• Department of Housing and Urban Development
• General Services Administration
• Department of Energy
• Department of Labor
• National Aeronautics and Space Administration
• Department of Commerce
• Department of Health
• Department of the Interior
• Social Security Administration
• Department of the Navy
• Department of the Air Force
• Department of Defense
• Department of Justice
• Department of the Army
• Department of the Treasury
• Department of Veterans Affairs
• Department of Agriculture
• Department of Energy
• Department of State
• and many more

[Table of the General Schedule follows showing rates for Grades GS-1 through 15, 10 steps per grade, and an annotation that there is a 30 percent pay range per grade.]

• Pay Linked to Classification and Contributions

  • equal pay for substantially equal work

  • variations in rates of pay based on
    • difficulty, responsibility, and qualification requirements of the work
    • contributions of employees to efficiency and economy in the service
    [Classification Policy (5 U.S.C. 5101)]

  • appropriate incentives and recognition for excellence in performance
    [Merit System Principles (5 U.S.C. 2301(b)(3))]

• Single white-collar system covering most employees
  • Separate blue-collar system
  • Separate senior management/senior level system
  • Special systems, special rates

• Single job-grading system
  • 15 grades (formerly 18 grades)
  • Some agencies outside of the General Schedule have more or less than 15 grades [example: the Foreign Service, another statutory pay system, has 9 classes (grades)]

• Single pay plan
  • The General Schedule pay plan code is GS; other structures may look like GS (e.g. GG), but differences exist.
  • GS covers about 70 percent of the executive branch
  • There are about 160 pay plans in the executive branch

Allows Government to deal systematically and fairly with:

A. Internal Equity

B. External Competitiveness

C. Individual Pay Progression

• The Classification System facilitates all other aspects of personnel management

• The classification structure is fixed

• Pay is variable

[Table showing FES Points and 2000 GS Pay Range for each GS Grade.]

• 15 grades (definitions in 5 U.S.C 5104)

• 10 steps per grade

• 30 percent pay range per grade and overlapping pay ranges

• Inter-grade differential
  • Job intervals for one-grade series
  • Job intervals for two-grade series
  • Declining percentage grade differentials

• Shape of pay structure
  • Exponential curve

[From table:]

One-Grade Inter-Grade Differential

From (Midpoint) GS-1 to (Midpoint) GS-2 -- Percent: 12.4%
From (Midpoint) GS-2 to (Midpoint) GS-3 -- Percent: 9.1%
From (Midpoint) GS-3 to (Midpoint) GS-4 -- Percent: 12.3%
From (Midpoint) GS-4 to (Midpoint) GS-5 -- Percent: 11.9%
From (Midpoint) GS-5 to (Midpoint) GS-6 -- Percent: 11.5%
From (Midpoint) GS-6 to (Midpoint) GS-7 -- Percent: 11.1%
From (Midpoint) GS-7 to (Midpoint) GS-8 -- Percent: 10.8%
From (Midpoint) GS-8 to (Midpoint) GS-9 -- Percent: 10.5%
From (Midpoint) GS-9 to (Midpoint) GS-10 -- Percent: 10.1%
From (Midpoint) GS-10 to (Midpoint) GS-11 -- Percent: 9.9%

[Chart shows bars representing the approximate salary range for grades 1 through 11.]

[From table:]

Two-Grade Inter-Grade Differential

From (Midpoint) GS-5 to (Midpoint) GS-7 -- Percent: 23.9%
From (Midpoint) GS-7 to (Midpoint) GS-9 -- Percent: 22.3%
From (Midpoint) GS-9 to (Midpoint) GS-11 -- Percent: 21.0%
From (Midpoint) GS-11 to (Midpoint) GS-12 -- Percent: 19.9%
From (Midpoint) GS-12 to (Midpoint) GS-13 -- Percent: 18.9%
From (Midpoint) GS-13 to (Midpoint) GS-14 -- Percent: 18.2%
From (Midpoint) GS-14 to (Midpoint) GS-15 -- Percent: 17.6%

[Chart shows bars representing the approximate salary range for grades 5, 7, 9, and 11 through 15.]

[Chart showing salary progression for Professional from approximately $16,000 to approximately $48,000 during the years 1990 to 2000, and salary progression for Clerical (Full Performance) from approximately $16,000 to approximately $28,000 during the same span.]

