2012 Federal Employees Almanac
Chapter 8, Section 9: Senior Executive Service
General Rules and Procedures
The Senior Executive Service (SES) covers most managerial, supervisory, and policy positions in the Executive Branch above grade GS-15, except those that require Senate confirmation. The SES is a system in which salary and career status are personal rather than dependent on the position occupied. There are two main types of SES positions: career-reserved (which must be filled by career appointees) and general (which may be filled by career or non-career appointees, or by limited-term or limited emergency appointees). The number of non-career executives is limited by law to 10 percent of the total SES allocation. There are about 6,000 SES positions.
Most agencies have SES members. By law, however, certain agencies and classes of employees are excluded from SES provisions. These include the Foreign Service, Federal Aviation Administration, FBI, Drug Enforcement Administration, CIA, Defense Intelligence Agency, National Security Agency, and the National Imagery and Mapping Agency, some government corporations, such as the Tennessee Valley Authority, and certain financial regulatory agencies. Many of them have senior executive corps whose policies largely parallel those of the SES.
Subpart D in 5 CFR Part 534 prescribes the rules for setting and adjusting rates of basic pay and granting awards to SES members. The agencies' plans may establish policies on the minimum increase in pay that may be offered to current employees upon initial appointment to the SES.
Pay adjustments for SES members must be based on the employee's individual performance and/or contribution to the agency's performance. Agencies may consider such things as the individual's unique skills, qualifications, or competencies and their significance to the agency's mission, as well as the individual's current responsibilities.
Under 5 CFR 430, an agency's highest-performing senior employees receive the largest pay adjustments and/or highest pay levels (including both basic pay and performance awards), particularly above the rate for level III of the Executive Schedule. Agencies must provide for transparency in the processes for making pay decisions. For example, agencies may consider communicating the overall results of performance management decisions to senior employees, if individual confidentiality can be assured.
The system features a single pay range from a minimum of 120 percent of the base General Schedule (not including locality pay) grade 15, step 1, to a maximum that is either Level III or Level II of the Executive Schedule. The higher Level II cap applies in agencies whose performance appraisal systems make "meaningful distinctions based on relative performance," as certified by the Office of Personnel Management, with concurrence by the Office of Management and Budget. Most agencies have that certification.
Under 5 U.S.C. 5307, in agencies with such a certification, the total compensation cap (comprising base salary, plus premium pay, performance bonuses for career SES members, and certain other allowances and incentives, but excluding certain other forms of compensation) also is higher--the rate of the Vice President's salary, versus Executive Schedule Level I for agencies without certification.
Under 5 U.S.C. 5307(d), an agency's senior executive performance appraisal system must be certified on a calendar year basis.
See Aggregate Limit on Compensation in Section 2 of Chapter 1 for details of the certification procedure and what forms of compensation are counted toward the total compensation cap.
Upon an initial appointment to an SES position, an agency may set a senior executive's rate of basic pay at any rate within the applicable range, taking into account factors such as performance, unique skills or competencies the individual possesses, and their significance to the agency's mission, as well as the individual's responsibilities.
Rates of basic pay higher than the rate for Level III of the Executive Schedule up to the rate for Level II of the Executive Schedule generally are reserved for executives who have demonstrated the highest levels of individual performance and/or made the greatest contributions to agency performance, as determined by the agency through its performance appraisal system for senior executives or, in the case of newly appointed senior executives, those who possess superior leadership or other competencies, consistent with the agency's strategic human capital plan. For example, rates of pay higher than the rate for level III of the Executive Schedule may be reserved for a senior executive with an exceptionally meritorious accomplishment, for one who is assigned to a position with substantially greater scope and responsibility, or for one who is critical to the mission of the agency. In all cases, setting pay above the rate for level III of the Executive Schedule must be approved by the agency head or designee.
Appraisal systems must include either four or five summary rating levels--an outstanding level, a fully successful level, an optional level between outstanding and fully successful, a minimally satisfactory level, and an unacceptable level. A senior executive who receives an annual rating of outstanding must be considered for an annual pay increase. A senior executive who receives a rating of less than fully successful may not receive an increase in pay for the current performance appraisal period.
Subject to the one-year prohibition in 5 U.S.C. 5382(c) on reducing a senior executive's rate of basic pay (see 534.406(b)), an authorized agency official may reduce a senior executive's rate of basic pay for performance and/or disciplinary reasons. Such a reduction in pay for a career senior executive may not exceed 10 percent. Any pay reduction may be appealed to the head of the agency. The agency head's decision is final and non-reviewable.
