WASHINGTON May 19 The U.S. consumer bureau said
on Monday it would compensate employees who received
less-than-stellar performance ratings in 2012 or 2013 because
its system put certain groups such as blacks, Hispanics and
older workers at a disadvantage.
An internal Consumer Financial Protection Bureau analysis
found that black and Hispanic employees were less likely than
white workers to receive the top score in ratings used to set
pay raises, Director Richard Cordray said in an email to staff.
Employees who were over the age of 40, who worked in one of
the bureau's field offices rather than its headquarters, or who
had less than one year of experience at the consumer agency also
received lower ratings than their counterparts, according to a
summary of the analysis that was released on Monday.
Under the system, managers rated employees on a scale from 1
to 5, with 5 representing top-notch work. The ratings were used
to determine both merit raises and lump-sum bonus payments.
Cordray said after seeing the results of the analysis,
bureau officials decided to compensate employees who received
ratings of 3 or 4 - which indicate solid and high performance,
respectively - as if they had received the top score.
"We will make appropriate adjustments to employee
compensation to ensure that we erase the remnants of any
statistical disparities caused by our performance management
system," Cordray said in the email to staff.
A bureau spokesman said compensating employees who received
lower ratings in 2012 or 2013 was expected to cost between $5
million and $5.5 million. The bureau did not disclose how many
people would receive payments but said about 100 people who have
left the bureau would be included.
Bureau officials found preliminary issues with the ratings
in January, and the problems were revealed publicly in March.
The consumer bureau, or CFPB, announced then that it would
revamp its performance management system.
Members of the U.S. House of Representatives' financial
services committee have been pushing for more information about
the disparities. Two bureau officials and a representative of
the agency's union will testify about the problems on Wednesday.
Lawmakers created the consumer bureau as part of the 2010
Dodd-Frank law and charged it with overseeing a broad swath of
consumer financial products. Officials scrambled to hire
employees, write new rules and investigate wrongdoing in a short
period of time after the bureau was established. The rating
system was designed to reward the highest-performing people.
"The performance management system implemented by the CFPB
was based on best practices and, on paper, it had considerable
merit," the bureau said in its analysis.
"It is clear that the system was too sophisticated for a new
agency like the CFPB, which was experiencing a high level of
rapid growth and organizational pressures as it worked to build
itself out starting from scratch," it said.
(Reporting by Emily Stephenson; Editing by Cynthia Osterman)