The pay debate

Do you trust your manager to set your pay?

The Bush administration's legislative blueprint for the new Department of Homeland Security makes the following request: Trust us.

But 'Don't trust them' has long been the rule of thumb in federal management, leading to to exhaustive rules that tell the government's supervisors how to manage their employees. Some 36 chapters of Title 5 of federal law-2,141 pages altogether-set out the rules of federal human resources management. Pay rules, for example, dictate that an employee whose job requires "somewhat extended" training and experience be paid one pay level less (GS-11) than someone whose job requires "extended" training and experience (GS-12).

Instead of a massive set of legal rules, managers in the president's proposed Homeland Security Department would operate under just three relatively vague adjectives. The administration's legislation calls for a personnel system that is "(a) flexible, (b) contemporary and (c) grounded in the public employment principles of merit and fitness."

The new department's executives, with the help of experts from the Office of Personnel Management, would be responsible for crafting this new system. While they would develop regulations to govern the actions of federal managers, those rules would be much less rigid than the statutory restrictions that govern other departments' managers.

The first two adjectives are essentially refutations of the current personnel system, which reformers consider rigid and old-fashioned. The third adjective refers to the nine established merit principles and the basic notion that people should be qualified for their jobs.

The administration could have worded that section as: "grounded in the public employment principles of merit described in 5 U.S.C. 2301(b) and the principles of fitness described in 5 U.S.C. 3301 (and other sections of Title 5)."

Instead, the administration chose to leave the definition of those terms up to the leaders of the new department and of OPM.

OPM Director Kay Coles James has said that she would like to see federal pay more closely reflect labor market rates and individual employee performance. She has also said that the current pay system puts too much emphasis on equal pay for equal work. James envisions a pay system that balances all three factors: market rates, performance and internal equity.

Two of James' three criteria can be set relatively scientifically. Internal equity has typically been achieved through the use of set salary schedules. To determine labor market rates, employers typically turn to salary surveys.

It's the third criterion, individual employee performance, where human discretion-supervisory discretion-becomes most important. And it's in that criterion, as far as federal pay goes, that the Bush administration is making the "Trust us" request.

For federal employees, the question is: Do you trust your manager to evaluate your performance objectively and then make decisions about your pay based on his or her evaluation?

And two follow-up questions are: If so, why? If not, why not?

Send your thoughts to bfriel@govexec.com. I'll explore your responses in an upcoming column.