The Office of Personnel Management gave federal agencies the green light yesterday to give out merit pay raises next month to supervisors and managers, even though rank-and-file employes will have to wait until January for an increase.
Depending on how agencies rate employes, the October payout could be as high as 6 percent for some of the Grade 13, 14 and 15 people under the merit pay system. It covers 106,000 supervisors and managers, including about 50,000 in the Washington area.
Under President Carter's Civil Service Reform Act, employes in the merit pay system are guaranteed only one-half of the percentage of each regular federal pay raise. The next raise, due this January, will be around 4 percent and it will go to the more than 1 million white-collar workers who are not in the merit pay system.
Supervisors and managers rated either "outstanding, exceeds fully successful or fully successful" will get some increase next month, in addition to a 2 percent adjustment (half the general pay increase) in January.
Managers and supervisors rated "minimally satisfactory" or "unsatisfactory" will not get any merit pay increase in October. They will get only about 2 percent in January.
The exact size of merit pay raises will depend on the size of the merit pay pool within agency sub-groups of managers and supervisors, and the ratings spread within each group.
Supervisors and managers do not get within-grade pay raises (they are worth 3 percent) that go to rank-and-file employes every one, two or three years depending on their time in grade. Merit pay people are also denied quality step increases that are available to rank-and-file workers. The merit pay pool consists of money from the within-grade raises and quality step increases that supervisors-managers would be eligible for if they were not under merit pay, plus an amount equal to one-half of the percentage amount of the general federal pay raise.
What each merit pay employe gets depends on how much is in the merit pay pool for his or her peer group, and performance ratings within that group.
For example, raises will be smaller in groups where large numbers of managers and supervisors get top ratings. In units where relatively few people get top marks, the raises will be worth more for those who do get them.
OPM Director Donald Devine decided to go ahead with the October merit payout after consulting with the Federal Managers Association and the Professional Managers Association. Devine advocates a merit pay system for all white-collar U.S. workers.
"I believe our merit pay managers have performed extremely well during the past year and that it would be unfair to delay the payout until January," Devine said. "These managers, understandably, think it unfair that, under the present system, they must earn their raises while nonmanagement subordinates receive their within-grade raises automatically. . . . Indeed, it was this inequity which led us to promise pay-for-performance for all employes."
Most people under merit pay already know what their performance ratings for this year are, or will know by October. The actual increases, for those who get them, will show up in paychecks later next month or in early November.