Describe to me what the Edward N. Hay Associates does.

Mr. KIMMEL. My name is Joseph W. Kimmel. I am senior principal and manager of Government programs for Edward N. Hay Associates with headquarters in Philadelphia. I am here in the Washington office. Mr. WALDIE. What does Edward N. Hay Associates do?

Mr. KIMMEL. We are management consultants to hundreds of corporations.

Mr. WALDIE. Mr. Kimmel, you have done a tremendous amount of work. It seems to me that this is extremely important information.

I am embarrassed that there is no one on this committee but me to listen to your presentation. I am embarrassed there is no one here except you and me. It's not a productive use of your time and it's an extremely unproductive use of my time. If it's at all possible for you to come back, I would much rather have your testimony taken at the beginning of the committee session when there are committee members here to listen to it. It just does not seem to me that this is the courteous thing to you. If you have no objections, if you can arrange your schedule so that you can come back when there are committee members present to listen to your testimony, I will adjourn the committee session today.

Do you have any objections to that?

Mr. KIMMEL. I would be very pleased.

Mr. WALDIE. Then I will adjourn the committee session today. We will be in touch with you and arrange for you to come back and make this presentation when the members are here to listen to it.

Mr. KIMMEL. Thank you.

Mr. WALDIE. Thank you for appearing. I am sorry for the discourtesy to you.

The committee will now adjourn.

(Whereupon, at 10:55 a.m., the committee was adjourned.)

COMPENSATION IN THE FEDERAL CLASSIFIED

SALARY SYSTEM

THURSDAY, JULY 30, 1970

U.S. HOUSE OF REPRESENTATIVES,
SUBCOMMITTEE ON COMPENSATION,

COMMITTEE ON POST OFFICE AND CIVIL SERVICE,

Washington, D.C. The subcommittee met, pursuant to recess, at 10 a.m., in room 210, Cannon Office Building, Hon. Morris K. Udall (chairman of the subcommittee) presiding.

Mr. UDALL. The subcommittee will come to order for the further consideration of H.R. 18403 and H.R. 18603, on Federal salaries and compensation. This session this morning has been scheduled to permit two witnesses to appear. I am going to begin this morning with Mr. Joseph W. Kimmel, senior principal and manager of Government programs, Edward N. Hay & Associates.

Mr. Kimmel, you have prepared a very interesting statement for the subcommittee. We will be happy to hear from you this morning.

I would suggest in the interests of time that you summarize in whatever way you see fit in 20 or 25 minutes the main points you wanted to make, and then we can take, as other subcommittee members arrive, such time as might be indicated for discussion.

STATEMENT OF JOSEPH W. KIMMEL, SENIOR PRINCIPAL AND MANAGER OF GOVERNMENT PROGRAMS, EDWARD N. HAY & ASSOCIATES

Mr. KIMMEL. As the representative of Edward N. Hay & Associates, I am honored to appear before your committee to testify on this significant bill. H.R. 18403.

I would like to compliment the chairman and the subcommittee on their sincere and dedicated interest in the proper compensation for employees in the Federal Government. This is a very sensitive area and one which receives many headlines and is of much interest to affected employees and to the American public, and it is one which, combined with the job evaluation process, has significant impact upon the kinds of people who seek service in the Government and drastically affects the services provided to the public and the compensation paid therefor. Your continuing twofold interest in the employee who makes the Government his career and the compensation paid him for services provided the public provide a service in itself which I wish to publicly note at this time. The impact of your proposed bill, combined with proper job evaluations, should significantly affect the quality of Gov

ernment employees in the Federal Government in the years to come, and the quality of services provided the public. How this bill is finally written and passed into law, and how it is administered, will vitally affect not only Federal employees, but the general public and the taxpayers.

As a part of this testimony, I am pleased to show excerpts from our 1970 and 1969 surveys of compensation for supervisory and management categories of positions. As you may or may not know, Hay has been deeply involved with over 700 clients in the last 25 years in job evaluation, compensation, and benefits.

Each client has utilized the Hay guide chart profile method of job evaluation and has been provided with our compensation guidelines and standards, particularly relating salary changes to performance of the individual, as well as to competitive and economic factors.

The information herein supports the aims of this subcommittee in providing a rational, semiautomatic process of adjusting compensation annually. What you are proposing is similar in some respects to the processes engaged in by corporations, except that our hundreds of private clients increase their compensation policy lines, and do not give across-the-board increases to incumbents. There is quite a difference, which we will discuss shortly, and which has also been covered to some extent in my testimony on H.R. 13008.

The first exhibit is table 2, taken from our forthcoming Hay compensation comparison industrial management, and covers changes in compensation for the same companies 1962-70 for each year. The percentages are compounded each year, of course. Six categories of compensation are shown, and each has its own graphic chart, several of which are also attached. Each year these clients send in the compensation paid to each of their employees. We thus have some 400 clients who contribute data on many hundreds of thousands of employees yearly, which we analyze, plot, run through our computer, and resubmit to each client, thus permitting them to compare their own compensation practice lines with other industrial and financial companies. Each client has had their jobs evaluated using the same techniques and each has set up its compensation practices following Hay methodology. Thus, we can compare an accountant's job in Du Pont with an engineer at Union Carbide, or a salesman at United States Steel and know that true comparability exists. In other words, the same measuring stick is used is used for all levels and categories of positions, and some such approach is essential if comparability is to be achieved.

Table 2, chart A, covers base salaries for all industrials, whether bonus paying or not. For 1970 you will note that the increase has been 6.3 percent at H200 to 5.5 percent at H1500. “H200-400-600–10001500" refer to Hay job evaluation points, and of course, the higher the points, the larger the job. The largest jobs are about 3000 May points. Of course, there are not many jobs at that level in this country. As you will note, over the years increases have been heavier at the lower ranges, with a few exceptions.

Chart B depicts total compensation for bonus and nonbonus companies, including base salary and bonus, if any. You will note that table 2 increases in this category have not been quite as heavy as base salaries, reflecting the somewhat reduced amounts corporations have been giving as bonuses in 1970.