No employee may suffer a reduction in pay by reason of a transfer from an agency where pay is allowable up to the Level II rate to one where pay is subject to the Level III rate cap or as a result of a decision to suspend certification of the applicable performance appraisal system.
Break in Service--Upon reappointment to the SES following a break in SES service, an agency may set the rate of basic pay of a former senior executive at any rate within the SES rate range if the break was more than 30 days. If the break was 30 days or less the senior executive's rate of basic pay must be at least equivalent to the executive's former rate.
Twelve-Month Rule--Generally, an authorized agency official may increase or reduce the rate of basic pay of a senior executive not more than once in any 12-month period. The setting of pay upon initial appointment or reappointment to the SES and adjusting an SES rate of basic pay are considered pay adjustments for this purpose. However, under Title 5 534.404(c)(4), an authorized agency official may approve an increase in a senior executive's rate of basic pay more than once during a 12-month period where the head of an agency or designee determines that an additional increase is warranted (1) for an exceptionally meritorious accomplishment, (2) for a senior executive who is reassigned to a position with substantially greater scope and responsibility, (3) for a senior executive who is critical to the mission of the agency and who would be likely to leave the agency in the absence of a pay increase, or (4) to align a senior executive with the agency's senior executive appraisal and pay adjustment cycle (for example, in the case of a senior executive who was appointed to an SES position within the past 12 months or a senior executive who was transferred to an SES position from an agency with a different senior executive appraisal and pay adjustment cycle within the past 12 months).
Awards and Bonuses
Federal agencies use various awards and bonuses to reward members of the SES for outstanding performance and to recruit, retain, and relocate employees:
- Performance Awards--Agencies may award a lump-sum payment of between 5 percent and 20 percent of basic pay to career members (but not to political members) of the SES to recognize their excellent performance over a one-year period. The total amount awarded cannot exceed 10 percent of the total base pay for the agency's career SES members for the prior year.
- Awards for Special Acts--An agency or the President may reward members of the SES for special acts, suggestions, or inventions that improve the functioning of the federal government. Those awards range from $10,000 to $25,000.
- Rank Awards--The President may make two types of awards to career members of the SES who demonstrate consistently excellent performance over an extended period. The Distinguished Executive award provides a lump-sum payment of 35 percent of the recipient's base pay. No more than 1 percent of SES members may receive that award. The Meritorious Executive award, given to no more than 5 percent of SES members, provides a lump-sum payment of 20 percent of the recipient's base pay.
- Recruitment, Relocation, and Retention Payments--Senior executives are eligible for recruitment, relocation and retention payments under generally the same terms as other federal employees. See Recruitment, Relocation and Retention Payments in Chapter 1, Section 5.
A June 10, 2011, memo from the Office of Personnel Management and Office of Management and Budget capped the total amount an agency may spend on individual performance awards for members of its Senior Executive Service at no more than 5 percent of their aggregate salaries, effective on that date through fiscal year 2012. The policy is at www.chcoc.gov/transmittals.
Sabbatical--Agency heads may grant sabbaticals to SES career members for three to 11 months during any 10-year period to encourage study or uncompensated work experience that will contribute to the individual's development and effectiveness. While on sabbatical, SES members continue to receive salary and leave benefits, and agencies may authorize travel and living expenses.
Leave--SES members earn 13 days of sick leave per year. They earn annual leave at the rate of 26 days per year regardless of their years of service, under 5 U.S.C. Sec. 6303, carried out at 5 CFR 630. (This authority extends to parallel executive cadres in certain law enforcement and intelligence agencies, as well as to certain other high-level employees; see Annual Leave Accrual and Accumulation in Chapter 5, Section 1.) Also, compared with most federal employees, SES members can carry over higher amounts of unused annual leave to a new leave year--720 hours. (SES members who had more than 720 hours of annual leave as of October 1994 had the higher amount "grandfathered" as a personal leave ceiling. See SES Members: Annual Leave Rules in Chapter 5, Section 1.)
Presidential Appointments--SES members who accept Presidential appointments may choose to retain some, all or none of the SES provisions related to basic pay, performance awards, awarding of ranks, severance pay, leave, and retirement. This includes retaining a higher aggregate limitation on pay, equal to the Vice President's salary, that applies to the SES members in agencies with certified performance appraisal systems. That election will remain in effect for no less than one year, unless the appointee leaves the position sooner.
