Money doesn't make feds' world go round

(Editor's note: Linda E. Brooks Rix is co-chief executive officer of Avue Technologies Corp. A detailed list of the salary rankings by agency is available on www.avuetech.com at the "Show me the money" link.) 

I am a Yankees fan — I’ll admit it right off the bat. Most people who don’t like the Yankees are put off by their exceedingly high payroll, which they say constitutes an unfair advantage. Michael Lewis, in his book “Moneyball: The Art of Winning an Unfair Game,” debunks that idea by contrasting the disappointing performance of the Yankees with that of the upstart Oakland A’s, a team with less than half the Yankee’s bloated payroll.

So, when I read about the Office of Personnel Management’s Federal Human Capital Survey results and the unrelated ranking of the best places to work by the Partnership for Public Service, I thought: Could there be a correlation between job satisfaction and salary? And how does that translate to organizational effectiveness?

At Avue Technologies, we took the partnership’s small-agency scores and integrated them with the large-agency scores to produce one list. Then we looked up average salaries for each agency. The conclusion: Money talks.

The median salary for the top 20 agencies was $107,329. The median salary for the lower ranking 38 was $87,210. Twenty grand and change — that could make you pretty happy with your employer.

We then looked to see if a rising-tide-lifts-all-boats effect occurred. Indeed it did. If you worked at the Securities and Exchange Commission (No. 19), which has an average salary of $135,099, and you were a mail and file clerk, you’d make $50,000 in round numbers. In contrast, at the Forest Service (No. 41), if you worked fighting wildland fires, you’d make $32,000. I can see how making $18,000 more and keeping your personal injury level to paper cuts and stapler malfunctions could make you pretty happy with your employer.

It’s even more interesting when you compare the same occupations across agencies. For example, the Commodity Futures Trading Commission (No. 8) pays its information technology workers an average of $134,796. However, No. 32 (Department of Defense) pays, on average, $80,082 for the same work. In fact, in the IT occupation, the highest-paying agency pays a full 5.4 times more than the lowest.

The two lowest-paying agencies to hit the top 20 in our list provide services to citizens. The Social Security Administration (No. 17) processes entitlements and benefits, and the Veterans Affairs Department (No. 20) provides health care to veterans. VA’s salaries for nurses averaged $76,844, whereas the State Department (No. 13) averaged $90,518. There are other cases in which the contrast is even higher: No. 41 (Department of Agriculture) averages $74,102 for its ecologists, whereas the Environmental Protection Agency (No. 14) pays such professionals $100,132.

Perhaps even more important, the statement that generated the most positive responses was “The work I do is important.” It scored a 90.8 percent positive response from all surveyed. That must help with retention and is likely to be the reason so many federal employees can cope with pay disparity. According to basic motivational theory, meaningful work is the No. 1 motivator for employees.

The theory has also proven true with regard to pay. Although lower pay and benefits can reduce satisfaction with one’s work, higher pay is not an inducement to perform. Instead, the motivation to perform at one’s highest level comes from high job satisfaction. However, low pay can eliminate that incentive.

Although pay disparity discussions have typically focused on a public- vs. private-sector comparisons, internal pay disparity is a far more real problem. For one thing, when salaries are aligned internally, it is easier to compare federal pay to private-sector compensation. Internal alignment also reduces serious issues with poaching between agencies and retention and recruitment overall, whereas pay disparity affects everything from morale to benefits, such as retirement income.

One might well ask if the country is well-served by the pay disparities at agencies. The Office of Management and Budget wants to use the scores as a way to measure progress in workforce management. But, as Lewis wrote in “Moneyball,” team performance and pay are not necessarily correlated. A high-scoring payroll does not necessarily result in high organizational performance. In other words, being highly compensated might increase your satisfaction with your employer even if, as an organization, you’re not winning.

Perhaps it is time to examine how spiraling salaries at a few agencies can fuel significant pay disparities and thus increase the potential for job dissatisfaction elsewhere in the government. And if we are so wedded to the idea of pay for performance, perhaps we should direct it at total agency payrolls and focus on the results achieved, not individual employees' pay.