According to a recent study by the Government Accountability Office, virtually all federal employees are above average.
In a five-scale rating system, 74 percent of federal employees were given the highest two ratings of “exceeds fully successful” and “outstanding.” Including the middle category of “fully successful” encompasses more than 99 percent of federal employees, leaving less than one-half of one percent as either “minimally successful” or “unacceptable.”
Under a normal, bell curve distribution, an equally low percentage of employees would be rated in the lowest and highest categories. Yet, for every federal employee with the lowest “unacceptable” rating, 386 employees receive the highest “outstanding” rating.
Are federal employees really that far superior to private sector employees, or is the rating system rigged?
Most private sector employers would probably have an upwardly skewed rating of their employees as well (though almost certainly not as highly skewed as the federal government). But private sector employers actually fire employees who underperform.
Not so in the federal government.
According to a study by the Office of Personnel Management, almost 80 percent of all federal managers have managed a poorly performing employee, but fewer than 15 percent issued less than fully successful ratings for problematic employees.
It’s not only hard to fire federal employees—it’s hard just to rate them as anything less than “fully successful.”
Even fewer—less than 8 percent—attempted to reassign, demote, or remove problematic employees, and among those who attempted to do so, fully 78 percent said their efforts had no effect. Consequently, the federal government’s annual 0.46 percent firing rate is less than a third of the private sector’s 1.5 percent monthly layoff and discharge rate.
It’s not only hard to fire federal employees—it’s hard just to rate them as anything less than “fully successful.” Federal managers who rate their employees as either “minimally successful” or “unacceptable” must develop extensive and time-consuming performance improvement plans for those employees. And employees who receive less than favorable ratings can appeal those decisions through either a union grievance or to the Merit Systems Protection Board, and most do. Defending that decision can cost an agency tens or hundreds of thousands of dollars.
But inflated ratings and keeping problematic employees on the federal payroll costs taxpayers millions—if not billions—of dollars every year. That’s because performance-based pay increases are tied to those ratings.
In addition to annual cost of living increases, federal employees who receive ratings of “fully acceptable” or higher also receive within grade step increases. With only about one of every 1,700 federal employees denied these raises, step increases function as automatic, as opposed to performance-based, pay raises.
Congress should make it less difficult for federal managers to give employees anything less than a “fully acceptable” rating by requiring performance improvement plans only for employees that federal managers want to fire and by limiting appeals for employees who do not receive a step increase.