Report - Government Executive

Although the salary and bonus increase algorithms are intended to achieve internal equity, the
pay pools’ structure and composition also have an impact on equity. DCIPS policy allows DoD
intelligence components to use their own discretion in structuring pay pools based on such
considerations as:
• organizational structure and geographic distribution
• number of employees and their occupational composition, work levels, and work
categories
• size and manageability of the pay pool
• “line of sight” between the reviewing authority and pay pool officials and the work of
the pay pool members
Providing this flexibility to the components has the potential to introduce variation in the size
and composition of pay pools, which can influence an employee’s performance-based salary
increase or bonus. For example, a pay pool with many high-salaried employees will be funded at
a higher dollar amount than one with a relatively lower salary mix, thus making more funds
available to the former. Similarly, pay pools with a greater percentage of employees with high
performance ratings can affect potential payouts because the higher ratings will dilute payouts
from the available funds. 78 Wide variations in pay pool size is especially evident at larger DoD
agencies such as DIA, where it was reported that the smallest pay pool had 37 employees and the
largest had 2,205 employees. 31
OUSD(I) officials acknowledge that the policy on structuring pay pools provides too much
discretion to components and can result in inconsistent treatment of employees in the same pay
band who perform at the same level. Absent more controls and guidance in the design, the
perceptions of unfairness may be more prevalent. Additional policies and clarifying guidance
are needed to ensure increased equity among pay pools in these decisions.
Allowing components to include different occupational groups in the same pay pool also raises
issues impacting equity. As noted previously, employees in administrative and support
occupations have less direct impact on the mission and may be viewed as less worthy of rewards
for their performance than other employees in mission-critical occupations. This situation could
result in disparate impact on employees due to the nature of their work, rather than the quality of
their performance.
External/Market Equity
External/market equity is necessary to ensure that employee salaries are competitive with those
outside the agency. Currently, DCIPS is designed to achieve external equity through use of the
Local Market Supplement (LMS), which initially will tie to GS/GG locality pay areas and
associated locality rates. However, DCIPS’ goal is to develop a market pricing methodology that
78
ODNI modeling generally showed that payout results were much more consistent for pay pools of 100 or more
employees.
31
DIA Briefing at DCIPS Interim Conference, Southbridge, Massachusetts, Feb. 2010.
44