Obama Increases SES Performance Award Spending Cap

President Obama on Tuesday signed a long-awaited executive order on strengthening the Senior Executive Service that streamlines recruiting and hiring while raising the aggregate spending cap on executive performance awards from the current 4.8 percent cap to 7.5 percent.

The new cap, equal to the average agency percentage spent in 2010 before the White House and the Office of Personnel Management trimmed it, is more generous than the 4.8 percent contained in a draft of the order leaked in November. The statute permits a cap as high as 10 percent.

The impetus for the hike, the order said, is to “retain and reward more top performers” among SES and senior level/scientific or professional employees. “The heads of agencies with SES positions that supervise General Schedule employees will implement policies for initial pay setting and pay adjustments, as appropriate, for career SES so their compensation will exceed that of their subordinate GS employees,” the order stated.

More broadly, the directive seeks to “build a world-class workforce” as part of the president’s management agenda by hiring the best talent, strengthening SES development and improving SES accountability. It was released just minutes after the Office of Management and Budget gathered nearly 300 top federal officials in the Old Executive Office Building to witness the inaugural presentation of the White House Customer Service Awards. That audience included members of the White House Advisory Group on SES reform that helped craft the executive order, as well as some of the 16 White House Leadership Development Fellows on loan from other agencies.

The customer awards, the advisory group and the fellows program all grew out of Obama’s meeting with the SES workforce one year ago. Also in the audience were several winners of the 2015 Presidential Rank Awards, whose names were scrolled during the presentation.

The executive order requires agencies to implement procedures to streamline the hiring process, develop a plan to increase rotations of SES members to differing agencies (as the corps was originally envisioned), boost aggregate spending on performance awards and “increase the initial basic rate of pay to ensure SES/SL/ST earn more than General Schedule employees where they work,” the White House said.

A phased approach will implement talent management and succession planning processes, require executive ownership of recruiting and hiring, increase professional development requirements and create an onboarding program. Those requirements will begin among the 24 Chief Financial Officers Act agencies, with seven implementing in them in fiscal 2016, seven in 2017 and the rest in 2018.

The order also creates a subcommittee of the President’s Management Council to advise OPM, members of the full committee, and the president on implementation and additional ways to strengthen and improve the SES workforce.

Reinforcing the order, OMB and OPM will undertake a number of administrative actions, among them launching an educational campaign on SES performance and accountability and creating an expert team to consult two or three agencies to address SES conduct and performance challenges.

Reacting to the order, Tim Dirks, interim president of the Senior Executives Association, welcomed the hike in performance award spending, which was among the group’s recommendations. “We would have preferred that it be completely lifted, but we think this is definitely movement in the right direction,” he told Government Executive. Though the rise doesn’t take effect until 2017, he noted, the order did indicate that OPM and OMB will review their current guidance on awards for this fiscal year and inform the agencies. He said he is hopeful for a hike this year.

SEA also welcomed acceptance of its recommendation that SESers be made to earn more than the employees they supervise, as well as the encouragement of non-monetary “tools in the toolbox” such as special act awards. Regardless of the presidential election results, “We’re hoping that a new administration would see the value of creating the type of flexibility to reward employees who perform in an outstanding manner in a meaningful way, which is difficult to do it under current guidance.”

Max Stier, president and CEO of the nonprofit Partnership for Public Service, praised the order, saying, “The challenges facing our nation today demand the very best of government. We need a senior leadership team that is innovative, flexible and that works across agency lines and sectors to deliver results for the American people…. Investing in how agencies recruit, retain and develop their leaders will fundamentally change how our government works.”

The brand-new customer service awards were bestowed on Tuesday to two individuals and three teams, all of whom traveled to the event (in one case from Saudi Arabia) to receive plaques and have their photo taken with acting OPM Director Beth Cobert. They were:

• Shawn Lynch of the Social Security Administration’s Alabama Field Office, who led efforts to drastically reduce appointment wait times, increase registrations and clear the backlog of applications through outreach to the community. She increased registrations by 488 percent and cut the backlog by 70 percent.
• Dr. Justin Springer of the mental health unit at the Veterans Affairs Department’s DeBakey, Va., Medical Center, who systematically identified and implemented 19 different initiatives to improve customer satisfaction. His efforts have led to an almost 10 point increase in overall inpatient satisfaction since fiscal 2012.
• The Global Entry Program at the Homeland Security Department’s Customs and Border Protection bureau facilitated more than 17.2 million crossings and saved more 287,000 staff working hours by expediting clearance of pre-approved, low-risk travelers into the United States. The average wait time for members is 84 percent less than for travelers not enrolled in the program.
• The State Department’s Consulate of Dhahran, Saudi Arabia Team, which, faced with increasing safety concerns for some 20,000 Americans working in a violent area, eliminated the need for Americans to travel on dangerous roads to reach the consulate and saved hundreds of travel hours for its customers.
• The BusinessUSA Veteran Entrepreneur Initiative, a multi-agency portal coordinated by the Commerce Department and the Small Business Administration, streamlined a complicated process to provide veterans with easy access to resources on how to start or grow a new business. Previously, veterans seeking this information had to navigate through multiple government websites that often used different terminology and provided inconsistent advice. Since its launch on July 1, 2014, more than 250,000 veterans have been served.

The awards capped an event keynoted by White House Budget Director Shaun Donovan. On behalf of  Obama, Donovan thanked federal employees for “working tirelessly on behalf of the country and taking risks, even with sequestration, budget cuts—notice I didn’t say shutdown,” he said, referencing the unfolding omnibus spending bill in Congress—“for too little recognition.” Donovan stressed the need to build the workforce for tomorrow and for “hiring to provide quality government services that are critical for government to assure that programs are well designed and responsible to citizen needs.”

White House Chief of Staff Denis McDonough also expressed his “deep respect,” calling the federal workforce with its panoply of missions “an antidote to the cynicism that marks so much of our public discourse” at a time when “faith in our institutions is being battered.”

Cobert noted that 65 percent of the SES is eligible to retire by 2021, “so we have to make sure we’re attracting and developing the next generation of federal leaders.” She said the executive order means that agency heads must now “take ownership of recruiting SESers and personally oversee how the process is streamlined.”