Commerce: No Guaranteed Raises

The money that would have gone to cover longevity-based pay raises would go toward base pay raises and bonuses for hard workers.

Under the plan, which is expected to go into effect in November, the General Schedule pay scale would be eliminated. Employees would instead be classified in broad pay bands, which would be different for different types of careers. For example, scientists might be classified in bands like entry, developmental, expert and managerial. Administrators, computer specialists and other professions would have different band structures.

Broad banding, its proponents say, gives supervisors more flexibility when giving raises and ties promotion more closely to performance. If a manager decides an employee deserves a raise, his or her manager is not confined to the step increases in the General Schedule, but can determine an appropriate raise within the pay band.

Furthermore, the project would allow supervisors to reward employees for superb performance with bonuses of up to $10,000.

Under the demonstration project, managers also would be able to deny raises to poor performers.

"We will move away from management decisions being made in the human resources department," says Stroud. Managers will have more control over how they allot raises, but will also be held more accountable for their decisions, she says.

The proposal draws on a demonstration project on alternative compensation and classification systems that has been under way at the National Institute of Standards and Technology (NIST) since 1988. The project would be tested at portions of five Commerce Department organizations: the Office of the Secretary, Office of Technology Administration, Economics and Statistics Administration, National Telecommunications and Information Administration, and National Oceanic and Atmospheric Administration.

Commerce held meetings over the last few months so that employees could air their concerns about the project. Some employees were worried about losing the guaranteed pay increases in the General Schedule. Stroud says government is moving away from those guarantees. "Employees will be financially recognized based on their performance," she says.