1. Survey of the Senior Executive Service Pay and Performance
Management System Lost in Translation in partnership with
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3. TABLE OF CONTENTS
Introduction...........................................................................................................
03 Comments & Signicant
Findings.........................................................................
04 Members of the Senior Executive Service support effective
performance management and believe they should be held accountable
for agency performance. A majority of respondents believe that de
facto quotas are affecting nal performance ratings. Respondents
reported disconnects between ratings, pay adjustments, and bonuses.
Respondents reported that the new system has not affected their
performance or the performance of their peers; however, the new
system has negatively affected morale. Respondents reported the new
system has been implemented with a lack of adequate communication
and a resultant lack of transparency. Survey respondents noted that
the abolishment of the SES ranks and locality pay have resulted in
negative impacts on the SES. Appendix A Survey Demographics and SES
Workforce Comparisons ............ 18 Appendix B SEA Assessment and
Recommendations ..................................... 20 Appendix C
Survey Background and
Protocol................................................. 24
Appendix D SEA Survey
Instrument..................................................................
26 Appendix E Survey Response
Tables...............................................................
30 Appendix F Summary of Survey Comments, arranged by Major
Category ..... 45 These materials are copyrighted jointly by the
Senior Executives Association and Avue Technologies Corporation and
may not be extracted, copied, reproduced Page 2 or distributed in
any form without the consent of the Senior Executives Association
and Avue Technologies Corporation. 2006 All rights reserved.
4. [Page intentionally blank.]
5. INTRODUCTION To fully understand the impact of this new
system, SEA The Federal government has embarked on several
determined that hard data, not just anecdotes, were major and
unparalleled changes in the structure and needed from as many
Senior Executives as possible. systems for compensating the Federal
workforce. The implementation and administration of the National If
there were systemic problems, they needed to be Security Personnel
System (NSPS) in the Department identied and brought to the
attention of OPM, the Ofce of Defense (DOD) and MaxHR in the
Department of Management and Budget (OMB), and Congress. SEA of
Homeland Security (DHS) have the potential for also recognized that
there are success stories regarding drastically changing the human
resources management the SES pay system and determined to solicit
more data processes of the Federal government. Understanding about
the successes, as well as the problems. these changes and
evaluating their impact on the Federal workforce will be essential
for determining if the SEA, in partnership with Avue Technologies,
developed changes are in the best interests of the government and
an online survey to develop a fact-based understanding the public
the government serves. of the experience and views of Senior
Executive Service members with the SES pay and performance
Preceding the NSPS and MaxHR changes, the Federal management system
as implemented. Questions government implemented the new Senior
Executive solicited demographic information, SES members Service
(SES) pay and performance management experience with the system and
involvement in its system in January 2004. The new SES system was
implementation, how the new system affected the the rst major,
signicant change to the SES since the member, perceptions of how
the system affected the implementation of the SES in 1978 as a part
of the Civil SES members colleagues, and views on how the new
Service Reform Act of 1978. Since the new SES system system might
affect the future of human resources is a performance-based
compensation system and the management in the Federal government. A
nal open- rst to be applied government-wide, the implementation
ended question solicited comments regarding the and administration
of the new system may serve as SES pay and performance management
system and lessons learned for implementation and administration
its implementation. The report that follows presents a of
performance-based compensation systems for the summary of the
results of the survey, a compilation of the DHS, DOD, and
ultimately the rest of the government. signicant comments by
executives who have worked under the new system, and
recommendations for how The changes implemented in 2004 have
already some of the identied concerns can be resolved to create
affected the SES and will signicantly affect a better system for
the SES and the Federal government. management of the Federal
workforce and the performance of Federal agencies. Congress and the
media have heard little about implementation SUMMARY OF SIGNIFICANT
SURVEY and administration problems in the SES system; FINDINGS
conversely, the new SES system has been touted as 1. Members of the
Senior Executive Service support a model system of pay for
performance by the Ofce effective performance management and
believe they of Personnel Management (OPM). However, no one should
be held accountable for agency performance. in government has asked
the SES members for their 2. A majority of respondents believe that
de facto reactions to the new system or its impact on their quotas
are affecting nal performance ratings. morale, motivation, or
performance. 3. Respondents reported disconnects between ratings,
pay adjustments, and bonuses. For some months prior to April 2006,
the Senior 4. Respondents reported that the new system has
Executives Association (SEA) heard a number of not affected their
performance or the performance of concerns from its members on the
implementation of the their peers; however, the new system has
negatively SES pay and performance management system. These
affected morale. concerns were often coupled with discouragement 5.
Respondents reported the new system has been and exasperation at
the treatment of career Senior implemented with a lack of adequate
communication Executives under this system. Rather than seeing and
a resultant lack of transparency. rewards for their hard work, some
executives reported 6. Survey respondents noted that the
abolishment they were seeing performance ratings being decreased of
the SES ranks and locality pay have resulted in without explanation
and were losing purchasing power negative impacts on the SES. each
year. Some concerns suggested system-wide problems, from
certication of agencies to rating The following pages present
survey results supportive of executives. Many concerns were with
the methods each of the signicant ndings. Accompanying the survey
required to obtain OPM/OMB certication and agency results for each
signicant nding are the comments by implementation processes,
including the de facto use Senior Executives that serve to
highlight the concerns of of quotas at many agencies. those who
have dedicated major portions of their adult lives to public
service. These materials are copyrighted jointly by the Senior
Executives Association and Avue Technologies Corporation and may
not be extracted, copied, reproduced Page 3 or distributed in any
form without the consent of the Senior Executives Association and
Avue Technologies Corporation. 2006 All rights reserved.
