The modified merit pay system that goes into effect Oct. 1 means no more automatic length-of-service (in-grade) raises for 125,000 managers and supervisors in Grades 13, 14 and 15.

Each year 55 percent of the federal white-collar work force gets an in-grade raise that is worth about 3 percent, in addition to the regular October pay adjustment, which is 4.8 percent this year. In-grades are virtually automatic. Ninety-eight percent of the people who come due for them get them based on satisfactory service and longevity. Workers get in-grade raises every year for their first three years' service, every other year for the next three years and a 3 percent increase every third year in their grade thereafter.

Supervisors and managers due in-grades before the Oct. 1 cutoff (unless their agencies are already under merit pay) are okay. But in-grades will cease after Oct. 1 for the GS 13s, 14s and 15s who will get a new bureaucratic designation -- GM -- next month.

Under supervisor-manager merit pay as laid out in former president Carter's civil service reform, those workers lose entitlement to in-grade adjustments and cash QSIs (quality step increases). The original Carter plan timetable called for merit pay to be launched this Oct. 1. Supervisors-managers were guaranteed only one-half of the regular civil service pay raise (or 2.4 percent this year) with extra increases of 10 percent or more going to those who got good marks from their bosses.

Their increases would be at the expense of colleagues who got poor ratings, and from money that would have been spent on automatic in-grade raises.

Last week the General Accounting Office advised congress that the merit pay plan due to go into effect next month didn't meet the intent of Congress. The Office of Personnel Management blasted the "last minute" GAO ruling (although GAO says it warned OPM earlier this year) but said it would institute a modified merit-pay plan this year. That means managers and supervisors will get the same 4.8 percent raise as their subordinates.

But the other half of merit pay-- denial of automatic in-grade raises for the GM people in Grades 13, 14 and 15 -- will go into effect in October. Workers in Grades 1 through 12, and GS 13, 14 and 15 people outside merit pay, will keep getting in-grades as per usual.

Lots of people have called since Friday's column, which said that the pay part of merit pay was being deferred. They concluded that as a result of the deferral, they could continue to get in-grade raises for another year. Wrong! OPM confirms that the GM supervisors-managers will not get in-grades after October 1. Others will keep getting them--but not the merit pay people.