A Cautionary Note

The old hands of federal pay and personnel issue a warning to the Bush administration.

It's a sign of the times. The end is near for the Classification and Compensation Society, a professional group for federal human resources specialists steeped in the knowledge of how the government's complicated classification and pay systems work.

These are the folks who can tell you the difference between a GS-11 and a GS-12. They know how to put together the knowledge, skills and abilities requirements for federal jobs. They understand the difference between a team leader and a supervisor.

But classifiers are a vanishing breed in the federal government. Faced with downsizing in the 1990s, federal agencies pushed their human resources officers to become generalists, capable of dealing with hiring, performance evaluation, benefits issues, equal employment opportunity concerns and the many other issues that HR professionals have to address.

In the late 1970s, more than 2,000 classifiers worked in the government. By 1996, only 1,100 did. By March of this year, the total had fallen to fewer than 500. The ranks of the government's overall human resources workforce declined by 20 percent from 1991 to 1998.

Faced with declining membership and revenue, the Classification and Compensation Society, a fixture in the federal HR world for decades, expects to shut down soon if it does not merge its operations into a larger human resources professional organization.

But before the organization disappears, the old hands of federal classification and pay have sent a cautionary note to Bush administration officials: Don't be too hasty.

Their concern stems from the Office of Personnel Management's recent white paper, "A Fresh Start for Federal Pay." The paper says the current system of classifying and paying workers doesn't reward individual excellence and does not reflect market pay levels. OPM suggests reforms are needed to correct those problems. OPM is also pushing for a "flexible and contemporary" personnel system for the new Department of Homeland Security.

In a letter crafted by the Classification and Compensation Society's executive board, the group's president, Richard W. Bell offered the following pieces of advice to OPM Director Kay Coles James:

  • "Flexibility is a fine idea in principle, but too much creates waste and confusion. … Individual agency pay and classification systems increase government overhead costs. Continued Balkanization of human resources erodes the ties to basic merit system values."
  • "The last decade has seen an erosion of human resources staff levels and skills. It leaves too few of us-particularly those of us with expertise in compensation, job evaluation and organizational design-to handle anything as ambitious as designing multiple new pay and job evaluation systems. As evidenced by the demise of our society, there are fewer and fewer federal HR specialists with the requisite knowledge, skill and experience to take on such a task and make it work."
  • "We urge you not to yield to the temptation to rush headlong into the HR fad du jour, throwing out bathwater, baby, tub and plumbing system, only to discover that the results are far worse than the problems you hope to solve."

The administration has floated several possible reforms for the pay system. The General Schedule, the 15-level pay system for federal workers, could be replaced by a pay- banding system. Pay-banding would reduce the number of levels and allow managers more discretion in setting pay within the levels. Proponents say pay-banding lets managers differentiate pay based on performance more easily than does the General Schedule.

In the society's letter, Bell cautioned that pay-for-performance systems are more expensive than the General Schedule and can end up promoting favoritism rather than good performance. "Safeguards must be put into place to curtail pay increases based mainly on skilled performance in the game of organizational politics," Bell wrote.

The society's proceed-with-caution letter may go unheeded in the Bush administration, which has threatened to veto any legislation setting up the Department of Homeland Security that doesn't give the executive branch the power to set up a new personnel and pay system for the new organization. OPM's James has also pledged to reform the federal pay system before her tenure is over.

What do you think? Is it time for pay reform or should the Bush administration slow down? Send your comments to bfriel@govexec.com. We'll publish your thoughts in an upcoming Pay and Benefits Watch.