5/30/12: A new report released this week by the Partnership for Public Service shows that federal employees’ satisfaction with their compensation is dropping, but also that levels of satisfaction vary widely between federal agencies. The report provides further evidence of persistent problems with human capital management at the Securities and Exchange Commission.
The Partnership’s new report compares the SEC directly to another similarly situated financial regulator, the Federal Deposit Insurance Corporation. Employees at the FDIC, which was the highest-ranked Best Places to Work large federal agency in 2011, had the highest pay satisfaction rating with a score of 83.3 out of 100, which was almost nine points higher than the next agency on the list, the Nuclear Regulatory Commission. By contrast, the SEC had one of the lowest 2011 pay satisfaction scores (57.8) and the largest decrease on this issue—down 17.6% from 2010.
Max Stier, the president and chief executive of the Partnership, noted this week that the data in the Pay Satisfaction report alone do not explain why satisfaction levels can vary so greatly between agencies. “Agencies are facing the same headwinds but respond in different ways,” Stier said in a recent article in the Washington Post.
The Partnership's report points out that the substantial difference between the SEC and the FDIC on pay satisfaction cannot be explained by the fact that the FDIC is funded by fees paid by the entities that it regulates, nor by the fact that it is not subject to the Presidential federal pay freeze and has independent authority to pay higher salaries than in other federal agencies. All of these things are also true at the SEC. The report concludes that the primary explanation seems to be related to the differences in culture at the two agencies:
The differing employee attitudes toward pay at the two financial agencies comes against the larger backdrop of the FDIC rising from 21st place in 2007 to first in the 2011 Best Places to Work rankings, while the SEC dropped to 27th place in 2011 after having been ranked 24th in 2010, 11th in 2009 and third in 2007. While the FDIC is in the midst of a five-year culture change initiative to improve communications, increase the sense of empowerment and make leadership more responsive to employee concerns, SEC employees have repeatedly given negative responses regarding agency leadership, strategic management and other workplace issues.
The employees at the SEC are represented by precisely the same NTEU compensation negotiator as the employees at the FDIC. What could explain the stark difference in the results? Because FDIC senior management has chosen to engage in meaningful collaboration with its employees and their union representatives on compensation and many other issues, while at the SEC senior management has chosen a different path.
At the FDIC, senior management collaborated very closely with NTEU over many months to develop significant improvements to a new performance management system which is directly linked to employee pay, and the parties continue to work on revising and improving that system. In addition, the FDIC and NTEU reached a new agreement on compensation earlier this year that boosted morale for both managers and non-managers alike. At the SEC, by contrast, senior management has refused to engage meaningfully with NTEU representatives on its new performance management system, and it is currently creating a new compensation system with the assistance of an outside contractor, again without meaningful union involvement.
The SEC's strategy on compensation is part of a broader pattern that also includes taking an extremely aggressive posture in its negotiations over the past year with NTEU over a new collective bargaining agreement. As the union reported here a few weeks ago, the FLRA recently filed a complaint against the agency alleging that it has violated federal labor law by engaging in bad faith negotiations. The hearing in that matter is scheduled to occur in June.
Obviously, compensation alone is not what boosts the morale of any organization. But effective leadership understands the importance of engaging its workforce and their representatives on workplace issues. As the Partnership concluded:
Leaders may feel they don’t have much control over federal salaries, but they can influence other factors to make sure pay is not the tipping point that discourages workers. Creating a great workplace environment, in spite of tough economic times, matters now more than ever.
"Creating a divisive workplace environment by refusing to collaborate with employees' representatives is simply not a formula for success," NTEU Chapter 293 President Greg Gilman remarked today. "The union continues to stand ready to collaborate with senior management, but it takes two willing parties to engage in that process. Unfortunately, we have not seen that willingness from SEC senior management."
The Partnership for Public Service is a nonprofit, nonpartisan organization based in Washington, D.C., whose fundamental mission is to inspire a new generation of civil servants and transform the way government works. Each year, the Partnership releases its highly anticipated report on Best Places to Work in the Federal Government, which is based on the results of OPM’s annual Federal Employee Viewpoint Survey.