How Well are Government Employees Paid?

Dr. Howard Risher is the editor of Compensation and Benefits and a consultant on pay and performance with 40 years of experience. In his article How Well are Government Employees Paid? he addresses the topic of determining pay in a system that does not rely on market forces in the same way that the private sector determines pay.

With this expertise in pay and benefits, he discusses federal (and government pay systems generally) with a critique and a broad overview that will interest FedSmith readers. As the pay and benefits of federal employees are the subject of increasing political debate and national elections coming in November, the article is timely. (See An Election in Wisconsin and the “Perfect Storm” for Federal Employees Still Gaining Strength)

Here is a quick summary.

Federal Pay Agent Has “Lost Credibility”

The public will generally accept paying government employees the same as private sector. But, what triggers a political response, are claims that government workers make more money.

Many FedSmith readers cite the calculations of the Federal Salary Council to substantiate their belief they should be paid much more than they currently receive—as much as 25% – 30% more than federal employees are currently paid.

Dr. Risher notes that the recommendations by the federal pay agent to the president have “lost credibility.” The annual recommendations for federal GS pay are signed by the director of the Office of Personnel Management, the director of the Office of Management and Budget and the Secretary of Labor. For reasons he explains in his article, he concludes “It is impossible to conceive of a change in circumstances that will restore credibility to the Pay Agent recommendations.” Moreover, the latest report to the president noted the pay agent has “serious concerns” about the process used to adjust salary ranges and the method used for estimating pay gaps.

Change Coming to Federal Pay System?

The current classification system has been in place since 1949. The problem with this system is that it becomes isolated from market trends over time and any change to the internal system is seen as unfair by employees. The goal of such a system is to maintain “internal salary relationships” in an organization rather than relating government pay to any market system.

While the Obama administration has paid lip service to changing the pay system, there is not any visible effort behind changing the existing system. This is despite the fact that the locality pay system used by the federal government is “out of control” according to the author and that “No business would even consider the practice.”

The problem stems from the theory that all jobs, even in a complex organization like the federal government, can be paid under a single pay schedule. At the same time, labor markets demand the “flexibility to stay competitive.”

Pay for Performance

Pay based on a person’s performance is widely accepted and “has been a global trend for public employers now for two decades.” With financial and political pressure to change the current system away from a system based largely on seniority rather than performance, the pressure will build to institute a performance based system.

“Companies stress emphasizing and rewarding the best performers.” In the absence of pay for performance, performance ratings have few consequences and inflated ratings become commonplace.

Instituting such a system in the federal government will be difficult. Dr. Risher emphasizes that “pay for performance needs to be managed as a major organizational change initiative. Top management needs to champion the change and to reinforce the importance of the policy change to the organization.” And, he concludes, “Employees need to know hat they can expect and kept informed of plans.”

NSPS Experience Needs to Be Avoided

Some FedSmith readers cite the National Security Personnel System (NSPS) as an example of why pay for performance will not work in the federal government. But, he notes, the NSPS “confirmed how not to approach the problem.” Also, mistakes in the Securities and Exchange Commission (SEC) and the Government Accountability Office (GAO) need to be avoided in any new system.

Instead, Dr. Risher cites the system used by the National Geospatial-Intelligence Agency (NGA) as a system that has been successful and one that used a strategy that “should be considered a best practice” it was planned with extensive and ongoing input by managers and employees  and there is also a commitment to assess the program each year and address any problems.

© 2016 Ralph R. Smith. All rights reserved. This article may not be reproduced without express written consent from Ralph R. Smith.

About the Author

Ralph Smith has several decades of experience working with federal human resources issues. He has written extensively on a full range of human resources topics in books and newsletters and is a co-founder of two companies and several newsletters on federal human resources.

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  1. uniteuniteunite says:

