The basic logic of awarding salary bonuses seems straightforward. Ideally, bonuses encourage exceptional performance. Work hard and well and come the end of the year expect a little something extra. Accomplish only what’s expected, no bonus for you. In some circumstances, bonuses are an understandable and necessary retention incentive for the best and brightest as the Federal workforce ages and retires. Leaders may use bonuses to keep the high-end professionals from moving on to the competition or attract new talent.
It’s all very Pavlovian, pretty straightforward behavior modification. In theory.
ON THE WANE
But human nature and behavior modification isn’t that straight forward in large social circles. Sometimes, most everybody gets a bonus, and so employees and executives alike see “bonus” as entitlement. In other cases, bonuses encourage employees to cheat so they can look outstanding when they’re not. In the civilian sector, the bonus is beginning to look less and less attractive among some. Craig Newman, CEO of the $20 billion asset Woodford Investment Management, reports, “’There is little correlation between bonus and performance and this is backed by widespread academic evidence. Many studies conclude that bonuses don’t work as a motivator, as expectation is already built in. Behavioural studies also suggest that bonuses can lead to short-term decision making and wrong behaviours.’”
So much for Pavlov.
MAKING A COMEBACK
In the Federal government – for a couple of good reasons and perhaps some not so good reasons – the bonus discussion isn’t about ending them; it’s about bringing them back full force across the board. As government technology becomes more and more mainline across Federal agencies, the Federal service has to be able to compete with salary and opportunities in the civilian sector to get the truly best and brightest to join Federal service. Additionally, the Federal workforce is aging and retiring, so Federal agencies have to attract new talent to government service. Given the lucrative opportunities in the private-sector tech world these days, incentive is more productive than a sense of service to nation. Last December, President Obama signed his executive order “Strengthening the Senior Executive Service.” That order lifted an earlier cap on SES bonuses to 7.5 percent of salary. Government Executive’s Charles S. Clark reported back then, “The impetus for the hike, the order said, is to ‘retain and reward more top performers’ among SES and senior level/scientific or professional employees.” Some Federal leaders would like to see the cap removed altogether in order to attract and retain talent.
UNLEASH THE BONUSES!
The Executive Order guidance, typical of government policy, is something of a complicated mess. Office of Management and Budget (OMB) Director Shaun Donovan and Office of Personnel Management (OPM) acting Director Beth Cobert seem worried that bonus awards may quickly evolve into entitlements, for the executives, at least. Government Executive’s Kellie Lunney reports, “Donovan and Cobert said . . . that agencies should make meaningful distinctions among senior employees when it comes to handing out performance bonuses.”
With all the attention on SES’ers, rank-and-file employees are feeling out in the cold, and union leadership is crying foul. Lunney writes, “A federal employee union says lifting the bonus cap for senior executives across government in fiscal 2017 without doing the same for other employees will lead to ‘significant morale issues’ at agencies.” Lunney reports that National Treasury Employees Union national president Anthony Reardon argues, “Not lifting the cap for everyone ‘would be both unfair, and misguided’ . . . . the union wants ‘to be assured that all federal employees—not just less than 1 percent of the federal workforce and only its highest paid employees—will be covered by this new policy on awards for fiscal year 2017.’”
What do significant moral issues among employees sound like? “’No one’s reaction . . . in actual govt work, is ‘Gee, good thing those SES’s are getting well compensated,’” one reader wrote, “’Because we all know come bonus time, even with some outstanding ratings, you’re lucky to receive $250 or an 8-hr time off award.’”
Bonus policy for GS and WG workers is yet to be published, “’still moving through the clearance process at OPM’” as OPM’s Cobert explained.
So be patient. Everyone will be taken care of. Indeed.
