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Pay-for-Performance Provides Neither
By Chuck Mulidore
In January 2006, the Merit Systems Protection Board published a report titled “Designing an Effective Pay for Performance Compensation System.” Because NAPS had just three years earlier agreed to enter into a pay-for-performance system with the USPS, this report seemed particularly relevant. It is possible that, during those early days of pay for performance, it was a system that reflected many of the ideals contained in this MSPB report. However, over time, we have witnessed an erosion of at least two of the core principles cited in the 2006 report:
“Performance evaluation serves as the foundation of a pay for performance system. A pay for performance system links an employee’s pay to some measure of individual and/or pay organizational performance, usually through a formal performance appraisal. Consequently, performance standards and measures—and the application of those standards and measures—matter greatly to both the agency and the employee. Agencies should therefore ensure that (1) performance goals and measures are relevant, reasonable and usable; (2) employees understand and participate in the performance evaluation process; and (3) performance is evaluated fairly and rigorously. Agencies considering a pay for performance system should be prepared to devote considerable effort to performance evaluation. One frequently cited challenge is that performance is often difficult to define and measure in public sector organizations. Even so, it is critical that this effort be made.”
“Performance evaluation systems do not evaluate performance; supervisors do. Although agencies should take steps to define and measure performance as precisely and reliably as possible, they should recognize that it is not possible to predetermine or quantify every important aspect of employee performance. Therefore, agencies need to allow some room for supervisors to use discretion and judgment when evaluating employee performance—which is to say, some element of subjectivity. But they should also provide guidelines and training to equip supervisors to exercise that judgment responsibly because trust between supervisors and employees is critical to success.”
“Supervisors also perform other tasks that directly affect employee performance and how employees will fare under a pay for performance system. For example, supervisors assign work; they translate organizational goals into work unit and individual performance goals; they identify training needs and provide access to training opportunities; and they provide coaching and feedback.”
How many of you, as EAS employees, feel that today the pay system, based on goals predetermined by the USPS with minimal input by NAPS, is fair, relevant and reflects your supervisory judgment in running your operation? How is a 15-box PFP system, whereby the majority of the higher-pay boxes are unattainable, adequately reflect a fair compensation system?
How can a system that doesn’t allow thousands of EAS employees to receive pay increases, while all other employees—from craft to the executives running the company—receive raises or bonuses each year, be considered fair and equitable by those very same executives?
The Postal Service has long lost the principles and concepts laid out in the 2006 MSPB report; it is time to revamp the entire compensation system. If it is fair for all leading executives to receive pay “bonuses,” as described in the 2017 USPS Annual Report, then it is fair for all EAS employees to receive a pay increase. I mean, after all, who sets the pay policies, who sets the compensation system and who designs the goals and measurements of that compensation system? Not us—that’s obvious.
NAPS was forced to a fact-finding process with the Postal Service as a result of pay consultations whereby the USPS wanted to further erode your pay by reducing the already paltry payouts under the current system by perpetuating a pay-for-performance system that provides neither pay nor performance. It’s time for new thinking.