TOPICS
TOPICS
Paybanding Evolution
IRS Commissioner Mark Everson announced Wednesday that he's leaving the agency to run the American Red Cross. This means he won't be at the agency to see new pay rules take effect.
On Tuesday, the Office of Personnel Management published draft regulations in the Federal Register to change the paybanding system at the IRS. Paybanding, of course, is a staple of the new wave of compensation systems replacing the General Schedule across government. Broad pay bands are meant to give supervisors greater flexibility in compensating employees and to allow for pay for performance.
The IRS switched to a payband system for its senior and departmental managers in 2001, but it hasn't put the whole agency onto the system yet. OPM's draft regulations make it clear that employees covered by collective bargaining agreements can't be forced into paybands without their union's consent.
IRS was one of the first agencies to experiment with paybands, and its experience is instructive for all government employees. There are a number of developments of note in the latest regulations.
First, they allow the agency to create a new pay track that lets entry-level employees move up the payband faster than longer-term employees.
Also, the proposal would give the IRS the option to widen the bands. Right now, for example, an IRS payband that goes up to the GS-13 level can include a maximum of five GS grades. The new regulations let the IRS broaden that.
Supervisors also will have more say in determining raises. OPM's regulations would allow managers to take into account the employee's current spot in the band when making that decision, as well as his or her performance review.
In addition to pay raises derived from employees' performance reviews, the IRS also can give across-the-board raises to groups of employees as it sees fit. OPM's new regulations allow the agency to forgo any general increases in favor of entirely performance-based raises, if it wants.
There are a couple of areas that OPM makes more rigid in the IRS pay system. The new regulations require the IRS to put more than one GS grade in a band. That means the agency can't just graft the old system onto the new and call it paybanding. And the rules reiterate that IRS supervisors can't give raises just because an employee has been with the agency for a long time.
It seems this next evolution in paybands provides for more and more flexibility in setting pay. The only flexibility it doesn't provide is the ability to abandon paybanding.
COMMENTS
- My recent experience has been that the paybanding system that was initially designed to provide flexibiilty was instead misused as a barrier. Grade 15 managerial positions were converted into IR-1 and later IR-3 categories. During redesign, however, the payband distinctions were used to deny job swap requests, basically eliminating that mitigation strategy as an option for employees who had previously all been considered equal and would have been able to move between jobs in comparable pay scales. As a result, some managers were precluded from swapping and were given the choice of either accepting downgrades or being RIFed. Bonnie Esrig Posted May 21, 2007 11:33 AM
- Anyone who believes the line about these changes being "... meant to give supervisors greater flexibility in compensating employees and to allow for pay for performance" are either on another planet, or they are part of the cabal that is using PFP as a thinly disguised means of reducing payroll costs. Yes, we led the way with the Senior Manager (IR-01) and Department Manager (IR-02) pay bands, but after a short five years, the Senior Manager pay band was changed...radically. In the beginning, we knew exactly what we would get in the way of step increases and performance awards. Our pay was to be determined by meeting specific performance appraisal gates (i.e., Met, Exceeds Fully Successful, and Outstanding). At some point between the first and second pay setting events (i.e., Jan 02 and Jan 04), the agency reneged on the formula for performance awards; and, after the third event (Jan 06) they reneged completely on step increases...by eliminating steps. As further evidence of the true nature of the agency's duplicity, I offer the fact that even when we had biennial steps, quality step increases (QSI) were removed from the program. How does the system work now? Well, you work hard, contribute to the mission, commiserate with your peers, supervisors, and third tier executives, and then wait until the agency figures out how much it wants to spend on payroll before it lets you know what your Exceeds Fully Successful is going to represent (forget about getting an Outstanding). One thing is an unequivocal certainty...annual pay events will be less, not more, not the same, as they would have been under the original IR-01 plan. Mark S. Pfeiffer Posted April 20, 2007 9:28 PM
- This is supposed to be an improvement? I suggest so called "pay for performance" be implemented for all elected and politically appointed members of the current administration first, before it creeps any deeper into the general government. The budget savings could then be used to provide an across the board pay raise for all career federal employees. This would do more to improve morale in the federal work force than anything else so far proposed. GovExec.com reader Posted April 19, 2007 3:51 AM
