U.S. Office of Personnel Management - Ensuring the Federal Government has an effective civilian workforce
Strategic Compensation Update
Strategic Compensation Conference 2002
Alexandria, Virginia
August 27-28, 2002
Since last we met . . .
- 09/11/01
- A Nation at War
- Volcker Commission
- Enron, Worldcomm, etc.
- Budget Deficits
- Homeland Security
Meanwhile, back at OPM . . . .
- Emphasis on the President’s Management Agenda and improving the strategic management of human capital
- Director committed to examining pay reform and other issues
Strategic Compensation Initiative
- Wraps up main research agenda
- Wraps up working group discussions on compensation components
- Shifts to developing a White Paper
The White Paper
- Purposes:
- provide an honest examination of the current white collar pay and job evaluation system
- stimulate discussion
- Emphasis:
- merit system principles
- classic compensation principles (external equity, internal equity, individual/contribution equity)
The White Paper
- Deliberately does not include proposals for change
- The nature of changes are implied:
- "If what we’ve got is wrong, what would be right?"
Sharing the White Paper
- Unveiled at a Kennedy School of Government Executive Session on the Future of Public Service hosted at OPM
- Several key groups briefed immediately:media, congressional staff, stakeholder groups
Reaction and Next Steps
- Reaction has generally been quite positive
- Some significant concerns raised
- We will "continue the conversation"
- Addressing related issues
- More research as needed
Related Issues
- Executive pay
- Pay gap(s)
- Bargaining pay
- Funding
- Poor performers
Readiness Issues
- Federal managers and supervisors
- Performance management systems
Federal Supervisors and Managers
- If Federal agencies got pay flexibilities tomorrow, would managers be ready to use them effectively?
- Another negative effect of pay inflexibility
Federal Supervisors and Managers
- Selection, development, reward systems for managers may need updating
- System for valuing managerial work must be updated to work better
- Not designed for modern structures
- Assumes steep hierarchy still present
- Technical skills rewarded more than leadership and performance management skills
Performance Management Systems
- Effective performance-oriented pay requires credible measurement systems
- Levels of performance must be distinguished
- To be meaningful, "Outstanding" must be the exception, not the rule
Performance Management Systems
- Must start examining performance culture NOW
- Be alert to possible disparate impact
- Audit measurement systems NOW, and take corrective action as needed
Performance Management Systems
- Not paying proper attention to this issue can derail efforts to relate performance and pay
- Such outcomes can be averted, but it takes vigilance and commitment
Checking Ratings Distributions
- Compare across:
- Protected groups
- Grade groupings
- Look for disparate distributions
- Can you explain any differences with credible measures?
Ratings Distributions
Data Source for the following graphs is the Central Personnel Data File, 2001.
The data are only for appraisal programs that use five summary levels graphed here with
0 = Level 5
XFS = Level 4
FS = Level 3
FS = Level 2
< FS = Levels 1 & 2
All Non-SES & Non-Foreign Service
| O | XFS | FS | <FS | |
|---|---|---|---|---|
| White |
47.1
|
26.8
|
25.8
|
0.3
|
| Black |
41.3
|
30.8
|
27.4
|
0.6
|
| Hispanic |
43.1
|
29.1
|
27.5
|
0.3
|
| A/PI |
42.8
|
28.9
|
27.7
|
56.0
|
| AI/AN |
23.8
|
19.7
|
56.0
|
0.5
|
| Total |
45.1
|
27.6
|
27.0
|
0.4
|
GS 13-15 Supervisors/Managers
| O | XFS | FS | <FS | |
|---|---|---|---|---|
| White |
58.6
|
20.6
|
20.7
|
0.1
|
| Black |
51.7
|
27.3
|
20.9
|
0.1
|
| Hispanic |
57.9
|
25.4
|
16.7
|
0.1
|
| A/PI |
52.2
|
25.5
|
22.3
|
0.2
|
| AI/AN |
41.9
|
18.1
|
40.1
|
0.2
|
| Total |
57.5
|
21.6
|
20.8
|
0.1
|
GS 13-15 Nonsupervisors
| O | XFS | FS | <FS | |
|---|---|---|---|---|
| White |
55.6
|
27.5
|
16.7
|
0.2
|
| Black |
51.0
|
32.0
|
16.6
|
0.4
|
| Hispanic |
53.2
|
31.1
|
15.3
|
0.4
|
| A/PI |
53.0
|
28.6
|
18.0
|
0.5
|
| AI/AN |
45.5
|
27.8
|
26.7
|
0.3
|
| Total |
54.7
|
28.3
|
16.8
|
0.3
|
GS 1-6
| O | XFS | FS | <FS | |
|---|---|---|---|---|
| White |
41.9
|
24.4
|
33.3
|
0.9
|
| Black |
37.7
|
27.9
|
34.0
|
1.1
|
| Hispanic |
40.0
|
25.2
|
34.2
|
0.7
|
| A/PI |
39.4
|
26.9
|
32.7
|
1.0
|
| AI/AN |
14.3
|
14.1
|
70.6
|
1.0
|
| Total |
39.9
|
24.8
|
35.1
|
1.0
|
Checking Ratings Distributions
- What do your distributions reveal?
- Are you ready to explain them?
Checking Ratings Distributions
- What’s the solution?
- Measure results!!
Oncoming Events
- Continued outreach from OPM
- Establishment of the Department of Homeland Security
- Volcker Commission’s report and recommendations
- Continued emphasis on the strategic management of human capital
It’s Still True . . .
- From a report by the Federal Council for Science and Technology:
"Only one area has been selected for attention because improvements in it are of the most pressing importance.This area is the modernization of the Federal salary structure.. . . The most vital needs are (1) to increase salary rates to appropriate levels, and (2) to provide flexibility in the salary structure primarily as a means of recognizing superior quality."
Our Motto:
Press on, regardless!!!
U.S. Office of Personnel Management 1900 E Street NW, Washington, DC 20415 | (202) 606-1800 | TTY (202) 606-2532