6. Supporting comments by the vast majority of executives noted
their belief that their work was not susceptible to matrices and
objective measures and that to attempt to apply matrices was a
waste of time. In addition, many comments reected the belief by
executives that agencies had to spread out their performance
ratings in some pre-determined way in order to achieve OPM
certication, and thus the higher pay cap. Many also said that
forced limits on high ratings led to ill-will between senior
executives. A signicant number thought favoritism and in-groups,
rather than objective considerations, determined who got what
rating, as well as pay increases and bonuses. I am very interested
in accomplishing measurable results in my job, but as a
policymaker, MEASURABLE Performance measures are not that important
to (Quantiable) results are very difcult to assess. By me. I try to
provide my personal best all the time. the timelines that policies
are issued? By the number During the last ve years I have averaged
152 hours of pages? Also..many of my most important tasks each pay
period 80 with pay; 72 free. I know in the take a long time to
bring to fruition. Should I ignore private sector I would be paid
more. But, I like serving these for shorter-term, more easily
achievable gains? the public. This is my calling. Everything else
is (DOD) secondary to me. I wish my compensation was more, but it
is not. As a SES member for over 20 years, and a SEA member for
about 15 years, I support the SES cadre and wish that
Administrations would appreciate I have long believed, as have many
colleagues, that the work we do, the long hours we contribute, and
the there is a quota system on Outstanding ratings. This dedication
to public service that almost all of us have. past year my
supervisor actually used the word, and In simple terms, the
taxpayers get a great deal from the would not back down when
challenged. He said the SES. (Agriculture) quota was in the
neighborhood of 25-30%. This year, my supervisor directed me to
lower the rating of an SES subordinate for whom I had proposed an
Outstanding rating, and to lower the rating on any You asked the
question about the expressed use element I chose for him because it
just wasnt his of quotas. I answered yes but in reality the use of
turn to get an Outstanding. Needless to say, I am quotas was more
subtle: sites being told they could very cynical about it all.
(Agriculture) forward one outstanding; appraisals being returned
for downgrading because we needed lower scores; and perceived
written intent from the CHCO saying that the Deputy Secretary
expected to see few outstanding in a highly political area like
foreign affairs, ratings. (Energy) measurable performance
objectives are ctitious. Accomplishments are heavily affected by
external political events outside the inuence, much less the After
(certication process) review by OPM, they now control, of the
SESer. (State) have us chasing more quantiable measures that may
indicate production of things but will be of little utility in
assessing whether we are accomplishing our mission. (NASA) The
amount of time and the playing of games to have a quota without a
quota is ridiculous. (GSA) Page 4 These materials are copyrighted
jointly by the Senior Executives Association and Avue Technologies
Corporation and may not be extracted, copied, reproduced or
distributed in any form without the consent of the Senior
Executives Association and Avue Technologies Corporation. 2006 All
rights reserved.
7. SIGNIFICANT FINDING #1 Do you believe you should be held
accountable for measurable Members of the Senior Executive Service
support accomplishments by your agency? 55% effective performance
management and believe they 41% should be held accountable for
agency performance. When the respondents were asked if they believe
they should be held accountable for the performance of 0% 0% 4%
their agencies over 96% indicated they should be held No Opinion
Dont Know No Yes, to a Yes accountable. limited Degree While the
respondents agreed they should be held accountable, many indicated
the performance rating If your initial summary rating for 2004/2005
was lowered, what process is awed by the pressure to force t the
nal was the reason? ratings. 53% 47% SIGNIFICANT FINDING #2 A
majority of respondents believe that de facto quotas 2004 2005 27%
are affecting nal performance ratings. 21% 21% 17% Executives
perceive that adjective performance rating 9% distributions are
being forced to meet agency set 5% standards or limitations on the
number of high ratings. The percentage of survey respondents who
believe Performance Agency need Agency forced No explanation their
agency set ratings to meet a preconceived quota Specics for lower
high ratings distribution provided increased from 42% for the 2004
ratings to 53% for the 2005 ratings. The increase in the percentage
believing that ratings were set to achieve a preconceived quota In
terms of the overall assessment by survey was gained by decreases
in both those who were not respondents of the ratings in their
agencies executive sure and those who disagreed that ratings were
set to performance management system, 17% believe the achieve fewer
high ratings. ratings are fair and accurate, 27% believe the
ratings to be fair and accurate to a limited degree, while 33% For
2004/2005, my agency rated executives to meet a believe the ratings
are not fair and accurate. Over 23% preconceived quota and achieve
fewer high ratings of the respondents either did not know or had no
opinion 53% regarding whether the appraisal process was fair and
42% accurate. 34% 2004 2005 30% 24% Are ratings given to executives
in your agency fair and accurate? 18% 33% 27% Not Sure Disagree
Agree 19% 17% Some of the survey respondents were advised of their
initial performance rating and were subsequently informed that the
initial rating was lowered. In some cases, the executives were
advised of the reason for the 4% lowered rating and in other
instances, no explanation was provided. The summary of survey
respondent views No Opinion Dont Know No Yes, to a Yes indicate
that 74% in 2004 and 64% in 2005 believe the limited Degree initial
rating was lowered because the agency needed to lower the number of
high ratings or to achieve a forced distribution of ratings. For
2004, 5% of the respondents In further support that performance
ratings were were informed that performance-based reasons assigned
based on consideration other than the supported the lowered rating.
