Bringing Federal Pay Into the 21st Century

According to a series of recent interviews with 55 chief human capital officers, an outdated federal pay system is one of the primary challenges facing federal employment today.

The Partnership for Public Service recently conducted interviews with 55 chief human capital officers on the state of the federal workforce and the challenges facing the federal government.

One of the key challenges facing federal employment that the officers identified was an outdated federal pay system. Nearly all chief human capital officers interviewed agreed that the current, circa 1949 General Schedule pay and job classification system is outdated and doesn’t meet the needs of the 21st century workforce.

While not a new sentiment, it represents a particularly difficult challenge when one considers a number of alternative pay systems have been tried by agencies since 1981.

The Partnership for Public Service noted that in its past three reports, a clear consensus exists among officers who were interviewed that the GS pay system should be abolished in favor of a government-wide, pay-banded system. Such a system would use a smaller number of broader pay bands in place of the GS system’s 15 grade levels.

However, in this latest report, the Partnership for Public Service said that it found a growing understanding that simply changing the pay system would not solve all of the stated problems, in part because managing any pay system is difficult. Most interviewees supported abolishing the GS system, although a few were against the idea out of concern that the government would replace it with something worse.

Any new pay system would need significant investment from the outset, and managers must be willing to manage it well. The human capital officers cited the pay for performance debacle within DoD as a reason to proceed with caution on implementing any new pay system.

As to why the officers interviewed don’t like the current GS pay system, much of the consensus centered around the fact that they felt the current system is not market based and therefore does not align with pay setting practices in the private sector. The demand for jobs in government exceeds the supply which leaves agencies at a disadvantage if they cannot pay competitively.

The second problem cited had to do with arbitrary pay caps which result in pay compression at higher levels. In the SES for instance, pay can be close to or even below that of subordinates which discourages high performing employees to aspire to jobs within the SES.

One officer interviewed summed up the overarching concern about the federal pay system, saying, “It is difficult to attract and retain the good talent when it takes nine years to get from step one to step six. The manner in which we advance pay doesn’t work for the new workforce and it needs to change.”

About the Author

Ian Smith is one of the co-founders of He has over 20 years of combined experience in media and government services, having worked at two government contracting firms and an online news and web development company prior to his current role at FedSmith.