Administration will propose pay-for-performance fund

Administration will propose pay-for-performance fund

In its fiscal 2004 budget proposal, the Bush administration will call for revamping the federal pay service to make compensation more inline with the private sector.

The White House will request a $500 million pay-for-performance fund and recommend raising the top of the Senior Executive Service pay scale to $154,700.

The administration's proposals bode well for IT workers, especially those in senior posts, said Myra Shiplett, director of the National Academy for Public Administration's Center for Human Resources Management.

'Senior technical experts or CIOs generally are significantly underpaid,' Shiplett said. 'Sometimes by as much as 20 percent to 50 percent.'

Agencies would be able to tap the proposed Human Capital Performance Fund to reward top workers and those with critical skills, said Mark Everson, deputy director for management at the Office of Management and Budget. The increases would be above the 2 percent across-the-board raise the administration will recommend for all federal employees in 2004, Everson said Friday.

'The federal pay system is in a time warp of over 50 years,' he said. 'The president is committed to fixing it and rewarding people who do more.'

NAPA called for a pay-for-performance approach in its most recent study on the federal IT work force. The last time the government made a significant adjustment to the pay scale was in the early 1990s when OPM instituted locality pay, Shiplett said.

The Office of Personnel Management would administer the fund, for which agencies would be required to submit plans on using pay-for-performance metrics. After approving the plans, OPM would mete out funds from the $500 million allotment based on each agency's payroll percentage.

'Most people recognize that the pay system is broken and rewards people for longevity,' OPM director Kay Coles James said. 'This will give the agencies a tool to recruit and retain employees with needed skills.'

In raising the top end of the SES pay scale to $154,700'the same amount deputy secretaries make'managers would then be able to give employees an increase based on performance, James said. Currently, 60 percent of all SES workers have maxed out at the top of the pay scale, she said.

Rep. Tom Davis (R-Va.) last week said his House Government Reform Committee will focus on revitalizing the civil service, including looking at things such as pay-for-performance incentives. Sen. George Voinovich (R-Ohio), chairman of the Governmental Affairs Subcommittee on Oversight of Government, Management, Restructuring and the District of Columbia, also has been pushing for pay changes over the last two years.

(Updated Jan. 27, 2003, 9:44 a.m.)

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