For 2005, performance- executives performance, many indicated that
they based reasons accounted for 9% of the lowered ratings.
received ratings that were not aligned with pay increases
Executives who were provided no reason for the and bonuses. lowered
performance rating increased from 21% for the 2004 ratings to 27%
for the 2005 ratings. These materials are copyrighted jointly by
the Senior Executives Association and Avue Technologies Corporation
and may not be extracted, copied, reproduced Page 5 or distributed
in any form without the consent of the Senior Executives
Association and Avue Technologies Corporation. 2006 All rights
reserved.
8. Many of those who commented on the connection between
performance ratings and pay indicated administrative decisions and
budgetary constraints were more controlling than the executives
performance. Executives at small agencies suffer greatly under the
new system. Our bonus and salary adjustments are totally dependent
upon the availability of The new pay system was a huge step
backwards funds for overall agency operations. In an era of but,
even worse, is the new system is not adequately decreasing
resources it is especially disheartening funded. In my agency,
there may be no bonuses to know that any potential SES bonus or
adjustment whatsoever paid in 2006 (for 2005 performance) is
dependent upon what is left after all the bills are because of
budgetary considerations. (NLRB) paid and the paper clips bought
for the nal quarter of the scal year. (EEOC) The salary level for a
GS-15 (10) may soon surpass my current salary. I have received
performance I was treated fairly in 2004, but after receiving
bonuses for the last two years but no salary increase an
Outstanding rating for 2005 together with a because my supervisor
does not believe in them. Presidential Rank award for meritorious
service I If I had it to do over I would probably stay as a
received no salary increase. So I performed at the GS-15.
(Education) top during 2005 and had my performance properly
documented, but received no salary increase. (NASA) I am very
concerned about cascading this program down to non-SES employees.
There arent enough funds in our agency to adequately compensate pay
for performance under this system. The unions might be agreeing in
principle but they wont be happy when they see how little can be
executed for the employees when it is put into place. We are
building expectations which under current budgets we cannot meet.
(HHS) Page 6 These materials are copyrighted jointly by the Senior
Executives Association and Avue Technologies Corporation and may
not be extracted, copied, reproduced or distributed in any form
without the consent of the Senior Executives Association and Avue
Technologies Corporation. 2006 All rights reserved.
9. SIGNIFICANT FINDING #3 Respondents reported disconnects
between ratings, pay adjustments, and bonuses. 2004 Ratings and
2005 Bonus The Senior Executive Performance Management Bonus No
Bonus System is intended to link performance and rewards with
higher pay increases and larger bonuses for those 86% with higher
performance ratings. Survey respondents reported that the intent
was not always clearly linked 69% or apparent as related to the pay
increases. The respondents with the highest ratings in 2004 and
2005 54% reported that 13% in 2005 and 15% in 2006 received no 46%
salary increase. However, of the respondents reporting 31%
receiving a Fully Successful rating in 2004 or 2005, 22% in 2005
and 33% in 2006 reported receiving a salary 14% increase. 2004
Ratings and 2005 Pay Increases Pay No Pay Fully Successful Above
Fully Successful Highest Rating Increase Increase 89% 87% The open
pay range provisions implemented in 78% 2004 have also allowed
agencies to increase the responsibilities of an executives position
without requiring a compensation increase. Of the 233 executives
who reported an increase in responsibilities since the
implementation of the new system, 191 or 82% of those with
increased responsibilities reported 22% that they received no
corresponding salary increase. 12% 13% Fully Successful Above Fully
Successful Highest Rating Did you receive a salary increase when
your responsibilities were increased? 82% 2005 Ratings and 2006 Pay
Increases Pay No Pay Increase Increase 82% 85% 67% 18% 33% 18% 15%
No Yes Fully Successful Above Fully Successful Highest Rating 233 ~
responsibilities increased 42 ~ received a salary increase based on
the increased responsibilities 191 ~ responsibilities added with no
salary increase A similar result was reported regarding the 2004
appraisal ratings and the 2005 bonus award The disconnects in the
performance management distributions. Of those receiving the
highest rating, system were not reportedly affecting executive 14%
received no bonus, while of those receiving a fully performance;
however, the system is adversely affecting successful rating, 46%
reported receiving a bonus. The morale. respondents were not asked
to report on 2006 bonus distributions since some agencies may not
have made the 2006 bonus decisions. These materials are copyrighted
jointly by the Senior Executives Association and Avue Technologies
Corporation and may not be extracted, copied, reproduced Page 7 or
distributed in any form without the consent of the Senior
Executives Association and Avue Technologies Corporation. 2006 All
rights reserved.
