Title: Reinventing Human Resource Management Author: Vice President Al Gore's National Performance Review Date: September, 1994 ************************************* Reinventing Human Resource Management ************************************* Accompanying Report of the National Performance Review Office of the Vice President Washington, DC September 1993 ******** Contents ******** Executive Summary 1 Enable Managers to Create and Maintain a Quality, Diverse Workforce ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^ HRM01: Create a Flexible and Responsive Hiring System 9 HRM02: Reform the General Schedule Classification and Basic Pay System 19 Enable Managers to Empower, Develop, Train, Reward, and Discipline Employees ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^ HRM03: Authorize Agencies to Develop Programs for Improvement of Individual and Organizational Performance 31 HRM04: Authorize Agencies to Develop Incentive Award and Bonus Systems to Improve Individual and Organizational performance 35 HRM05: Strengthen Systems to Support Management in Dealing with Poor Performers 39 HRM06: Clearly Define the Objective of Training as the Improvement of Individual and Organizational Performance; Make Training More Market-Driven 43 Enable Employees to Manage Work and Family Responsibilities ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^ HRM07: Enhance programs to Provide Family-Friendly Workplaces 49 Hold Managers Accountable for Adherence to Principles of Merit and Equal Opportunity ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^ HRM08: Improve Processes and Procedures Established to Provide Workplace Due Process for Employees 57 HRM09: Improve Accountability for Equal Employment Opportunity Goals and Accomplishments 61 HRM10: Improve Interagency Collaboration and Cross-Training of Human Resource Professionals 67 Create a System That is Self-Renewing and Continually Improving ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^ HRM11: Strengthen the Senior Executive Service So That It Becomes a Key Element in the Governmentwide Culture Change Effort 73 HRM12: Eliminate Excessive Red Tape and Automate Functions and Information 77 HRM13: Form Labor-Management Partnerships for Success 79 HRM14: Provide Incentives to Encourage Voluntary Separations 87 Appendices ^^^^^^^^^^ A. Summary of Actions by Implementation Category 91 B. Methodology 95 C. Accompanying Reports of the National Performance Review 97 Implementation Categories ^^^^^^^^^^^^^^^^^^^^^^^^^ Each action is followed by a number in parentheses that indicates the necessary avenue for effective implementation. Appendix A organizes all actions according to these categories. (1) Agency heads can do themselves (2) President, Executive Office of the President, or Office of Management and Budget can do (3) Requires legislative action (4) Good idea, but will require additional work, or may be better suited for future action Abbreviations ^^^^^^^^^^^^^ ADR Alternative Dispute Resolution AFGE American Federation of Government Employees CFR Code of Federal Regulations CPDF Central Personnel Data File CSRA Civil Service Reform Act DOD Department of Defense EEO Equal Employment Opportunity EEOC Equal Employment Opportunity Commission FEPCA Federal Employees Pay Comparability Act FLRA Federal Labor Relations Authority FMCS Federal Mediation and Conciliation Service FPM Federal Personnel Manual GAO General Accounting Office GETA Government Employees Training Act GM General Manager GS General Schedule GSA General Services Administration HRM Human Resource Management MSPB Merit Systems Protection Board NAPA National Academy of Public Administration NFFE National Federation of Federal Employees NPR National Performance Review NTE not to exceed NTEU National Treasury Employees Union OMB Office of Management and Budget OPM Office of Personnel Management OSC Office of Special Counsel OTS Office of Thrift Supervision PMRS Performance Management and Recognition System QSI Quality Step Increase SES Senior Executive Service ULP Unfair Labor Practice USC United States Code USDA Department of Agriculture USPS U.S. Postal Service ***************** Executive Summary ***************** In 1991, the Navy's Human Resources Office in Crystal City, Virginia, processed enough forms to create a mountain of paper 3,100 feet in height--or roughly six times as high as the Washington Monument. Meanwhile, the Agriculture Department recently determined that the total weight of the federal personnel laws, regulations, directives, case law, and departmental guidance required to make human resource management (HRM) decisions was 1,088 pounds. But problems with Washington's personnel system, which affect 2.1 million non-Postal Service employees in the executive branch, go well beyond paperwork. Indeed, the overly prescriptive system has a very real impact on how government works--or doesn't. As John Sturdivant, national president of the American Federation of Government Employees, told the National Performance Review (NPR): The Federal government's current personnel management "system" must be candidly termed "management by regulation." In this regard, the Office of Personnel Management micro-manages individual agencies from Washington through the detail-intensive Federal Personnel Manual. . . [A]gencies follow suit by issuing additional volumes of personnel regulations that generally parrot, with even further limitations, their parent agencies' dictates.(1) The federal human resource administrative system contains major impediments to efficient and effective management of the workforce. It's a patchwork of rules and requirements that confound rather than serve customer needs. It's process-driven; results are a by-product, not a measure of accountability. At the day-to-day operating level, it's not user-friendly--to managers, to employees and their representatives, or to personnel specialists. Recognition of the problems is not new. In 1983, a National Academy of Public Administration (NAPA) panel observed, "The present personnel management system is far too process oriented. It is much too rigid and needs major change. . . . Process drives out substance."