• Range spreads usually vary based on the level and sophistication of skills required for a position. Entry-level positions that require skills that are quickly mastered usually have narrower pay ranges than supervisory, managerial, or high-level technical positions.

• Individuals in lower-level positions not only master the requirements of the job sooner, they also have a greater number of opportunities over time to be promoted to higher-level positions. Senior-level positions require a longer learning curve and often have limited opportunities for advancement. (WorldatWork)

• Narrow pay ranges and more grades allow for more frequent promotions-and a greater perception of growth and advancement-than wider ranges and fewer grades. (WorldatWork)

[Graph illustrating pay for each GS grade (1 through 15) and pay for Junior, Mid, Journey, and Senior ranges. The Junior range encompasses grades 1 through 4; the Mid range encompasses grades 5 through 8; the Journey range encompasses grades 9 through 12; and the Senior range encompasses grades 13 through 15.]

Pay System: Federal Wage System
Characteristics: Nonexempt Production and Maintenance
Range Spread: 16.7 percent

Pay System: General Schedule
Characteristics: Professional, Administrative, Technical, Clerical, and Officer
Range Spread: 30 percent

Pay System: Foreign Service
Characteristics: Officers and Support Personnel
Range Spread: 47 percent

Pay System: Demonstration Project- China Lake
Characteristics: Scientific and Engineering and Senior Professional Staff
Range Spread: Band III - 55%

Pay System: Senior Executive Service
Characteristics: Executive Level Management
Range Spread: No Range - Rank-in-Person

Characteristics: lower-level service, production, and maintenance
Common Pay Range: 20-25 percent

Characteristics: clerical, technical, paraprofessional
Common Pay Range: 30-40 percent

Characteristics: professional, administrative, and middle management
Common Pay Range: 40-50 percent

Characteristics: higher-level managerial, executive, and technical
Common Pay Range: 50 percent and up

(WorldatWork)

• General Schedule Steps
  • Uniform dollar amount
  • Calculated as 3.33 percent of the step 1 rate
  • Declining percentage
    Step 1
    plus 3.3 percent = Step 2
    plus 3.2 percent = Step 3
    plus 3.1 percent = Step 4
    plus 3.0 percent = Step 5
    plus 2.9 percent = Step 6
    plus 2.9 percent = Step 7
    plus 2.8 percent = Step 8
    plus 2.7 percent = Step 9
    plus 2.6 percent = Step 10

• Foreign Service Steps
  • Uniform percentage amount
  • Calculated as 3 percent of previous step
    Step 1
    plus 3 percent = Step 2
    plus 3 percent = Step 3
    plus 3 percent = Step 4
    ...
    plus 3 percent = Step 12
    plus 3 percent = Step 13
    plus 3 percent = Step 14

• The Foreign Service pay system has about a 47 percent range with intergrade differentials of 12 percent for class 9 through 5 and 23 percent for classes 5 through 1. There is a great deal of overlap between levels.

[Graph showing pay blocks for classes 9 through 1, capped at GS-15, Step 10.]

• Federal Wage System Steps
  • A uniform percent of step 2 rate, but a declining percentage system
  • Calculated as 4 percent of the step 2 rate
  • Step 2 represents the prevailing wage rate for the survey locality
    Step 1, 96 percent of the prevailing rate

    plus 4.17 percent = Step 2, 100 percent of the prevailing rate

    plus 4.00 percent = Step 3, 104 percent of the prevailing rate

    plus 3.85 percent = Step 4, 108 percent of the prevailing rate

    plus 3.70 percent = Step 5, 112 percent of the prevailing rate

• Last resort for staffing problems
• Labor market supply and demand dynamics
• Influenced by non-Federal pay rates
• Links to the GS pay structure

[Graph with vertical axis labeled "Salary" showing levels from $0 to $70,000 in $10,000 increments, and with horizontal axis labeled "Step" showing steps 1 through 10. The graph shows GS-9 Base Rates in the $32,000 to $42,000 range represented as points on the graph, ascending on a line in relation to the steps. Above is a similar ascending line representing Maximum Special Rates at the same steps, demonstrating a 67 percent increase over the GS-9 base rate on the left side (step 1) and a 51 percent increase on the right side (step 10).]

• Measures of Pay Structure
  • Midpoint
  • Compa Ratio
  • Minimum-Maximum

• Measures of Workforce Distribution
  • Step Distribution
  • Weighted Average

• The private sector uses midpoint differentials to construct pay ranges and compa ratios to control costs.

