Why Agencies Should Invest in Managers (and Pay Them More)

With the end of the pandemic in sight, agencies will soon be expected to transition to what will be the new normal. Where working remotely has become the norm, the genie is out of the bottle. Employees who became comfortable with increased autonomy are going to resist returning to the old grind. There are pros and cons to working remotely but overall it's proven to be attractive to both employers and employees.

The group that has been most affected by the change are managers and supervisors, and the most important remaining question is what more agencies need to do to prepare them for the redefined future.

In other sectors, managers are central to creating high performance organizations. Their behavior is the focus of Gallup’s Q12 employee engagement surveys. To make the often repeated statement, highly engaged employees perform better. That’s attributable to better managers. Multiple research studies in 40 countries show organizations that adopt effective day-to-day management practices—those practices below the strategic and policy level—are significantly more successful. Those practices are relevant in every organization and would contribute to better agency performance.  

Government, however, has failed to embrace the lessons learned. Middle managers have been largely forgotten by policy makers as well as researchers. The reasons are buried in the history of civil service and a now outdated understanding of the manager’s role. 

Government has had trouble attracting top talent for years but in some respects even more troubling is the early turnover among new hires. That cost is high. The time invested in recruiting, onboarding and training is a sunk cost. It’s disruptive and the employee’s dissatisfaction prior to resigning affects the morale of co-workers.

The picture is complicated now by the pandemic, the uncertain economy going into 2021, the millions of unemployed, and the possible attraction of working in the new Biden administration. Recruiting could improve but until agencies commit to improving the new hire experience early turnover will continue to be a problem. 

Again, research shows managers are the primary reason new hires resign early. Research by Gallup and others confirms “the No. 1 reason people quit their jobs is a bad boss or immediate supervisor.” Managers are the keys to making new hires fully productive. 

It’s Time to Invest

The pandemic and the shift to working remotely has forced all employers to begin rethinking how work is organized and managed. That should be seen as an opportunity. Change is already well underway. A common thread running through the changes in virtually every sector is the need for managers to adapt and empower their people to act with more independence. The process of empowering employees began almost immediately when remote working began. Had it not been for the pandemic, the mass shift to remote work would have been very difficult, if not a failed attempt at organizational change. 

Now is the time to invest in understanding the approach to supervision that is most effective in the new work paradigm. The answers are very likely to vary across government. The role of managers in a federal prison, for example, is clearly not the same as the role of managers in a Social Security office or in the Foreign Service. The practice has been to impose common answers, but that serves no real purpose.

The redefined roles of managers requires a fresh look at the competencies associated with success as a manager. The changes in the supervisor/subordinate relationship and new supervisory practices should be explored and documented. There is no better time to undertake the research. 

The Pay Problem  

Central to the manager “problem” is the pay. Managers and senior executives have long been affected by the artificial—and political—ceiling that is the pay of senior government officials. The salary of members of Congress has been frozen at $174,000 since 2009. Executive Schedule salaries have also been frozen for years. And that governs the salaries and salary increases for members of the Senior Executive Service.

From the passage of the Federal Employee Pay Comparability Act in late 1990, congressional salaries have increased 39%. For comparison, Bureau of Labor Statistics surveys show the salaries of engineers have increased 105%; the salaries of lawyers 123% and registered nurses 140% over the same period of time.

The problem is simple: The starting salaries for promotion to managerial positions are too low to warrant the added headaches of becoming a manager. The linkage to the pay of government leaders is not explicit but the pressure to hold down the salaries of senior executives and managers in government goes back decades, if not centuries. 

The Bureau of Labor Statistics surveys do not even try to determine the market pay levels for managers and executives. In business, management compensation surveys started in the 1950s. Today, surveys are conducted in every industry. Management compensation is a specialized business for consultants.

The starting salary in Washington, D.C., at GS 12 is $83,335, far below what’s needed for a decent lifestyle in a high cost city like Washington. In rural locations, the salary, $76,721, is possibly more attractive. While promotion is a sign of career success, many cannot afford to send their children to college. For comparison, according to Glassdoor, the average starting salary for new software engineering graduates in Washington is $91,568, with undefined “additional cash compensation” of $7,800 (and that’s 4% below the national average.)

Low salaries have to be a problem enticing well qualified employees into management roles across government. That’s a problem in the U.S. Postal Service as well. (USPS never adopted locality pay.) The cost of raising management salaries to make the jobs more attractive would be nominal. 

Already there are federal employees paid well above congressional salaries. The average employee at the Securities & Exchange Commission, for example, earns over $190,000. At the National Institutes of Health, a number of physicians earn more than $300,000 (which is still significantly below what they would earn in private practice). At the state level, it's increasingly common to find some employees paid more than the state governor.

In addition, cash incentives are an integral component of the pay package for private sector managers and supervisors. That’s common in healthcare as well. Year-end awards are based on individual and company performance. At the $100,000 salary level, the average award is at least $10,000. Outstanding performers might earn awards as large as $20,000. For some reason BLS surveys ignore cash incentives.

If it's not possible to increase salaries, adding year-end incentives would make managerial roles more attractive to engaged managers and improve agency performance. Recognizing and rewarding the best performers is essential for creating a performance culture.  

The Goal: Improved Performance

With the end of the pandemic, and with new leaders across government, there will be pressure to re-energize agencies and build a commitment to new strategic goals. The unequivocal good news about the distribution of COVID-19 vaccines should boost morale. It would be a mistake to ignore this opportunity.

Working remotely triggered the transition away from the culture of compliance. That approach to supervision no longer is viable when managers and their people work miles apart. Now is the time to focus on changes to make the new management paradigm fully productive. Leaders have to advocate for change; new talent management practices are needed, but managers are the keys to redefining the work experience and changing the culture in work units across government.

As critical as the issue is, pay is just one factor that needs to be addressed to develop government’s management cadre for the future. For a fuller discussion of what’s at stake and how to boost the performance of government agencies, please download my new ebook with Trish Holliday, Tennessee’s first chief learning officer, Preparing Managers for Tomorrow’s Government.