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Pay freezes accelerate GS 'grade creep'

Jul. 14, 2014 - 06:00AM   |  
By ANDY MEDICI   |   Comments

More federal employees are in the top ranks of the General Schedule job system than ever before, and years of pay freezes and small raises have only made things worse, according to federal employment experts.

For the first time, more than half of all GS workers fall within grades 12 through 15, according to data from the Office of Personnel Management.

Managers are feeling pressure to promote employees who are otherwise cut off from other varieties of compensation increase, such as annual pay raises, step increases or bonuses, according to Henry Romero, a one-time Office of Personnel Management compensation executive now at consulting firm Federal Management Partners.

He said once one job at an office is reclassified, it puts pressure on other offices and agencies to reclassify the same jobs, creating a cycle that is hard to break and reinforcing a system where most people get paid similar amounts despite great differences in work and responsibility.

“It just waters down the whole concept that you should get paid for what you do, whether it’s a clerical or administrative job or working at a laboratory at the [Food and Drug Administration],” Romero said. “Everybody gets paid generally in the same salary range, no matter what you do.”

Romero said the effect could also serve to demoralize portions of the workforce when employees who are doing difficult or complex work see others in the same pay grade doing a lower level of work.

At the Department of Homeland Security, 93 percent of the growth in its higher grades came at the GS-12 and GS-13 levels, including occupations such as transportation security officers, Secret Service agents, Customs and Border Protection officers and criminal investigators.

Part of that increase came from three classification upgrades for CBP occupations like border patrol agents, according to DHS.

Employees serving in these specialties were given new position descriptions that reflected the expanded scope of their work in a post-9/11 world, according to DHS spokeswoman Nicole Stickel.

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“The new positions brought with them increased full performance levels for the journeyman and supervisory positions and corresponding promotion actions,” Stickel said.

Rep. John Mica, R-Fla., the chair for the House subcommittee overseeing government operations, said he was “disturbed” by the rise in higher grade employees and will look into the increase and decide if a hearing is necessary.

“It looks like the number of highly paid people within the bureaucracy is increasing,” Mica said.

John Palguta, vice president for policy at Partnership for Public Service, said while there are many contributing structural factors to the growth of feds in higher GS grades, the lack of pay raises and employee financial rewards has helped to accelerate that growth.

Managers who want to keep and attract talented employees lobby their human resource offices to reclassify jobs to higher levels — boosting the pay and stature of the position — instead of waiting for Congress to move on a higher pay raise.

“The budgetary pressures have been severe with sequestration and a gridlocked Congress — all of that has created real workplace pressures, and I think we are seeing part of that reflected in the grades,” Palguta said.

Federal executives are working within a broken system to reward employees and attract new talent, Palguta said.

“There is no question in my mind that the increase in people at higher grades has to do with government managers acting rationally in the face of an irrational situation,” Palguta said.

The inequities created by having too many high-grade employees results in some employees being overpaid for what they do while others are underpaid, and it makes it more difficult for agencies to recruit talent by region, where salary differences are stark, according to Palguta.

“The issue of grade creep is a symptom, it’s not the disease,” Palguta said.

Structural problems and possible solutions

The slow upward creep of federal employees in the GS system is the latest part of a trend that saw government move away from clerical jobs to a greater emphasis on expertise, according to Palguta.

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Instead of an entire room full of lower level GS employees processing paper or filing application by hand, those activities have been automated, the workers replaced with more specialized information technology specialists.

Meanwhile agencies strapped for cash have outsourced more extraneous functions, such as landscaping services at military bases or food preparation within federal facilities, according to Palguta.

The solution lies in crafting a system that is flexible by occupation, agency and region with clearly defined pay bands with clear separation between employers, managers and senior advisers, according to Palguta. Instead, the current GS system can be reduced to five levels, with the lowest for entry-level workers, and the top level for senior management, he added.

Within those pay bands would be the flexibility to offer different salaries by region in order to reach parity with the private sector. But nothing can change without action from Congress, according to Palguta.

“It’s clearly going to require a change in law, and it‘s not going to happen quickly,” Palguta said. “The system is almost set in stone.”

But agencies are always trying to break free of the GS system, with some financial regulatory agencies working outside the GS system, such as the Consumer Financial Protection Bureau. Other agencies have lobbied for and successfully received special pay authorities.

But managers also need ways to create incentive for employees beyond just a bump in annual pay, whether its small financial awards, or a special investment in their training and development, according to Romero.

Any reform of the pay system must look at a top-to-bottom approach that takes into account the entire federal workforce and what the government wants to accomplish at each agency. It must start with how agencies hire employees, how they train and develop those employees and how they retain employees long term.

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