Page images
PDF
EPUB

Now, Mr. Macy, will you proceed.

Mr. MACY. Thank you, sir.

Mr. Chairman and members of the committee, I am very glad to have this opportunity to discuss with you the President's legislative proposal for salary reform, and to express my sincere appreciation to Chairman Murray for his courtesy in introducing H.R. 10480 which embodies this proposal. I should also like to express my thanks to members of the committee staff, particularly Mr. Charles Johnson, for their cooperation in arranging for committee prints of the several documents, including the summary analysis of the proposal, which are so essential to the consideration of this comprehensive and complex

measure.

Let me say immediately that from the standpoint of its effect on the future character of the Federal career service, I regard this as the most important legislative proposal within my experience, worthy of a place alongside the Classification Act of 1923 as a landmark in Federal salary administration. I hope that after I have explained the urgent need for Federal salary reform and the specific measures proposed, you will agree with my views as to the necessity for enacting this very important and significant bill.

BROAD PURPOSE OF THE BILL

It is not the purpose of the bill to bring about a general Federal pay raise, although increases in salaries are one of its results. This is not the time for a general increase in Federal salaries. Changes in the economy since the 1960 raise do not support any substantial acrossthe-board increase, nor is such an across-the-board increase consistent with what the President is asking of the economy as a whole.

Mr. GROSS. Mr. Chairman, if I may interrupt for one moment to clarify this. Perhaps this should be in the nature of a parliamentary inquiry, but the paragraph just read is to me a very startling statement. This seems to set the key for this entire bill, II.R. 10480. Mr. Chairman, I believe you stated that Mr. Macy should be permitted to complete his statement before any questions are asked. The statement apparently will take most of the session this morning, perhaps all the session this morning, and I would like to have it understood that Mr. Macy will be called back if there is not enough time to ask questions to clarify particularly this paragraph that he has just read. I would like it understood he will be called back to clarify all the points made.

Mr. MORRISON. I think your point is well taken. If the Chairman. of the Civil Service Commission does not finish his statement in time for every member of the committee to ask all the questions they desire, as acting chairman of the committee I will certainly ask that Mr. Macy return, and he has said he would do so. I would like to make this observation, however, as acting chairman. Every witness before this committee has the right to express his or her own views, as I see it. Whatever they care to say is entirely up to each and every witness and at the conclusion of their statements I think it is very appropriate that any questions any member of the committee desires to ask should be asked. If the members of the committee do not have an apportunity to ask all the questions they have of Mr.

Macy today, Mr. Macy will be asked to come back at the next meeting. Mr. GROSS. With that understanding I am perfectly willing to forgo questions at this time.

Mr. UDALL. Mr. Chairman, may I make a suggestion at this time? Mr. MORRISON. Mr. Udall.

Mr. UDALL. I take it these hearings will be somewhat protracted. I do not want to influence the witness in presenting his testimony, but many times witnesses are willing to forgo the formal reading of their statements. I have read most of Mr. Macy's statement and I feel sure most members of the committee have read it, and I wonder if he would prefer to put the statement in the record at this time so that the members could proceed with their questions?

Mr. MORRISON. The Chairman of the Civil Service Commission has stated he would prefer to read his statement in full. I appreciate your suggestion, but I think that is entirely up to the witness and as the witness has requested that he give his prepared statement, as other witnesses in the future may wish to do, they certainly should have that right, and the Chair believes it is optional with the witness.

Mr. UDALL. I fully agree. If that is his wish, he should be permitted to proceed in that manner.

Mr. MACY. Thank you, Mr. Chairman. I certainly in no sense wish to foreclose any questions any member of the committee may have. That is a very important piece of legislation and we desire to be just as clear and complete as we possibly can. I think the statement as a complete document will give a more appropriate picture than if I attempted to paraphrase it or summarize it.

The purpose of the bill is to overhaul Federal statutory salary systems, to bring them up to date, to make them useful tools in carrying out essential Government programs in the years to come. The bill seeks to correct inequities between individuals in Federal employment and those employed in the private economy; to enable the National Government to attract and retain the kind and quality of staff it now needs and will continue to need, to carry out the will of the people expressed through the Congress.

In considering this proposal it is important to recognize the significant impact on the future of our country and its citizens of the programs on which managerial and professional career civil servants are engaged; to name a few examples:

Placing a man on the moon within 8 years, an utterly inconceivable assignment only a few short years ago.

Developing the most modern weapons for our country's defense and supporting their constant readiness.

Controlling traffic of jet-propelled air carriers flying at nearsonic speeds and only a few minutes apart.

Combatting the smuggling and sale of habit-forming drugs, the fuel for many vicious forms of crime.

Operating the largest hospital system in the free world for the care of those who have fought in our wars.

I personally believe that salary reform is vital to the success of Federal programs whose failure we cannot contemplate. For some 20 years I have been associated with the Federal service. During this time I have seen problem after problem arise in critical operating programs due to deficiencies in Federal salary systems. Today we have

serious problems in recruiting. We are losing more key personnel than we can afford. There is a constant temptation to resort to emergency devices in attempts to solve pay problems because our pay systems do not allow us to solve the problems by the appropriate pay action-such devices as manipulation of position classification, or lowering of qualification standards, or contracting out for services that might better be performed by the Government organization itself.

ACTIVITIES IN OTHER PERSONNEL MANAGEMENT AREAS

I assure you that Federal management is pressing forward to improve and maintain the quality of the service. We are not asking for changes in the salary systems to make up for shortcomings in other fields.

I shall be happy to provide more detailed information on any of the activities that I am about to mention, but to conserve time, let me list some current efforts toward insuring a high-quality service: Extensive college recruiting campaigns.

Quality graduate and management intern programs.
Student-trainee arrangements.

