| Comment Number: | OL-10505911 |
| Received: | 3/11/2005 9:35:31 AM |
| Subject: | Notice of Proposed Rulemaking, Request for Comment |
| Title: | National Security Personnel System |
| CFR Citation: | 5 CFR Chapter XCIX and Part 9901 |
| No Attachments |
Comments:
Facts: The basic structure of the General Schedule is a 15-grade matrix with ten steps per grade. Movement within a grade or between grades depends upon the satisfactory performance of job duties and assignments over time. That is, an employee becomes eligible for what is known as a "step" increase each year for the first three years, and then every three years thereafter up to the tenth step. Whether or not an employee is granted a step increase depends upon performance (specifically, they must be found to have achieved "an acceptable level of competence"). If performance is found to be especially good, managers have the authority to award "quality step increases" as an additional incentive. If performance is found to be below expectations, the step increase can be withheld. Additionally, the General Schedule has been modified numerous times, in some cases quite fundamentally since its implementation began in 1994. A distinguishing feature, the locality pay system introduced a full array of pay flexibilities into the allegedly rigid and never-changing General Schedule that included: • special pay rates for certain occupations • critical pay authority • recruitment and retention flexibilities that allow hiring above the minimum step of any grade • paying recruitment or relocation bonuses • paying retention bonuses of up to 25% of basic pay • paying travel and transportation expenses for new job candidates and new hires • allowing new hires up to two weeks advance pay as a recruitment incentive • allowing time off incentive awards • paying cash awards for performance • paying supervisory differentials to GS supervisors whose salaries were less than certain subordinates covered by non-GS pay systems • waiver of dual compensation restrictions • changes to Law Enforcement pay • special occupational pay systems • pay flexibilities available to Title 5 health care positions, and more. In addition, agencies retained the authority for quality step increases, which allows managers to reward extraordinary performance with increases in base salary that continue to pay dividends throughout a career. The federal position classification system, which is separate and apart from the General Schedule and would have to either continue or be altered separately and in addition to any alteration in the General Schedule, determines the starting salary and salary potential of any federal job. As such, a job classification determines not only initial placement of an individual and his or her job within the General Schedule matrix, classification determines the standards against which individual workers performance will be measured when opportunities for movement between steps or grades arise. And most important, the classification system is based upon the concept of "equal pay for substantially equal work", which goes a long way toward preventing federal pay discrimination on the basis of race, ethnicity, or gender. The introduction of numerous pay flexibilities into the General Schedule under FEPCA was only one part of the pay reform that legislation was supposed to effect. It was recognized by President George Bush, the Congress, and federal employee unions that federal salaries in general lagged behind those in the private sector by substantial amounts, although these amounts varied by metropolitan area. FEPCA instructed the BLS to collect data so that the size of the federal-non-federal pay gap could be measured, and closed gradually to within 90% of comparability over 10 years. To close the pay gap, federal salary adjustments would have two components: a nationwide, across-the-board adjustment based upon the Employment Cost Index (ECI) that would prevent the overall gap from growing, and a locality-by-locality component that would address the various gaps that prevailed in specific labor markets. Unfortunately, neither the Clinton nor the George W. Bush administration has been willing to comply with FEPCA, and although some small progress has been made, on average federal salaries continue to lag private sector salaries by about 22%. The Clinton administration cited, variously, budget difficulties and undisclosed "methodological" objections as its reasons for failing to provide the salary adjustments called for under FEPCA. The current administration ignores the system altogether, and for FY04 proposed allocation of a fund with 0.5% of salaries to be allocated via managerial discretion. Meanwhile, the coming retirement wave, which was fully anticipated in 1990, has turned into a full-fledged human capital crisis due to highly irresponsible and untargeted downsizing and privatization in the intervening years, as well as a stubborn refusal to implement the locality pay system which was designed to improve recruitment and retention of the next generation of federal employees. General Schedule versus "Pay for Performance" The rationale offered by proponents of pay for performance in the federal government have generally fallen under one of four headings: improving productivity, improving recruitment prospects, improving retention, and punishing poor performers. Perhaps the most misleading rationale offered by advocates of pay for performance is that its use has been widespread in the private sector. Does a pay system that sets out to reward individual employees for contributions to productivity improvement and punishes individual employees for making either relatively small or negative contributions to productivity improvement work? Measuring productivity of government services that are not commodities bought and sold on the market is even more difficult. These forms of "pay for performance" that proliferated in the private sector seem now to have been mostly about hiding expenses from the Securities and Exchange Commission (SEC), and exploiting the stock market bubble to lower actual labor costs. When corporations found a way to offer "performance" pay that effectively cost them nothing, it is not surprising that the practice became so popular (Example: ENRON). However, this popularity should not be used as a reason to impose an individualized "performance" pay system with genuine costs on the federal government. Time and again, federal employees report that competitive salaries, pensions and health benefits, job security, and a chance to make a difference are what draw them to federal jobs. They are not drawn to the chance to become rich in response to financial incentives that require them to compete constantly against their co-workers for a raise or a bonus.