Federal Merit Pay: Important Concerns Need Attention

Highlights

The progress made by the federal government in implementing merit pay under the Federal Merit Pay Program was discussed. A review was initiated to determine if agencies will be adequately prepared to make merit pay determinations by October 1981.

Recommendations

Recommendations for Executive Action

Agency Affected	Recommendation	Status
Office of Personnel Management	The Director of the Office of Personnel Management (OPM) should take a stronger role in encouraging agencies to develop additional training courses and other programs designed to increase managerial skills and gain employee acceptance of pay-for-performance systems.	Closed Please call 202/512-6100 for additional information.
Office of Personnel Management	The Director, OPM, should: (1) require federal agencies to define the objectives of their merit pay plans in more specific terms and develop evaluation strategies, using these objectives, to monitor operations of the merit pay plans; and (2) provide more detailed cost information to Congress on the implementation of the merit pay program. To do this, OPM will have to provide agencies with a comprehensive list of items for determining the cost of implementing merit pay and issue more detailed guidance on coverage so that agency heads and employee associations will have a more clear-cut idea of those employees that should or should not be covered by merit pay.	Closed Please call 202/512-6100 for additional information.
Office of Personnel Management	The Director, OPM, should establish minimum pretest criteria which agencies must successfully meet before making initial merit pay determinations. Extensions should be afforded to those agencies unable to complete pretesting activities successfully by October 1981.	Closed Please call 202/512-6100 for additional information.

Full Report

Full Report (36 pages)

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Topics

Government Operations

CompensationEvaluation criteriaFederal employeesMerit compensationPayPerformance appraisalProgram evaluationPay for performanceFederal agenciesAppraisals