Programs for promotions based on merit.

Central rosters of qualified personnel in key fields.

Expanded training: Within agency, interagency, outside the

service.

Incentive awards.

SALARY INADEQUACIES LIMIT RESULTS

The problem is this: The results one can accomplish by efforts in all these areas are limited by the inadequacy of Federal salaries for managerial and professional occupations and the lack of flexibility particularly in the Classification Act system. Salaries are inadequate to recruit and retain individuals at the intermediate and upper levels, where they lag from 10 to 20 percent or more behind private-enterprise levels for similar work. They are inadequate to attract and hold enough topnotch college graduates, who perceive that a Federal career offers them a possible top salary of $18,500 if they are among the few who reach grade GS-18-compared with opportunities in industry ultimately to reach salaries of $35,000 or $40,000 a year, without having to become president or chairman of the board. Inflexible provisions in the Classification Act system-more inflexible than those of many other Federal pay systems-prevent use of the within-grade salary range, for example, to reward and motivate the better performers in the service.

BASIC CHARACTER OF ADMINISTRATION PROPOSAL

A pay raise of a flat amount or a percentage applied across the board will not solve the Federal salary problem. What is needed is a complete overhaul of Federal statutory salary systems-and that is exactly what the President has proposed in the salary reform bill. After the overhaul, after salary schedules are fully realined, any future increases can be expected to be more evenly distributed among the lower and higher grades. But an across-the-board pay raise

today would not provide a solution; it would merely postpone the day of decision.

The administration proposal would remedy two basic deficiencies that have plagued Federal salary setting for years:

(1) It would establish a firm policy standard-an impartial measuring stick-for Federal salary levels: Salaries paid in private enterprise for the same levels of work.

(2) It would provide a continuing systematic procedure for reviewing and, when appropriate, adjusting Federal salary schedules: Annual comparison of Federal salaries with findings of Bureau of Labor Statistics surveys of salaries paid by private firms.

These two features are of outstanding importance, but the reform. proposal would make other important and much-needed improvements in Federal systems:

Improved salary structures;

Necessary flexibility in the use of salary schedules;

Coordination among salary levels of the four statutory systems; and

A clear line between positions to be paid under these systems and those to be paid under the Federal Executive Pay Act and similar statutes.

The proposal would continue the existing legislative salary adjustment process, but with annual recommendations from the President on whether adjustments are required, their nature, and any revisions believed desirable in salary structures or policies.

The proposal, as I have emphasized, is not for a general pay raise. It does, however, provide some increase for all rates of the statutory salary schedules.

Making the initial adjustments to bring Federal salaries up to private-enterprise levels would increase Federal expenditures by about $1 billion a year. Primarily to avoid undue budgetary and economic impact in any one year the salary adjustments proposed would be divided into three phases spread over a period of 3 years, with the initial adjustments effective in January 1963.

APPROACH TO REFORM

The key to the reform proposal lies in two principles, the machinery for their application, and necessary flexibility in day-to-day executive branch salary administration. Before reviewing the provisions of the bill in which these features of the proposal are incorporated, I shall discuss briefly the basic principles underlying the proposal and the major element that is entirely new, the development of Federal salary schedules at levels comparable to those prevailing in private enterprise.

The basic approach to reform is through these two principles:

First, the comparability principle: Federal pay should be comparable with private-enterprise pay for the same level of work. Adoption of this principle assures equity for the Federal employee with his equals throughout the national economy, provides more nearly competitive rates for recruitment, and supplies an objective yardstick for continuous adjustment of the level of Federal pay.

Second, the internal-alinement principle: Equal pay for equal work, and pay distinctions in keeping with work and performance distinctions. The equal pay for equal work part of the above principle is already stated in the current Classification Act and is implicit in the Postal Field Service Compensation Act. But adequate pay distinctions are not present. The full principle fulfills the requisite of equity among Federal employees, and is the basis for reform of pay structure and rules.

The principle of comparability with private-enterprise rates is sound. It provides a logical and factual standard of judgment. It insures equity and more nearly competitive rates. It encompasses other legitimate pay factors such as cost of living, standard of living, and productivity as those factors are resolved into the "going rate" over bargaining tables throughout the economy.

The principle has wide acceptance. The Federal Government first. adopted it 100 years ago for navy yard workers, and has since applied it to all Federal trade and craft workers, to TVA, and to Government work contractors through the Walsh-Healey and Davis-Bacon Acts. It is used by corporations, by many State and local governments, and by some other national governments. Where it has been used, it has worked well.

The internal-alinement principle is now in force as to equal pay for equal work, but pay distinctions frequently fall short of work and performance distinctions (and of rank distinctions) and improvement is needed accordingly in pay structure.

DEVELOPING FEDERAL SALARY SCHEDULES AT PRIVATE ENTERPRISE LEVELS

There are three major steps in developing a Classification Act salary schedule at levels comparable with salaries in private firms:

The Bureau of Labor Statistics makes surveys of private-enter

prise rates and reports national averages.

A Classification Act pay line is developed from the grade averages of rates reported by BLS.

A Classification Act pay schedule is constructed based upon this pay line.

Salary schedules for other statutory systems are derived by linking key levels of those systems with appropriate Classification Act grades. In view of the importance of these steps in the operation of the proposed salary system, permit me to develop them more fully as they are followed in arriving at a schedule.

Bureau of Labor Statistics survey

The Bureau of Labor Statistics surveys annually, as a part of its community wage survey program, salary rates paid in private enterprise for 70 professional, administrative, technical, and clerical jobs. The jobs surveyed

Consist of work which is essentially the same in Government and industry;

Occur frequently in both Government and industry; and
Are representative of grades GS-1 through GS-15 of the
Classification Act.

Salary information is collected in

« PreviousContinue »