Midpoint differentials show the difference in midpoints between two grades. [Graphic showing a rectangle labeled "Grade A" and a similar rectangle labeled "Grade B," with "20% Range" noted below. The "Grade A" rectangle is inset and a line is drawn from its midpoint to the midpoint of the "Grade B" rectangle, showing a midpoint differential of 10%.]

Compa ratios compare individual employee pay to the pay range midpoint.

Example: An employees pay is $14,000.
The pay range midpoint is $15,000.
The ratio between the employees pay and the midpoint is $14,000/$15,000.
The employees compa ratio is 93%.

• Grade overlap is the amount by which the pay of one grade overlaps an adjacent grade.

• Grade overlap is minimal when midpoint differentials are large and range widths are small. Grade overlap is significant when midpoint differentials are small and range spread is large. (WorldatWork)

[Graphic showing the following:]

Minimal Grade Overlap: 20% range spread - 25% midpoint differential

General Schedule Grade Overlap: GS-14 and GS-15, 30% range spread - 17.6 midpoint differential

Significant Grade Overlap: 50% range spread - 10% midpoint differential

• Since the General Schedule is adjusted by a single uniform percentage (5 U.S.C. 5303), the current inter-grade differentials are frozen in place. (See charts for one-and two-grade interval work for GS intergrade differentials.)

• The structural and individual pay mechanisms of the General Schedule do not require Federal managers to calculate compa ratios as part of the pay-setting process.

• Within-grade increases
  • Time in grade
  • Satisfactory performance (acceptable level of competence)
  • Virtually automatic progression
  • Learning curve theory

• Quality step increases
  • Outstanding performance
  • Not more than once every 52 weeks
  • Does not affect time in grade for next within-grade increase

• 30 percent rate range

• Uniform dollar within-grade step increases
  • 3.3 % of step one rate
  • 2.6 % of step nine rate

• Grades 1 and 2 out-of-alignment

  [Graph showing Grade 9 salary at each step.]

[Similar graphs labeled "Grade 9 (Steps)" and "Grade 9 (Power Curve)." The vertical axis of each shows $30,000 to $45,000 in $5000 increments; the horizontal axis of each shows years 0 to 18. Points representing step progression are shown on an ascending line on each graph. The line on the "Grade 9 (Steps)" graph has plateaus; the line on the "Grade 9 (Power Curve)" graph follows the same course but in ascending increments without the plateaus.

[Bar chart: Vertical axis is labeled "Employment" and ascends from 0 to 7,500 in increments of 1,500. Horizontal axis shows steps 1 through 10. The bar for step 1 ascends to 6,000. The bars for steps 2 through 9 are at 750 or below. The bar for step 10 ascends to 1,500.]

[Bar chart: Vertical axis is labeled "Employment" and ascends from 0 to 20,000 in increments of 4,000. Horizontal axis shows steps 1 through 10. The bar for step 1 ascends between 16,000 and 20,000. The bars for steps 2 through 10 ascend between 6,000 and 16,000.]

[Bar chart: Vertical axis is labeled "Employment" and ascends from 0 to 5,000 in increments of 1,000. Horizontal axis shows steps 1 through 10. The bars for step 1, 2, 3, 8, and 9 ascend between 1,000 and 2,000. The bars for steps 4 through 7 ascend between 3,000 and 4,000. The bar for step 10 ascends above 4,000.]

[Bar chart: Vertical axis is labeled "Employment" and ascends from 20,000 to 180,000 in increments of 20,000. Horizontal axis shows steps 1 through 10. The bar for step 1 ascends to 140,000. The bars for steps 2 and 3 ascend between 60,000 and 80,000. The bars for steps 4, 5, and 6 ascend between 120,000 and 140,000. The bar for step 7 ascends between 140,000 and 160,000. The bar for step 8 ascends between 100,000 and 120,000. The bar for step 9 ascends between 60,000 and 80,000. The bar for step 10 ascends between 140,000 and 160,000.]

