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Published in Print: September 1, 2004, as Most in Ed. Dept. Are Paid Bonuses for Performance

Most in Ed. Dept. Are Paid Bonuses for Performance

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The U.S. Department of Education gave more than $5.7 million last year in bonuses to its employees, including a student-aid official who got $71,250.

In the 2003 calendar year, more than 75 percent of the department’s employees received bonuses, with political appointees among the recipients.

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View the accompanying table, "Fatter Paychecks."

Each year, the department gives some employees cash awards on top of annual raises, a practice that spans federal agencies. While officials say bonuses are a way to reward performance and help lure employees from the private sector, critics say the practice smacks of favoritism and isn’t based on measurable criteria.

"It’s a system that certainly needs to be looked at and fixed, because it’s broken," said Ben Miller, a member of Council 252 of Education Locals, the union that represents 3,200 career employees at the Education Department.

In the last calendar year, the department gave out 3,606 bonuses to its employees, according to information obtained by Education Week through a Freedom of Information Act request. The department has about 4,600 employees, said spokeswoman Susan Aspey. Forty-four of the employees received bonuses of $10,000 or more.

In 2000, the last full year of President Clinton’s administration, the department gave out $3.4 million in bonuses to 1,378 employees, all career workers. Among bonus recipients that year, 39 employees received $10,000 or more.

An analysis by The Washington Post earlier this year found that nearly two-thirds of 1.6 million civilian federal employees got bonuses or special awards in fiscal 2002.

‘The Wrong Signal’?

The practice of doling out bonuses to reward federal workers has been around for decades, said Barbara W. Colchao, an acting manager in the U.S. Office of Personnel Management.

A law permitting employee-incentive awards has been on the books since 1954 and began as a way to reward suggestions for new programs or significant accomplishments. As the decades passed, new bonus programs were put into place, ranging from overall- performance awards to those given for a single accomplishment, Ms. Colchao said. There are recruitment and retention bonuses and relocation bonuses.

Some awards are based on a percentage of salary, while others are set amounts. Bonuses can differ for civilian workers, career executives, and noncareer executives, she said.

However, President Clinton barred bonuses for political employees during his term, though he never changed the law. In March 2002, Andrew H. Card, President Bush’s chief of staff, issued a memo saying political appointees could once again be eligible for bonuses.

Forty- three of the employees who received bonuses at the Education Department in 2003 were political employees. Only four of the bonuses given to such appointees last year were $10,000 or more.

Of those political appointees, Inspector General John P. Higgins got $26,800. Stacey R. Lukens, then the deputy chief of staff, who has since left the department; James F. Manning, then the chief of staff for the deputy secretary and now the chief of staff at the office of federal student aid, known as FSA; and Ronald J. Tomalis, the counselor to Secretary of Education Rod Paige, all received $10,000, according to the documents.

"I think there’s no excuse whatsoever for giving bonuses to political appointees," said Paul C. Light, a professor of public service at New York University, who said such appointees often leave federal service for high-paying jobs, while career government workers stay on for modest salaries. "It sends the wrong signal down to the career workforce and is a bad practice."

Theresa S. Shaw

But it was nonpolitical senior managers who garnered the really hefty bonuses in 2003. Theresa S. Shaw, the chief operating officer for the student-aid office was the top recipient, with a bonus of $71,250. Ms. Shaw’s base salary is about $144,000, Ms. Aspey said.

Debra D. Wiley, the ombudsman for the student-aid office, received two bonuses, totaling $35,104. Some employees received more than one bonus during the calendar year at different time periods and in "recognition for two different performance periods," according to Ms. Aspey.

Susan K. Thares, the FSA’s external- events director, also received two bonuses, totaling $32,891. Calvin D. Thomas, the general manager for workforce-support services in the student-aid office, likewise received two bonuses, adding up to $30,294. Gerald T. Schubert Jr., the office’s chief information officer, received $28,500.

The large sums "make me question what has transpired," said Cyndy Littlefield, the director of federal relations at the Washington-based Association of Jesuit Colleges and Universities, "although it could be perfectly above board and well-deserved."

Ms. Aspey said that the student-aid office differs when it comes to bonuses compared with other units within the Education Department. The 1998 legislation that reorganized the FSA made it into a "performance- based organization" and contains language saying the chief operating officer can receive a bonus of up to 50 percent of his or her base salary.

During the 1990s, the student-aid office was widely regarded as a troubled organization, plagued by inefficiencies. The 1998 legislation was designed to streamline the office and to upgrade the delivery of financial aid.

FSA programs have been on the Government Accountability Office’s high-risk list since 1992, Ms. Aspey said, but department officials expect them to be removed by early next year. The office has had two clean audits in a row, she wrote in an e-mail message to Education Week.

Ms. Shaw and her employees have made the difference, Ms. Aspey said.

"Terri Shaw is worth more than her weight in gold and then some," Ms. Aspey said in the e-mail. "Her leadership has saved the federal taxpayers hundreds of millions of dollars."

Context Is Everything

Outside of the student-aid office, other top bonus-getters within the Education Department last year were Steven Y. Winnick, the deputy general counsel, and Thomas P. Skelly, the director of budget services, who each received $46,900.

Education Department employees have several ways to earn bonuses, Ms. Aspey said. Some programs recognize long-term accomplishments by career employees and give employees lump sums of either 35 percent or 20 percent of their base pay. Performance bonuses also can be given to recognize excellent work on a project; those can range from 5 percent to 20 percent of an employee’s salary, she said.

"Without context, it probably is possible to look at some of the bonuses with skepticism, but context is everything here," Ms. Aspey said in an interview. "The bottom line is that some folks could be making a lot more money in the private sector."

But the way bonuses are doled out is something the union representing Education Department employees says it is working to change. Mr. Miller, the Education Locals leader, said he met more than a month ago with personnel officials at the department to try to revamp the bonus system.

Mr. Miller, a management-program analyst in the department’s office for civil rights, said the union believes employees should be rated with objective criteria when determining bonuses, but that is not currently happening.

"The bonuses are decided now in a very subjective manner," he said. "No one really knows what the basis is."

Often, he contended, bonuses are awarded in secret, and the bonus amount is not linked to an employee’s annual evaluation. "That leads to a great deal of employee suspicion and unhappiness regarding the lack of equity in the process," he said.

Ms. Aspey said bonuses are awarded based on merit.

"It’s not a given that somebody who does the basics of the job is going to get a bonus," she said in an interview. "That’s what you get a paycheck for."

But getting a bonus just for doing one’s job seems to be the norm, said Thomas A. Schatz, the president of Citizens Against Government Waste, a Washington-based watchdog group. His concern isn’t the method for awarding bonuses; it’s the number of Education Department workers getting them each year.

"It’s unlikely," he said, "in most organizations that two-thirds or so are doing above-average work."

Vol. 24, Issue 1, Pages 1,36

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