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Good Performance Not Necessary for Federal Employees’ Pay Increases

March 26, 2011 | Filed Under Finance | Comments Off

Wouldn’t it be nice if you received a pay increase every year whether you performed well or not?  That is what approximately 20% of the federal workforce can expect.

Earlier this month, the Office of Personnel Management (“OPM”) gave their approval of continued automatic pay increases for federal employees. At a hearing on federal pay the Office of Personnel Management Director John Berry denied a request by Rep. Darrell Issa, R-Calif to temporarily halt the General Schedule employee step increase.  If approved, the request would save the government (aka taxpayers) $500 million by the end of the year, according to Representative Issa.

Although the OPM’s director believes that pay reform needs to happen within the federal system, he was unwilling at this time, to grant approval of the proposal to reduce spending. He argued that “within-grade step increases are important because they allow federal employees to advance in their careers, and help the government retain vital employees.”  However, just .06 percent of eligible federal workers were denied within-grade pay increases in fiscal 2009, according to OPM data.  Can we surmise then that 99.94% of eligible employees are vital to the functioning of our government?

Colleen M. Kelley, president of the National Treasury Employees Union, spoke against Rep. Issa’s amendment to the House budget bill. She stated that the amendment was unfairly targeting federal employees, would have little impact upon the deficit and would greatly limit the government’s ability to recruit and retain skilled workers.

Analysts at the Heritage Foundation estimate that federal employees ” earn 22% more on average than their private sector counterparts”.  In addition, poor performers are not held accountable, and thus are “rewarded” with automatic increases in their salary.

It is true that $500 million would not make much of an impact upon our federal debit, however while the private sector is seeing a decrease in employment and in pay, should government employees get pay raises?  Sounds a lot like what the government castigates Wall Street for when it raises salaries of corporate CEO’s, during a time of financial bailouts.

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