Federal Manager's Daily Report

Although the SES long has been one of focal points of performance evaluation in the executive branch, the new compensation system for the SES, the new system will seek to strengthen that link-and possibly set a precedent for mid-level managers and non-managerial workers as well. “To emphasize the link between pay and performance, the law eliminates across-the-board pay increases, including locality pay increases, for SES members,” said OPM, adding that the new system “allows significantly higher base pay limits for the best performing executives.”

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OPM said that it and OMB will jointly issue new regulations establishing criteria and procedures for certifying that an agency’s SES evaluation system makes meaningful distinctions based on relative performance. “As currently envisioned, these regulations will describe the elements and practices that typify the best executive performance appraisal systems, especially insofar as they assure a linkage between agency results and individual accountability,” said the OPM announcement to agencies.

Pending the release of regulations for pay administration, agencies will be authorized, at their discretion, to increase the rate of basic pay of eligible executives (i.e., those executives who have not received a pay adjustment in the previous 12-month period) up to the new rate for level III of the Executive Schedule “where their performance, responsibilities, and/or contributions warrant.”

Further, SES members in an agency with a certified executive performance appraisal system will also be subject to a substantially higher aggregate compensation limit (that is, base salary, plus performance bonus for career SES members, and other allowances and incentives) equivalent to the pay of the Vice President, currently $198,600. That higher limit may also apply to an agency’s senior-level (SL) and scientific or professional (ST) employees if their performance appraisal systems are similarly certified by OPM, with OMB concurrence. Absent certification, annual aggregate compensation remains limited to the rate for level I of the Executive Schedule (currently $171,900).