Clinton administration sees 'compelling need' to change bonus pay system


WASHINGTON -- The Clinton administration wants to revamp the bonus system for federal workers, joining critics who say the awards often are tossed out like candy.

"We've identified some problems," said Elaine Kamarck, a senior policy adviser to Vice President Al Gore. "[Bonuses] are being given out so widely, it does call into question whether they're being used to reward performance or to just give some people raises."

In a letter this week to Sen. David Pryor, D-Ark., Ms. Kamarck said that according to "virtually all observers," bonuses at several federal pay scales have not resulted in improved performance. She said there is a "compelling need" to change incentive systems to ensure greater accountability and better use of government dollars.

Ms. Kamarck works on the National Performance Review, the panel assembled by Mr. Gore to recommend ways to cut waste from the federal bureaucracy as part of the "reinventing government plan."

Her criticism comes amid rising protests by Capitol Hill lawmakers, including Mr. Pryor, who characterize the bonuses as generally inflated and meaningless.

In April, House Republicans sharply attacked the Baltimore-based Social Security Administration for paying $32 million in bonuses while imploring Congress for $200 million to help reduce the backlog of disability claims.

Employee bonuses for good work -- known as "performance awards" -- went to roughly two-thirds of the SSA staff in fiscal year 1993, or some 45,000 out of 65,000 workers. One employee had worked for SSA for just 2 1/2 months and received a bonus of $9,256.

SSA argues that the bonuses were permitted under civil service law and amounted to just 1.5 percent of the agency's $2.8 billion payroll. SSA says none of the money appropriated for the disability reviews was spent on bonuses.

The union representing SSA workers also jumped to the agency's defense.

"There is no reason why federal workers should not receive the same level of appreciation for their hard work and dedication," American Federation of Government Employees president John Sturdivant said in a statement.

But such arguments did little to quell attacks from Capitol Hill. In an angry floor speech last week, Mr. Pryor called for a sweeping overhaul of award-giving in all federal agencies.

"Managers in some agencies seem to be giving out bonuses like candy, as a matter of routine, rather than as a reward for truly outstanding work," he said. "These managers need to be trained to use bonuses only as an incentive, not as a matter of routine."

In a letter to Mr. Gore, Mr. Pryor urged the administration to target employee bonuses when it overhauls civil service laws later this year.

Four days later, the administration offered that support in a letter to Mr. Pryor, chairman of the Senate Governmental Affairs subcommittee on federal services, post office and civil service.

"The issues you raise underscore the compelling need for change in government-wide performance management and incentive systems," Ms. Kamarck wrote. "We look forward to working with you and your staff on this important initiative."

The use of performance awards appears to be on the rise, according to data from the Office of Personnel Management. In fiscal year 1992, the most recent year for which data are available, the government spent more than $549 million on 759,660 bonuses, with the average award totaling $724. That's up from 1991, when 695,559 awards were allotted at an average $701 each.

Not all agencies dole out bonuses at the same pace, OPM figures show. In 1992, about 37 percent of the government's career employees were granted the bonuses -- a spending figure ranging from a low of 3.5 percent at the Library of Congress to a high of 76.4 percent at the U.S. Information Agency.

But advocates for federal workers say that when it comes to government waste, the current bonus system is the cure -- not the disease. The administration should not second-guess the decisions of agency managers, said Carol Bonosaro, president of the Senior Executive Association.

"The point is that the person who is supervising these people is best able to judge their performance," she said. "[The criticism] really puts a damper on efforts for more flexibility in the name of reinvention."

Some personnel consultants say government bonuses pale when compared to those awarded by big companies in the private sector.

"The total amounts are far less per capita, per employee than those available in the private sector, all things being equal," said Abe Zwany, vice president of the Hay Group, a management consulting firm in Washington. He estimates that a manager making $100,000 a year at a large industrial organization would receive an average bonus of more than $20,000.

The administration targeted the bonus system as flawed long before this recent flare-up. The National Performance Review has been looking into less expensive kinds of awards, such as "productivity gain-sharing," whereby employees share in savings resulting from improved work.

Another twist is granting deserving employees increased authority or additional resources rather than monetary awards.

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