    Most civil servants are not overpaid and not paid as well as those in private industry either, especially those working as government contractors. They are bleeding us dry. I’ve earned every penny of my salary and gone unpaid for a lot time too when I knew somebody’s family members life, limb, and/or wellbeing depended on it. Anybody who works for the government knows that anything under 15 minutes “gets written off”, that is, it can’t be claimed on a timesheet. Well, 5 here, 10 there, up to 14 minutes elsewhere, several days a week, adds up to a lot of working for free! Let’s also be clear on the fact that it was not easy to get a government job, even a temporary one back in 1984 either, but I did by beating out hundreds of applicants, with no extra points for ethnicity or military service, because I am very qualified, and very, very good at what I do. The fact is, my salary has gone down 10% over the past 4 years due to higher healthcare premiums, cost of living freezes, and zero step or within grade and bonuses since 2008. Now, starting 8 July 2013, I will take a 20% Gross pay cut due to Sequestration in the form of an 8 hour weekly furlough. That’s my reality, and that of every other dedicated civil servant. Worst of all, the ever growing inept contractors, sitting beside me, are paid twice as much as me, and they will go on working, and getting bonuses, unlike me, as they remain unaffected by Sequestration. Yet, the press and Congress remain basically frozen on that issue. Purportedly because they can’t get a real handle on the data. What crap. Nobody wants to follow the money yet we all know where, how and why it flows upstream and to whom. Let’s just say it clearly. Campaign contributions, Congress, lobbyists, big business, big bank, their cronies and thieve alike running this country are they are raking in the bucks doing it. They rape and defile our salaries, life savings, retirement, and that of our children then blame it on us; and the press helps them for fear of backlash from above.

  2. Picknaul says:

    publication publishes distorted negative views of federal employees, their
    benefits and their compensation. You really want to report on the realities of
    federal employee life? (I am sure you wont publish this).

    1. Federal Professional
    employees ARE underpaid!!!! We know what the contractors (You know-those jobs
    that government doesn’t create) get paid. They ARE compensated far more per position.

    2. There is far
    more than just one pay system in the federal government. The 1949 GS schedule
    is just one pay scheme.

    3. There are
    pay for performance systems in the federal system that work and have worked for
    decades. It is not a new idea.

    4. Government
    is not a business-It is for everyone. We don’t get to pick our customers and
    sell stock, market our services, nor do we have a symbiotic relationship with
    the business world. If we did it would be called fascism (see WWII)

    5. You have to
    be stupid to think that the cost of living is the same in a large metropolitan
    area and a rural area. It would be impossible to live on a the same salary in
    two completely different cost regimes.

    6. Military service
    is a federal worker without a wardrobe.  Sorry, but in todays distorted system you choose either. 

    You publish
    views that match your own terribly distorted far right angle on reality. Knock
    it off or I will cancel having this sent to me.

    BTW-I have spent
    most of my working life in the private sector-including 2 business ventures.
    How about you authors?   

  3. Gary Chavez says:

    The people in the private sector could of applied and gone to work in the public sector over the years. It is not easy unless you are hired, employed to meet some quota which many of the government employees are. Many are hired and advance to meet afirmative action quotas , Racial preference’s. Not because of being the best available in the market place that applied. Myself I had not such luck, I had to compete for my lowly position. But I was told I beat out over 100 applicants who had applied for the position I was hired for with the government. I could of worked in the private sector but I chose to work for the public sector because of the benifit’s , rights and job security.Anybody could of made the same choices and gone to work for the public sector if they made the cut or were woman or minority or both. That group is the priviliged born with in a preference group that is why government is in infficent and non responsive. It doe’s not always hire the best person available in the market place at the time they have a position that needs filling. They have legal quoits the must meet by law and they are very closely monitored by EEO, The Justice Department and NAACP. The veterans should be the only preference, one that is earned by scraficing for the existance of this country and government and public’s freedom. That is the only preference the government should give in hiring one that is earned threw sacraficing  and risking one life so this country exist and not a hiring preference that one that a person is lucky to be born with. The best qualified should also be a major factor in who the government employees not sex or color of ones skin for the major hiring factor.Any private sector citizen could of applied for a position working for the government. But for the most part the jobs with the government are hard to get and very competative. I have almost a masters degree and over 35 years experience in my career field and I am paid about $60 K a year. I am not the political type and I really don’t have the noise for  it, if you know what I mean. I know my job very well and several other related fields pretty good and I do my work. If people in the private sector think I am over paid, I disagree and ask why did they apply for a job with the government like I did. I think the do nothing congress is very over paid, they only work a very few days a year and then the accomplish very little of the public business. They and there large staffs are the ones who don’t do there job and are very over paid that work for the government. Do you realize how little they actually do as work for the people that is not party politics or for personal gain.

  4. Khoff2 says:

    Funny that nobody I deal with everyday mentions my salary or is even remotely concerned with it. The only time this topic has been brought up was by a certain candidate during the presidential debates.

