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Executives continue to earn high performance marks

In 2003, nearly 75 percent of SESers received top ratings and more than half received bonuses averaging $12,883.

Agencies continued to rate the performance of their senior executives at very high levels in 2003, according to new data released by the Office of Personnel Management.

The percentage of career senior executives given their agencies' highest possible rating was 74.5 percent in 2003, just one-tenth of 1 percent lower than in 2002. Governmentwide, 57.4 percent of senior executives received performance bonuses, averaging $12,883.

Those percentages may decrease when 2004 figures are released. In December 2004, OPM and the Office of Management and Budget finalized regulations that require agencies to set up rigorous performance evaluation systems in exchange for the right to lift maximum SES salaries to about $160,000 a year.

Last year, 26 agencies won provisional certification, which must be renewed annually, and two others-the General Services Administration and Pension Benefit Guarantee Corporation-earned full certification.

In a memorandum sent to agency heads announcing the 2003 executive pay data, OPM Acting Director Dan G. Blair said that OPM and OMB "fully expect the results of the 2004 rating cycle to reflect the stringent terms and conditions of an agency's certification."

In 2003, the Housing and Urban Development, Interior, and Transportation departments gave every one of their 420 senior executives top marks. Other agencies, such as the Defense, Education, Health and Human Services, and State departments weren't far behind, with more than 96 percent of executives at the highest possible rating level. The Labor Department was the toughest grader among Cabinet-level agencies. It rated only 32.5 percent of its executives at the highest level.

At the same time, though, Labor was the most generous in doling out bonuses. More than 90 percent of its executives received performance awards, averaging $11,594. The biggest bonuses went to Defense Department executives, who averaged $16,418. The smallest were at Housing and Urban Development, where bonuses averaged $8,947. HHS had the lowest percentage of executives awarded bonuses, at 25.8 percent.

Congress passed legislation in November 2003 that authorized OPM and OMB to raise the Senior Executive Service pay cap from the rate for Executive Level III to Executive Level II ($162,100), but only if agencies could demonstrate that they had developed reliable means of measuring executive performance.

The law 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 leaders determine that their performance merits an increase.

At the time of the law's passage, about 70 percent of executives received basic pay rates at or near the old cap of $145,600. The new cap was designed to relieve pay compression in the upper echelons of the SES. The OPM guidelines state 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 are eligible for raises only to Executive Level III, $149,200.

Last July, OPM issued regulations that established rigorous criteria for SES performance appraisals. Full certification requires that such systems meet nine criteria: 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 unless an agency can demonstrate two years of results under the pay differentiation and performance differentiation criteria.