The Office of Personnel Management is reminding federal agencies that within-grade pay raises, often called step increases, must be based on an employee’s performance and should not be automatic.

In a June 8 memorandum to heads of executive departments and agencies, OPM Director John Berry said, “law and regulations state that a GS [General Schedule] employee’s performance must be at an acceptable level of competence, as determined by the head of an agency (or designee), before the agency may grant a within-grade increase to that employee.”

If employees do not earn “fully successful” ratings, Berry said they “are not eligible for within-grade increases and must not receive such increases....The payment of within-grade increases should never be viewed as automatic or routine.”

Berry’s memo reflects the increased attention on step increases that have largely been based on longevity. House Republicans have focused on the within-grade increases as a loophole in the two-year pay freeze imposed on federal workers in January. “The truth is, there will be pay increases throughout this [freeze] process,” Rep. Darrell Issa (R-Calif.), chairman of the House Committee on Oversight and Government Reform, said at a hearing on federal pay in March. And last month, the House approved legislation that would that would deny regular annual pay increases to federal workers whose performance is rated unacceptable.

Berry’s memo firmly restates government policy, but it probably won’t make much of a change to most employees. According to a House report on authorization legislation for the Defense Department, the government’s largest agency, for example, only about 1 percent of employees are rated unacceptable.

Within-grade increases average about 3 percent of an employee’s pay. They are eligible for them after one, two or three years at their current step, depending on their level.