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Where's my step increase? A novice's guide to senior pay.

Despite extensive press coverage about "pay for performance" for the Senior Foreign Service or Senior Executive Service, we get a surprising number of questions from employees about how the senior pay system works. So we decided to make this effort to explain the system in simple terms.

In 2003, the Office of Personnel Management instituted government-wide "pay for performance" guidelines to implement legislated senior pay reform. In the 2004 rating cycle, members of the SES and SFS became subject to performance-based pay adjustments. This meant no more time-in-grade-based step increases, fixed pay scales and annual COLAs. Instead, all senior pay increases are based entirely on performance. People who do not receive an evaluation get no pay raise at all.

From 2004 to 2006, pay adjustments were made in two parts: a base pay adjustment based on Congressionally-approved increases to the Executive Schedule in January and an additional performance-based adjustment in April. For 2007, OPM mandated that all pay for performance adjustments be made in January to align more closely with the end of the performance rating period. This year, the two-step adjustment was combined into one pay raise effective the first pay period in January (and payable in the February 1 paycheck).

SES and SFS performance-based salary increases are based on similar criteria. Pay adjustments are made on a six-tier scale, with Tier I being the highest increase and Tier VI the lowest (no increase). SFS members for whom the summer selection boards recommend no pay adjustment or members who are involved in investigations of wrongdoing are Tier VI employees and get zero pay adjustment. SES employees who are rated "unsatisfactory" or have ongoing investigations are also in Tier VI. In both services, when the investigation is completed, salary increases may be restored if the employee is not disciplined or reprimanded.

In Tier V are SFS members who were not recommended by selection boards for subsequent consideration by performance pay boards (about 40 percent of the SFS). They received a pay adjustment equal to the Executive Schedule increase. In 2007, that increase was 1.7 percent of base pay. Tier V also includes SES members who received "fully successful" performance ratings.

Tier IV comprises SES members who received a rating of "exceeds expectations," but did not receive a summary rating by the Performance Review Board of "outstanding." There is no equivalent to Tier IV in the SFS system.

Tier III employees receive the Executive Schedule increase plus two percent (a 3.7 percent increase in 2007). These are SFS members who are reviewed by the performance pay boards but do not receive cash performance pay awards, and SES members who receive an "outstanding" summary rating from the SES PRB but do not rank high enough to receive a cash award.

Tier II includes SES and SFS members who rank high enough to get a $10,000 cash award and/or (for the SFS) are promoted from FE-OC to FE-MC. They received the Executive Schedule increase plus three percent (or 4.7 percent) in January 2007.

Tier I pay adjustments are reserved for SES/SFS members who received $12,500 or $15,000 cash awards and/or SFS members promoted from FE-MC to FE-CM. They received a 5.7 percent increase (the Executive Schedule increase plus 4 percent) in 2007.

The chart below summarizes the criteria for the six performance tiers and the associated pay increases for 2007.

A couple of points of clarification:

* Payment of performance pay cash awards to members of the Senior Foreign Service is limited by law to 33 percent of the SFS. The SES does not have a statutory limit, but generally hovers around 50 percent. SES members do not have promotion opportunities within the senior salary band.

* Promotees within the SFS no longer get a pay raise effective on the date their promotion is confirmed by the Senate and attested by the President. Instead, they get January pay adjustments. Those promoted into the SFS receive a six percent increase in their FS-01 base pay (not including locality pay). Upon promotion into the senior ranks, theWashington locality rate is permanently incorporated into salary. Pay raises for new OCs are effective the first pay period after promotion is attested by the President.

Some basic pay caps apply. OC basic pay is capped at 102 percent of EX III ($157,692 in 2007); MC pay is capped at 107 percent of EX III ($165,422); and CM pay is capped at EX II ($168,000). SES members must have a summary rating of "outstanding" by the PRB to be paid above the EX III level ($154,600) and are capped at EX II ($168,000).

Additional information and pay calculation examples can be found at the HR/RMA website hrweb/rma/compensation.html.

Nancy Serpa was, until February, director of the Office of Performance Evaluation; Phil Lussier is director of the Office of Resource Management and Organization Analysis.
Senior Pay for Performances System (Summary)

Tier SFS Criteria SES Criteria

I $15K, $12.5K 'Outstanding' Rating
 Performance Pay and (Presidential
 Bonus, Promotion to Award, or $15K, or
 CM $12.5K Performance
 Pay Bonus)

II $10K Award, or 'Outstanding' Rating
 Promotion to MC and $10K Award

III Reviewed by Remaining
 Performance Pay 'Outstanding'
 Board (approximately Summary Rating

IV N/A 'Exceeds
 Expectations' Rating

V All others performing All others performing
 at fully successful at 'Fully Successful'
 level not otherwise level not otherwise
 disqualified disqualified

VI Open Investigation/ Open
 Referral to Investigation/Referral
 Performance to Performance
 Standards, no rating Standards, no rating

Tier Pay Adj. CY 2007

I Tier V +4% 5.7%

II Tier V +3% 4.7%

III Tier V +2% 3.7%

IV Tier V +1% 2.7%

V Adjustment to EX 1.7%
 or if no change to
 Ex, equal to the
 adjusment to the
 GS exclusive of
 locality pay

VI 0%
COPYRIGHT 2007 U.S. Department of State
No portion of this article can be reproduced without the express written permission from the copyright holder.
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Article Details
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Author:Serpa, Nancy; Lussier, Phil
Publication:State Magazine
Geographic Code:1USA
Date:Mar 1, 2007
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