The Bush administration will publish a regulation tomorrow allowing federal agencies to provide most career executives with their first meaningful salary increase in more than a decade.
But the regulation also makes clear that salary and pay raises for federal executives should be based on what they accomplish on the job and how well their agencies stack up against various performance measures, including a White House scorecard that tracks how well agencies are doing with presidential initiatives.
"Basing the pay of federal employees on performance and results has been a priority of President Bush, and this represents a major step in accomplishing that objective," Kay Coles James, director of the Office of Personnel Management, said in a statement Friday announcing publication of the regulation.
Overall, the regulation makes the most far-reaching changes in the Senior Executive Service since it was formed almost 25 years ago, said Doris Hausser, senior policy adviser to James.
Because the regulation stresses job performance, the new SES pay system could become a model applied to other groups of federal employees in future years. Two departments, Homeland Security and Defense, are at work on regulations that would take into account job performance ratings when making pay decisions.
The new regulations also address a long-running problem in the SES ranks called "pay compression." About two-thirds of career executives receive the same salary, about $145,000, because of a pay cap set by Congress.
Under the regulation, salaries for the 6,000 members of the SES will range from a minimum of $104,927 to a maximum of $158,100. Previously, the top end of the scale had been set at $145,600.
The combination of salary and bonuses can go as high as $203,000, the salary of the vice president.
Those salary figures, however, come from pay scales for this year. They will rise by a few percentage points in 2005. The precise increase will not be known until President Bush issues an executive order this month authorizing new pay tables to take effect in January.
Federal agencies must win approval from OPM and the Office of Management and Budget before raising the pay of federal executives. Only 19 agencies have been given permission this year, but Hausser said many agencies have decided to wait for the pay regulation before seeking certification.
These "certifications" are usually valid for only a year, but Hausser said OPM analysts are looking at options that would permit agencies to use 2004 job ratings as a basis for increasing salaries in January. She said OPM would likely put together transition guidelines for agencies, because the pay regulation came out so close to the end of the year.
Under the new regulation, members of the SES -- who oversee day-to-day operations of federal programs and provide specialized and technical expertise to agencies -- are no longer entitled to annual across-the-board raises or "locality pay" adjustments, two common features of federal pay systems.
During the public comment period on the regulation, the Senior Executives Association, which represents the interests of federal executives, and Rep. Thomas M. Davis III (R-Va.) expressed concern that, because the regulation does away with locality pay, some executives would lose protection against inflation even when their job performance was deemed "fully successful."
The regulation tries to address that concern by giving agencies the flexibility to give more than one raise to an executive in a 12-month period, provided the executive falls within a certain salary level and meets certain conditions.
According to the regulation, executives may receive more than one raise in a year if they are recognized for "an exceptionally meritorious accomplishment" or "to maintain his or her relative position in the rate range."
William L. Bransford, general counsel for the Senior Executives Association, said he is concerned "about how evenly and fairly" the regulation will be applied to federal executives.
"How is this all going to play out?" Bransford asked. "Will agencies apply it in a haphazard manner? Will it discourage executives who think it is being applied without any standard or cannot judge how reasonably the agency is applying the system?"
Hausser said that differences will crop up among agencies but that "we don't expect anything egregious."
She added, "The idea that it is only right that the same thing happens to everybody isn't the way modern organizations work." The regulation gives discretion to officials at each federal agency, "and we believe that is appropriate," she said.
E-mail: barrs@washpost.com