Post-Employment Restrictions--Under 18 U.S.C. 207(c) as carried out in 5 CFR Part 730, an SES member whose basic pay is at least 86.5 percent of the rate for level II of the Executive Schedule is subject to certain post-employment restrictions that are more strict than those generally applying to federal employees. See Post-Employment Restrictions in Chapter 10, Section 5.
RIF Procedures--Special rules apply to SES members in reductions-in-force. See SES RIF Procedures in Chapter 9, Section 1.
Agencies are required to establish development programs for executives, managers, and supervisors, as well as candidates for those positions, and to regularly update those programs. These executive development programs must be designed in accordance with an agency's strategic plan, foster a corporate perspective of government, and provide for initial training, continuing learning experiences, and systematic development of candidates for advancement to higher-level management positions.
There are many ways to provide developmental opportunities, such as the Candidate Development Program, formal and informal training experiences, seminars, forums, participation on task forces, interagency details, sabbaticals, assignments outside the federal sector, and mobility assignments.
Many of these programs are geared toward developing the qualifications deemed necessary for senior executives. See Executive Core Qualifications in Section 3 in this chapter.
A February 18, 2011, memo to agencies from the Office of Personnel Management and Office of Management and Budget (at www.opm.gov/ses/OMB_OPM_SESMemo.pdf) put renewed emphasis on career development through steps such as a government-wide leadership development approach, networking opportunities, and rotational assignments for senior managers with potential to move into the executive ranks.
Candidate Development Program--This program, www.opm.gov/fedcdp, is designed to create pools of qualified executives for SES positions on a centralized basis, complementing agency-based programs. Application periods, announced by OPM, are limited and eligibility rules may vary from one to the next; the program typically is available only to those in high General Schedule grades. The length of the programs also may vary, typically between 12 and 24 months.
Those applying to the program undergo an assessment/selection process, which includes an initial screening of qualifications and evaluation of written narratives describing key accomplishments, followed by an assessment center review and a structured interview. Applicants apply for occupational specialties identified by the employing agency and are required to submit extensive documentation to demonstrate their qualifications, including a resume, occupational questionnaire, accomplishment record, and other information.
Once selected, candidates participate in a developmental program, which may include: classroom training sessions; developmental assignments; on-the-job learning; leadership forums; mentoring; coaching; field experiences; reading assignments, and Web-based learning. Following satisfactory completion of such a program and Qualifications Review Board certification of their executive qualifications, graduates are eligible for career appointment to the SES without further competition. However, an appointment is not guaranteed.
Rules at 5 CFR 432 require agencies to obtain prior OPM approval and re-approval every five years of their own SES candidate development programs. The rules also required that developmental assignments include at least one assignment of 90 continuous days outside the scope of the candidate's position of record and include roles at the executive level where the candidate is held responsible for achieving organizational or agency results during the assignment.
Post-Selection Programs--A September 30, 2011, memo to agencies (at www.chcoc.gov/transmittals) provides guidance on agency "onboarding" programs to integrate newly hired SES members. Such programs may address both short-term and longer-term strategies on subjects ranging from operational matters to issues of agency culture.
Applying for SES Positions
There are two methods for entry into the career SES: application for a specific agency position and application for inclusion in an SES candidate development program (see above). SES vacancies are online at www.usajobs.opm.gov and through Federal Job Information Touch Screen kiosks located at OPM offices and in certain federal buildings throughout the country. Individuals interested in applying to join the SES should familiarize themselves with the executive core qualifications (see Section 3 in this chapter) and the Guide to Senior Executive Service Qualifications (www.opm.gov/ses/references ).
OPM does not maintain registers of eligible candidates for the SES. Instead, agencies oversee the merit staffing process required for career entry. They determine position qualification requirements, advertise career vacancies at least throughout the government, and make selections for their SES positions. Vacancies must be advertised for at least 14 calendar days and must be open to all federal employees in the civil service. Agencies may fill positions with former SES members eligible for reinstatement, by reassigning or transferring a current SES member, or by appointing a candidate development program graduate.
Before an initial career appointment to the SES can be made, the candidate's executive qualifications must be approved by an independent Qualifications Review Board. Those are OPM-administered independent boards of senior executives that assess the executive core qualifications of candidates and who must certify that a candidate has the broad leadership skills to be successful in a variety of SES positions.