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News Release

FOR IMMEDIATE RELEASE
Friday, December 17, 2004
Contact: Michael Orenstein
Tel: 202-606-2402

OPM Grants SES Performance-Appraisal System Certifications to 28 Agencies

Washington, D.C. -- The U.S. Office of Personnel Management and the Office of Management and Budget have certified the performance appraisal systems of 28 federal agencies, making many of the government's very best senior executives eligible for higher, performance-based salaries.

Twenty-eight agencies, including 11 cabinet departments, have received provisional, or temporary, certification. The Pension Benefit Guaranty Corporation and the General Services Administration have earned full certification. (The list of the 28 agencies with full or provisional certification as of today is noted at the bottom of this release.)

OPM grants full certification to an agency that has a working appraisal system in place and a track record documenting its ability to make meaningful distinctions in the relative performance of Senior Executives and Senior Professionals against nine criteria, including the alignment of performance to the agency's mission, strategic goals or policy objectives. Full certification is granted for two calendar years, after which appraisal systems are re-evaluated against the criteria by OPM.

Provisional certification is granted by OPM to an agency that has designed, but not yet fully implemented, an appraisal system that can document meaningful distinctions in relative performance.

With certification also comes an increase in the cap on the aggregate annual limit on pay and bonuses that Senior Executive Service (SES) members and senior professionals can earn. Senior professionals represent another category of high-level federal employees.

"This first group of agencies receiving certification worked diligently to align their executives' appraisal systems to performance goals and results," said OPM Director Kay Coles James. "All agencies should be putting in place appraisal systems that provide meaningful evaluations of their senior executives and senior professionals in order to further recognize merit."

Last week, James issued final rules that became effective December 6 on performance-based pay affecting the federal government's more than 6,000 Senior Executive Service (SES) members and senior professionals. For the SES, the rules lift the pay for the highest-performing executives at agencies with certified appraisal systems to the rate for level II of the Executive Schedule, $158,100 in 2004.Without OPM's and OMB's certification of an agency's appraisal system, pay for the SES is capped at the rate for Executive Level III, currently $145,600.

With certification, the new aggregate limit on pay and bonuses for both senior executives and senior professionals becomes capped at the salary earned by the Vice President, $203,000 in 2004.

The new SES pay-for-performance system was proposed by President George W. Bush in the fiscal 2004 budget. It was adopted by Congress in the 2004 National Defense Authorization Act.

In July 2004, OPM issued regulations that established rigorous criteria for senior executive and senior professional performance-appraisal systems as the foundation for a credible and effective pay-for-performance strategy. This component of the SES pay-for-performance model was a prerequisite to the issuance of the SES pay regulations.

Agencies that have received full certification (as of 12-17-04) of their SES performance-appraisal systems:

General Services Administration
Pension Benefit Guaranty Corporation

Agencies that have received provisional certification (as of 12-17-04) of their SES performance-appraisal systems:

Department of Agriculture
Department of Commerce
Department of Energy
Department of Health and Human Services
Department of Housing and Urban Development (OIG)
Department of Interior
Department of Justice
Department of Labor
Department of Transportation
Department of Treasury
Department of Veterans Affairs
Agency for International Development
Environmental Protection Agency
Equal Employment Opportunity Commission
Federal Communications Commission
Federal Energy Regulatory Commission
Federal Trade Commission
Merit Systems Protection Board
National Aeronautics and Space Administration
National Endowment for the Arts
National Labor Relations Board
Office of National Drug Control Policy
Office of Personnel Management
Railroad Retirement Board
Small Business Administration
Social Security Administration

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Our mission is to Recruit, Retain and Honor a World-Class Workforce to Serve the American People. OPM supports U.S. agencies with personnel services and policy leadership including staffing tools, guidance on labor-management relations and programs to improve work force performance.


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