In proposed rules set for publication tomorrow, the Office
of Personnel Management would formally abolish the traditional
method of paying Senior Executive Service members in favor
of a pay band with a strong pay-for-performance element.
The proposed rules from the Office of Personnel Management
would carry out provisions of Public Law 108-136, which
ordered replacing the old six-level SES pay system with an
“open-range” pay band whose minimum works out to be $104,927
this year and whose maximum is determined according to
whether the agency’s performance appraisal system for execs
is certified as making meaningful distinctions based on
performance; the maximum is Executive Schedule Level II (
currently $158,100) if the system is certified and Level III
(currently $145,600) if it is not.
Similar to the requirements for the higher maximum SES salary
under the new regs, under a separate law (P.L. 107-296),
agencies with certification may pay total compensation,
including bonuses, at the Vice President’s salary (currently
$203,000) versus Level I (currently $174,500) without
certification.
However, the rules make it clear that rates of pay higher
than the Level III rate “generally should be reserved for
those senior executives who have demonstrated the highest
levels of individual performance and/or made the greatest
contributions to agency performance, as determined by the
agency through the administration of its applicable
performance appraisal system for senior executives, or,
in the case of newlyappointed senior executives, those
who possess superior leadership or other competencies,
consistent with the agency’s strategic human capital plan.”
The rules effectively will abolish pass-fail type rating
systems and require at least four rating levels. A senior
executive who receives an annual summary rating of
outstanding must be considered for an annual pay increase.
A senior executive who receives a summary performance
rating of less than fully successful may not receive an
increase. Further, agencies could reduce pay for
performance and/or disciplinary reasons by up to 10
percent, about twice the previously allowed reduction, an
action that is appealable only to the agency head or a
designee, whose decision is final.
