Freeze on bonuses could have trickledown effect

While the executive order President Obama signed on Tuesday suspending bonuses and cash awards for political appointees through the end of fiscal 2011 does not directly affect career civil servants there could be trickledown effects, according to a group representing senior executives.

In justifying the freeze in any bonuses or discretionary payments or salary adjustments for political officials, Obama said he appreciated the work of federal employees and understood these payments were important to them. "Yet like households and businesses across the country, we need to make tough choices about how to spend our funds," the president said.

Carol Bonosaro, president of the Senior Executives Association, said the freeze was not surprising, but she was concerned there will be indirect effects on the career civil service.

"When you're a political appointee who is suddenly not eligible to receive a cash award, your inclination to be appropriately generous to your career executives will be decreased," she said.

Performance awards, which are completely discretionary, are a substantial part of senior executives' compensation, according to Bonosaro. Members of the SES do not receive the same annual pay raises as General Schedule employees; senior executives' pay is based on job performance, under a system established by the fiscal 2004 National Defense Authorization Act.

"We have already heard some concerns from executives that agencies might be cutting back on performance awards for the same reasons the president cited," she said. "When you add this [executive order] to the mix, it does raise concerns."

Matthew Biggs, legislative and political director for the International Federation of Professional and Technical Engineers, said the order was a clear extension of the president's earlier statements that political appointees should not expect raises. But Biggs said any future actions affecting the bonuses of career federal employees could have unintended consequences.

"In terms of the potential of things to come, if a similar freeze on bonuses were to be extended to the rank and file, it would not be a stretch to assume that such an action would seriously endanger any future effort by [the Office of Personnel Management] to put in place governmentwide performance management," Biggs said.