Rethinking pay

In a report recently issued by the Office of Personnel Management, OPM officials say that changes to the federal pay system are in order.

"The government asks its agency leaders to face new and unprecedented management challenges using an antiquated pay system," OPM maintains. "Work-level descriptions in law that date back more than 50 years are not meaningful for today's knowledge-driven organizations."

The OPM report deals with many aspects of the federal pay system, but what really caught my attention was the chapter that involves within-grade pay increases. OPM contends — quite correctly — that the federal pay system does not reflect market pay levels and has minimal ability to encourage and reward achievement and results. No argument there. But then officials fall flat on their faces — in my opinion — by attacking within-grade pay increases.

OPM claims that more than 75 percent of increases in federal pay bear no relationship to individual achievement or competence. The report continues, "In any given year, federal employees receive more pay increases for remaining on the rolls than for meeting or exceeding performance expectations."

Although it may be true that most federal employees get within-grade pay increases without a hitch, that doesn't mean that the government is sending a signal to its workforce that performance doesn't count. Every fed knows that superior performance leads to promotions and awards, while within-grade pay increases reward journeyman work and time on the job.

What's wrong with giving employees a reward for longevity? How else do you reward longevity? Longevity leads to increased proficiency and should be rewarded. And the amount of within-grade pay raises — a few percentage points — can hardly be called excessive.

OPM seems to be arguing that the money used to fund within-grade pay raises should be used to reward performance. But if you did that, how would you reward longevity and the increase in proficiency that comes with it?

Mechanisms for rewarding performance already exist — performance awards, step increases and promotions. If not enough money is being spent for rewards based on performance, then let's find some money for this purpose. But arguing you shouldn't give within-grade pay raises because they don't reflect performance is specious. Within-grade pay increases are not supposed to reward performance!

The problem that OPM is trying to deal with — incorrectly, in my opinion — is the lack of sufficient resources to adequately reward fed performance. The answer is not to divert money that's been earmarked for within-grade pay increases. That's just robbing Peter to pay Paul.

You can redesign the federal pay system in any one of a hundred ways but it's still going to suffer if it's inadequately funded. That's the problem today and that's the problem that existed a generation ago. We don't need more OPM reports — we need more money!

Zall is a retired federal employee who since 1987 has written the Bureaucratus column for Federal Computer Week. He can be reached at milt.zall@verizon.net.