Time to Revamp the GS System?

Last week, I asked if the federal pay freeze President Obama announced last week could do more harm than good, at least when it comes to recruiting and retaining highly-skilled federal employees. In an analysis for Government Executive, Howard Risher, an independent compensation and performance consultant, writes that the pay freeze will likely inhibit federal hiring and trigger attrition. Resignations among new hires are likely to increase as the economy improves and private sector alternatives rise, and the image of government as a career path will be damaged, he writes.

The debate over whether federal employees are overpaid or underpaid also will continue. "It is indisputable that federal salaries for new college graduates already are low, however," Risher writes. "The national average this year is $48,351 as compared with the General Schedule Grade 7 pay of $42,209 in Washington. For high-tech grads -- engineers and computer specialists -- the averages are around $60,000. That gap risks damaging future government operations -- and it's going to widen with the freeze."

But with a two-year pay freeze in the mix, the government now has a sufficient amount of time to evaluate the federal pay system and begin coming up with a market-sensitive pay system to replace the General Schedule, Risher writes. Failed pay for performance projects like the Pentagon's National Security Personnel System could serve as a model for what worked and what didn't, he notes. "Agencies need a reward system that supports mission accomplishment," he writes. "The country would not be well-served by allowing this debate to continue into 2013."

What are your thoughts? Would implementing a more market-driven pay system for federal workers be more effective than short-term fixes like freezing federal pay increases for a couple of years? How would a market-driven system help government recruit and retain information technology workers -- one of its most critical and competitive career fields?