Shift from Performance to Retention Bonuses is Deja Vu

The AIG & Wall Street bonus flaps are a redux. A prior ripple in the Democratixx occurred in 2007, when performance bonuses were under attack at the Veterans Administration. Military.com reported:

Groups such as the Veterans of Foreign Wars and the Iraq and Afghanistan Veterans of America have called on Nicholson to explain why officials involved in budget foul-ups would be rewarded. The VA says the bonuses are need to retain hardworking senior officials.

Did you notice how they magically transformed from rewarding performance to retaining key leaders? That's sleight of hand, especially given the GAO report on the program:

VA's requirements for performance plans contained in its 2006 submission and 2007 draft submission show that VA made changes to the policy requirements for its performance plans to reflect a greater emphasis on measurable results.

Specifically, the elements of the job requirement in the 2007 policies provides that each critical element and performance element will be weighted. These performance requirements, according to the policy, will be described in terms of specific result(s) with metrics that the SES member must accomplish for the agency to achieve its annual performance goals.

The policy further states that the expected results should be specific, measurable, and aggressive yet achievable, results-oriented, and time- based.

A greater emphasis on achieving aggressive, measurable results? Did that have any impact on executive pressure on clinicians to not diagnose post traumatic stress syndrome (PTSD)?

"OK," Dr. McNinch told Sgt. X. "I will tell you something confidentially that I would have to deny if it were ever public. Not only myself, but all the clinicians up here are being pressured to not diagnose PTSD and diagnose anxiety disorder NOS [instead]." McNinch told him that Army medical boards were "kick[ing] back" his diagnoses of PTSD, saying soldiers had not seen enough trauma to have "serious PTSD issues."

"Unfortunately," McNinch told Sgt. X, "yours has not been the only case ... I and other [doctors] are under a lot of pressure to not diagnose PTSD. It's not fair. I think it's a horrible way to treat soldiers, but unfortunately, you know, now the V.A. is jumping on board, saying, 'Well, these people don't have PTSD,' and stuff like that."

How important is an accurate diagnosis of PTSD for proper treatment? There is nothing excellent in performance in sand bagging diagnostic codes to save the Army and the VA money.

"VA remains committed to the statutory imperative of executive bonuses to both reward and to encourage continued excellence in performance. We've got some damn good people."

And those "damn good" VA executives suboptimize care for injured soldiers. However, it does optimize executive bonus home pay. AIG and Wall Street aren't the first case of deforming incentive pay. Unfortunately, President Obama wants to spread the toxin of pay for performance to education and health care. Expect more foolishness.