Summary: The one overriding issue which is the key to the success or failure of the Senior Executive Service (SES) is executive pay compression. Retirement for employees at the pay ceiling has increased dramatically. Much has been said about the possibility that the SES bonus has been used to circumvent this ceiling on executive pay. Given the fact that top level SES members have substantially more responsible or more difficult jobs than others, but at no extra salary, it is unrealistic to expect that there will not be a tendency on the part of some to use bonuses to recognize these differences. The best way to alleviate this tendency is to allow executive pay increases which will bring about appropriate differentials among SES pay levels. It is still too early to determine how well SES performance appraisal systems are working, or how valid, fair, and objective they are for making pay and other personnel decisions. It generally takes several years, or previous experience, to implement effective appraisal processes. Most agencies have not had this time or experience. Many procedures, which experts agree should be employed, were not used or were only minimally used when implementing SES performance appraisal systems. SES executives appear to be generally optimistic about the future of the SES performance appraisal process. Congress has reduced the number of SES members who could receive awards from 50 percent to 25 percent. The Office of Personnel Management (OPM) further limited bonuses to 20 percent of the career executives and limited the size of the bonuses so that no more than 5 percent of bonuses could be 20 percent of salary. A frequent criticism of the awards process has been that those who review and make recommendations on ratings and bonuses are granting themselves awards. Many agencies exceeded OPM guidance to limit bonuses to 20 percent of career eligible executives. During the first SES appraisal period, some executives had not served enough time in the SES to receive performance ratings. If eligibility had been restricted to 20 percent of those who had received a fully successful rating, fewer awards could have been made. OPM did a credible job of converting positions and personnel into SES.