10. Comments from many executives indicated that the new
performance management system adversely affected their morale and
the morale of other senior executives. Most all SESers I knew were
highly motivated It is obvious that IRS and other agencies are
forcing people who did not need the alleged incentives of
performance evaluations lower, in order to achieve the new-style
PWP to work hard.. (Justice) meaningful distinctions, so their SES
plans can be certied.This is the worst development I have seen in
28 years in the Government. It has affected teamwork among
executives, and had a very bad I have done about as well as any
executive could effect on morale. (Treasury) have asked for under
performance and pay system. My pay raises and bonuses have been
among the Morale is the lowest I have seen in almost 36 years
highest in the agency, but I think I see systemic aws with the
Government. (NIH) which are in fact demoralizing signicant portions
of our SES cadre and will weaken its foundations in the future.
(VA) There is signicant pressure on reviewers to distinguish
between executives in ratings in a somewhat articial manner so as
to show a The current plan has resulted in signicantly range of
results The system does not improve reduced morale among top
managers.As a performance in any important way and has negative
manager of SES myself, I am looking for ways to impacts that far
exceed any usefulness. (NIH) distinguish performance that means
downgrading ratings on SES to meet the expectation of higher What a
tremendous waste all of this is wasting managers that we should
only have a 30% level human capital seems to me to be the biggest
sin of outstanding performance. Since we are a small of all. Until
the day I leave, I will give this work my agency with a limited
budget, the difference in pay best because I owe it to the
taxpayers and to the between ratings is minimal. We are like
chickens warghters risking their lives for our country, but I
pecking for crumbs. There is no budget to fund sure dont do it
because of this pay for performance pay for performance, and we
ought to stop the system. In fact, this system insults me and
wastes charade. (NLRB) my time. (Defense) The rationales provided
by most political appointees and elected ofcials for making changes
to Federal employee (executive and non-executive) compensation
systems almost always carry with them the not-so- subtle
implication that the changes are necessary to make lazy Federal
workers actually produce. These rationales are damaging to the
morale of current Federal employees. They also serve to deter
potential applicants from even considering Federal employment.
(Defense) Page 8 These materials are copyrighted jointly by the
Senior Executives Association and Avue Technologies Corporation and
may not be extracted, copied, reproduced or distributed in any form
without the consent of the Senior Executives Association and Avue
Technologies Corporation. 2006 All rights reserved.
11. SIGNIFICANT FINDING #4 How has the new system affected
morale? Respondents reported that the new system has not 40% 40%
40% affected their performance or the performance of their peers;
however, the new system has negatively affected 33% morale. My
Morale How has the new system affected performance? My Peers Morale
86% 83% 14% 12% 11% 7% My Performance My Peers 2% Performance 1% No
change or Very negative Negative Positive Very positive neutral
change change change change 9% 8% 6% In terms of morale, fewer
respondents reported the new 2% 2% 3% 1% 1% system had no change
with only 40% reporting no change for themselves or their peers. Of
the respondents, 47% No change or Very negative Negative Positive
Very positive neutral change change change change reported the new
system negatively affected morale their morale and 52% reported
that the new system negatively affected their peers morale.
Thirteen percent of the respondents reported the new system had
produced positive change for them, while 8% reported the new system
had produced negative morale consequences for How has the new
system affected motivation? their peers. 56% 54% As noted in the
comments and reected in Finding #1, Senior Executives are
performance-driven. Morale and My Motivation My Peers Motivation
motivation are also generally internalized. However, executives are
very interested in quality communication on 29% performance and
compensation. This communication is not happening for many survey
respondents. 21% 13% 8% 8% 8% 2% 1% No change or Very negative
Negative Positive Very positive neutral change change change change
Survey respondents reported minimal positive effect on their
motivation or the motivation of their peers as a result of the new
performance management system. Only 15% of the respondents viewed
the changes as having a positive effect on their motivation and
only 9% of the respondents believe the new system has affected
their peers motivation positively. However, negative change was
much more signicant with 29% of the respondents reporting negative
results for themselves and 37% reporting negative results for their
peers. No change or neutral impact on motivation was reported by
56% of the respondents for themselves. Fifty-four percent of the
respondents reported the new system had no change or a neutral
impact on the motivation of their peers. These materials are
copyrighted jointly by the Senior Executives Association and Avue
Technologies Corporation and may not be extracted, copied,
reproduced Page 9 or distributed in any form without the consent of
the Senior Executives Association and Avue Technologies
Corporation. 2006 All rights reserved.
