The federal General Schedule position classification system is in crisis. Practitioners at the operating level can provide insights on how best to repair its inherent dysfunctions.
The federal General Schedule (GS) rank-in-position classification system has been criticized for decades. Its complexity frustrates federal managers and confuses employees. Friction between managers and position classifiers is the norm, and gaming of the system is common due to lack of incentives to control labor costs. Clearly, the General Schedule is broken. But is there an alternative?
Reality of Federal Compensation
The last nationwide study of classification accuracy was conducted in 1983. It estimated that 14.3 percent of the GS positions were over-graded and 1.5 percent was under-graded. In Washington, though, over-grading exceeded 30 percent. Per the U.S. Office of Personnel Management (OPM) 2007 Fact Book, the average GS grade was 8.16 in 1980 and 9.8 in 2006.
Some experts attribute average grade increases over the last 20 years to reductions in the number of clerical and support positions--due in part to the introduction of the Internet. There are two flaws in this argument. First, the average grade went from 8.16 to 9.21 (1.05 points) between 1980 and 1993 and from 9.33 to 9.8 (.47 points) from 1994 through 2006. Second, the percentage of high-grade positions (GS-13 level and above) increased by 10.05 percent between 1990 and 2006.
Another reason for the increases is that many federal managers opt to solve a perceived compensation problem in the GS system by upgrading local jobs, because it's easier than asking OPM for special pay rates that must be endorsed by agency headquarters.
In recent years, special pay plans that exceed the GS pay schedule have been authorized for individual agencies to recruit and retain employees in hard-to-fill positions. According to the 2012 Congressional Budget Office report Comparing the Compensation of Federal and Private-Sector Employees, "The federal government paid 16 percent more in total compensation than it would have if average compensation had been comparable with that in the private sector, after accounting for certain observable characteristics of workers." The report also confirmed, however, that total compensation for federal employees with professional degrees or doctorates was 18 percent less than the private sector.
Interestingly, it seems that federal managers often push for higher grades to compete with other agencies--not the private sector for talent--particularly in large metropolitan areas.
History of Federal...