Raising the Roof

More than 6,000 members of the Senior Executive Service will begin to work under a new pay system in 2004, which will include a higher pay cap. That should somewhat relieve the pay compression that has left 70 percent of all senior executives earning the same salary.

The current SES pay cap is $134,000, plus locality-based pay. Under new rules included in the 2004 Defense Authorization Act, agencies that have a performance management system certified by the Office of Personnel Management will be able to pay their senior executives up to $154,700. Increasing the pay cap was a victory for the Senior Executives Association, which represents these top managers and lobbied hard for inclusion of the provision.

OPM will begin to offer provisional performance management certifications for agencies before the end of the year, so the agencies can move forward with the new pay plan early in the new year. More detailed regulations regarding performance management systems, to be worked out by OPM and the Office of Management and Budget, also are forthcoming.

The shift will presumably lead agencies to tighten up on performance grading standards for senior executives, and make it more difficult to reach the top end of the pay range. In recent years, more than 80 percent of senior executives have received the highest performance rating possible.

The new pay system eliminates the six current SES pay levels and replaces them with one pay range with a floor of about $102,000. It also abolishes locality pay, though all current senior executives will at least maintain their current pay rate.

The bill does not state whether or not SES members will receive pay increases when Congress sets the governmentwide pay raise each year. It guarantees that pay will not be decreased for any senior executive for a period of one year, but eliminates locality pay for executives.

The Senior Executives Association lobbied against the removal of locality pay, but according to SEA president Carol Bonosaro, the Bush administration insisted on it.

Bonosaro also is displeased with a provision in the legislation that would allow the Defense Department to hire up to 2,500 "highly qualified" experts from outside government. Each of the experts could hold a position at the department for up to six years. Her concern is that the department may use these experts as a mechanism for replacing senior executives with political appointees. The Defense Department, which requested the authority, argued that it was necessary to compete with the private sector for scientists, engineers and medical personnel.