Efforts at 10 agencies to create a performance-based pay system for their federal executives have passed an initial test, putting them on track to increase the salaries of senior staff.
The 10 agencies have received "provisional certification" of their new job appraisal systems for members of the Senior Executive Service from the Office of Personnel Management and the Office of Management and Budget, OPM announced last week.
With the certifications in hand, the agencies will be able to raise executive pay when the Bush administration issues final regulations this year implementing the new SES pay system.
Under the regulations, the top end of the pay scale for federal executives would increase by $12,800 -- to $158,100. Their combination of pay and bonuses could not exceed $203,000, the salary of the vice president.
The 10 agencies that received provisional certification are the departments of Health and Human Services, Interior and Transportation; the Environmental Protection Agency; the Federal Energy Regulatory Commission; the Federal Trade Commission; the Office of National Drug Control Policy; the Merit Systems Protection Board; the Railroad Retirement Board; and the Social Security Administration.
Fifteen other agencies, which were not identified, are under review for certification, OPM said.
The Pension Benefit Guaranty Corp. received full certification for its senior-level staff, OPM said. As a government corporation, PBGC is not part of the SES system.
The Bush administration has moved slowly on regulations for the new SES system, creating some confusion on when executives would be eligible for raises and what standards they would be judged against.
The SES changes grow out of a law that kicked in Jan. 11 and will likely set the tone for Bush administration plans to create pay-for-performance systems for rank-and-file employees at the departments of Defense and Homeland Security.
Under the law, the 6,000 members of the SES -- the top tier of managers and professionals -- are no longer entitled to annual across-the-board raises or locality pay adjustments that General Schedule employees receive in January.
Instead, their pay raises will hinge on their duties and how well they perform them in the eyes of their agency leaders. Last year, more than two-thirds of career executives received the same salary -- about $142,000 -- because of a pay cap set by Congress. That cap will be raised slightly under the new system.
Rep. Thomas M. Davis III (R-Va.), chairman of the House Government Reform Committee, has suggested that the administration consider living costs and labor market conditions when issuing SES pay regulations.
"The federal government has traditionally considered such factors as inflation and comparability with the private sector, and these should not be completely discarded with the move to a new system," Davis said in a letter this summer to OPM.
Since taking office, the Bush administration has urged agencies to tighten up on how they evaluate federal executives and link those ratings to salary decisions. This month, OPM Director Kay Coles James reminded agencies "to pay particular attention to such distinctions as you finalize SES performance appraisal and pay decisions this year."
She said that agencies have made progress since 2001 but added that "it is clear that more can and must be done."
The annual enrollment season for the Federal Employees Health Benefits Program starts next Monday. As part of the law expanding the Medicare program, a new option -- health savings accounts -- will be offered.
With an HSA, a federal employee buys a high-deductible insurance plan and then makes a tax-deductible contribution to a savings-investment account. This account is used for routine medical costs, tax-free, while the high-deductible plan covers serious ailments.
To help employees understand HSAs, OPM has created a Web site -- www.opm.gov/hsa -- that posts answers to frequently asked questions and allows employees to sign up for e-mail updates.
Nearly 12,000 people had signed up for open season information as of Tuesday, an OPM spokesman said. The site has counted 90,124 visitors, he said.