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Two-thirds of federal workers get a bonus

Almost two-thirds of 1.6 million civilian full-time federal employees received merit bonuses or special time-off awards in fiscal 2002, according to a comprehensive examination of federal records obtained by The Washington Post.
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Almost two-thirds of 1.6 million civilian full-time federal employees received merit bonuses or special time-off awards in fiscal 2002, according to a comprehensive examination of federal records obtained by The Washington Post.

Of the 62 percent who got awards, half received $811 or more. The typical bonus amounted to 1.6 percent of salary. The awards ranged from less than $100 to more than $25,000. At some agencies, more than 90 percent of General Schedule workers collected a bonus. Government-wide, about 2,900 employees received cash bonuses totaling more than $10,000 each.

The disclosure of the figures brought varying reactions. Some civil service specialists said the proliferation of bonuses reinforces a common belief that many federal workers are rewarded for little more than showing up. Some agency and union officials said it was evidence of a talented workforce that performs admirably, and often at salary levels inferior to those of the private sector.

For the Bush administration, the numbers underscore the challenge President Bush faces in his drive to revamp personnel systems to more strongly tie pay to performance, an endeavor underway at the departments of Defense and Homeland Security. White House officials have called the federal pay system broken, saying it rewards civil servants for longevity rather than how well they do their jobs. The Post undertook a wide-ranging analysis of federal bonuses after obtaining detailed pay records from the Office of Personnel Management through a Freedom of Information Act request. The records covered all civilian federal employees, except for those whose data was excluded for security or technical reasons.

Paul Light, a professor of government at New York University, said he doubts the public will swallow the notion that merit was the driving force behind the awards.

"I don't think Americans think that 60 percent of federal employees could possibly be so well above average that they would earn a bonus," Light said in an interview. "This is just going to further confirm what many Americans believe, that the federal government is somehow an island unto itself."

Colleen M. Kelley, president of the National Treasury Employees Union, said such views are unfounded. "There are an awful lot of federal employees who do a very good job, whether it's on a project or on a consistent annual basis," Kelley said. "And I'm glad to see that managers are looking for some way to recognize and reward them."

All civil servants eligible
Under civil service law, federal agencies can hand out cash awards or additional time off to reward employees for good annual performance or contributions on specific projects. The law allows for multiple awards throughout the year, and all civil servants are eligible.

Three agencies -- the National Science Foundation (NSF), the Department of Energy and the General Services Administration (GSA) -- each gave bonuses to more than 90 percent of their General Schedule employees.

At the NSF, Joseph Burt, the director of human resources, said the high number reflects "a high-performing staff across the board." He said the awards vary greatly, ranging from as little as $200 to more than $6,000.

"[P]eople recognize that if they do a good job -- do their jobs, if you will -- that they are going to likely get some bonus," Burt said. But, he added, "people know that the payouts are much larger for top performers. So there continues to be an incentive . . . to perform at a higher level."

At the GSA, bonuses are based on merit in a system that is fair and inspires good performance, said spokeswoman Mary Alice Johnson.

"Who is to say that those 90 percent didn't all merit awards?" Johnson said. "Maybe the number we should be concerned about is the 62 percent. Maybe those 62 percent aren't where we are." GSA recently revamped its bonus system for senior executives so that only those achieving the top two annual performance ratings will be eligible for awards, Johnson said. Similar changes for General Schedule workers are on the drawing board, she said.

The Energy Department also has changed its bonus system, said spokesman Joe Davis. As recently as 2002, managers were obligated to give bonuses to all employees with an annual performance rating of "met expectations" or better, Davis said. Now only an "outstanding" rating guarantees a bonus, although some workers with lesser ratings still may get awards, he said.

"We don't recognize people if they don't do a good job," Davis said.

Bonuses don't always track performance
White House officials say there is plenty of room for improvement across the government.

Clay Johnson III, deputy director for management at the Office of Management and Budget, said the large number of awards did not surprise him. Johnson said he could even envision a revamped system rewarding roughly the same percentage of workers with bonuses -- but only if top performers got substantially more than those who were merely competent.

"You hear anecdotes where bonuses are divided up equally across all employees. I don't know that to be the case, but you hear those stories," Johnson said. "And yet you hear other stories about the great lengths that agencies go to to determine bonuses and awards. But we do want a system that has a more conscious, formal link between someone's formal performance evaluation and how that performance is recognized."

A 2002 survey by the Office of Personnel Management found that many federal workers are unhappy with the bonus system. Only 47 percent of workers said awards depend on how well employees do their jobs. Fewer than a third said their organization's awards program gave them an incentive to perform their best.

"Those numbers are not numbers to be proud of," said Max Stier, president of the Partnership for Public Service, which promotes government service.

