Federal Job Pay, Promotions Based On Tenure, Not Performance

Federal jobs have been in the public eye (however not in the eye of the main stream media) the last few days, thanks to Obama’s fondness for lawless executive orders. While doing research on the subject I am reminded that Congressman Darrell Issa proposed legislation to reform step increases for poor performing federal workers. The bill was defeated in the House with 46 Republicans voting against it. There was also House legislation requiring “pay for performance” restrictions for federal workers in the 2012 Defense Bill. The Bill is in Committee in the Senate and, doing a word search, there is no language calling for “pay for performance” in the Bill they are considering. In April 2011, Issa and Congressman Dennis Ross called for the Government Accounting Office (GAO) to review how federal workers are paid. The following is some very interesting information on the way our government pays, promotes and lies about our public servants.

Pullout Quote:

Federal employees who put in a minimal amount of effort automatically earn within-grade increases in pay. Over three-quarters of federal pay increases are based on time served, not performance. This systematically inflates federal pay. ~ James Sherk, Senior policy analyst in labor economics at The Heritage Foundation

The House legislation not in the pending Senate bill sought to make federal raises and promotion dependent upon satisfactory job performance; a strategy not ignored in the private sector, where if you don’t do your job well, you don’t keep your job. This legislation DID pass the House.

Congressman Darrell Issa, Chairman House Oversight and Government Reform Committee:

“Americans believe in pay for performance,” Issa said in a statement issued late Wednesday. “The federal pay system is not a pay for performance system. This provision moves us in the right direction, because it stops rewarding non-performers.” Source: Washington Post

Also from Issa, and note the difference in the way the government labor statistics on federal pay, and what you see below from James Sherk (April 2011):

Two leading House Republicans last week asked the Government Accountability Office to help lay the groundwork for replacing the General Schedule with a performance-based system.

House Oversight and Government Reform Committee Chairman Darrell Issa, R-Calif., and Rep. Dennis Ross, R-Fla., the chairman of the federal workforce subcommittee, said in an April 1 letter to GAO that the GS system must be replaced “with a merit-based, market sensitive system that recognizes and rewards individual employee performance.”

The federal government’s own studies, based on data from the Bureau of Labor Statistics, show federal employees are paid on average 24 percent less than their private-sector counterparts. But recent studies from conservative and libertarian groups such as the Heritage Foundation and Cato Institute conclude that federal employees are vastly overcompensated.

James Sherk, a senior policy analyst writes (my emphasis):

The federal pay system unnecessarily inflates federal pay. My research shows that, on average, federal employees earn hourly wages 22 percent higher than otherwise comparable private-sector workers. Numerous studies by researchers whose personal views span the political spectrum come to similar conclusions.

The only significant study that finds that federal employees are underpaid is the President’s Pay Agent report. However, even the Office of Personnel Management has serious concerns with this study’s methodology and believes that this finding lacks credibility.

If the federal government underpaid its workers, it would have severe retention problems. Instead, the opposite occurs. Federal employees are considerably less likely than private-sector workers to quit their jobs. Federal employees demonstrate that they earn above-market pay through their actions.

Federal employees also receive premium benefits. They receive both a defined-benefit and defined-contribution pension plan, can retire with full benefits at 56, and receive significantly more paid leave than their private-sector counterparts. Accounting for the value of these benefits raises the federal compensation premium to between 30 percent and 40 percent above similar private-sector workers. All told, the federal compensation premium will cost taxpayers $47 billion this year.

A major factor inflating federal pay is the fact that the federal government promotes employees faster than private-sector employers. My research found that most of the federal pay premium resulted from federal employees receiving raises more rapidly than their private-sector counterparts.This is a consequence of the General Schedule, which primarily bases pay on time served rather than performance.Federal employees who put in a minimal amount of effort automatically earn within-grade increases in pay. Over three-quarters of federal pay increases are based on time served, not performance. This systematically inflates federal pay.

Federal promotions are called “step increases.” Demotions within the federal system are unheard of. A Federal Times article asks: Does job performance play a factor in employee raises and step increases?

Unions defending the General Schedule say yes.

But the latest numbers say clearly no.

Only 737 out of more than 1.2 million GS employees — or one in every 1,698 — were denied a regularly scheduled step increase and accompanying raise in 2009 because of poor performance, according to data provided by the Office of Personnel Management at Federal Times’ request.

That equates to a 0.06 percent denial rate, which is far lower than any estimates given of how many poor performers exist in the work force. OPM estimated in 1999 that poor performers make up approximately 3.7 percent of the federal work force. A 2000 survey by the Merit Systems Protection Board found that 14.3 percent of federal employees were judged by co-workers to be performing below reasonably expected levels.

In a 2010 governmentwide employee satisfaction survey, only 36 percent said they thought differences in performance among employees are recognized in a meaningful way. Only 35 percent said they thought promotions in their work unit were based on merit.

As low as it is, the 0.06 percent rate of denied step increases in 2009 is the highest rate in recent years. OPM statistics show that between fiscal 2004 and 2008, the number of employees denied step increases each year varied between 556 and 696 — or between 0.04 percent and 0.05 percent.

Read more about “step increases” at the link above. The fact is, the government lies to us regularly. Let’s not forget it and encourage Issa to soldier on.

Linked by Jimmy Bise at The Sundries Shack’s “Don’t Play the Paartisan Hacks’ Game. Thanks!

Related and Background:

Obama Jobs Plan by Executive Order: Maxine Waters Orders Obama to Get His Diversity On

Obama Orders Diversity by Executive Order: Diversity = Social Justice 

Posted by Maggie @ Maggie’s Notebook


  • How about a 5% pay cut across the board, then wait for a few months or a year to see if there is any decrease in the numbers or the output, and then maybe try it again. We are an evidence-based Administration, aren’t we?

  • Years ago,before the automatic pay raises for Fed Employees was even heard of we or most of us who got a pay raise got it on merit. There was a lot of bitching and moaning several years later as the ranks filled with affirmative action types who felt they were owed every thing and if they failed to get a raise they filed a complaint and sure enough they got a raise . They would then flaunt the fact they could get a raise when “whitey” couldn’t cause they knew how to make the system work. What they menat was they knew how to work the system. Eventually it became the status quo to give raises based on many things other than performance. Basically what it was was a raise based on race. Promotions came the same way. Hiring came into play with the quota system which was denied for years. Even States were taken into the game by the “race baiters” and if you were white and competing with a Black, especially a Black female for a job then white boy you had better just forget it. The State of NC said they didn’t use that system but I was privy(via my now late wife) to a memo giving the number of “credits” that an agency got for certain hiring practices. Black female got the most credits, Black got the next, other race got third and White was just a mention. Pay raises and promotions came the same way at the State level. Wife had over 17 years with the State, more time in grade and at the position than the competing (Black)individual a promotion and you can guess who got the position. The one with 5 years time with the State and 6 months experience.
    The Feds have and continue to sink to new lows and with Obummers new “law” ,another one of his royal assholes decrees, it will get worse. Whites may as well not even try to get a job, or a promotion or a raise. As one recent VA employee told me,” We got da man in duh WH and we gets what we want”.

    Time to go back to when if you couldn’t cut it, you were OUT!. Don’t hold your breath however for that to happen. We have become too much of an entitlement society.

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