General Schedule (US Civil Service Pay Scale) - Pay For Performance

Pay For Performance

In recent years, there have been several attempts to eliminate the GS and replace it with various pay systems emphasizing "pay for performance" (i.e., a system in which pay increases are awarded based more on merit and work performance and less on seniority and length of service). The pay structure which enables this is typically known as pay banding. The best known efforts in this area are the pay systems created for the Departments of Homeland Security and Defense (the National Security Personnel System) in 2002 and 2003, respectively. These efforts were challenged by federal labor unions and other employee groups. Many supervisory and non-bargaining-unit employees, however, were converted from their GS positions into equitable NSPS positions. As part of his fiscal 2007 and 2008 budget proposals, President George W. Bush proposed the eventual elimination of the GS to be replaced by a pay-for-performance concept throughout the Executive Branch of the government. The Office of Management and Budget prepared draft legislation, known as the "Working for America Act", but as of January 2008 Congress has not implemented the proposal. President Barack Obama signed the legislation repealing the NSPS system on October 29, 2009. Under the terms of the 2010 Defense Authorization Act, Public Law 111-84, all employees under NSPS must be converted back to their previous pay system not later than January 1, 2012. The law also mandates that no employees lose pay as a result of this conversion. In order to ensure this, a set of conversion rules has been developed. In most cases, if an employee's current NSPS salary falls between two step levels of the GS grade to which their position is classified, their salary will be increased to the higher step. Employees whose salary was increased beyond the GS step 10 amount while under NSPS will be placed on retained pay, meaning they will receive 50% of the annual cost of living increase until the GS table catches up to the level of salary they are earning.