PAY FOR PERFORMANCE REFORMS AND FEDERAL ORGANIZATIONAL EFFECTIVENESS
Cain, Jeffrey C.
The United States Federal government is currently moving from a rigid civil service system to one that features flexibility in performance management and compensation. These revolutionary changes in Federal personnel management seek to better align the workforce's efforts to the mission and goals of the agency. This study seeks to determine whether these reforms have shown to significantly improve organizational effectiveness in the Federal government. Accordingly, this study builds on existing models of governmental organizational effectiveness and evaluates whether human resource management reform is significantly associated with organizational effectiveness. To examine whether human resources management reform improves organizational effectiveness, I include the conceptual model established by prior research. I employ data from the 2004 Federal Human Capital Survey (FHCS) to evaluate the association between individual level and agency level factors and organizational effectiveness. In order to evaluate the magnitude of the impact of each determinant of organizational effectiveness, I have created specific examples where I have assigned known values to all independent variables of the model and changed the values of each variable whose coefficient I need to interpret. The coefficient estimate for human resource management reform is statistically significant when the employee's workplace is excluded from the model and insignificant when it is included. This result, and existing research, suggests that other agency specific factors, such as the mission, executive leadership, and autonomy, are likely more influential on employee perceptions of organizational effectiveness.
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