The GS classification system is a mechanism for organizing work, notably for the purposes of determining pay, based on a position’s duties, responsibilities, and qualification requirements, among other things. The GS system was created by the Classification Act of 1949 and was later codified in Title 5 of the U.S. Code. The origins of the GS system can be traced to the 1880s when merit replaced political patronage as the method of filling federal jobs. Classification was seen as a necessary first step in the equitable treatment of applicants and employees. A guiding principle of the GS classification system is that employees should earn equal pay for substantially equal work. The classification system aligns positions with rates of base pay by establishing a standardized schedule, which OPM administers.classification system is the foundation of many other human capital management policies, as shown in figure 1. Our analysis of subject matter specialists’ comments, related literature, and interviews with OPM officials identified a number of important characteristics for a modern, effective classification system, which we consolidated into eight key attributes. While each attribute is important individually, the inherent tensions between some will challenge OPM, policymakers, and stakeholders to find the optimal balance points so that all of the attributes will contribute to an effective system when assembled collectively. Importantly, the weight that policymakers and stakeholders assign to each attribute—and the trade-offs made among competing attributes—are important in evaluating alternative classification designs like those found in demonstration projects or the Partnership for Public Service’s recent model. Moreover, while the attributes listed below were frequently cited by subject matter specialists and the literature we examined, there was no consensus in priority or in degree of these attributes. Subject matter specialists agreed that any changes to the classification system should align with the guiding principle of equal pay for work of substantially equal value. The eight attributes of a modern, effective classification system are as follows: Internal equity. All employees with comparable qualifications and responsibilities for their respective occupations are assigned the same grade level. External equity. All employees with comparable qualifications and responsibilities are assigned grade levels and corresponding pay ranges comparable to the nonfederal sector. Transparency. A comprehensible and predictable system that employees, management, and taxpayers can understand. Flexibility. The ease and ability to modify the system to meet agency- specific needs and mission requirements, including modifying rates of pay for certain occupations to attract a qualified workforce, within the framework of a uniform government-wide system. Adaptability. The ease and ability to conduct a periodic, fundamental review of the entire classification system that enables the system to evolve as the workforce and workplace changes. Simplicity. A system that enables interagency mobility and comparisons with a rational number of occupations and clear career ladders with meaningful differences in skills and performance, as well as a system that can be cost-effectively maintained and managed. Rank-in-position. A classification of positions based on mission needs and then hiring individuals with those qualifications. Rank-in-person. A classification of employees based on their unique skills and abilities. The values policymakers and stakeholders emphasize could have large implications for pay, the ability to recruit and retain mission critical employees, and other aspects of personnel management. This is one reason why—despite past proposals—changes to the current system have been few, as finding the optimal mix of attributes that is acceptable to all stakeholders is difficult. For example, on the one hand a rank-in- person system classifies individuals based on individual qualifications such as performance, education, and seniority. This approach is used by the military and Senior Executive Service. On the other hand, a rank-in- position system classifies positions based on factors such as the duties, responsibilities, and qualifications the position requires and is widely used across the federal government. The extent to which the design and implementation of the GS classification system balances the attributes of a modern, effective classification system varies. There are two main design features of the GS system: (1) a set of standardized occupations, and (2) statutorily defined grade levels and steps. We found, in concept, these features incorporate several of the key attributes including internal and external equity, transparency, simplicity, and rank-in-position. However, as agencies implement the GS system the attributes of transparency, internal equity, simplicity, flexibility, and adaptability are reduced. This occurs, in part, because as discussed earlier in this report, some attributes are at odds with one another, so fully achieving one attribute comes at the expense of another. OPM publishes and defines a set of occupational standards that describe and differentiate all of the different types of work performed across the government, which agencies then use to develop position descriptions. Providing standard government-wide occupational standards is an example of how transparency and internal equity are built into the system. For example, the occupational standard for an information technology specialist clearly describes the routine duties and tasks, and experience required for the position. This information is published for all of the 420 occupations defined in the GS system, so all agencies are using the same, consistent standards when writing position descriptions. At the same time, any occupation