Agencies rarely deny employees within-grade increases and corresponding, fixed salary bumps, despite data showing federal workers and supervisors often perceive poor performance among their colleagues.

According to a data analysis from the Merit Systems Protection Board, agencies deny step increases to one in every 1,000 employees.

Federal employees usually receive within-grade increases if their performance meets an “acceptable level of competence.” If an employee isn’t performing at an acceptable level of performance, agencies can take steps to deny them a step-increase and promotion.

Employees must wait a certain amount of time to move from one step on the General Schedule to another, and the waiting period varies by step. Employees, for example, typically wait 52 weeks to advance to steps 2, 3 or 4, but they’ll wait 156 weeks to advance to steps 8, 9 or 10.

Some agencies have automated procedures for approving step increases, but others do not. Regardless of agencies’ IT capabilities, the MSPB described step increases as being “nearly automatic” given how infrequently denials actually occur.

The data doesn’t match employee perceptions of performance in the federal workplace.

According to MSPB survey data, more than a quarter of supervisors say they have at least one employee who isn’t meeting an acceptable level of competence. Using that data, a supervisor with 10 employees would deny a within-grade increase once every 40 times, the MSPB said.

A 2016 MSPB survey found 34% of employees believed at least one person in their immediate work unit was performing so poorly that their agency should remove them from federal service. And 62% said at least one person in their work unit performed at a level below what’s expected of them on the job.

“We do not say that within-grade increases should or should not be denied more often,” the MSPB wrote. “It is for agencies to determine the criteria for what constitutes acceptable competence and how to measure it.”

Many, but not all, employees receive a performance rating between 1 and 5, with a 1 being the lowest and a 5 the highest. All of the agencies MSPB surveyed said employees must receive a performance rating of 3 or higher to qualify for within-grade increases.

“In some organizations, a low within-grade increase denial rate may mean that some individuals received a within-grade increase that should have been denied. In others, a low WGI denial rate may simply mean nearly every employee is performing at an acceptable level of competence. Nevertheless, the governmentwide rate of within-grade increase denials is inconsistent with governmentwide survey results on the incidence of under-performance,” the MSPB said.

There are a few reasons why employees are so rarely denied an automatic promotion and fixed salary bump, MSPB said.

One reason may relate to the nuances of an agency’s performance rating system. Some agencies use all five levels to assess employee performance, while others use three levels or a two-tiered system.

At any rate, Office of Personnel Management regulations don’t assign a particular label to a level 2 rating. That opens up some ambiguity for managers, because a level 2 is most analogous to a employee failing to meet an acceptable level of competence, but the rating itself is still technically undefined.

“This may be why within-grade increase denials are less common when the employing agency’s appraisal system does not include a summary rating of level 2,” the MSPB said. “If the employee is at level 3, that implies they are at an acceptable level of competence. If the employee is at level 1, continued employment is uncertain. Without level 2, there is no level at which an employee should be denied a within-grade increase, yet should not be removed.”

Just 0.2% of employees who worked for an agency that uses a level 2 rating were denied a within-grade increase, according to the MSPB. A level 2 rating itself often places employees in limbo, because they’re not performing so poorly to warrant removal, but they’re not performing at an “acceptable” or higher level either.

The nature of work is another factor. Positions with clearly defined, quantifiable performance goals or duties that involve case work, such as passport specialists or veterans claim examiners, are more often denied step increases, the MSPB said.

The State Department, for example, said it denies step increases to passport specialists 10 times more often than it does for the rest of the agency, because it uses specific metrics to rate case output.

“One reason that case work often coincides with higher rates of WGI denials may be that case work lends itself to easier measurement of performance,” the MSPB said. “But there can be a difference between having the option to measure performance and a culture that takes advantage of that opportunity.”

Agency culture is another factor.

Some agencies have collective bargaining agreements with more specific procedures that detail when and why the organization might deny a step increase.

Other agencies said they also had detailed documentation that helped supervisors think about their employees’ performance and encouraged them to address individual issues early, before a decision on a within-grade increase is due.

According to the MSPB’s analysis, employees being ill-suited to their jobs and employees being unwilling to do their jobs were the most common causes for insufficient performance.

Agencies said they see value in managing the step increases, and having a structured or automated process to remind supervisors when within-grade increases are due is especially helpful. But that requires having supervisors who actively discuss performance with their employees and find ways they can improve, agencies said.

“Warning employees about the possible denial of a WGI — or effectuating the denial if necessary — may help communicate that those consequences are real,” the MSPB wrote. “But, to do that, supervisors need to keep track of the WGI schedule and have the conversations in time to make a different WGI decision if warranted.”

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