12. The overwhelming sentiment expressed in comments by senior
executives was that more transparency, both from OPM and their
individual agencies, was needed. My rater refused to discuss my
evaluation with me. (Defense Finance and Accounting Service) I have
still not been issued Performance Standards or a Performance Plan
for the year beginning Oct. 1, 2005 and it is now May 3, 3006. The
system is a joke. (DHS) There needs to be a more transparent
process when it comes to pay increases and bonuses. Information is
shielded and gives the appearance that monetary awards and pay
increases are provided through a The pay adjustments and
performance bonuses are system of cronyism . (Transportation) not
revealed, so we have no way to judge how we compare to others. Even
those receiving very large bonuses are not made known for others to
emulate I do not have a work plan that I know of. (OMB) their
outstanding achievements This secrecy leads to mistrust of the
entire system. (Commerce) It is bewildering why political
leadership do not discuss performance nor explore an executives
development. As I near retirement I have not had a meaningful
discussion on my performance with any political leader. While I
have enjoyed the bonus and pay adjustments, they occurred without a
word. Its as if it is always a surprise. (DHS) Page 10 These
materials are copyrighted jointly by the Senior Executives
Association and Avue Technologies Corporation and may not be
extracted, copied, reproduced or distributed in any form without
the consent of the Senior Executives Association and Avue
Technologies Corporation. 2006 All rights reserved.
13. SIGNIFICANT FINDING # 5 Does your agency share with you
summary info on executive 72.1% rating distributions? The new
system has been implemented with a lack of adequate communication
and a resultant lack of transparency. Several survey questions
asked respondents to report on the degree of communication by their
agencies 20% regarding the new system. Of the respondents, 49%
reported that they have not seen a copy of their agencys 8%
performance management plan and 67% reported that they have not
received a copy of the agencys executive No Yes, to a limited
degree Yes, to a signicant degree compensation plan. Does your
agency share with you summary info on executive Have you seen or
received a copy of your agencys executive performance bonuses?
performance management plan? 76% 49% 29% 19% 18% 6% 2% No Yes, I
have Yes, I have a Yes, I helped No Yes, to a limited degree Yes,
to a signicant degree seen a copy copy draft the plan In terms of
substantive communications on performance appraisals, 16% of
respondents reported that their 2004 performance rating was not
discussed with them and Have you seen or received a copy of your
agencys executive 17% reported that the 2005 performance rating was
not compensation/pay policy? discussed with them. 67% Was your
performance rating discussed with you? 2004 2005 45% 46% 39% 37%
21% 10% 2% No Yes, I have seen a copy Yes, I have a copy Yes, I
helped draft the plan 16% 17% Regarding the information provided to
executives regarding the performance appraisal distributions No
Yes, as a cursory Yes and compensation results, 72% reported
receiving no discussion summary data on the distribution of
performance ratings and 76% reported receiving no summary data on
the distribution of performance bonuses. The lack of communication
was also reected in the changes that eliminate SES ranks. These
materials are copyrighted jointly by the Senior Executives
Association and Avue Technologies Corporation and may not be
extracted, copied, reproduced Page 11 or distributed in any form
without the consent of the Senior Executives Association and Avue
Technologies Corporation. 2006 All rights reserved.
14. The elimination the Senior Executive Service ranks was
found to be a negative factor for many of those commenting on the
survey. Executives commenting also noted that the elimination of
cost-of-living related annual adjustments for those rated fully
successful and above and locality pay components for higher cost
areas were negative factors affecting their satisfaction with the
new system. In an agency, that is very conscious of hierarchies and
ranks, the elimination of SES grades was a major mistake. Now, the
military does not know how to respond to me in terms of protocol,
where I rank in the I believe that the cost of living and locality
pay pecking order vis--vis ag ofcers, etc. (DOD) adjustments should
be applicable to SES personnel. This disparate treatment is a
travesty of justice and has an extremely negative impact on
generating interest in becoming a senior executive with the federal
government. (USAID) I thought the new system was a big step
backward for the Senior Executive Service. My view is that the idea
of rank in the person was very important to the success of the SES
because of its contribution to self-esteem and recognition by
others throughout the agencies. (Interior) The lack of locality
adjustments severely restricts recruitment into SES in high cost of
living areas such as DC. Average workforce cost of living and
locality adjustments has been 3.7% in DC the past l2 years now most
SES pay adjustments are lower than that. Many SES members who were
at ES-1 at the time of the conversion are now earning less than GS
15 step 10 in high cost of living areas. I am planning on reverting
to GS 15 step 10 to preserve my CSRS retirement high-3 and will
continue to serve my agency in that capacity although I thoroughly
enjoy my SES position. (Commerce) We are dispersed across the
nation. Our positions vary in difculties, which easily could have
been distinguished by rank. In the present system equivalent
targets are expected regardless of the difculty of assignment
resulting in larger pay raises in the less demanding assignments,
often low cost areas with fewer responsibilities than in the more
difcult high cost areas with more difcult operational assignments.
(VA) Page 12 These materials are copyrighted jointly by the Senior
Executives Association and Avue Technologies Corporation and may
not be extracted, copied, reproduced or distributed in any form
without the consent of the Senior Executives Association and Avue
Technologies Corporation. 2006 All rights reserved.
