Race Still a Factor in DoD Pay Raises

The Defense Department’s controversial pay-for-performance system still gives larger raises and bonuses to white employees than to minorities, according to a Federal Times analysis of the latest round of payouts given in January.

The good news is those disparities in the department’s National Security Personnel System (NSPS) are narrowing from a year ago. And gender differences in raises and bonuses that existed a year ago have virtually disappeared.

To find out why the disparities exist, the Pentagon has begun a review of how employees within so-called pay pools were rated and compensated. Pay pools are defined groups of employees — such as those from a common facility or organization — that are compensated from the same pool of funds. Each pay pool is overseen by a panel of managers that ensures the fairness of the ratings and raises given in that pool.

The aim of the review is to see whether members of different races, ethnicities and other demographic groups are treated differently.

NSPS program executive officer Brad Bunn said his office began looking at how to do that last year, but figuring out the right way to analyze NSPS at the pay pool level proved more complicated than expected.

“We can generate the numbers pretty easily and see what’s happening, but to see why those things are happening is hard,” Bunn said. “We still don’t know if anything needs to be corrected. Organizations have to take a hard look and understand what’s going on.”

Racial bias is “always a concern,” Bunn said June 4. “You have to continue to be vigilant to make sure that racial bias and other kinds of bias that don’t have to do with assessing actual performance is not part of the process and is dealt with.”

Bunn said that the racial and ethnic differences in payouts may not be because of systemic flaws or prejudiced reviewers. It could have more to do with Defense’s demographics, he said, and the fact that higher-ranking employees — who tend to benefit most from pay-for-performance systems — are more likely to be white.

‘A red flag’

Critics, such as the American Federation of Government Employees, aren’t buying it. The fact that white employees received the biggest raises two years in a row shows the system is discriminatory and fatally flawed, AFGE said.

“It continues to be a red flag,” said AFGE chief of staff Brian DeWyngaert. “These numbers and a continued lack of transparency [in the pay pool process] are indicative of a complete failure. NSPS should be terminated, and employees should be moved back to a colorblind system that will not have these kinds of red flags hanging over them.”

Democratic lawmakers, such as Reps. Ike Skelton, D-Mo., and Solomon Ortiz, D-Texas, have also raised concerns about NSPS’ fairness. And during the campaign last year, President Barack Obama expressed concerns about whether NSPS discriminated against minorities and pledged to review the system and make necessary modifications.

One Hispanic employee covered under NSPS said he feels the evaluation process discriminates against minority employees. Carlos Jimenez, an engineer at the Army’s White Sands Missile Range in New Mexico, said he believed he had to prove himself more to the white managers who evaluated him and determined his raises.

Jimenez said that managers “interrogated” him about his accomplishments. But when Jimenez asked his white co-workers about their evaluations, he found they were not asked nearly as many pointed questions as he had been. Jimenez did not know how his raise and bonus compared with his white co-workers’.   “I felt I was held to a higher standard,” Jimenez said.

Gilbert Sandate, the chairman of the Coalition for Fairness for Hispanics in Government, said his group has heard similar concerns from other Hispanic employees under NSPS, who feel that because their managers are often white, they have to work harder to receive the largest payouts.

Pat Niehaus, a labor relations officer at Travis Air Force Base in California, said she has never seen any hint of pay pools discriminating based on race or ethnicity in the pay pools she has advised.

“I’ve seen instances where there was some intense discussion, but it was always based on what [the employee] contributed, not who they were,” Niehaus said.

Paul Dorf, a pay expert and managing director of the human resources consulting firm Compensation Resources Inc., said unconscious bias may be skewing how pay pool managers evaluate minority employees.

Defense should look at the racial and ethnic makeup of managers overseeing pay pool panels to make sure minorities are adequately represented, Dorf said.

“If most of your minorities are in support positions and your Caucasians are in supervisory or higher-level management positions, I think that could have an impact,” he said.

Bunn said that at least one Navy organization conducted such a review of its pay pools last year and as a result added more women and minorities.

But Dorf said Defense should be lauded for whittling down the disparities in total payouts. The racial and ethnic differential declined by 28 percent between the 2008 and 2009 payouts, and the difference in payout by department dropped 37 percent.

“Both of those are significant,” Dorf said. “It looks like they’re on the right track.”

Bunn said he was pleased that the gap had shrunk, though he said he did not know for certain that it means NSPS is becoming fairer.

He said that comparing the 2008 and 2009 results may not produce reliable results since the 2009 payout covered 167,000 employees — 65,000 more than the previous year.

Bunn said that fiscal 2008 marked the second year many organizations were under NSPS, and better-experienced managers might have done a better job accurately evaluating employees this time.