GAO releases details of new pay structure

In the first step towards implementing new personnel flexibilities granted by Congress, the Government Accountability Office announced on Thursday that it has set new market-based compensation ranges for much of its workforce, as well as "general principles" that will guide managers in making decisions about performance-based raises in the future.

The new pay ranges are good news for upper-level analysts, as well as attorneys and economists, whose pay caps were raised, but bad news for less experienced analysts, for whom maximum future potential earnings were reduced. The change will mostly affect new hires initially, since current analysts will not have their pay reduced because of the change.

The 2004 GAO Human Capital Reform Act (H.R. 2751) gave the agency the authority to link all raises to managerial evaluations of employees' performance starting in fiscal 2006. In 2005, GAO may deny raises to employees who don't meet expectations, but must give others at least the governmentwide average increase of 3.5 percent.

The law also allows GAO to offer greater vacation time to experienced new employees, and to conduct exchange programs with private businesses.

The announcement followed a study by consulting firm Watson Wyatt that examined private and public sector pay ranges for employees with skills similar to GAO analysts, specialists and attorneys.

New employees will face a "speed bump" before they can advance to the top levels of the new pay ranges, starting in 2006. Only employees who rank among the best in annual performance evaluations will be able to advance beyond a certain as-yet-to-be-determined pay level, to the top rate in the range.

Employees who have salaries above the new pay ranges will not be able to receive raises after this year, but can win annual bonuses if their performance is above a specified level. This year their rating must be in the top 20 percent for their pay band. Eventually, as the pay ranges increase with inflation and changes in labor market rates, all employees will receive salaries within the ranges. This year, those employees will receive the governmentwide average increase.

For the Washington area, the presentation indicated that salaries for Level I analysts would be between $45,000 and $74,000 if the employee has a master's degree. Analysts without master's degrees will be in a less generous, but as-yet-unspecified range.

Level II analysts can be paid between $60,000 and $125,000. However, in order for employees to be paid in the top half of this range in future years, they will have to meet certain criteria that have yet to be determined. Level III analysts will earn between $86,000 and $135,500, an estimate that will be adjusted when the Office of Personnel Management sets final locality pay rates for the Washington metro area.

In Washington, Level I economists and attorneys will earn between $57,000 and $94,000; Level II, between $75,000 and $125,000; and Level III, between $86,000 and an estimated $135,500. Financial auditors, IT analysts, social science analysts and statisticians at Level I will have the same pay ranges as the analysts. Communications analysts at level I will earn between $38,000 and $63,000. At Level II, they will earn between $60,000 and $99,000.

GAO will gradually readjust some locality pay ranges. New employees in Huntsville, Ala., for example, will face a 5.26 percent reduction, while employees in Boston will receive 3.94 percent increases. The changes will be phased in over several years. Still, no current employee will face a reduction in pay because of the rule changes.

Under GAO's performance-based pay rules, the amount of performance-based pay each employee receives will be allocated between an increase to base pay and a one-time bonus depending on where the individual's current salary places them in relation to the new compensation ranges. If the employee's salary is higher than the middle of the range, a greater percentage of the raise will be given as a bonus.