15. SIGNIFICANT FINDING #6 797 SES responded to the question ~
How has the abolishment of pay adjustments based on locality Survey
respondents noted that the abolishment of the affected the
executive corps? Respondents were able to select SES ranks and
locality pay with the implementation of neutral or positive and/or
negative assessments of the change. the new system have resulted in
negative impacts on the 54% SES. A major change implemented with
the Executive Performance Management and Compensation in 2004 was
the elimination of the six SES pay ranks used to distinguish rank
in person and rank of position by many agencies. This creation of
an open pay range without 25% ranks resulted in some agencies
creating pay bands. Of the respondents, 16% found a positive
aspects to the 13% elimination of the SES ranks with an increased
focus on 8% pay and/or believe it a positive that pay adjustments
are not dependent on a rank level increase; however, 43% believe
the elimination of the ranks had negative results Neutral Positive
Only Positive & Negative Negative Only including loss of an
indicator of level of responsibility and/or believe the loss of
ranks to be a negative in terms of a loss of an established
promotion path within the The elimination of SES ranks and locality
pay are SES. perceived as negative changes. When a new system is
implemented determining the systems impacts on 789 SES responded to
the question ~ What is your opinion on executive retention and
recruitment of future executives the impact of the loss of ES
ranks? Respondents were able to has to be considered. select
neutral or positive and/or negative assessments of the change. 43%
25% 16% 15% Neutral Positive Only Positive & Negative Only
Negative In addition to the loss of SES ranks, the introduction of
the new system eliminated locality pay for the SES. Respondents
overwhelming indicated (54%) that the loss of locality pay was only
a negative factor for the SES corps. Making the system less
attractive for encouraging executives to accept geographic moves
and failing to recognize the differences in living costs were found
as primary negative aspects. Of the respondents 25% found the
changes to be neutral and only 8% cited only positive aspects to
the changes to pay. These materials are copyrighted jointly by the
Senior Executives Association and Avue Technologies Corporation and
may not be extracted, copied, reproduced Page 13 or distributed in
any form without the consent of the Senior Executives Association
and Avue Technologies Corporation. 2006 All rights reserved.
16. In addition to their responses to specic survey questions,
many executives added comments indicating that the new performance
management system had accelerated their retirement plans and was
adversely affecting the interest of the executives subordinates in
competing for positions in the Senior Executive Service Having come
from industry myself, I believe that the new system has two major
negative A GS-15 working in Fort Lauderdale FL., if aspects: 1) It
is accelerating the retirement of accepted into the SES/SFS would
lose 17% cola experienced senior executives (many to industry and
10 percent SIP for a total of 27 percent loss of as contractors)
(DOD) pay. Many GS-15s will not open their window for competing
into the senior ranks for the reason listed (State) High level
Grade 15s can now make as much, with bonus, as a mid level SES.
They do not want In the last three years, my performance ratings
the additional hassles SES brings. (Commerce) have been arbitrarily
lowered and my salary increases have been far below what would have
resulted under the COLA system for all. I will retire when
ELIGIBLE. Although I am My experience with the SES Performance
ercely dedicated to my mission, which is to equip Management and
Compensation System is wholly our ghting forces with war ghting
equipment negative and a principal driver for my decision to that
will enable them to prevail and survive, I am retire in the very
near future. (Homeland Security) emotionally devastated by the
change in my work environment. The AFs implementation..of the Pay
for Performance legislation has reduced Several executives that I
know are concerned me to Mickey Mouse measurements and useless
about the steady creep of GS-15 pay on the salary initiatives. In
fact, I was told by my military levels that SES are paid. No one
agrees with the supervisor, who by the way doesnt have a work
ridiculously low entry level pay. A fully successful plan and views
mine as one big pain in the neck, executive could be earning less
than subordinates that my day-to-day work was just my regular job
under the current pay system. SES pay should and therefore is not
pertinent to receiving a bonus include at least mandatory MRP
adjustment every or pay adjustment, so dont include it in my work
year in order to keep on par with GS employees. plan. The telephone
advisor issued to me by AF- (OPM) DP to help me write a work plan
that would pass OPM review advised me to parse complicated,
multi-year technology and process developments into absurdly trite,
but measurable steps that people who dont know anything about what
you do will understand. (Air Force) My agency is starting to see a
severe reduction in highly qualied applicants for SES positions
compared to referral lists received prior to implementation of the
new system. (Army) Page 14 These materials are copyrighted jointly
by the Senior Executives Association and Avue Technologies
Corporation and may not be extracted, copied, reproduced or
distributed in any form without the consent of the Senior
Executives Association and Avue Technologies Corporation. 2006 All
rights reserved.
17. AN ADDITIONAL CONSIDERATION For the permanent civilian
workforce of the Federal ~ THE SES RETIREMENT TSUNAMI government,
the retirement rate was 2.6% in FY 2001 OPM estimates that 90
percent of about 6,000 and 3.6% in FY 2005 for an average annual
increase federal executives will be eligible for retirement over of
0.025%. The average years of service for all Federal the next 10
years, Linda Springer, Director, Ofce of employees in FY 2001 was
26.4 years and has since Personnel Management, February 3, 2006.
increased in FY 2005 to 28 years of service. Beyond the raw
percentage of SES members potentially Based on the data obtained
from the U.S. Ofce of eligible to retire in the next 10 years,
there is signicant Personnel Management, FedScope database and the
data available to indicate a potentially severe retirement average
annual increases in retirements for the scal tsunami is building.
