Making Better Pay Decisions

The Economic Research Institute can tell you what you are likely to be paid if you have one of 5,867 jobs and live in any city of significant size in the United States. ERI can tell you what your bonuses and compensation would be worth, how fast your pay would rise as you become more experienced, and the point at which your salary would plateau. There's just one catch if you're a federal employee: The data just covers the private sector.

It's not as though there's a lack of information about how federal employees are paid. The Office of Personnel Management keeps tidy tables of General Schedule salaries and locality pay adjustments, and cranks out reports on bonuses and performance awards.

But if pay for performance spreads through the federal government, having more information about compensation would be critical for managers as they make decisions about what skills ought to be rewarded with higher pay, what bonuses would keep employees from leaving for the private sector, and how performance should correspond to raises.

In some cases, that would mean training managers about how to make compensation decisions and relying on certified compensation advisers.

"We need some understanding and knowledge of compensation now," said Mary Lacey, the program executive officer for the National Security Personnel System. Managers "are making decisions about how people progress in those pay bands; it's not automatic."

She added that Defense has instituted a requirement that compensation advisers be certified.

"This is an area where the department is going to need some help for a while," she said.

Getting those advisers certified is important, but getting good data from the private sector could help them make useful comparative decisions.

One attendee at an ERI presentation at the HrGov2007 conference in Morgantown, W.Va., earlier this week suggested that private sector data could help agency officials make decisions about what kinds of bonuses would keep high-demand employees from leaving government service in search of higher pay.

In August, The Washington Post reported that the Food and Drug Administration paid $13.6 million in bonuses in 2005. Some of them went to senior agency officials who said they would leave for private sector jobs if they weren't paid sizeable retention bonuses, even though they didn't have specific job offers for comparison purposes.

One FDA executive netted more than $178,000 in bonuses during four and a half years, and another walked away with $129,000 in retention bonuses and merit awards over four years. Officials at the Veterans Affairs and Education departments also have come under fire for the sizes of their bonuses.

Even when bonuses are handed out in appropriate amounts, they are no small matter for federal employees as a whole. Last year, recruitment, relocation and retention bonuses cost the government $140 million. About 67 percent of senior executives received performance bonuses in 2006.

Did 67 percent of executives really turn in outstanding performances? Would FDA officials really have walked away from government careers if they didn't get annual pot sweeteners? It's impossible to say for sure.

But information like those 5,867 job profiles could tell managers whether salary differentials between the public and private sectors are really large enough to keep a young engineer from accepting a job at NASA, or an older regulator from jumping ship to a lobbying firm. They could give some indication of whether a one-time retention bonus would make up an imbalance between sectors, or whether salaries might have to be adjusted upward to eliminate the constant temptation of big-time private salaries. As decisions get more difficult, a little more information could help out a lot.