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This Chapter applies to: All employees covered by FAA Core Compensation Plan

Chapter established on: March 12, 2002

This version effective: March 12, 2002

Chapter revision history: NA

Policy Bulletin(s) in effect: Policy Bulletin #9: Modifications to Annual Pay Adjustment Policies of the Core Compensation Plan

1. Policy

The Core Compensation Plan has four possible annual performance-based pay increases:
Four possible annual performance-based pay increases
Level of Increase Increase Computation Target Percent Receiving
No increase Ineligible for OSI or SCI No target percentage
Organizational Success Increase (OSI) OSI (amount determined by Administrator) 35 percent +/- 2.5 percent
OSI plus Superior Contribution Increase 2 (SCI-2) OSI plus 0.6% 45 percent +/- 2.5 percent
OSI plus Superior Contribution Increase 1 (SCI-1) OSI plus 1.8% 20 percent +/- 2.5 percent

2. Annual Pay Change Funding

bulletUnder the Core Plan, the funds previously reserved for the General Increase, Within Grade Increase (WIGI), and Quality Step Increase are re-allocated to the Organizational Success Increase (OSI) and the Superior Contribution Increase (SCI).
bulletAnnual pay increase amounts are based on organizational and employee performance factors via the OSI and SCI.
bulletThe budget allocation is consistently applied to all Lines of Business and Staff Offices.

The example below shows how plan funding under the FG system compares to funding under the Core Compensation Plan:

FG System Funding:
5.4% Total Expenditure
bullet1.6% WIGI Pool
bullet3.8% General Increase*
*Note: The percentage on this chart is for illustrative purposes only. The exact amount of the General Increase will vary from year to year, as determined by Congress and the President.
Under the FG system, all employees received a General Increase (3.8% in this example) as well as Within Grade Increases where eligible. Annual pay increase amounts were not based on employee or organizational performance factors other than an "acceptable level of competence" determination for receipt of a WIGI.
Core Compensation Plan Funding:
5.4% Total Pool (3.8% GI* plus 1.6%)
bullet0.6% SCI Pool
bullet4.8% OSI Pool
*Note: The percentages on this chart are for illustrative purposes only. The exact amount of the General Increase will vary from year to year, as determined by Congress and the President.

3. Annual Pay Change Process

Step 1: The Management Board establishes strategic goals, corporate projects, and performance targets that support FAA Strategic Plan. From these, specific OSI goals are established and approved by the Administrator at the beginning of each performance year. The performance year runs from October 1 to September 30 of the following year.

There are currently six organizational goals: Safety, Security, System Efficiency, Customer Satisfaction, Financial Responsibility, and People.

Step 2: The FAA Compensation Committee proposes to the Administrator the potential OSI pool by following the Annual Funding formula described above.

Step 3: After the end of the performance year, the Administrator assesses the performance of the agency against the organizational goals and makes a final OSI determination. Based on the assessment, the Administrator will determine whether to grant the entire available OSI pool for success or a portion of the pool for partial success as the final OSI.

Step 4: Managers will use a streamlined assessment process to identify recipients for each annual pay increase level. There are four possible annual pay increase levels:

bulletApproximately 20% will get the OSI plus an SCI-1 of 1.8% of base salary
bulletApproximately 45% will get the OSI plus an SCI-2 of 0.6% of base salary
bulletApproximately 35% will get the OSI with no SCI
bulletIneligible employees will receive no OSI nor SCI

The process for evaluating employees for the SCI component of the annual pay increase will include a Contribution Assessment Decision Aid and other tools, and an employee input capability. SCI decisions will be made at the lowest practical levels, so that to the greatest extent possible, decision-makers will be personally familiar with the employee contributions.

The criteria against which employees will be rated are collaboration, customer service, and impact on organizational success. A fourth criterion ? management and leadership ? will apply only to managers.

4. Employee Eligibility

Employees who have 90 days in a pay status with FAA in the performance year and who meet the minimum performance threshold will receive the Organizational Success Increase. Employees on an ODP (Opportunity to Demonstrate Performance) at the end of the performance year will not be eligible. Those employees who have received the following disciplinary actions during the performance year: suspension of any duration, demotion for conduct or performance, or who have been issued a removal decision letter, also will not be eligible. The head of a line of business or staff office may approve an exception to this policy for suspensions only. All performance increases will be effective on a specific date set by the Administrator.

Each year, Lines of Business/Staff Offices will be responsible for identifying those employees not eligible to receive performance increases.

5. Payment of Annual Pay Adjustments

Organizational Success Increases.
OSIs will be added to employees? base pay on a date determined by the Administrator. If the employee's salary is above the band maximum, the OSI will be paid as a lump sum payment. If the OSI will cause the employee's pay to exceed the band maximum, the employee will receive a pay increase up to the band maximum and the remainder as a lump sum payment. See COMP-2.21C Grandfathered Employees in the Core Compensation Plan for exceptions to this rule.
Superior Contribution Increases.
SCIs will be added to employees? base pay on a date determined by the Administrator after the OSI is paid. The SCI amount will be based on the employee's base pay rate in effect prior to payment of the OSI. (Note: OSI and SCI payments will not be compounded; SCIs will be applied to the base pay rate in effect prior to the OSI payment). If the SCI will cause the employee's pay to exceed the band maximum, the employee will receive a pay increase up to the band maximum and the remainder as a lump sum payment. See COMP-2.21C Grandfathered Employees in the Core Compensation Plan for exceptions to this rule.

6. Locality Increases

In addition to performance increases, employees in the Core Compensation Plan will continue to receive locality pay adjustments in line with those authorized by the Office of Personnel Management for General Schedule employees. Adjustments will be adopted on the date authorized by OPM, normally the first day of the first full pay period of the calendar year.

Related Policies

bulletCOMP-2.13C, Pay Retention in the Core Compensation Plan
bulletCOMP-2.21C, Grandfathered Employees in the Core Compensation Plan
bulletPolicy Bulletin #9: Modifications to Annual Pay Adjustment Policies of the Core Compensation Plan

Related Reference Material

bulletCore Compensation Pay Bands (MS Excel)

Related Forms and Decision Tools

bulletSCI Contribution Assessment Decision Aid (MS Word)
bulletSCI Employee Contribution Self-Assessment (MS Word)