OPM to issue federal pay review next week

The Office of Personnel Management will issue a review of federal pay next week that officials hope will trigger a debate on potential pay reforms.

OPM Director Kay Coles James will unveil the report to civil service leaders at a closed session on the government's human resources challenges sponsored by Harvard University's Kennedy School of Government on Monday. On Tuesday, OPM will publish the report on its Web site.

The report, "A Fresh Start for Federal Pay: The Case for Modernization," will discuss the current state of federal pay and the problems people have with the government's compensation system. The report won't make recommendations for change, OPM officials said. Instead, it will serve as a catalyst for discussions of pay reform.

The American Federation of Government Employees issued a pre-emptive strike against the report on Wednesday. AFGE President Bobby Harnage said in a written statement: "Federal pay is too low. That is the problem with the federal pay system, and more funding is the solution to that problem. But OPM has released a virtually useless report full of jargon and arguments for the ridiculous idea that inadequate pay can be addressed by robbing Peter to pay Paul."

Harnage said the report promotes pay for performance or merit pay, a concept the union does not endorse. "Merit pay invites favoritism and favoritism invites corruption," Harnage said.

In recent speeches, James has argued that the current compensation system is out-of-date, focusing on pay equity among federal employees-equal pay for equal work-without differentiating pay based on performance or on labor market pay rates.

"While basic internal consistency is important, internal equity is only one part of the equation," James told the Classification and Compensation Society in December. The society is a group of federal pay specialists. "High-performing organizations know that their pay must be competitive in the market in which they operate--in other words, provide external equity--or they will lose the best employees. They recognize that performance should be rewarded--that individual equity also must be part of a successful compensation system."

Congress is considering several pieces of legislation that would make changes to the federal personnel system.