Administration makes preemptive strike against House Republicans on pay issues

Joe Davidson
Columnist June 13, 2011

The Obama administration gave federal employees a one-two punch last week, first on pay raises, then on performance awards. And while it is the federal workforce that will take the hits, largely symbolic though they may be, it was House Republicans who seemed to be the real target of a preemptive strike.

On Wednesday, Office of Personnel Management Director John Berry issued a memo to the heads of executive agencies reminding them that within-grade pay raises, often called step increases, must be based on an employee’s performance and should not be automatic. These increases were not covered by the two-year pay freeze imposed in January.

Joe Davidson writes the Federal Diary, a column about the federal workplace that celebrated its 80th birthday in November 2012. View Archive

As we blogged Friday, Berry’s memo said “a GS [General Schedule] employee’s performance must be at an acceptable level of competence” before a within-grade increase is granted. If employees do not earn “fully successful” ratings, Berry added, they “are not eligible for within-grade increases and must not receive such increases.”

This is a key line: “The payment of within-grade increases should never be viewed as automatic or routine.”

That’s been the rap on step increases, which have a reputation for being based more on longevity than performance.

Berry’s memo firmly restates government policy, but it probably won’t change things much. A House report on authorization legislation for the Defense Department, the government’s largest agency, said only about 1 percent of employees are rated unacceptable.

Two days after Berry’s step increase memo, he and Jeffrey Zients, the administration’s chief performance officer and deputy director of the Office of Management and Budget, capped the money available for federal employee awards.

They told agency heads that the total of awards for employees at the senior executive level must not exceed 5 percent of an agency’s aggregate senior level salaries. Total awards for all other workers, including those in General Schedule positions, must be no more than 1 percent of an agency’s aggregate salary for those positions. By law, senior level awards must be between 5 and 20 percent.

This memo closely follows a draft document the Federal Diary reported on last month. Friday’s memo says that “the current fiscal environment, and the budget constraints” require awards to be carefully considered.

Yet, the new awards policy isn’t likely to save much money. In March, Berry told Congress that awards are less than 2 percent of federal salaries. And according to OPM data, the average amount of 1.3 million awards in fiscal 2006 was $969, which was just slightly more than 1 percent of total salaries that year.

While praising federal workers, Zients said, “in these exceptional fiscal times, capping agency awards is one tool for helping each agency live within its means.” He expects the cap to save about $300 million through 2012.

So the policies won’t save big money or really change within-grade increases, but they do provide the administration ammunition against House Republicans who would like to see stronger action to curb federal compensation.

But the policies are not placating administration adversaries even as the memos upset labor organization friends.

Colleen M. Kelley, president of the National Treasury Employees Union, found the memos “disappointing and misguided.”

At the same time, the administration has not curbed the appetite for attacks on federal compensation by some Republicans who say that the pay freeze, by not touching awards and step increases, did not go far enough.

“These memos confirm the need for legislation,” said Rep. Dennis A. Ross (R-Fla.), chairman of the House subcommittee on the federal workforce. “A year and a half ago, Director Berry was right when he said ‘the cracks are showing in the General Schedule pay system’ and we ‘could limp along for a few more years’ or ‘we can seize the moment to build something new.’ These failed systems are entrenched in statute, and now is the time for the administration, if it is serious, to work collaboratively with House Republicans and with the Senate to seize the moment and build a personnel system that rewards performance.”

Although Republicans control the House, there is no guarantee that proposals to cut federal compensation will win in that chamber. An attempt to block step increases in February did not succeed because many Republicans did not support it.

In many ways, the Obama administration is very supportive of federal employees, yet John Gage, president of the American Federation of Government Employees, insists the preemptive approach by OPM and OMB is the wrong strategy.

“I’m very disappointed, and I’ve told that to Mr. Berry and, as well, to Mr. Zients,” Gage said. “When it comes to something political, they throw us under the bus.”

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