The Reagan administration, under heavy pressure from Congress, agreed yesterday to delay implementing its controversial plan to abolish automatic "in-step" pay increases for an estimated 1.4 million federal workers by linking their pay to job performance standards.
Donald J. Devine, director of the Office of Personnel Management, also agreed to postpone indefinitely a major change in personnel rules that would devalue seniority and give job performance more weight in federal layoffs. A regulation that, in effect, would have given OPM the power to define what is an "appropriate" bargaining issue for federal employe unions also will be withdrawn, Devine said.
Devine said the administration still endorses all three concepts, but agreed to pull back after Sen. Ted Stevens (R-Alaska), chairman of a Senate Governmental Affairs subcommittee, threatened to use budget legislation to block OPM's proposals. Rep. Steny H. Hoyer (D-Md.) had pushed similar action through a House committee Wednesday.
Faced with such strong opposition and several lawsuits filed by federal employe unions, the administration agreed instead to consider a merit pay reform bill introduced by three Virginia Republicans: Sens. Paul S. Trible Jr. and John W. Warner, and Rep. Frank Wolf.
The Virginians' bill would make a number of major changes in the government's current merit pay system, but it would not expand the performance pay requirement beyond its current level. Since October 1981, federal employes in management positions, GS grades 13 to 15, have been under a performance pay system.
Under OPM's proposal, which caused a furor among federal employe unions when it was announced in March, raises for all federal workers in grades 1 through 15 would have been tied to job performance ratings.
Employe groups claimed OPM's proposal would destroy the civil service system because it would give political appointees the final say on whether employes received raises. Administration officials claimed such fears were unfounded.
Devine told Stevens' subcommittee on Civil Service, Post Office and General Services yesterday that the administration still is "strongly committed" to requiring all government workers to obtain high performance ratings before they receive raises. But he indicated the administration is willing to negotiate what grades should be included in the new merit pay system.
Stevens, who suggested several compromises yesterday, said he believed grades 11 through 15 should be put under pay performance guidelines.
All employes in grades under GS 11 would continue to receive "in-step" increases, but everyone in the upper grades would have to receive a rating of "fully successful" or better from their bosses. Currently, employes automatically receive in-step increases if they receive an "acceptable level of competence" rating from supervisors, which has been considered a step below "fully successful." OPM had wanted to require all employes in grades 7 and above to obtain ratings of "exceeds fully successful" or "outstanding" to receive increases.
The bills being offered by Trible, Warner and, in the House, Wolf, would establish "lump sum performance awards" for employes who receive high marks from their supervisors.
Stevens endorsed that concept and also suggested major changes in two other proposals that OPM had announced. He recommended a simplified point system for determining federal layoffs.
While Devine contended the administration had not retreated on any of its proposals and still could implement them if a compromise failed, yesterday's action was seen as a major step in curbing the administration's plan.
Stevens, who called the deadlock between Congress and OPM over the proposals a "festering sore," warned Devine that OPM wouldn't "agree entirely with what we put on the president's desk."