(2) Also, the panel noted, "Management processes, centrally designed and dictated, often become overly proceduralized. . . . Personnel technicians rather than line managers end up making personnel decisions, thus putting further distance between the line managers and their personnel responsibilities."(3) These problems have compounded over time. Over the years, "anecdotal mistakes prompted additional rules," the Office of Personnel Management (OPM) wrote in 1988. The same document also noted that: When the new rules led to new inequities, even more rules were added. Over time . . . a maze of regulations and requirements was created, hamstringing managers, doing little to convince employees that their employer treats them fairly, and often impeding federal managers and employees from achieving their missions and from giving the public a high quality of service.(4) Structure of the Existing System ******************************** The civil service revolves around merit system principles requiring that positions be filled through fair and open competition, with the best qualified candidate chosen without regard to political affiliation or other non-merit factors, and protecting career workers from arbitrary dismissal. OPM's director, who serves as the President's personnel officer, promulgates human resource policy directives that support, interpret, or otherwise implement Title 5, United States Code; the Code of Federal Regulations; miscellaneous executive orders; case law from various adjudicative bodies, such as the Federal Labor Relations Authority (FLRA); Civil Rights Acts; and Equal Employment Opportunity Commission (EEOC) management directives. Along with OPM, organizations with authority to regulate, direct, or enforce human resource policy include the Merit Systems Protection Board (MSPB), FLRA, EEOC, the Office of Special Counsel, the Justice and Labor Departments, and the General Accounting Office. About 40,000 people help administer the federal government's civilian human resource administrative system. "Most of the personnel laws we use today were written for a troubled civil service of 1883," OPM Director James B. King explained in May 1993. "We must cut the cord to regulations that were right for their time a century ago, but which hog-tie managers today. In their place, we need systems and mentalities that, while still based in merit and fairness, will let managers manage today and into the future."(5) Though varying in size from a few dozen to several hundred thousand employees, all executive branch agencies have internal structures for administration of human resources. In each, directors of personnel and directors of equal employment opportunity (EEO) advise and support the agency head--developing policies and guidance, executing authorities delegated to the agency, preparing required reports, acting for the agency with external organizations such as OPM and EEOC, and generally administering programs related to human resources. The personnel directors are linked to OPM through membership on the Interagency Advisory Group. Supporting the personnel directors, headquarters personnel staffs perform functions at the agency level akin to those that OPM performs for the entire federal service. In large departments, personnel staffs are also located at subordinate levels such as regions and bureaus. Operating personnel offices and EEO staffs exist at the field or service delivery levels, providing day-to-day advice to managers and employees and processing personnel actions. Problems with the Existing System ********************************* Today, the system's functional operating components present a burdensome array of barriers and obstacles to effective HRM. Hiring is complex and rule-bound; managers can't explain to applicants how to get federal jobs. The classification and pay systems are inflexible. The performance management system is not adequately linked to the organization's mission and goals. The labor relations program is adversarial. The federal workplace is not family-friendly, with its overly restrictive leave practices and limited implementation of available programs. Diversity programs are fragmented, and affirmative employment planning and reporting processes are duplicative and resource-intensive. Agencies see little value in the efforts of central guidance agencies to monitor and control their activities. At the operating personnel office level, processes for delivering human resource services have remained largely unchanged for years, and customers accept them as the norm. In a 1993 special study of federal personnel offices, MSPB concluded, "Unfortunately, for a variety of reasons, some of the functions assigned to personnel offices are too often simply not done well or are of little relevance to line managers in their focus on mission accomplishment."(6) Human resource administration is forms driven, labor intensive, and time consuming. Managers and personnelists alike labor under rules and procedures requiring the meticulous handling of paper. With incomprehensible procedural and regulatory requirements, managers shy away from learning or accepting responsibility for HRM. To what can we attribute this proliferation of external controls and procedural constraints? In a forthcoming book, public administration professor Patricia Ingraham observes: In the pulling and hauling between the President and Congress . . . the permanent bureaucracy remains a target for control by both. The pattern of control is similar in both cases: discretion for members of the career service is to be limited whenever possible; control is to be exerted through additional levels of political appointees or other staff responsible to the President and/or Congress; and accountability will be defined as responsiveness to those controls.