Abstract
Purpose. The purpose of this study was to analyze the effect of the pay-for-performance (PFP) pay system utilized by the Transportation Security Administration (TSA) in comparison to a similar agency that utilizes the General Schedule (GS) pay system, Customs and Border Protection (CBP). This research investigated the effect of each pay system, through examination of employee demographic characteristics, workplace satisfaction, and organizational relationship factors, to measure the pay systems' influence on employee satisfaction, performance, and turnover intention.Theoretical Framework. The theoretical framework of this study was based on the research foundations of the following theories: Herzberg's hygiene 2–factor theory; expectancy theory; equity theory; principal–agent theory, and public service motivation as a lens to assess and understand the effects of the philosophies of PFP and GS pay systems on employees' motivations.Methodology. The subjects in this study were employees of the federal government agencies: TSA and CBP. Subjects responded to surveys administered in the form of the 2015 Federal Employee Viewpoint Surveys (FEVS) to code statistical data and quantify the identified variables under each pay system.Findings. Examination of quantitative data from the two FEVS data sets for each federal agency indicated that the GS system was more likely to successfully address the conflict between turnover and retaining a dedicated workforce, whereas PFP indicated higher turnover intention. Secondly, examinations of the same variables between the two data sets showed that the GS pay system was less likely to address the conflict between performance and employee satisfaction.Conclusions and Recommendations. The results of this study support that employees' perceptions of performance and employee satisfaction are influenced in agencies with PFP systems, focusing on extrinsic values (i.e., money) than in GS agencies focusing on intrinsic values (i.e., organizational goals, mission attachment). Further research is advised: Analyze similar variables for previous year's FEVS and compare results between the pay systems to identify trends. Identify differences among supervisory and nonsupervisory employees (education, production); determine which are more inclined to leave their organization. Compare other agencies that utilize the PFP system to determine if similar responses occur.