As a result of recent scrutiny, acting Comptroller General Gene Dodaro sent a letter last week to Government Accountability Office (GAO) employees, managers and other stakeholders to discuss changes to their pay-for-performance system next year.

Having a fairly extensive history of implementing pay reforms, the GAO began implementation of their current competency-based appraisal and pay system in 2001 and completed the change for all staff in June of 2004.

The pay system, like other pay-for-performance systems being tested in government, decouples GAO from General Schedule (GS) annual increases, eliminates automatic increases in pay, and allows the agency to provide salary increases driven by performance rather than merely the passage of time.

The program's objectives include basing rewards on contributions and performance, making pay increases available yearly, and providing larger base pay increases than are currently allowed under the General Schedule to top performers with the expectation that implementation would improve quality and help the organization operate more efficiently and economically.

In principal it sounds good, but apparently program implementation did not meet GAO's expectations.  In a recent employee survey, 81 percent of respondents believed morale is worse at GAO now than before the pay restructuring.  This survey, along with other concerns, fueled employee complaints which led to a recent House Oversight and Government Reform Federal Workforce Subcommittee hearing and an effort on the part of employees to unionize.

For an organization whose charter is to help improve the performance and ensure the accountability of the federal government for the benefit of the American people, they appear to have missed the mark within their own organization.

GAO is not the only organization with unrest to the implementation of pay-for-performance systems.  The Department of Homeland Security has been trying to implement pay-for-performance since its inception without success due to pending litigation.

Additionally, OhMyGov! has received numerous angry comments from our readers alleging significant problems with the Department of Defense's new pay-for-performance system, the National Security Personnel System (NSPS).

It seems that government agencies adopting pay-for-performance programs consistently underestimate the impact of the program on the organization's culture and related systems such as recruitment, appraisal, and payroll.  If GAO is the model for other government agencies, what does this bode for the administration's push to replace the General Schedule (GS) personnel system with a pay-for-performance system?