The U.S. intelligence community’s performance-based pay system is built on 10 principles drawn from the National Geospatial-Intelligence Agency’s system, Office of Personnel Management’s studies of pay-for-performance demonstration projects, and Government Accountability Office’s audits of alternative-pay systems at the Homeland Security Department, Defense Department and Internal Revenue Service.
1. Ensure senior leadership commitment.
2. Engage employees to build consensus, acceptance and understanding.
3. Budget for sufficient funding — no less than under the General Schedule.
4. Provide sufficient training to managers, employees and human resources staff.
5. Establish implementation milestones and assess readiness.
6. Develop a credible performance management system.
7. Hold managers accountable for managing performance.
8. Establish a clear link between performance rating and pay decisions.
9. Build in safeguards to ensure transparency, fairness and merit.
10. Provide appropriate avenues for reconsideration and redress.
When intelligence community officials began to lay the groundwork for a performance-based pay system two years ago, one of their priorities was to tap the wisdom of the people who would feel the full force of such a fundamental change — their employees.
“You have to involve employees, engage them, talk to them and listen to them,” said Ronald Sanders, the intelligence community’s chief human capital officer. “You have to be as transparent and open as you can.”
The pay-for-performance system, called the National Intelligence Civilian Compensation System, will be phased in at the 16 intelligence community agencies during the next four years.
Most human resources experts agree that attempts to introduce performance pay in the federal government have produced mixed results at best, especially in terms of employee acceptance. Often, the biggest mistake is not obtaining and assessing employee feedback early in the process.
For example, a 2006 Senior Executives Association study found that the Senior Executive Service’s new pay plan had been implemented without adequate communication with SES members. Nearly half of the senior executives in an SEA survey said they had never seen a copy of their agency’s executive performance management plan. The result has been widespread dissatisfaction with system and low morale among those affected.
“You’ve got to start with employee involvement and, to the extent possible, get their buy-in to do this successfully,” said John Palguta, vice president of the Partnership for Public Service. “But the buy-in isn’t just convincing them that this is a good thing to do. It’s employees being involved in helping design [the system]. You don’t want to implement a new system that actually demotivates people.”
Robert Tobias, director of public-sector education at American University, told the House Oversight and Government Reform Committee’s federal workforce subcommittee earlier this year that “active, meaningful involvement of the affected employees…is critical if increased individual and organizational performance is the goal of the performance management plan.”
Intelligence community officials took this strategy to heart and applied it to the development of their new pay system. Beginning in spring 2006, they convened an intensive series of focus groups to identify employees’ concerns about performance pay. The Defense Intelligence Agency alone has held more than 60 town hall meetings with its employees and has another 50 scheduled, said John Allison, the agency’s deputy director of human capital management.
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