The career Senior Executive years from 2001 to 2005, it is
projected that 4.8% of the Service (SES) had 6,201 members as of
March 2006. Federal workforce will retire in FY 2010 and 11% of the
In September 1998, 34% of the 6,190 career SES career SES workforce
will retire in 2010. Based on the members were age 55 years of age
or older and 28% projections, 49% of the career SES workforce will
retire of the career SES had 30 or more years of Federal over the
next ve scal years, while only 22% of the total service. In March
2006, 46% of the career SES Federal workforce will retire. members
were age 55 or older and 34% had 30 or more years of Federal
service. Estimating that 90% of the SES workforce will be The
increased percentage over age 55 and with 30 or eligible to retire
in the next 10 years and projecting more years of service indicates
a sizeable increase in that 50% of the SES workforce will retire in
the next the numbers of SES members eligible or approaching ve
years, indicates a need for effective planning and eligibility to
retire immediately. implementation of policies that do not
exacerbate an already looming retirement tsunami. In FY 2001, six
percent of the SES retired. Since FY 2001, the annual rate of
increases in the percentage Certainly, implementing compensation
and performance of SES retiring has been 0.055%. In FY 2005, 8.2%
of management practices that result in SES members the career SES
retired. The average years of Federal accelerating their retirement
plans would not be a service for an SES employee retiring in FY
2001 was productive approach. However, with the implementation 32.3
years. In FY 2005, the average years of Federal of the new SES
performance management system, service for retiring SES was also
32.3 years. 16% of the survey respondents indicated that they are
accelerating their plans to separate from the government. Sixteen
percent of the respondents indicated that their peers are also
discussing plans to separate and 15% of the respondents indicated
that they were aware of peers who retired, in part, because of the
new system. Career SES Age Ranges Career SES - Years of Federal
Service 36% 30% 29% 23% 29% 22% 22% Sep 98 Mar 06 Sep 98 Mar 06 18%
22% 21% 16% 12% 16% 11% 10% 13% 8% 5% 6%6% 8% 3% 8% 2% 7% 1%1% 1%
1% 2% 4% 4% 2% 2% Less 1-2 3-4 5-9 10-14 16-19 20-24 25-29 30-34 35
0%0% than 1 years years years years years years years years years
30-34 35-39 40-44 45-49 50-54 55-59 60-64 65 or year or more more
These materials are copyrighted jointly by the Senior Executives
Association and Avue Technologies Corporation and may not be
extracted, copied, reproduced Page 15 or distributed in any form
without the consent of the Senior Executives Association and Avue
Technologies Corporation. 2006 All rights reserved.
18. Losing a major percentage of the SES over the next ve years
would be manageable given the signicant population of GS-14s and
GS-15s who have spent years in the government with many
well-prepared to assume positions of greater responsibility in the
SES. However, according to 47% of the survey respondents, the
changes in the SES performance management and compensation system
have had a negative impact on the interest of GS-14s and GS- 15s in
becoming members of the SES. The combination of increasing numbers
of retirements from the career SES ranks and the declining interest
of GS-14s and GS-15s in becoming members of the SES are indicative
of potentially serious problems over the next ve to ten years.
Permanent Federal Employee Retirements Percent of Career SES &
All Permanent USG Employees SES Actual SES Projected USG Actual USG
Projected 11% 10.4% 9.9% 9.3% 8.8% 8.1% 8.2% 7.4% 7.5% 6% 4.6% 4.8%
4.3% 3.9% 4.1% 3.6% 3.1% 3.3% 2.6% 2.6% FY01 FY02 FY03 FY04 FY05
FY06 FY07 FY08 FY09 FY10 Page 16 These materials are copyrighted
jointly by the Senior Executives Association and Avue Technologies
Corporation and may not be extracted, copied, reproduced or
distributed in any form without the consent of the Senior
Executives Association and Avue Technologies Corporation. 2006 All
rights reserved.
19. APPENDIX A- SURVEY DEMOGRAPHICS AND SES WORKFORCE
COMPARISONS These materials are copyrighted jointly by the Senior
Executives Association and Avue Technologies Corporation and may
not be extracted, copied, reproduced Page 17 or distributed in any
form without the consent of the Senior Executives Association and
Avue Technologies Corporation. 2006 All rights reserved.
20. [Page intentionally blank.]
21. APPENDIX A- To determine respondent experience levels as
members SURVEY DEMOGRAPHICS AND SES of the SES, they were asked to
identify their SES level if they were members of the SES prior to
the January WORKFORCE COMPARISONS 2004 implementation of the new
system. Completed surveys were submitted by 846 current and retired
members of the Senior Executive Service. Members of the current
career and non-career SES workforce completed 830 surveys and
represented ES Level Prior to January 2004 12.1% of the 6,837
members of the SES as of March SES Workforce December 2003 2006.
