Nine more agencies gain SES pay certification

Nine more federal agencies have received certification from the Office of Personnel Management and the Office of Management and Budget for their performance evaluation systems. Those agencies can now raise executive salaries to nearly $160,000 a year.

Eight of the agencies received provisional certification, which will expire at the end of 2004. To raise executives' pay up to the new cap in 2005, those agencies will have to reapply for certification. But agencies with provisional certification can initiate employee raises this year and process them in 2005, if necessary.

The eight agencies are the Commerce, Treasury and Veterans Affairs departments, the inspector general's office at the Housing and Urban Development Department, the Federal Communications Commission, the National Aeronautics and Space Administration, the National Endowment for the Arts, and the Small Business Administration. The General Services Administration received full certification for its plan, so it will not have to seek recertification until the end of 2005.

About 3,000 of the nearly 7,000 top civil service executives now are eligible to receive the higher pay rate. P> Congress passed legislation in November 2003 that authorized OPM and OMB to raise the senior executive pay cap from the rate for executive level III ($145,600) to executive level II ($158,100), but only if agencies could demonstrate that they had developed reliable means of measuring executive performance. The law also permits certified agencies to raise the aggregate pay cap for executives to $203,000 per year when bonuses are included.

But the law also eliminated regular cost-of-living adjustments for the government's senior executives, as well as locality pay. Under the new system, executives only receive raises if agency management determines that their performance merits an increase.

About 70 percent of executives now receive basic pay rates at or near the old base pay cap and the new cap was designed to relieve pay compression in the upper echelons of the Senior Executive Service. The OPM guidelines say that agency heads must approve raises above executive level III, and that only the best performers or those who make the greatest contributions to the agency should receive the higher salaries.

Employees at agencies that have not received certification will be eligible for raises only if President Bush raises executive schedule salary caps and agency managers determine that the executives' performance merits an increase. Those employees also will only be eligible for raises up to the old pay cap, $145,600, plus any percentage increase granted by Bush.

Last July, OPM issued regulations that established rigorous criteria for SES performance appraisal systems. Full certification requires that such systems meet nine criteria in the areas of "strategic alignment, consultation, results, balance, assessment and guidance, oversight, accountability, performance differentiation, and pay differentiation."

Provisional certification is given to agencies whose performance appraisal systems have met five of the nine criteria: strategic alignment, consultation, results, balance, and accountability. Full certification cannot be granted to any agency unless it can demonstrate two years of results under the pay differentiation and performance differentiation criteria.

Last October, OPM announced that the Pension Benefit Guaranty Corporation had received full certification for its performance evaluation system, while 10 other agencies had won provisional certification: the Health and Human Services, Interior and Transportation departments; Environmental Protection Agency; Federal Energy Regulatory Commission; Federal Trade Commission; Office of National Drug Control Policy; Merit Systems Protection Board; Railroad Retirement Board, and Social Security Administration.

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