This bill creates a 5-year test program that ties federal employee pay directly to job performance. Starting 180 days after the law passes, federal agencies will enroll between 1% and 10% of their eligible employees in this new system. Eligible employees are those in mid-to-senior level positions (GS-11 through GS-15 and above) in jobs with clear, measurable performance standards—like project managers, IT specialists, policy analysts, supervisors, and claims processors.

Here's how the pay system works: Each year, employees are evaluated against specific performance metrics focused on productivity, quality, and timeliness. Employees who significantly exceed expectations get a 15% pay raise. Those who meet expectations see no change to their base pay. Those who fall short face a 15% pay cut and are required to participate in training to improve. Agencies can also award bonuses and non-monetary perks like flexible schedules and telework to top performers. However, participating employees lose access to regular federal pay raises, step increases, and other standard federal benefits they'd normally receive.

The program requires agencies to submit annual reports showing productivity gains, cost savings, and employee satisfaction levels. The Office of Management and Budget will oversee the program and report to Congress each year. After the 5-year pilot ends, the Government Accountability Office and OMB will conduct a final assessment of whether the program actually improved productivity and employee engagement. Agencies can opt out if they believe participation poses risks to national security or public safety, but they must explain their decision in writing.