2/12/08: SEC Executive Director Diego Ruiz stated during testimony before a House subcommittee this afternoon that all employees receiving an "acceptable" performance rating will receive an "equivalent share" of the funds the SEC has available for merit pay increases, until the agency's new performance management system has been implemented.

Chapter 293 President Greg Gilman has urged the agency to adopt such an interim approach to merit pay for several months, given the obvious deficiencies that have rendered the SEC's current pay for performance system inherently unfair and unworkable. A federal arbitrator ruled last fall in a national arbitration filed by NTEU on behalf of SEC employees that the agency's merit pay program in 2003 violated Title VII of the Civil Rights Act, as well as the Age Discrimination in Employment Act (ADEA). NTEU is pushing ahead with national merit pay arbitrations for 2004, 2005, 2006 and 2007. In each of those years, similar discriminatory patterns in merit pay distributions have occurred.

"Continuing problems with a lack of transparency, inadequate funding and the absence of objective performance appraisal standards that managers and employees can understand have made the merit pay system fundamentally unfair from its inception," Gilman recently noted. "While efforts are being made to implement a pay for performance system at the SEC that has a chance to work, it makes little sense to continue compounding the problem by continuing to use a broken system to distribute pay raises each year. I look forward to continuing to work with the agency to remedy these problems."

Ruiz made his remarks during a program entitled, "Robbing Mary to Pay Peter and Paul: The Administration’s Pay for Performance System," before the Subcommittee on Federal Workforce, Postal Service, and the District of Columbia, a subcommittee of the Committee on Oversight and Governmental Reform. During his testimony, Ruiz noted that the SEC has decided to temporarily separate its performance management system from the merit pay system until a new performance management system is completely implemented. This approach, he noted, would allow the agency to focus its efforts on effective implementation of all aspects of the new system before relying on it to provide performance information to support pay decisions.

Chapter 293 will keep you updated regarding further developments on the merit pay front in the coming weeks.