MAX STIER OWES YOU AN APOLOGY

Max Stier is the President of the Partnership for Public Service (PPS), an alleged think-tank that claims to be interested in improving government.  Max and his Partnership posse just issued a widely-touted report entitled, “Bracing for Change,” in which they recommended dumping the GS salary system for some unspecified new system. While they are entitled to their opinion, their policy-analysis report is a reckless, unprofessional, whine that could hurt over a million federal employees.  It should be withdrawn with a public apology.

Because federal employees and their unions will see this same kind of pseudo-academic drivel for the next 18 months or so, they need to know how to discredit it quickly.

Max and his partners made the following recommendation about the current GS system:

Rethink the federal job classification system and develop a new approach for setting federal pay that allows government to cost-effectively compete for talent and to encourage and reward exceptional performance among current employees.

The implications of that enormous and include–

• designing a new system that works in hundreds of different agencies for over a thousand different jobs in which a million people are employed,
• rewriting hundreds of computer programs that operate based on the current GS grades, such as those that produce salary checks with the proper withholdings,
• rewriting tens of thousands of position descriptions, qualification standards, and performance standards ,
• selling the vast changes to over a million people so as to avoid massive resistance and backlash,
• dealing with waves of litigation as employees and unions fight against inequities, and
• retRaining over 100,000 managers to use a new system that will likely carry enormous risk for civil rights litigation.

Given the potential enormity, risk, and cost of Max’s recommendation, it is fair to expect it to be backed up by a rigorous analysis of hard data, high quality research, and balance. However, here in their own words is the evidence Max and the P-posse relied upon to make such monumental recommendations:

• Some of 55 Chief Human Capital Officers they surveyed, but fewer than in the past, said something like, “The federal pay system is out of date, fragmented. and inefficient.” (Pg. 4)
• Nearly all CHCO’s interviewed agreed that the current 1949-era GS pay and job-classification system is outdated and doesn’t meet the needs of a dynamic and changing 21st century. (Pg. 16)
• The CHCOs also agreed about much of what they considered to be wrong with the current GS pay and classification system, including that it is not market-based and therefore does not align with pay-setting practices in private industry. (Pg. 16)
• The demand for qualified applicants for jobs [in science areas]. . . far exceed the supply leaving agencies at a severe disadvantage if they cannot pay competitively when trying to bring in and retain top talent. (Pg. 16)
• Arbitrary pay caps have resulted in pay compression at the top. (Pg. 17)
• It remains difficult to reward high performers and discipline poor performers (Pg. 17)

That’s it.  No hard data backing up any of the assertions–just opinion; no analysis of how much such a change would cost; no analysis of the risk of such a vast change; no detailed explanation of the precise benefits that would flow from the change or their value; no mention of, much less assessment of, less costly alternatives; no discussion of how the money and time could be put to better use on some other effort; etc.

The policy analysts who drafted the report Max signed off on merely cherry-picked comments that they allege were representaive of 55 unnamed people who represent a less-than-microscopic slice of the federal workforce. The PPS report reminds us of the same kind of policy analysis that led this country to invade Iraq because of the slam-dunk certainty about its eminent use of weapons of mass destruction.

Max isn’t the only person who will attack the GS system during the early days of the new Presidential Administration. Most of them will be consultants (or linked to consultants) who are looking for multi-million dollar contracts to do the work.  (We see that Max’s report was somehow supported by the huge consulting firm of Grant-Thornton.  We are surprised that they were willing to put their name on such a low-quality work.  Apparently, some consultants hve no shame threshold.) 

Federal employees should be prepared to respond to charges like Stier makes.  We have provided below in italic print our rebuttals to each of his so-called findings.

Some of 55 Chief Human Capital Officers they surveyed, but fewer than in the past, said something like, “The federal pay system is out of date, fragmented. and inefficient.” (Pg. 4)

Democracy is older than the GS system; should it also be dumped because it is not modern? Global warming is modern; does that make it a good thing?  Claiming something is not modern is a cheap trick used by those without better arguments.  If you are going to make these accusations, back them up with data and facts. 

Nearly all CHCO’s interviewed agreed that the current 1949-era GS pay and job-classification system is outdated and doesn’t meet the needs of a dynamic and changing 21st century. (Pg. 16)

Every century throughout time has been dynamic and changing.  This accusation is another cheap shot designed to mask the fact that the charge says nothing—although the words are flashy.

The CHCOs also agreed about much of what they considered to be wrong with the current GS pay and classification system, including that it is not market-based and therefore does not align with pay-setting practices in private industry. (Pg. 16)

Check out our article entitled, “Vultures are Circling Your Salary System.”  It specifically lists three ways that the GS is market-based today, points out that OPM is to blame for not using the special rates tool more often to sharpen the market-link, notes that funding BLS to do more surveys is the biggest obstacle to market equity, and makes clear that agencies have enormous discretion even today to correct salaries for below market salaries.

The demand for qualified applicants for jobs [in science areas]. . . far exceed the supply leaving agencies at a severe disadvantage if they cannot pay competitively when trying to bring in and retain top talent. (Pg. 16)

Once again, OPM can fix that by allowing agencies to pay special salary rates and agencies already have the discretion to compensate the super employees or applicants above the GS rate.  Where is your report on the failure of the feds to use the discretion they already have?

Arbitrary pay caps have resulted in pay compression at the top. (Pg. 17)

Those are not arbitrary pay caps.  Those are the explicit decisions of the U. S. Congress and the President.  If you want to change the SES salary scale, go ahead.  But that does not mean the GS system should be tossed aside because executives deserve more money.

It remains difficult to reward high performers and discipline poor performers (Pg. 17)

If managers cannot figure out how to reward high performers they should be fired.  Quality step increases, bonuses, promotions, reclassifications, details to higher grade, and a dozen other options are already available to managers. As for the manager who claims it is too tough to get rid of poor performers, fire him/her too.  That is one of the core duties of their job; if they can’t figure out how to do it, they are the problem.  Today, the GS system gives managers the unilateral, unreviewable power to set performance standards, requires that they merely have substantial evidence the standards were not met, and need only show the employee failed on just one of his/her many critical elements.  How much easier can it get?  How little work should a manager be asked to do before he/she takes a person’s livelihood away?