WASHINGTON -- Charged with designing a new pay system for white-collar civil servants, the Office of Personnel Management came to two basic conclusions: the federal managers' pay plan does not work, and agencies need more flexibility to carry out their missions effectively.
A proposed alternative pay system made public late last month would decentralize OPM's authority by giving agencies -- and employees -- more say in how a worker's job performance is evaluated.
"One thing we learned through having a system that is very regulated, where we watch and make sure what you do is right, is that it does not succeed," said OPM's Doris Hausser, who helped draft the plan.
The plan also would move the 160,000 administrators and managers under the Performance Management and Recognition System into the General Schedule pay system.
Changes also would be made to the General Schedule, which covers some 1.4 million white-collar, nonmanagerial civil servants. The five-category work appraisal scheme, which ranges from unsatisfactory to outstanding, would be replaced with a simple, two-level evaluation of satisfactory/unsatisfactory.
Agencies would be required to consult with employees to establish clear goals for each department and each worker.
One of the most controversial parts of the plan is a proposal to eliminate all pay increases -- including locality pay and annual labor cost adjustments -- for workers deemed unsatisfactory.
Federal unions and worker advocates in Congress say payments based on regional cost-of-living differences and other economic factors should not be linked to performance. But Ms. Hausser disagreed.
"When you give them [unsatisfactory workers] an increase, you're sending a message that: A. Poor performance doesn't matter; and B. You stick around and you'll get an increase," she said.
Poor performers would not have to live with the system long. They would improve, be transferred or fired.
This policy is in effect under PMRS, but the General Schedule does not require that any action be taken to address unsatisfactory work.
An unsatisfactory worker would not lose his or her job immediately, Ms. Hausser emphasized. The supervisor would talk to the worker about what he or she must do to improve the rating, and the worker would get a probationary period to do so.
Another controversial provision of the plan is a proposal to eliminate "step" pay levels. General Schedule salaries are structured on a scale of 15 levels, called grades, and within each grade are nine steps -- each with a specified level of pay.
Federal workers who get a job evaluation of "fully successful" -- the third ranking on the five-step scale -- or higher, receive a step increase. Job evaluations occur every one to three years.
The OPM proposal would eliminate step increases because the salaries of many PMRS employees fall between the step levels. If OPM were to bump everyone into the next highest step -- for some an annual raise of more than $2,000 -- it would cost the government $80 million.
The new system would give each worker receiving a satisfactory evaluation the same raise as usually comes with a step increase -- about 3 percent. But strict salary levels would no longer be set for each step.
Representatives of federal worker unions testified before Congress last week that elimination of established step levels is a bad idea because employees would feel they were getting less money.
Federal managers, while generally supportive of the OPM plan, object to the idea that managers would no longer receive raises every year. General Schedule employees receive annual raises while they are in the first three steps of a grade, biannual raises in the next three steps, and raises every three years when they are in the upper three steps.
PMRS employees, on the other hand, receive half a step increase each year they are employed in the middle three steps and one-third of an step increase each year they are employed in the upper three steps. The new system would be more like the current General Schedule, with all employees receiving full increases every one to three years.