• Promotions
  • Career ladder or merit promotion
  • Minimum two-step increase
    Examples:
    • GS-9, step 1 promoted to GS-11
      • $32,380 to $39,178 (GS-11, step 1)
        amount $ = $6,798; amount % = 20.99%

    • GS-9, step 5 promoted to GS-11
      • $36,696 to $39,178 (GS-11, step 1)
        amount $ = $2,482; amount % = 6.76%

    • GS-9, step 10 promoted to GS-11
      • $42,091 to $44,402 (GS-11, step 5)
        amount $ = $2,311; amount % = 5.49%

• Alternative methods for determining individual pay rates and range progression
  • single rate
  • skill-based pay/competencies
  • automatic step rates/longevity
  • performance-based step rates
  • step rate and merit based pay
  • variable merit performance-based pay
  • structural versus individual adjustments
  • uniform or variable timing

[Graph: vertical axis shows percentage of pay range progression; horizontal axis represents time (no increments specified). Lines angle from the horizontal axis to the following performance levels and percentages of pay range progression:]

Outstanding - 100%
Excellent - 75%
Very Good - 50%
Good - 25%
Poor - 0%

[Graph with vertical axis labeled "Salary" showing levels from $0 to $12,000 in $2,000 increments, and with horizontal axis labeled "Grade" showing grades 1 through 15. The graph shows a line labeled "2000 Min" ascending from beneath the $2000 level at Grade 1 to the $8000 level at grade 15. Above is another line, labeled "1949 Min," that ascends from just above the $2000 level at Grade 1 to the $10,000 level at grade 15. A line of text below the chart reads: Note: GS 2000 pay rates are divided by a factor of 10.]

• The shape of the 1949 and 2000 General Schedule are similar. However, pay for higher grades has increased somewhat faster than at lower grades.
  • GS-5 increased 689 percent between 1949 and 2000
  • GS-13 increase 734 percent between 1949 and 2000

• Most annual pay adjustments have been a uniform percent across-the-board schedule increase. Intergrade differentials have remained fairly constant.

• Structural pay costs are controlled by the President and Congress, not individual agencies.

• Timing cycle
  • salary survey
  • recommendations
  • approval/Federal budget process
  • implementation

• General Schedule Structural Adjustments
  • General adjustment - based on annual change in employment cost index (ECI) as of September 30 minus 0.5 points

  • Locality adjustments - based on Bureau of Labor Statistics salary surveys in 32 localities

  • Measured, prepared, and analyzed centrally

  • Agencies implement

  • President and Congress make final decisions

1994: ECI-Based Adjustment: 0.00%, Locality Average Rate: 3.95%
1995: ECI-Based Adjustment: 2.00%, Locality Average Rate: 5.05%
1996: ECI-Based Adjustment: 2.00%, Locality Average Rate: 5.56%
1997: ECI-Based Adjustment: 2.30%, Locality Average Rate: 6.38%
1998: ECI-Based Adjustment: 2.30%, Locality Average Rate: 6.93%
1999: ECI-Based Adjustment: 3.10%, Locality Average Rate: 7.50%
2000: ECI-Based Adjustment: 3.80%, Locality Average Rate: 8.62%

1994: ECI of 2.2% canceled. Full locality pay.
1995: ECI of 2.6% reduced. Locality pay limited.
1996: ECI of 2.4% reduced. Locality pay limited.
1997: Full ECI. Locality pay limited.
1998: ECI of 2.8% reduced. Locality pay limited.
1999: Full ECI. Locality pay limited.
2000: Full ECI. Locality pay limited.

• Pay Adjustments
  • Employees move with the pay structure (Structural Adjustment)
    • structure adjusted by uniform percentage amount
    • annual frequency (aligned to the calendar year, not fiscal year)
  • Employees move within the pay structure (Individual Adjustment)
    • within-grade increases
    • quality-step increases
    • promotions
• Market strategy
  • FEPCA locality pay phase in
    • actual - 33.5 percent (2000)
    • statutory timetable - 90 percent (2001)
  • 2001 locality pay rates reflect the 1999 recommendation of the Federal Salary Council and Presidents Pay Agent as adjusted by the President and/or Congress.

• Step 4 on the base General Schedule for each GS grade is the Representative rate used for Highest Previous Rate (HPR) and reduction-in-force (RIF) determinations.

• Red Circle Rates (above step 10)
  • grade retention
  • pay retention

• Blue Circle Rates (below step 1)
  • are not permitted in the General Schedule

• Pay Schedules and Compensation Information
  • www.opm.gov/oca/payrates/index.htm
• Federal Classification Systems
  • www.opm.gov/fedclass/index.htm
• The Fact Book
  • www.opm.gov/feddata/factbook/index.htm
• Pay Structure of the Federal Government
  • www.opm.gov/feddata
• Annual Reports of the Presidents Pay Agent
  • email payleave@opm.gov, we will send you a copy.