GovernmentExecutive.com

Agencies have improved since 2004 in linking senior executives' salaries and awards more closely to job performance, according to a new report by the Office of Personnel Management.

The report highlights fiscal 2006 rating, pay and awards data for Senior Executive Service employees working under pay-for-performance systems in more than 25 agencies.

In a memo to heads of federal agencies, OPM Director Linda Springer said agencies are linking executive performance with organizational goals and results. Training also has become a major factor, "ensuring that executives understand how their pay for performance systems operate and reporting to executives the results of rating, pay and awards determinations," she said.

Agencies reported data on 7,137 senior executives for fiscal 2006. They received an average salary adjustment of 3.1 percent, down from 3.8 percent in fiscal 2005, the report found. The average rate of basic pay rose from $151,266 in fiscal 2005 to $154,960 in fiscal 2006.

The percentage of career SES employees receiving performance-based awards in fiscal 2006 was 67.2 percent, compared to 66.5 percent the previous year, the report found. The average payout for awards was $13,292 last year, with NASA offering the highest average award -- $17,139. The Nuclear Regulatory Commission and the Veterans Administration followed NASA for top award payouts, with averages of more than $16,600.

Meanwhile, 44.7 percent of all SES employees received top ratings last year, compared to 44.5 percent in fiscal 2005. For those who earned top ratings under a five-level system, the average salary adjustment was 3.7 percent of basic pay, and the average performance award was 9.3 percent, averaging a total performance-based payout of 13 percent. Career SES employees receiving minimally successful or unacceptable ratings received neither a salary adjustment nor an award.

Carol Bonosaro, president of the Senior Executives Association, said the report indicates a large gap between performance-based salary adjustments and awards. "Basically, what the system appears to have done is, in order to receive a cost-of-living adjustment, you need to exceed expectations at least or be outstanding at best," she said. "The bottom line is that the performance awards are critical in a system where the pay adjustments are not terribly substantial."

Because performance-based awards represent significantly larger monetary increases than the average salary adjustment, SEA has been lobbying to include bonuses and awards in executives' "high three" average salary, which is used to calculate retirement benefits.

Bonosaro also said the fact that 44.7 percent of senior executives were rated as outstanding indicates that achieving such a rating is difficult. She said that because the most experienced and brightest employees are in the SES, it seems feasible that many would achieve top ratings.

"You wouldn't expect a basketball team to have a bell curve of height," Bonosaro said. "Don't expect a bell curve of achievement among this group."

COMMENTS

• The analogy of a bell curve and basketball height is a good one. Basketball players are not recruited randomly from the general population and neither are our employees. I hire the best people I can and then train them to be even better. For the most part we do not let people float out on the low end of the curve - we help them improve - so the curve is skewed. If it isn't we are not doing our jobs of coaching, mentoring, and supervising our people. Forcing the performance of a professional staff onto a bell curve does one thing - it demoralizes those most in need of management support. A Supervisor Posted July 17, 2007 5:17 PM
• The real issue is development of objective and measurable performance objectives--not only for members of the SES but the rest of the workforce---especially with the advent of NSPS. Several years ago a Major General in charge of the Air Force Commissary Service asked his Comptroller to evaluate all store managers against criteria used in the food management industry--sales/inventory ratio, shrinkage, staff turnover, etc. He told the Comptroller he thought he knew the best managers and just wanted this information to confirm his personal assessment. Guess What--in the vast majority of cases, store managers with great reputations as a "best performer" or "role model" didn't deserve it. Store managers thought to be "average" or "fully successful" were actually doing the best jobs and should, repeat should, have been rewarded accordingly. But they hadn't been. The store managers with the best personalities and best wardrobes had been given all the awards and recognition. The Major General quickly changed this and ensured the most deserving (based on actual measurable performance objectives) were recognized and given their fair share of quality step increases. Botton line: When the Major General and Comptroller retired, things reverted back to the previous "pay for personality" system. Elton Hudgins Posted July 2, 2007 10:35 AM
• The statement in the article of "She said that because the most experienced and brightest employees are in the SES, it seems feasible that many would achieve top ratings" is ridiculous at best. It really goes back to the statement I used to make as an instructor on active duty " The difference between officers and enlisted is this: Many times it all depended on which recruiter they talked with." LD Bruce Posted June 26, 2007 2:12 PM