Feds Are Denied Step Increases In Just 1 of Every 1,000 Cases

Federal agencies deny their employees a step increase and corresponding pay bump just once in every 1,000 opportunities to do so, according to a new report, which found supervisors often fail to properly assess whether the reward is warranted. 

Each of the 15 grades in the General Schedule—the pay system for most federal workers—has 10 steps, each of which  corresponds to a distinct pay level. Employees are only eligible to move up to the next step if they demonstrate an “acceptable level of competence,” though a Merit Systems Protection Board study released on Monday found many agencies have failed to implement a process to ensure compliance with that baseline standard. 

Federal agencies often employ a 1 to 5 rating scale to measure employee performance, with any score 3 or above qualifying workers for a within-grade increase. MSPB noted its own survey conducted in 2016 found nearly 30% of supervisors said they had at least one employee below fully satisfactory (the equivalent of a 3 rating), suggesting they were giving far too many of their subordinates the bumps. Employees with a performance rating of 1 are typically fired or demoted, making those with a score of 2 the most likely candidates to be denied a within-grade increase. Many agencies skip over the 2 score altogether, however, only awarding 1s, 3s and 5s. 

MSPB found agencies that allowed performance ratings of 2 were four times more likely to deny a within-grade increase. Some federal officials reported to the civil service enforcement agency that it was difficult to define what constituted a job performance good enough to avoid a firing but poor enough to not be fully satisfactory. MSPB found occupations that lent themselves to more standardized metrics were more likely to deny within-grade increases. Patent examiners, for example, saw their step increases denied 3.6% of the time, a rate far greater than for employees in the rest of government. 

MSPB noted that denials of within-grade increases were “rarer than some might expect,” but it did not set out to prescribe a certain denial rate that would be more appropriate. 

“We do not say that WGIs should or should not be denied more often,” the board said. “It is for agencies to determine the criteria for what constitutes acceptable competence and how to measure it.” Still, MSPB added, existing data “implies that the governmentwide rate of WGI denials should be higher than it actually is.”

One agency that had a 3% denial rate spelled out in its collective bargaining agreement specific guidelines for within-grade denials to make raises less subjective, MSPB noted. The agency, which was kept anonymous, allowed 1 through 5 ratings and required regular documentation of performance.

MSPB suggested agencies use within-grade increases as a tool to encourage better performance throughout an employee’s tenure. 

“Warning employees about the possible denial of a WGI—or effectuating the denial if necessary—may help communicate that those consequences are real,” MSPB said. “But, to do that, supervisors need to keep track of the WGI schedule and have the conversations in time to make a different WGI decision if warranted.”

The current system has long garnered criticism for making pay raises essentially automatic, rather than based on performance in any material way. Increase denials are appealable to MSPB, which critics have flagged as a disincentive for supervisors to hold their employees accountable. MSPB also noted that the process of approving an increase is much simpler than denying one. Those factors have contributed to a system in which signing off on a step increase is merely a formality. 

“It appears to be common practice in many agencies that WGIs are nearly automatic,” MSPB said, “with just over 1 in 1,000 being denied, despite survey data from supervisors and employees indicating that performance concerns are fairly widespread.”