TOTAL GREEN DEFICIT: 1,425

_______________________________________________________________________________________________________________ Note. Agreement response categories were combined as follows: Disagree = Disagree and Strongly Disagree; Neither = Neither Agree Nor Disagree; and Agree = Agree and Strongly Agree. Descriptive statistics were calculated using the U.S. MSPB sampling weight variable and figures are shown in percentages. Reduced sample includes General Schedule employees only.

Traffic Light System with Graduated Zones: Green = 75.00 to 100.00 percent favorable response; Yellow = 40.00 to 74.99 percent favorable response; Red = 0.00 to 39.99 percent favorable response.

Agency Scores

Table 5 presents pay for performance criteria for success along with the corresponding criteria zones for all federal agencies. Among the 24 federal agencies surveyed, none reached the green zone on any of the pay for performance criteria for success. Yellow was the highest criteria zone achieved by any agency. All but one agency received a mixture of yellow and red criteria zones.

Six agencies received more yellow than red criteria zones. The Department of Commerce received the most yellow with fewest red criteria zones (8 yellow, 3 red). Not far behind were four other agencies (Army, Education, FDIC, and NASA) who achieved yellow zones in 7 out of 11 criteria, with 4 criteria in the red zone. One agency (EPA) earned a bare majority of yellow over red criteria zones (6 yellow, 5 red).

Seventeen agencies received more red than yellow criteria zones. Among them, five agencies (Air Force, GSA, HHS, HUD, and State) received 6 red and 5 yellow criteria zones, which matched the total federal government zones in number but not in area of scoring. Four agencies (Navy, DOD Other, Transportation, and Treasury) earned 7 red and 4 yellow criteria zones. Seven agencies (Agriculture, Energy, Interior, Labor, OPM, SSA, and VA) received 8 red and 3 yellow criteria zones, followed by one agency (Justice) who earned 9 red and 2 yellow criteria zones. Coming in last, one agency received nothing but red criteria zones. The Department of Homeland Security was the only agency that scored completely in the red zone on all pay for performance criteria for success.

Criteria Zones by Agency

Looking across Table 5, the criteria zones reveal the strongest and weakest pay for performance areas. No criteria received all yellow zones. Five criteria received a majority of yellow zones. The performance evaluation system received the most yellow criteria zones (19 yellow, 5 red). Within this criteria, five agencies (Homeland Security, HUD, Labor, OPM, and SSA) reached the red zone because less than 40 percent of federal employees agreed that employees participate in setting standards and goals used to evaluate job performance. Budget adequacy and trust in decision-makers received the next highest number of yellow criteria zones (18 yellow, 6 red). In the area of trust, six agencies (DOD Other, Energy, EPA, Homeland Security, SSA, and Treasury) reported a lack of trust in upper managers to refrain from favoritism to be problematic enough for individual scores to fall into the red zone. Sufficient managerial authority and pay for performance belief followed closely behind with 15 yellow and 9 red criteria zones. No federal agency received an overall red rating solely because of low scores in the areas of budget adequacy and sufficient managerial authority.

The remaining 6 criteria received all or mostly red zones. Starting with the best of the worst areas, organizational culture received 10 yellow and 14 red criteria zones, followed by fair treatment on the job with 7 yellow and 17 red criteria zones. Motivated by money received predominantly red criteria zones (4 yellow, 20 red) which makes one question the wisdom of focusing so heavily on monetary incentives in the first place. Finally, three criteria – pay for performance expectations, supervisory fairness, and quality of supervision – received the worst possible scores with red zones across all 24 federal agencies, suggesting areas in need of the most improvement.

Getting to Green

Getting into the green zone is the most difficult level to achieve, requiring a minimum favorable response of 75 percent on all scorecard items. When an agency finally reaches the green zone, it means it has achieved the highest standards for success as defined by the scorecard. But what about agencies that aren’t in the green yet? Where do they stand comparatively in terms of pay for performance readiness?

Although criteria zones are extremely useful in identifying patterns across agencies and highlighting problem areas needing improvement, they don’t tell the whole story. Because the scores contained within each criteria cover a range of responses, all criteria zones are not of equal value. For example, an agency receiving a yellow score with a 40 percent favorable response is less ready for pay for performance than an agency receiving the same yellow score with a 74 percent favorable response on any scorecard item. However, that difference in readiness isn’t apparent from the individual yellow score or yellow criteria zone alone. The green deficit calculation was created to complete the picture and allow for direct agency comparisons of readiness levels.

What does the green deficit score mean? The green deficit calculates the distance between the favorable response and the green zone of 75 percent for each scorecard item. The green deficit shows how far each agency must improve before reaching the highest scorecard zone. It helps to determine comparatively which agencies need the most improvement in order to have the best chance for pay for performance success.

Table 5 presents the total green deficit for the entire scorecard with rankings for each federal agency. Out of 24 federal agencies surveyed, NASA ranked the highest in 1st place for their pay for performance readiness with a total green deficit of -988.74.

This score puts NASA 436.43 percentage points closer to the green zone than the overall federal government which has a total green deficit of -1,425.17. Agencies that have already implemented pay for performance to some degree are not highly ranked by this scorecard.6 The FDIC implemented a revised pay for performance program in 2003 (U.S. OPM, 2005) and ranked in 4th place on the pay for performance readiness scorecard. The Treasury Department overall ranked in 8th place on the pay for performance readiness scorecard which includes the IRS whose pay for performance system began in 2001.

Other agencies with pay for performance systems scored considerably worse. Although the Federal Aviation Administration (FAA) has utilized a pay for performance system since 1996, the Department of Transportation (DOT) ranked among the worst prepared for pay for performance in 23rd place on this scorecard. The newest additions to the pay for performance club include the Departments of Defense and Homeland Security who both received authorization to develop their own pay for performance systems in 2002 under the Homeland Security Act. The Department of Defense scored higher than Homeland Security on the pay for performance readiness scorecard. Within the

Department of Defense, some groups ranked much higher than others: the Air Force landed in 6th place, the Army followed in 9th place, the Navy was next in 16th place, and DOD Other was in 17th place.

6

For a list of performance-based alternative pay systems within the federal government, see the U.S. Office of Personnel Management report on “Alternative Personnel Systems in Practice and A Guide to the Future”

106

Of all the federal agencies surveyed, the Department of Homeland Security ranked last on this scorecard in 24th place as the agency least ready for pay for performance. Moreover, their lack of pay for performance readiness is considerably worse than other agencies surveyed. While NASA is only -988.74 percentage points away from getting the green light to proceed with pay for performance, Homeland Security is -1,857.02 percentage points away from the green zone (a difference of -868.28 percentage points) – despite having a pay for performance system already in place. Furthermore, Homeland Security’s green deficit score is 431.85 percentage points worse than the green deficit for the entire federal government. With the Defense

Department’s National Security Personnel System already on the verge of total collapse, these scorecard results predict the next pay for performance program to fall will be at Homeland Security.