  5. Steve says:

    I’m a retired government employee who spent 36 years in the IT industry, and I remember being a GS-11 and I was making about $46 or $47 k per year and that was during the so-called ‘dot-com’ glory years.   I used to spend a little of my spare time, surfing the web and looking at the kind of salaries that were being offered to private sector people who were in my same area of IT.   I wasn’t interested in leaving the government, however, and was more concerned with  the stability and pension benefits that I knew I could get in exchange for the sacrifice of accepting a lower salary than my private sector counterparts.    But, with Congress constantly discussing Base Closures and Realignments (BRAC) and with the possibility hanging over my head of  being laid off – I thought it was smart to have some idea of what kind of salary I could expect from the private sector.   

    So, at a time when I was making between $46 and $47 k per year – a private sector IT employee with my same approximate skill-sets were being offered $80 k or higher.    In fact, I had an HP engineer try to entice me to leave the
    government sector and apply for a job at HP and he told me that I could get $80k as a starting salary. 

    Well, fast forward to today and what do we see?   Thanks primarily to a treasonous US Congress and subsequent infestations of our White House with treasonous politicians of both parties, we have seen the political leaders who were hired and put into office to supposedly look out after the best interests of their own nation’s people – instead drafting up and passing legislation and inserting devious little tax advantages and pushing treasonous and destructive “free trade” policies which have lead to the deliberate and malicious outsourcing of millions of good paying middle class jobs, including IT sector jobs, and to the off-shoring of the businesses and companies which once provided those jobs to the third world, where these companies can then hire people who are willing to work for peanuts and no benefits.   

    Incidentally, these ‘tax breaks’ that the super rich business owners were given that we were told they would use to reinvest in their own companies and create great new jobs for Americans?   News Flash: These greedy and selfish super rich business owners used the savings they got from those tax breaks to finance the relocation of their businesses out of America and into these third world, low wage and no benefits countries.   We got conned, folks.    Royally.

    Furthermore, to add insult to injury – our treasonous US Congress and subsequent White House Administrations have continually passed and enacted increases in the number of H1-B Visa quotas – as a means of enticing big and juicy campaign donations from the American IT companies (Microsoft, Oracle, HP, etc.) – and then this results in huge numbers of foreign IT workers flooding into America, whereupon they will be hired at rock-bottom scale salaries and usually without any benefits included.  This drives down the wages (and benefits) that American  born IT workers can demand, and forces them to compete with H1-B Visa workers who will work for less money. 

    So, let’s return to the subject of the private sector salaries being stagnant and now lower than the salaries that a government employee might receive in the year 2012, which as I explained previously – wasn’t the case just a few years ago.    The reason is simple – while outsourcing and off-shoring and increases in H1-B Visa maneuvers were being
    orchestrated and imposed across the private sector – moves which took time to implement fully, over on the government side of the fence – the government was trying to compete for IT talent with the private sector, who had been paying substantially higher salaries.   This is why the government salaries began to creep up at the same time the private sector salaries were beginning to feel the negative effects of all of the treasonous machinations of our disloyal politicians in our Congress and subsequent White House administrations.

    So, to the extent that government salaries might be slightly, or in some cases, significantly higher than the salaries for a specific set of skills in the private sector – this inequality is actually an illustration of two different trains moving at different speeds along a set of parallel tracks – but in opposite directions.     It is not a justification to demonize and ridicule government employees, or to paint them as greedy and overpaid fat cats.

    The real issue that every patriotic American citizen needs to focus on – is the issue of treason that is emanating from the people we elect to hold political office in Washington, D.C.    These people are supposed to work for us – we pay their salaries.   We, therefore, are their employers – and yet, they sell us out at every turn.    Consider also, the negative impact of outsourcing and off-shoring of good paying middle class jobs and the businesses which provided those jobs to (a) the future stability and viability of Social Security and Medicare, and to (b) the overall tax base, which decreases the revenues which are need to maintain the existing infrastructure needs of our entire nation.    I am no fan of taxes and I am also no fan of big, intrusive, meddlesome and totalitarianism oriented governments – but, there are basic and fundamental needs that suffer greatly when our elected leaders promote policies which send our jobs and industries out of our country. 

    As voters, we must stop letting our politicians get away with treason and then have them turn around and try to point their boney and hypocritical fingers at us, and try to blame us for the problems that they created with their treason. 

  6. Picknaul says:

    There are already successful pay-for-performance systems out there.  The FAA has had a successful pay for performance system that is based on industry pay- rates for any particular job for at least a decade.  I am sure there are others out there in the federal government.  The pay discussion has become so one-sided people are forgetting the facts.