(7) The Need for Change ******************* To understand the need for change, and the nature of changes required, we must first understand the extent to which accountability has been defined in terms of procedural controls. The 1983 NAPA panel found that ". . . accountability is divided and varies by functional areas within personnel management in such a manner that everyone and no one is fully accountable."(8) In his 1993 study of the role of the federal inspectors general, Paul Light concluded: Despite experiments with performance incentives, such as merit pay, and occasional investments in civil service reform, the definition of accountability in government has remained relatively constant over the past fifty years: limit bureaucratic discretion through compliance with tightly drawn rules and regulations. . . . [A]ccountability is seen as the product of limits on bureaucratic discretion--limits that flow from clear rules (commands), and the formal procedures, monitoring and enforcement that make them stick (controls).(9) Principles to Guide Change: A Vision for the Future *************************************************** To reinvent HRM, we must redefine accountability in terms of results- -and we must do so within the context of decentralization, deregulation, simplicity, flexibility, and substantially increased delegations of authority. The recommendations in this report will create a system in which the President, Congress and, through them, citizens will hold agency managers accountable for mission accomplishment while adhering to principles of merit, equity, and equal opportunity. NPR sees the following assumptions as the basis for forming human resource management policies in the federal government. In the future: --- Federal executives and managers should be responsible for HRM and accountable for their actions and the results of them. --- Federal executives and managers should own HRM administrative systems. That is, they should help design them, accept them in principle, know how to make them work, and share confidence that they help achieve desired results. --- Federal executives and managers should receive advice and technical assistance from staff advisors with expertise in administering HRM administrative systems. --- HRM staff advisors should be viewed as part of the management team, not servants of management or the system's police. --- The quality and effectiveness of HRM administrative support should be measured by their contributions to achieving the agency's mission, goals, and priorities. --- Within a governmentwide legal framework, agencies should tailor HRM administrative systems to meet unique needs that arise from their organizational culture, consonant with fundamental principles of merit and equity and without the volumes of regulations that stress process rather than results. --- Mistakes or failures to comply with regulations should not prompt additional or more-stringent regulations; instead, individual managers should be held administratively accountable for their actions. --- Authority to make HRM decisions should be vested in line managers and delegated to an agency's lowest practical level, including to self-managed work teams operating in flattened organizational structures. --- Executives and managers should value the federal workforce; labor and management are partners in carrying out each agency's mission. Given these assumptions, NPR's vision in the human resource management arena is one in which managers can adjust work and people to meet mission demands in a cost-effective manner; create and maintain a quality, diverse workforce; lead, develop, train, set high expectations for, reward, and discipline employees; foster a quality work environment that lets employees manage work and personal responsibilities; and promote cooperative relationships with employees and unions. The ideal system is free of political influence and embodies merit system principles. "[A]gency executives and managers take primary responsibility, and [are] held strictly accountable, for observance of merit principles and the prevention of prohibited personnel actions; for enforcing high standards of employee performance and conduct, and for taking necessary actions when such standards are not met."(10) Administrative systems for the management of human resources that underpin this vision will be simple to use, easy to understand, self- renewing, continuously improving, and cost-effective. NPR's recommendations will help achieve the vision by: --- creating a flexible and responsive hiring system, --- reforming the classification system, --- improving performance management systems, --- targeting the objectives of employee training and development, --- enhancing programs to provide family-friendly workplaces, --- improving workplace due process, --- focusing equal employment opportunity on achieving results, --- eliminating excessive red tape, and --- forming labor-management partnerships. These recommendations require dramatic changes in the roles and responsibilities of line managers and their HRM advisors, and in labor-management relationships. Managers and supervisors will have more latitude to exercise judgment in their actions affecting employees. This latitude carries a large element of risk and concomitant accountability for results. Managers must have access to quality, responsive advice, and assistance from HRM professionals who truly understand the organization's HRM needs. Personnel offices must shift from reactive processors of paperwork to responsive consultants and advisors. This shift requires personnelists to view the manager as a customer with needs to anticipate and meet with responsive service, including electronic support systems. This change in roles and relationships must include a similar orientation toward the workforce. Cooperative relationships with organized labor must be established and maintained, with unions viewed as partners. Endnotes ******** 1. Letter from John N. Sturdivant, National President of the American Federation of Government Employees, to NPR staff member Roy Tucker, May 1, 1993. 