Lesson 6: Compensation Administration Duration: 2 hours HR Elements

Lesson 6: Compensation Administration Duration: 2 hours HR Elements for HR Practitioners Basic Pay Administration Slide 6- 1 1

Lesson 6 Topics Lesson 6 Topics Topic 1 – Base Salary Topic 2 – Local Market Supplements (LMS) and Targeted Local Market Supplements (TLMS) Topic 3 – DCIPS Annual Structure Adjustments Topic 4 – Setting Pay Topic 5 – Other Special Situations Topic 6 – Foreign Language Proficiency Pay (FLPP) HR Elements for HR Practitioners Basic Pay Administration Slide 6- 22

DCIPS Occupational Structure DCIPS Occupational Structure DCIPS Occupational Structure HR Elements for HR Practitioners Basic Pay Administration Slide 6- 33

Basic Principles Compensation System Basic Principles Provides pay opportunities that enable flexible and effective recruitment, management, and retention of a high-quality, highperforming workforce Promotes a high-performance culture Recognizes employee performance and contributions to the mission Focuses on total compensation HR Elements for HR Practitioners Basic Pay Administration Slide 6- 4 4

Key Terms Total Compensation Key Terms Base Pay Local Market Supplement (LMS) Targeted Local Market Supplement (TLMS) Basic Pay Basic pay Base pay LMS (or TLMS) HR Elements for HR Practitioners Basic Pay Administration Slide 6- 5 5

DCIPS Occupational Structure DCIPS Occupational Structure DCIPS Occupational Structure HR Elements for HR Practitioners Basic Pay Administration Slide 6- 66

LMS and TLMS LMS and TLMS Allows Components to compete more effectively for highly skilled employees Replaces GS locality pay and special rate supplements Included in basic pay – Basic pay base pay LMS or TLMS – Employees may receive an LMS or TLMS, but not both Considered when calculating many of the Federal benefits HR Elements for HR Practitioners Basic Pay Administration Slide 6- 7 7

Setting and Adjusting LMS and TLMS Setting and Adjusting LMS and TLMS Who has the authority to set or adjust LMS and TLMS? What does DCIPS consider when determining the monetary value of LMS and TLMS? What is DCIPS LMS linked to? What are occupational TLMSs analogous to? Is an LMS portable? Is a TLMS portable? HR Elements for HR Practitioners Basic Pay Administration Slide 6- 8 8

Annual Structure Adjustments Annual Structure Adjustments Applies to both pay banded and graded compensation structures: Reviewed annually Linked to the annual Congressional pay increase process Adjusted at the same rate and at the same time as the General Schedule LMS rates are adjusted to correspond to locality rate increases Each TLMS is reviewed annually to determine whether the business case exists for its continuation Employee performance may affect eligibility to receive an LMS or TLMS HR Elements for HR Practitioners Basic Pay Administration Slide 6- 9 9

Setting Pay Setting Pay HR Elements for HR Practitioners Basic Pay Administration Slide 6- 10 10

Setting Pay Exercise This exercise is intended to help you understand that selectees bring many assets to a new position, such as education, training, experience, and past performance that should be considered when setting pay in relation to the requirements of the positions. Each group will read the case study. Review the hypothetical Component guidelines and the Professional Work Category DCIPS Salary Table. Discuss the possible responses to the case study. Record how your group arrived at its answers and any special considerations. Provide both the salary and the grade/step for each. Assign a spokesperson to share your group’s responses with the other groups. HR Elements for HR Practitioners Basic Pay Administration Slide 6- 11 11

Reassignment What is a reassignment? Are employees eligible for pay increases upon reassignment? What is an employee-initiated reassignment? What is a management-directed reassignment? When will a reassignment occur competitively? Which two work categories are considered equivalent for noncompetitive reassignments? HR Elements for HR Practitioners Basic Pay Administration Slide 6- 12 12

Promotion Promotion A promotion occurs when an employee is advanced to a higher pay band or grade HR Elements for HR Practitioners Basic Pay Administration Slide 6- 13 13

Reduction in Band or Grade Scenarios Reduction in Band or Grade Scenarios Voluntary reduction at employee’s request Involuntary reduction resulting from a management-directed action Involuntary reduction resulting from an adverse action HR Elements for HR Practitioners Basic Pay Administration Slide 6- 14 14

Pay Retention Pay Retention Pay retention is used to prevent a reduction in salary when an employee’s former rate of pay exceeds the maximum rate of the employee’s new pay band or grade HR Elements for HR Practitioners Basic Pay Administration Slide 6- 15 15

Setting Pay Exercise #2 Determine how pay would be set for each scenario provided. Go to ‘Exercise 6-2: Setting Pay for Reassigned or Promoted Employees’ on page 6-32 of the Participant Guide for the scenarios. Assign a spokesperson to share your answers with the other groups. HR Elements for HR Practitioners Basic Pay Administration Slide 7- 16 16

Special Situations Special Situations Related to Pay Developmental Progression Programs Continuation of Documented Career Ladders Non-foreign Area OCONUS (outside the contiguous United States) TLMS rates HR Elements for HR Practitioners Basic Pay Administration Slide 6- 17 17

Foreign Language Proficiency Pay Foreign Language Proficiency Pay (FLPP) Volume 2016, established in April 2015, assigns responsibility and required activities to administer FLPP FLPP is not considered when determining basic pay rate The minimum qualifying language skill level will not be less than Interagency Language Roundtable (ILR) Level 2 Total amount of FLPP may not exceed 55,000 in a calendar year Termination of FLPP cannot be grieved HR Elements for HR Practitioners Basic Pay Administration Slide 6- 18 18

Lesson 6 Review Lesson 6 Review Topic 1 – Base Salary Topic 2 – Local Market Supplements (LMS) and Targeted Local Market Supplements (TLMS) Topic 3 – DCIPS Annual Structure Adjustments Topic 4 – Setting Pay Topic 5 – Other Special Situations Topic 6 – Foreign Language Proficiency Pay (FLPP) HR Elements for HR Practitioners Basic Pay Administration SlideSlide 6- 193-192