The new compensation and job evaluation system for senior executive service members in which they re to be “judged, and paid, strictly according to their performance and/or contributions to the mission of their agency” will begin January 11, the Office of Personnel Management has told agencies. Draft rules to carry out the changes have been written and are pending White House approval.

The changes, ordered by the recently enacted Defense Department budget measure (Public Law 108-136), establish what OPM calls an “open” pay range in which SES members no longer will get automatic locality or across-the-board raises along with general schedule employees. Rather SES pay increases will be “based exclusively on individual and organizational performance,” said OPM.

The new pay system will eliminate the six pay levels in favor of an open pay range (that is, a “payband”) with a minimum base salary equivalent to 120 percent of the rate for grade 15, step 1, of the General Schedule (currently $102,168) and a new base salary limit of level III of the Executive Schedule (currently $142,500). However, those agencies that can demonstrate that their executive appraisal systems make “meaningful distinctions based on relative performance,” as certified by OPM and the Office of Management and Budget, may grant base pay increases to their highest performing executives up to level II of the Executive Schedule (currently $154,700). An executive’s salary could be set at any rate in the pay range.

An SES member’s rate of basic pay plus any applicable locality payment in effect immediately prior to January 11 will be combined to establish the member’s new rate of basic pay within the new open pay range. The rate of basic pay, plus any applicable locality payment, in effect for an SES member as of November 24, 2003 may not be reduced during the 12-month period following January 11, 2004.

The higher base salary limit and the elimination of locality pay do not apply to senior-level (SL) and scientific or professional (ST) employees.