Designing an Effective Pay for Performance Compensation System , January , 2018
Designing an Effective Pay for Performance Compensation System , January , 2018
From the report: “In the past, individual Federal Government agencies have obtained approval to introduce pay for performance systems in limited demonstration projects or in a few cases on an agency by agency basis. However, the transition of the Federal Government from the traditional General Schedule accelerated when the Department of Defense and the Department of Homeland Security obtained approval to implement performance-based pay systems. To further facilitate this shift from recognizing tenure to focusing on performance, legislation has been proposed to implement pay for performance across the Federal Government.
However, moving from a pay system that rewards tenure to a pay system that emphasizes and rewards performance, will require more than legislation. Performance-based pay systems present unique opportunities and challenges, and the transition from tenure-based pay systems will be neither quick nor easy. With that in mind, we have prepared this report to support agencies who are planning to use (or are already using) pay for performance. Specifically, we discuss how agencies can design, implement, and operate a pay for performance compensation strategy.
Past experience with the General Schedule suggests that in pay systems, “one size does not fit all.” Agencies need to customize compensation systems to their own unique circumstances. Based on this premise, readers should understand that although this report is presented as a “how to” guide, it is not our intent to prescribe a single solution. Instead, our goal is to help agency leaders anticipate and better understand some of the most critical decision points they are likely to face.”
Authors - U.S. Merit Systems Protection BoardRelated Resources
