Promotions and pay increases decline for many workers

Opportunities for promotions and related salary increases have declined in the federal workforce, forcing managers to use other incentives to recognize good work and help employees advance, according to a human resources organization.

A survey, released this month by WorldatWork, a human resources association focused on compensation, benefits and work-life issues, found that opportunities for promotions in the public sector have decreased, along with the average size of the pay raises associated with more senior positions.

Respondents from 720 government and private sector organizations reported that only 7 percent of the employee population received promotions in 2009 compared to 8.1 percent in a typical year. Employees at all levels have received smaller salary increases during the past few years, but officers and executives saw the biggest decline, from 11.4 percent in 2005 to 9.5 percent in 2010.

Public sector respondents reported promotions declined from 7.7 percent in a typical year to 6.8 percent in 2009. In 2010, hourly wage employees received an average raise of 6.9 percent, compared to 8.4 percent for salaried workers and 8.7 percent for officers and executives.

Promotions signal to employees that there are opportunities for recognition to advance in their career and to receive financial rewards, said Jim Stoeckmann, senior practice leader for WorldatWork. For federal workers facing a two-year pay freeze, the number of advancement opportunities and the size of promotional increases will go down, he said.

President Obama in December 2010 issued an executive order freezing federal civilian pay for two years. According to the Office of Personnel Management, however, workers still will be eligible for some raises, including performance awards, promotions, periodic within-grade step increases based on fully successful level of performance, and quality step increases for outstanding performance.

"The freeze is going to limit promotional options," Stoeckmann said. "The opportunity to recognize employees and to advance is a way to motivate the workforce. Especially with the pay freeze, it's going to be a significant issue."

According to Stoeckmann, federal managers would be smart to look for opportunities to reward employees with both cash and noncash incentives, such as praise from leadership and recognition of workers' accomplishments. While promotions have stalled, those opportunities are still there, he added.

The survey also found that most organizations do not communicate promotional opportunities to current employees or potential hires. Nearly two-thirds of respondents share promotion policies only when employees ask, while just 35 percent use promotional guidelines as a tool to attract new employees.

"Many organizations don't do a good job of communicating the kinds of promotional opportunities, what the guidelines are when you are promoted, how raises will be determined, or recognizing employees after being promoted," said Stoeckmann. "You are really missing an opportunity as an employer if you're not taking the time to look at that number or giving visibility to those who have recently been recognized."