Avoiding the Senior Executive Service

When the Senior Executive Service was created in 1978 to replace the GS "supergrades," the vision was all-encompassing. The SES, as designed by the Civil Service Reform Act, would deploy a force of senior executives across government, where their management and subject-matter expertise would be put to use solving problems and creating a more efficient and better trained workforce.

The SES would be something to which all highly motivated and highly talented federal employees could aspire.

Three and a half decades later, members of the Senior Executive Service say that vision has been turned on its head.

Senior executives now comprise approximately 1 percent of the federal workforce. Between 2008 and 2011, those executives made $340 million in cash bonuses, according to a memo put out last year by Missouri Democratic Sen. Claire McCaskill. But the Senior Executive Association, the professional association of current and retired SES members, says federal employees are either reluctant to enter SES positions or are leaving because of low pay and a flawed performance-based awards system.

Federal senior executive compensation has been in the spotlight since the House voted May 1 to suspend bonuses to executives at the Veterans Affairs Department, a move followed by the release of an SEA report alleging that morale issues are rampant among executives.

Two weeks after the House vote, the Office of Personnel Management announced the revamp of the Presidential Rank Awards for senior executives after a one-year hiatus.

SESers received an average bonus of approximately 7 percent of their salary in 2012, according to the Department of Commerce, the latest year for which complete figures are available. The average SES salary was $166,000, according to Office of Personnel Management, making the average bonus about $10,900.

'Rather disheartening'

SEA President Carol Bonosaro told a Senate subcommittee May 6 that the government is on the verge of, if not currently witnessing, a mass exodus of executives.

According to OPM figures, the ranks of the Senior Executive Service have actually grown in recent years, which doesn't necessarily contradict Bonosaro's conention, but could allay any fears that the government is about to be denuded of top executive talent. There were some 8,000 SES personnel in 2012, including political appointees and career employees, up from 7,700 in 2008.

According to Bonosaro, however, a storm is coming.

"With greater frequency, high-performing senior executives themselves are choosing to retire or seek employment in the private sector rather than continue in a system they believe does not support or reward their efforts -- and in some cases seems to denigrate their value as critical frontline leaders of the most important and impactful federal programs that affect all Americans," Bonosaro said in her prepared testimony.

Money has a lot to do with it.

We have a lot anecdotal evidence to the effect that a lot of the most highly talented people ... are choosing not to pursue SES positions.

Almost a quarter of GS-15 employees make more than their SES counterparts, before bonuses, Bonosaro testified.

"This pay compression is not only resulting in sort of a perverse salary administration problem, but it's also impacting morale among SESers and contributing to a much higher percentage of SESers retiring in recent years," said Tim Dirks, director of member and agency liaison at the SEA.

According to a July 2013 report by the Partnership for Public Service and McKinsey & Company, nearly two thirds of executives will be retirement-eligible within the next five years. That's part of a wider trend; retirements are up across the board as the baby boomer cohort grows older. And, of course, senior executives in the private sector come and go regularly for a multitude of reasons, including job dissatisfaction and failure to perform.

But few middle managers in the private sector are likely turning down chances to enter the executive suite, and Dirks said that is what is happening in government, where GS-14 and GS-15 employees who are on the cusp of SES are choosing to stay out of senior executive roles.

"We have a lot anecdotal evidence to the effect that a lot of the most highly talented people ... are choosing not to pursue SES positions because of the pay compression issues and the lack of potential rewards for outstanding performance," Dirks said.

The SEA report includes anonymous quotes from frustrated SESers.

"I have received either Outstanding or Exceeded Expectations during my 7 year SES tenure; never had a pay raise and no bonuses for the last 3 years," wrote one executive. Another wrote, "No feedback at all. Rather disheartening considering high expectations for results and ongoing scrutiny and criticism against SES."

'An in-depth look'

While McCaskill, a Missouri Democrat, has led a rhetorical charge in the Senate to rein in bonuses, the Republican-led House has actually passed a bill.

An amendment attached to a veteran's tuition bill would eliminate SES bonuses at the VA for five years. The amendment is the legislative response to dissatisfaction with the troubled department's progress in clearing backlogs and allegations of preventable deaths at VA facilities.

The department has also been less than responsive to requests from Congress to provide information about data breaches and other problems.

"So far, VA leaders have refused, and until we have complete confidence that VA is holding executives accountable – rather than rewarding them – for mistakes, no one should get a performance bonus," Veterans Affairs Committee Chairman Jeff Miller (R-Fla.) said in January.

Performance bonuses have not been a rare thing at VA. Like the children of Lake Wobegon, most of the members of the SES at the department are apparently above average. More than three-quarters of VA senior executives received a bonus in 2010, according to OPM. The average salary for VA SESers was $165,000, with an average award of $15,000. Across the federal government in 2010, SESers were paid $167,000 on average, with a $13,000 average bonus.

Jennifer Mattingley, SEA's legislative director, said VA uses OPM's government-wide performance appraisal process, an annual evaluation that measures SESers on leadership, business acumen and building coalitions.

OPM's system and VA's evaluation hold executives to a rigorous standard and the recent spotlight on VA does not necessarily reflect a lack of accountability, she said.

Rather than painting with a broad brush, Mattingly stressed, each case needs to be looked at individually, with a specific accounting of whether an award is justified. Most critics in Congress and the media are not doing that, she suggested -- at the VA or SES-wide.

"We need to be careful when we start throwing around the word accountability, because some of what we've seen in the media deserves at least an in-depth look at each executive and their performance," Mattingley said.