with the same education, experience, and other requirements should be assigned the same grade level and same base pay range, contributing to internal equity. The GS system defines occupations narrowly, meaning that different occupational definitions may exist even for closely related occupations, like electrical engineers and electronics engineers. These two occupations both require similar backgrounds in understanding the theories of advanced mathematics, economics, and computer science. However, in application, electrical engineers tend to concentrate on the electrical systems of physical infrastructure, among other areas, while electronics engineers tend to concentrate on the electrical systems of devices such as satellites and communication systems. The precisely defined occupational standards can also enable comparisons to those occupations in the private sector, providing some level of external equity. However, in practice having numerous, narrowly-defined occupational standards may actually inhibit the system’s ability to optimize these attributes for reasons including the following: Classifying occupations and developing position descriptions in the GS system requires officials to maintain an understanding of the potential responsibilities of the individual position and of the nuances between similar occupational definitions. Without this understanding, having numerous occupations from which to choose may inhibit transparency and internal equity. For example, one subject matter specialist said that the requirements of a particular position may be met by the qualifications of more than one occupational definition. As a result, officials may not be classifying positions consistently, comparable employees may not be treated equitably, and the system may seem unpredictable. Having many—more than 400—occupations can limit the simplicity of the system. For example, since individual occupations may have their own career ladders or a set number of grades for potential advancement, it can be challenging for agencies to move employees according to their core skills within and across agencies to address evolving needs. Likewise, qualified employees may be limited in their ability to advance in their general fields as related but distinctly defined occupations may require specific experiences in that occupation. Interdisciplinary occupations—those that involve duties and responsibilities closely related to more than one professional occupational standard, such as those in certain scientific research fields like natural resources management and biological sciences— provide some flexibility to agencies as they allow agencies to combine the work of multiple occupations. This is because the position could be classified in two or more occupational series and the employee with education and experience in either of two or more professions may be considered equally qualified to do the work. The final classification of the position is determined by the qualifications of the employee. However, interdisciplinary occupations decrease the simplicity of the system. This is because employees, management, and taxpayers may not be able to easily understand how one occupation differs from another, especially when position descriptions have overlapping responsibilities. Finally, a system composed of numerous occupational series can be cumbersome to systematically review, limiting the system’s adaptability. This is because reviewing and revising occupational series can be a time-consuming effort, partially due to analysis required to understand the differences between and potential effect of closely related occupations, ensure government-wide applicability and gain consensus. The second key design feature of the GS system is the 15 statutorily defined grade levels intended to distinguish the degrees of difficulty within an occupation, which are designed to simplify the system and provide internal equity. Agency officials assign a grade level to a position after analyzing the duties and responsibilities according to the factor evaluation system. This allows for easy comparisons of employees in the same occupation and grade level but in different agencies, providing simplicity and internal equity to the system, and it may help employees move across agencies. Within the 15 grades there are 10 steps— time-based increases that determine a GS employee’s rate of pay—providing transparency to the system by creating a clear, predictable process. This design feature emphasizes the GS system as a rank-in-position system that focuses on the position and the time spent in that position over the specific characteristics or performance of the incumbent, as a rank-in-person system would do. However, in practice the 15 grades and the 10 steps may actually inhibit the system’s ability to optimize these attributes for reasons such as the following: The 15 grades require officials to make meaningful distinctions between such things as the nature and extent of the skills necessary for the work at each level, which may be more difficult in some white- collar occupations where those differences may not be clear cut. For example, officials must be able to determine how the work of a GS-12 accountant is different from a GS-13 accountant. But making clear distinctions between these occupations may be more nuanced, as the basis for them hinges on, for example, how agency officials determine the degree of complexity of the work or the most important duties of the position. As a result, having 15 grade levels may make the system seem less transparent, as distinguishing between the levels may not be precisely measured by the elements of the factor evaluation criteria. Otherwise, agencies risk having two employees performing substantially equal work but receiving unequal pay, which decreases the degree to which the system can ensure internal equity.