Senior executives see smaller pay raises

Declining pay raises and bonuses for federal executives could deter General Schedule employees from applying to the Senior Executive Service, according to a former SES member.

A recent Office of Personnel Management study of 7,436 executives governmentwide found SES members received an average 2.7 percent increase in pay, or $4,485, in fiscal 2009. The raise is the lowest in the five years since the pay-for-performance system began. Executives in fiscal 2004 and fiscal 2008 received a 3.7 percent increase; and saw 3.8 percent, 3.1 percent and 3.5 percent boosts in fiscal 2005, 2006 and 2007, respectively. The fiscal 2009 adjustment was a full percentage point lower and nearly $1,350 less than the previous year.

In addition, 78.5 percent of senior executives received performance awards averaging $14,802 compared to $14,831 in fiscal 2008.

"By and large, the pay adjustments for senior executives compare rather unfavorably for [General Schedule] pay adjustments, which are made without regard to performance," said Carol A. Bonosaro, president of the Senior Executives Association, noting fiscal 2009 was the first year in which SES raises surpassed those of GS employees. Federal workers received a 2 percent raise in January compared to a 3.9 percent boost in 2009.

Bonosaro noted tight budgets and the potential for many federal executives to retire in the near future could create a gap in the SES.

"It's a bad or unfortunate time to devote any effort to curtailing performance awards. And it's also a bad time to be giving relatively parsimonious pay adjustments because those [GS-14s and GS-15s] know if they stay in the GS system chances are they are going to do better with fewer responsibilities," she said.

According to Bonosaro, agencies increasingly are using performance awards rather than pay adjustments to recognize SES achievements. Seventy-six percent of senior executives received bonuses in fiscal 2008 compared to just 58.2 percent in fiscal 2004 and 66.5 percent in fiscal 2005. Agencies often prefer awards over raises because they are one-time payments, said Bonosaro, but those bonuses don't factor into executives' high-three average salary used to calculate Civil Service Retirement System and Federal Employees Retirement System annuities.

Agencies also awarded a range of ratings, upon which raises and bonuses are based, to senior executives. The U.S. Agency for International Development awarded 85.7 percent of career SES the highest rating compared to 28.5 percent at the Defense Department and 30.2 percent at OPM. These differences raise questions about whether government should adopt a more uniform rating standard and why a rating of "outstanding" merits a lower adjustment at one agency than another, Bonosaro said.