Federal Employees News Digest

Fresh Take: Fixation on firing feds, Part II: Fire or retire … about those pension penalties

In January 2015, Rep. Jeff Miller (R-Fla.), chairman of the House Veterans Affairs Committee, introduced the “Increasing VA Accountability to Veterans Act of 2015.” This bill, H.R. 473, would let the Department of Veterans Affairs reduce a Senior Executive Service employee's pension if he or she is convicted of certain felonies. This would include in its sweep SES employees in the process of being fired as a result of a conviction, but who leave the VA before the firing action can take place.

If the bill passes, it would introduce the first performance-based pension penalties.

The government is currently prohibited from providing any form of retirement pay to an individual convicted of certain crimes related to national security, considered “forfeiture of annuities and retired pay.” These crimes include convictions for treason or engaging in acts against the United States—terrorism, sabotage, espionage, advocating to overthrow the government, transmitting defense secrets to foreign governments and similar offenses.

In Miller’s bill, a conviction must have “influenced the individual’s performance,” and it applies only to the SES within the VA. In both cases, the employee will be paid back all contributions to the retirement system.

The bill further mandates a quota system for SES performance ratings, a cap on the number of high-level ratings, forced rotation of all VA SES to different locations and programs every five years, and limits on administrative leave for an SES employee.

This is about increased leadership accountability—something difficult to argue against, especially at the VA.

Like all “tweaks” to laws that underlie federal workforce rules and regulations, a series of changes can create a cascade of unintended consequences. Performance-based pension penalties might seem like a good form of rough justice, but the federal personnel system isn’t designed to deal with meting out justice.

H.R. 473 focuses on criminal convictions affecting performance, forcing the VA to create a nexus between the crime and performance. Right now, this is exactly the problem the VA is having. Linking an observable effect to a specific cause is a very big challenge made worse by an ambiguous and cumbersome performance management process.

Wouldn’t it be enough to say that any SES employee, convicted of a felony, should be penalized because convictions do not model the desired behavior of great leaders?

The VA’s inability to fire poor performers and bad actors is a combination of many factors, high among them the inability to adequately document individual behavior and performance—exactly how any nexus would have to be established.

In the federal sector, the burden of proof is on the agency, not the employee. This is why federal performance management processes rely on an excessively burdensome documentation and validation process. But most supervisors and managers don’t have objective data to back employee ratings. Not many agencies would confess to this, but in reality, when appraisals are due, ratings are based on gut instinct and comparing employees to each other rather than to an objective measure.

Subjective ratings promote accusations of favoritism, bias, discrimination, and myriad other workforce-unfriendly perceptions—and that’s before you add bonuses to the mix. Bonuses create a twisted behavioral effect all their own, beginning with manipulation and distortion of data to secure a bonus, as with the recent VA appointments scandal.

Federal pay-for-performance systems actually dilute performance over time. The longer bonus pools are in place, the more pressure supervisors feel to ensure their employees are getting their share. This increases the number of employees receiving high ratings, and pools aren’t large enough to keep pace, making for smaller individual bonuses.

H.R. 473 requires VA to use a five-level SES performance management system and cap the ratings at 10 percent and 20 percent for the two highest levels, respectively. In theory, this eliminates the “Lake Woebegone” effect where everybody is above average. Instead, this requirement forces 70 percent of the SES workforce to a rating no higher than average. Not good.

People like being considered above average—especially in a country that likes to define itself with phrases like “American exceptionalism” and “the land of opportunity.” And this notion exists in direct conflict with our ideas about merit—if you turn out excellent work and have a great attitude about your job, no arbitrary quota should keep you from ranking at the top—pressure made more acute by a dangled bonus.

For the VA, devising and implementing a new performance management system in the middle of its many scandals and crises will not increase workforce accountability. Rather, it would add another layer of fog onto an already opaque administrative process.

Ultimately, the problem with H.R. 473 is that it tries to correct management deficiencies by legislating procedures and process rather than policy. Its implementation would be unwieldy and unlikely to achieve the level of management reform needed at the VA. It’s reactive, and it’s reasonable to have concerns that it may set a precedent for Congress to use in oversight of future agency scandals. And once it starts, where do performance-based pension penalties end?

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