GovernmentExecutive.com

The New Year brings a new pay system for employees at the Government Accountability Office.

GAO, which has been a leader in federal personnel reform and holds an exemption from most civil service rules, is introducing market sensitivity to its pay scale. The audit agency hired the global consulting firm Watson Wyatt to conduct a study of compensation for analysts and is making several changes based on those findings.

This year, the GAO is guaranteeing that all employees with a "meets expectation" or higher rating will receive at least a 2.6 percent salary adjustment, as long as their pay falls within a competitive market range. All pay hikes beyond that will be tied directly to performance ratings. Watson Wyatt found that comparable employers were raising pay 2.6 percent this year.

Analysts will be placed in one of four paybands, rather than three. The middle band is being split into two, with a higher compensation range available in the upper band for employees deemed to have supervisory roles.

The compensation study, which examined similar agencies such as the Office of Management and Budget and the Congressional Budget Office, as well as think tanks, not-for-profit groups and private accounting and consulting firms, found that GAO was paying too much for some analysts but not enough for supervisors.

Comptroller General David Walker, who heads GAO, said the agency should have conducted a market study when it launched the bands in 1989. He is encouraging all agencies moving from the General Schedule to a system of broad paybands to complete a market study at the start.

"Had we done the market-based study in 1989, I believe we would have set up four pay ranges, and we would have never had to have dealt with the...issue," Walker said. "The assumption was the GS pay ranges represented the market. Those assumptions may or may not be valid."

GAO analysts in the newly split band had the option to apply for placement in the better-paid supervisory band. Walker said decisions were made in a multilevel process, are open to appeal and will take effect on Jan. 9.

The decision will be based on three factors, he said: "What were the actual roles and responsibilities that these individuals had over the last several years? What was their actual and relative performance as compared to their peer group over the last several years? And number three, did they have the ability to immediately perform at a 'meets expectation' level or better."

Pay for the supervisory band will be up to $10,000 more than current levels, maxing out at $128,300 for the Washington, D.C., area. Only employees rated in the top half of their peers in this band will be eligible to achieve more than $118,000, however.

The lower, nonsupervisory band's maximum for Washington is $101,600.

Walker said no one's salary will be cut, but some employees' potential future earnings could be lower as a result of the market study.