Thirteen respondents identied that they retired & Survey
Respondents after the implementation of the new system. Age
Distribution of SES 3/2006 & SES Mar 06 Survey Respondents
Survey SES Mar 06 Survey ES-1 ES-2 ES-3 ES-4 ES-5 ES-6 12.9% 12.7%
16.5% 36.6% 14.7% 6.6% 10.5% 12.3% 17.4% 35% 17.7% 7% 25-29 30-34
35-39 40-44 45-49 50-54 55-59 60-64 65+ 0.1% 0.3% 3.4% 7.7% 16.1%
27.4% 27.5% 12.3% 4.3% 0.1% 0.2% 1.5% 3.9% 12.4% 28.4% 32.3% 16%
5.2% Respondents again essentially mirrored the SES population with
representation from respondents at all six of the SES pay levels
prior to the elimination of SES pay levels in January 2004. In
terms of age and service, the respondents tended to be older and
have more service than the March 2006 permanent SES workforce. ES
Level Prior to January 2004 Years of Federal Service SES Workforce
December 2003 SES March 2006 & Survey Respondents & Survey
Respondents SES Mar 06 Survey SES Mar 06 Survey 0-1 2-4 5-9 10-14
15-19 20-24 25-29 30-34 35+ 1.9% 7% 7.2% 6.4% 10.8% 14.9% 21.4%
19.7% 10.9% 0.0 3.8% 2.7% 3.8% 8.2% 14.5% 23.2% 27% 16.7% $170
$130k $140k $150k $160k $170k .4% 1.1% 8.2% 23.7% 46.4% 18.7% 1.6%
More respondents had 30 or more years of Federal 10.5% 12.3% 17.4%
35% 17.7% 7% service when compared to the current members of the
Senior Executive Service as of March 2006. Gender There was no
signicant difference in the salary SES Workforce ~ March 2006
distribution for the SES members as of March 2006 and & Survey
Respondents the survey respondents. 71.4% 72.4% Survey SES Mar 06
Survey respondents in major demographic variables appear to present
a representative group of the overall SES workforce. 28.6% 27.6%
Females Males The gender distribution of survey respondents and
current members of the SES was essentially the same. These
materials are copyrighted jointly by the Senior Executives
Association and Avue Technologies Corporation and may not be
extracted, copied, reproduced Page 18 or distributed in any form
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Technologies Corporation. 2006 All rights reserved.
22. APPENDIX B- SENIOR EXECUTIVES ASSOCIATION ASSESSMENT AND
RECOMMENDATIONS These materials are copyrighted jointly by the
Senior Executives Association and Avue Technologies Corporation and
may not be extracted, copied, reproduced Page 19 or distributed in
any form without the consent of the Senior Executives Association
and Avue Technologies Corporation. 2006 All rights reserved.
23. [Page intentionally blank.]
24. APPENDIX - B SENIOR EXECUTIVES ASSOCIATION ASSESSMENT AND
RECOMMENDATIONS In 1987, in its report, the Twentieth Century Fund
Task As a result of that work, as well as the recent survey, the
Force on the Senior Executive Service, observed, Association has
reached the following conclusions: The nation could not function
effectively without SES The Senior Executive Service pay and
executives. They not only manage the machinery performance
management system has been applied of state, they also provide
continuity in an often inconsistently and without full adherence to
rules cumbersome governmental system. concerning quotas,
transparency and performance feedback. In large part, OPM has
focused public Senator John Glenn put it another way that year, The
statements on a reduction in high ratings as an career Senior
Executive Service is the institutional indicator of the success of
this new system, rather memory; it knows how to grease the wheels
and make than on an assessment of whether performance them turn.
standards themselves are leading to meaningful distinctions between
rating levels, whether agencies The importance of the SES was
noted, as well, by are applying system requirements effectively and
both National Commissions on the Public Service. fairly, and
whether, in fact, the new system has The rst, in 1988, said The
President needs both the resulted in improved performance. In fact,
evidence energizing force of committed political executives to
exists of a substantial disconnect between ratings lead
governmental agencies and the competence and and pay adjustments.
experience of career civil servants to run programs. Fifteen years
later, the second Commission observed, In testimony before the
Senate Subcommittee No organization in this country is more
dependent on Oversight of Government Management, the on qualied
senior leadership than the federal Federal Workforce and the
District of Columbia on government. June 27, 2006 the Comptroller
General addressed the certication process for agency SES pay and
The quality of those serving in the SES was the focus performance
management systems. He said, A of remarks by Secretary of Energy
Samuel Bodman at majority of CHCOs and human resource directors the
Associations Presidential Distinguished Rank Award told (GAO) that
OPM could improve the clarity, banquet in April 2005. He said, The
caliber of the top consistency, and timeliness of its guidance to
people in the Senior Executive Service is just as high agencies.
Several agency ofcials commented as that which I was experienced
with and exposed to that OPM conveyed a well know it when we see in
the private sector. Cabinet secretaries like myself it method of
communicating expectations.one come and go. But the work of the
state is carried on, ofcial said, while OPM tries to point agencies
in and carried on very well, because of the commitment to the right
direction, it will not give agencies discrete excellence displayed
by the very best men and women requirements. This leads to
uncertainty about what in the top ranks of civil service. agencies
must and should demonstrate to OPM.. Some agencies indicated that
OPMs late issuance Given this, it is in the public interest to
attract and of guidance also creates an uneven playing eld retain
the best corps of Senior Executives possible and among agencies.
Perhaps most unsettling was to compensate them and manage their
performance Comptroller General Walkers statement that in as fair
and effective a manner as possible. It has OPM ofcials said their
evaluation of agenc
