No consensus on pay issues

Employee unions argue for fixing rather than scrapping General Schedule pay scale

As a House subcommittee began a series of hearings to examine performance-based pay and federal compensation in general, employee unions called on the government to take less drastic measures than several now being considered to fix the federal pay system. 

Stark differences in the positions of Bush administration officials and employee union leaders on how federal employees should be paid were on display at a July 31 hearing of the House Oversight and Government Reform Committee's Federal Workforce, Postal Service, and the District of Columbia Subcommittee.

Linda Springer, director of the Office of Personnel Management, said raising awareness of the need for a market- and performance-based pay system is one of OPM's top priorities in the administration's final 18 months. The General Schedule pay scale, which provides automatic pay increases, is 'an antiquated system that does not pay for performance,' Springer said. 'It pays people to show up at work.'

At the hearing, Colleen Kelley, who leads the National Treasury Employees Union, called Springer's remark 'an insult to federal employees.'

Representatives of NTEU and the American Federation of Government Employees said they oppose a complete overhaul of the GS pay scale. Those organizations said they agree that the GS system is flawed, but they said fixing it ' not scrapping it 'should be the objective of any changes.

'At this point, it's the best system that we have,' said David Cox, AFGE's national secretary-treasurer.

Administration officials want to replace the GS pay scale with performance-based pay by 2010. Various pay-for-performance demonstration projects that agencies have established in recent years now cover about 90,000 federal employees.     
Springer said those demonstration projects are 'the ultimate success story.' Kelley, however, called them failures.  

The critical factor in the success of those demonstration projects has been giving them a few years to gain a foothold, Springer said. Some efforts were rushed, and preparation and training were inadequate, but by and large, those projects have been successful, she said.

'Systems like this need to be around long enough to deal with the cultural issues, training issues and the migration from an old system to a new system,' Springer said. 'To look at some of the more recent examples ' the newer systems ' and pass judgment is really premature.'

Kelley disputed Springer's statements about the success of older demonstration projects by citing the example of a performance-based pay system adopted several years ago by the Federal Deposit Insurance Corp.

Employees in each organizational component are ranked, and pay increases are distributed among those in the top 25 percent, she said.

'This system of forced rankings and pay distributions has demoralized and angered FDIC employees,' Kelley said. 

Cox said the GS pay scale is based on objective market data, whereas pay for performance is based on subjective assessments. The pay system favored by administration officials gives managers the ability 'to discriminate and call it 'performance,' ' he said.

Tarallo is a freelance writer in Washington.

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