Mrs. Carol A. Bonosaro
Distinguished Members of the Subcommittee:
The Senior Executives Association, the professional association representing the interests of members of the career Senior Executive Service and those holding equivalent positions, appreciates the opportunity to testify about performance awards for Senior Executives at the Department of Veterans Affairs.
This investigation into and resulting publicity surrounding bonuses paid to Senior Executives at the Department of Veterans Affairs has been, in our view, unfair and misdirected. All Americans share the desire to give our nation’s veterans the best care and service possible, and no group more than VA career executives, who have dedicated their lives and careers to doing just that. These career executives are well worth their salaries and performance awards. Newsweek, U.S. News and World Report, the Wall Street Journal and other publications have repeatedly cited the Department of Veterans Affairs as administering the “finest healthcare in the world.” Such commendations are significant considering it is a system that many agree has been underfunded and under additional stress since 2002. We believe such commendations have resulted from the tremendous work of the dedicated executives who receive these performance awards and their teams.
Considering measures to restrict bonuses because of disagreement with policy decisions will unfairly punish career civil servants and achieve nothing in relation to those policy decisions. As the Subcommittee is aware, career executives work at the direction of political appointees. Consequently, concerns with Bush Administration decisions to request less money than is believed needed for VA health care and claims processing should be directed at the Administration’s policy makers, not at the career Senior Executives who implement their decisions.
At the Department of Veterans Affairs and throughout government, career executives are working to provide the best services they can within the resources they are given by the Administration and Congress.
If Congress limits or discontinues SES performance awards, the best career executives will have another incentive to leave for the private sector or retirement, rather to continue to carry out these programs in a system that only provides a mere fraction of the compensation these professionals are worth and can earn in the private sector. The media has portrayed these performance awards as extravagant. However, career executives who run VA health facilities generally make less than 50% of what their private sector counterparts earn in comparable positions. Many career SES earn as much as $70,000 a year less than some of the VA medical staff employed in the facilities under their direction. It is important to see performance awards in this environment and realize they are not lavish frills. They are a part of the compensation system for Senior Executives throughout government and are necessary to attract and retain the best leaders.
The Senior Executive Service was created in 1979 to encourage and reward the highest performers in government. It provides both greater risks and greater rewards than the General Schedule. If a Senior Executive is not rated as fully successful or better, his or her salary can be decreased as much as 10 percent. If rated below fully successful twice in three years, the executive can be removed from the Senior Executive Service with what is essentially no right of appeal. Those rated “fully successful” often do not even receive an increase in salary that covers increases in the cost of living as happens automatically each year for General Schedule employees, who also receive locality pay adjustments and are eligible for within-grade increases. Suffice it to say, mediocre or poor performing employees do not last long in the Senior Executive Service, and even being considered to be “fully successful” can bring no upward salary adjustment.
In contrast, high performing Senior Executives can and often do receive substantial pay raises or performance awards. By law, up to 10 percent of a department’s or agency’s SES pay pool can be set aside for annual performance awards. These performance awards range from 5 percent to as much as 20 percent of a career Senior Executive’s salary. As one would expect, top performers consistently receive performance awards. They are central to keeping those top performers in the Department of Veterans Affairs and in government.
These performance awards are not given out without substantial oversight. By statute, a Performance Review Board (PRB) consisting of a majority of career Senior Executives evaluate performance appraisal recommendations from supervisors for accuracy and equitability throughout the agency and provide a final recommendation to the agency head. PRB members must and do exempt themselves from decisions about their own performance appraisals. This is the case at the Department of Veterans Affairs, as well as in every agency in government with oversight from the Office of Personnel Management.
Some in Congress have called for PRB members to be ineligible for performance awards. This would be a serious mistake. Agencies select their highest performing career executives to be members of Performance Review Boards as impartial jurors of their peers. These high performing executives also have good judgment and are most knowledgeable about the agency. Obviously many PRB members will be recommended for awards. Excluding them from receiving awards will result in only those career Senior Executives not recommended for awards being eligible to serve, and the quality of advice may very well be lessened. Further, who would wish to accept appointment to a PRB with the understanding that such membership would make them ineligible to receive performance awards? Recusal by the PRB member when his or her performance is being discussed remedies this.
A recent survey by the Senior Executives Association (SEA) showed that many of the government’s career Senior Executives were discouraged by their relatively new pay system. Performance awards, on the other hand, have existed since the inception of the SES and are one part of the SES pay system that works as intended according to a quarter century of comments from SEA’s members.
Even with performance awards, Senior Executives in government are paid well below what they are worth. Taking away performance awards will push the best and brightest out of the civil service and into jobs in the private sector or retirement. With 90 percent of those in the Senior Executive Service eligible to retire over the next decade and with no effective government-wide succession plan designed to develop personnel trained to replace them, taking away performance awards would be moving in the wrong direction. Further, SEA consistently receives reports that many talented and accomplished GS-14’s and 15’s who would be prime candidates for the SES are dissuaded from aspiring to the SES given that they would take on additional responsibilities, enjoy fewer rights, and their pay adjustments would be far less reliable.
As a former career Senior Executive myself, and as president of SEA for over 20 years, I can assure you that these career Senior Executives are driven by a love for public service over financial gain. They are dedicated to their work, and putting in 70 hour weeks is not rare. They must make the best decisions possible with the resources they are provided. Those who do the best jobs and make the greatest contributions deserve the rewards available under the current SES pay and awards system, and perhaps more.
SEA understands that the Committee has some concerns about the budgetary policies and other policy decisions that have been made with regard to the Department of Veterans Affairs. SEA asks that the committee seek answers to those questions through the Administration. We are concerned that the career Senior Executives are becoming an easy scapegoat for these matters over which they have no control.
I thank you again for the opportunity to testify before this Subcommittee. SEA looks forward to working with this committee and with the Department of Veterans Affairs to correct this unfortunate misperception. We hope to continue to be an effective voice of the federal government career executive leadership on this and other matters regarding the civil service.