the Volcker Commission, recommended that explicit pay-for-performance (PFP) systems be adopted more broadly throughout the federal government. The authors compare several proposals aimed at enhancing the role of PFP in the federal government: a White House proposal (the Working for America Act), which recommends that the entire federal workforce be converted to PFP systems by 2010; and three bills in the 110th Congress. This occasional paper examines the advantages and pitfalls of explicit PFP schemes compared with the largely seniority-based salary system that still covers more than half of federal civil servants. The authors consider why using PFP in the public sector is challenging, what can be learned from the social science literature, recent practical experience, and growing congressional opposition to PFP.

Table of Contents

  • Chapter One

    Introduction

  • Chapter Two

    Pay for Performance: Social Science Perspective

  • Chapter Three

    PFP: Different Forms

  • Chapter Four

    The Appraisal System: A Source of Concern

  • Chapter Five

    PFP in the Public Sector: Evidence

  • Chapter Six

    PFP in the U.S. Federal Government

  • Chapter Seven

    Some Departures from the GS

  • Chapter Eight

    Proposals to Change the GS

  • Chapter Nine

    Burgeoning Opposition to PFP

Research conducted by

The research contained in this report was made possible by the generosity of donors to the Pardee RAND Graduate School, particularly Paul Volcker and Eugene and Maxine Rosenfeld.

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