IRS Reviews Performance-Based Pay for Managers

The inspector general's July report recommended that the IRS guarantee a minimum pay raise to managers, as it does for rank-and-file employees. But the IRS said such a policy "is not fiscally practicable at this time due to budgetary implications and restraints," the inspector general report said.

Robert Buggs, the IRS chief human capital officer, disputed key findings in the inspector general's report and said the IRS does not believe the pay system poses a risk to recruiting and retaining managers. "We are maintaining roughly the same number of applications per managerial vacancy that we were prior to the establishment of the pay bands," he said in a recent interview.

The design of the new system will provide the opportunity for high-performing managers to earn more than they would have under the General Schedule, Buggs said.

"The design fits for us, and is helping us to realize our business objectives and goals and plans," Buggs said. "I would not be one to recommend that we go back to the General Schedule. I think we need to move forward. I would much rather see the entire workforce under a pay-for-performance system."

Still, Buggs said, the IRS knows the system has not gone over well with most managers. "We could have done a much better job in terms of communicating," he said.

The IRS has hired a Dallas-based consultant to study the pay-for-performance system and determine if it is helping the agency hire and retain managers, Buggs said. "We want to assess and reassess how effective pay bands are working," he said.

Stephen Barr's e-mail address isbarrs@washpost.com.