Warren Joseph, 54, a lawyer in the Internal Revenue Service's Office of Chief Counsel, said bonuses don't always track with performance. A GS-14 who earns more than $96,000 a year, Joseph said his bonuses steadily declined -- from $1,500 in 2001, to $900 the next year, to $700 in 2003 -- even though his annual performance evaluation improved every year. Other employees in the same pay grade who had similar evaluations sometimes got bonuses double or triple the size of his, he said.

"I don't see employees who are just merely average getting the awards," Joseph said. "It's more the lack of correlation between the amount of the award and the performance that seems to be totally mysterious."

In the private sector, bonuses tend to be rarer but bigger, one analyst said. Laura Sejen, a compensation expert at Watson Wyatt Worldwide, a human resources consulting firm, said private awards often are in the 7 to 10 percent range, but only two-thirds of workers would be eligible for bonus plans in a typical company. So a far smaller share of the private sector workforce is likely to get an award in any given year.

"The amount that is at stake, or the potential opportunity, will be much greater," Sejen said. "Now what comes with that is a greater degree of risk. . . . In any given year, maybe about half of people eligible for a plan are going to see their full target bonus as an award. In the year in question, 2002, we were still in the thick of the soft economy then, and bonus awards took a dramatic drop."

2002 bonus data
The Post obtained bonus data for 2002, the most recent year for which records were available. The Post and analyzed the records across agencies and occupational categories and discussed the data with personnel experts inside and outside government. The analysis found:

• Workers were more likely to get a bonus if they were in the upper reaches of the General Schedule, the government's 15-grade pay system. Bonuses were awarded to nearly three out of four workers above the GS-11 level, where salaries ranged from $49,959 to $107,357. But they went to only 57 percent of employees below the GS-8 level, where workers earned $40,551 or less. General schedule workers typically are in white-collar occupations.

• Looked at another way, more than 64 percent of employees who earned $80,000 a year or more got such awards, compared with 55 percent of workers who earned less than $40,000 annually.

• It helped, slightly, to be a manager. About 67 percent of managers got bonuses, compared with 61 percent of non-managers.

• Employees in the Washington area fared slightly better than those who work outside the region. Sixty-five percent of the locals got bonuses compared with 62 percent of those who work farther away.

• Employees at some agencies did much better than others. Although more than 9 in 10 General Schedule employees at the NSF, GSA and Department of Energy got bonuses, only about half of such workers at the departments of Agriculture and Veterans Affairs (VA) were rewarded. General Schedule workers in defense agencies also tended to do better -- 69 percent got bonuses compared with 57.4 percent of similar workers in non-defense agencies.

• About 75 percent of employees in administrative, clerical, office services and engineering jobs got a bonus, compared with fewer than half of information technology, medical and biological sciences workers.

• Bonus size varied considerably. The typical award for a member of the Senior Executive Service was $10,000, or about 7.2 percent of salary, compared with a typical award of $865, or about 1.7 percent of salary, for other workers.

The bigger awards tended to go to employees at the departments of the Interior, Housing and Urban Development, Commerce, Education, and Energy, and the GSA. The typical bonus at those agencies was more than 2.2 percent of salary. It was only about half that at the VA, the Department of Transportation and the Social Security Administration.

• Political appointees faced a mixed blessing. Their bonuses, about 2.8 percent of salary, tended to be bigger than those for career workers, at 1.6 percent. But political appointees were less likely to get the awards in the first place -- only about 14 percent received them.

Awards for political appointees were banned for eight years until the Bush White House decided to lift the prohibition in 2002, clearing the way for $1.44 million in bonuses to be granted to 470 appointees. .

In general, cash awards based on annual performance ratings may not exceed 10 percent of base pay for General Schedule workers and 20 percent for members of the Senior Executive Service. But agencies have broad autonomy to devise their own bonus systems. So who awards the bonuses, how many may receive them and the amounts can vary considerably across departments, said Doris Hausser, senior policy adviser to OPM Director Kay Coles James.

"It is an extraordinarily decentralized program," Hausser said.

William A. Conte, 56, who retired this month after more than 33 years as a staff pharmacist and manager at the VA, said bonuses help keep senior managers from leaving government for more money elsewhere. He said he received a salary of $138,700 and a bonus of about $12,000 in fiscal 2002, when he was director of the VA Medical Center in Bedford, Mass.

"Some [bonus] numbers come back and they may not look good, but the reality of the situation is there's a lot of people putting a lot of hours in there for a lot less pay than they could get in the private sector," Conte said. "I understand it's a taxpayer-slash-government issue, but the reality of the situation is there's very few people that would do the work that senior executives do for the money they get."