The Office of Personnel Management recently issued the interim regulations that will help agencies make sure that senior executives are given meaningful performance evaluations, a critical first step before performance pay plans can be implemented.
The interim rules lay out the criteria agencies must meet if their performance pay systems are to receive OPM certification. OPM Director Kay Coles James said the federal government must have an effective process for recognizing good performance before top performers can be rewarded.
"The new [Senior Executive Service] rules are the outgrowth of three years of marked progress under the President's Management Agenda and illustrate a firm commitment to focus on performance and achieve results," James said. "Pay levels and pay adjustments for thousands of executives will now be determined by the evaluations earned under appraisal systems that make meaningful distinctions based on relative performance."
At many agencies, top performance ratings have been handed out to senior federal officials across the board, according to critics. In June, the Government Accountability Office said federal personnel officials must make performance ratings for senior executives more meaningful. The GAO surveyed executives at NASA and the Education and Health and Human Services departments and found that a large majority of senior executives received the highest possible performance rating in 2003. Less than half of the executives in the GAO survey said they believe the performance evaluation system provides "candid and constructive feedback."
The interim regulations for executive performance and accountability lay out specific criteria that agencies must satisfy to have their SES performance appraisal systems certified. The proposed SES pay regulations set forward the procedure for establishing basic pay for senior executives and increasing the top pay level.
After agencies have had their SES performance rating systems certified-and OPM's final regulations are issued-the top performing senior executives will be eligible for a higher pay rate, up to the vice president's annual salary of $203,000.
"These are important steps in reforming the federal pay and performance systems," James said in a July 26 memo to agencies. "They will enhance your ability to recruit and retain employees who can make vital contributions to your agency's mission and organizational goals."
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