2. National Academy of Public Administration (NAPA), Deregulation of Government Management Project: Personnel Management (Washington, D.C., October 1983), p. i. 3. Ibid., p. 1. (Interim panel report.) 4. U.S. Office of Personnel Management, Simplifying the Federal Manager's Job (Washington, D.C., 1988), Foreword. (Pamphlet.) 5. "OPM Takes Wrecking Ball to Personnel Structure," U.S. Office of Personnel Management News (May 28, 1993). 6. U.S. Merit Systems Protection Board, Federal Personnel Offices: Time for Change? (Washington, D.C., August 1993), p. ix. 7. Patricia Ingraham, The Foundation of Merit (Washington, D.C.: Johns Hopkins Press), p. 26. (Forthcoming.) 8. NAPA, p. 11. 9. Light, Paul, Monitoring Government: Inspectors General and the Search for Accountability (Washington, D.C.: The Brookings Institution, 1993), p. 12. 10. NAPA, p. 4. ******************************************************************* Enable Managers to Create and Maintain a Quality, Diverse Workforce ******************************************************************* ****************************************************** HRM01: Create a Flexible and Responsive Hiring System ****************************************************** Background ********** The system through which applicants are considered for competitive appointment to positions in the federal government is a merit system- -candidates are selected based on their relative ability to perform the job without regard to nonmerit factors, including political affiliation. There are nine merit system principles, covering (1) recruitment to achieve a work force from all segments of society, and selection and advancement following fair and open competition; (2) employment without regard to nonmerit factors; (3) equal pay for work of equal value; (4) standards of conduct; (5) efficient and effective use of the federal work force; (6) retention and separation based on performance; (7) effective education and training; (8) protections against arbitrary action and prohibition against interfering with an election; and (9) protection against reprisal for disclosing violations or mismanagement.(1) The law also defines prohibited personnel practices, including discrimination on the basis of nonmerit factors such as nepotism, political affiliation, and marital status.(2) It stipulates that "the head of each agency shall be responsible for the prevention of prohibited personnel practices, for the compliance with and enforcement of applicable civil service laws, rules and regulations, and other aspects of personnel management."(3) The first merit principle deals with recruitment and hiring. The merit system requires that (1) individuals be qualified; (2) appropriate sources be identified; (3) all segments of society be represented in the work force; (4) selection and advancement be determined solely on the basis of relative ability, knowledge, and skills; and (5) fair and open competition be afforded to ensure that all receive equal opportunity.(4) The Merit Hiring System. The competitive examining system for external candidates that has developed around these requirements is controlled by the Office of Personnel Management (OPM). Although OPM may delegate examining authority to agencies, by law OPM must conduct examinations for positions that are common to agencies. With OPM approval, agencies may directly hire candidates in a limited number of occupations where recruitment shortages have been identified--that is, where there is potentially a job for every qualified applicant. Throughout the year, OPM issues general notices or open announcements soliciting applications for particular occupations for which it retains examining authority. Managers wishing to fill vacancies from external sources must ask the personnel office to submit to OPM a request for a certificate of eligibles. Using an internal, unpublished rating scale, OPM rates and ranks candidates, whose names are then forwarded to the manager in ranked order. The actual list of candidates forwarded to the manager may not represent the best candidates, as higher-ranking individuals may have already been referred out to another agency. The rules surrounding selections are exactly the same for both OPM-generated certificates of eligibles and certificates issued by agencies with delegated examining authority. Although the certificate may contain many names, the manager is bound by law to select one of the top three available candidates, and may not pass over a veteran to select a nonveteran unless a request to pass over the veteran for reasons of qualifications or suitability is approved. Although authority to approve requests to pass over veterans is delegated to agencies, OPM must rule on requests to pass over veterans who are 30 percent or more compensably disabled. Managers may choose to interview all, some, or none of the candidates, but in no case may they subject candidates to further examination. Certificates may be returned unused when managers determine that candidates are unsatisfactory, which can result in significant time delays in filling positions, as alternative methods must then be considered. The General Accounting Office found in 1992 that managers returned 57 percent of certificates and chose to use alternate means.(5) Merit Promotion. OPM rules that govern competition among internal candidates, commonly termed merit promotion, are found in Federal Personnel Manual Chapter 335. Agencies typically construct internal rating and ranking procedures in order to identify the best qualified. Candidates are evaluated by personnelists, a subject matter expert, or a panel of subject matter experts, then either named to the selecting official as best qualified or eliminated from further consideration for that vacancy based on a cutoff score established by the evaluator(s). In most agencies, the selecting official does not participate in the rating, ranking, and referral process. Managers are free to select any candidate from among those referred by the panel. In 1989, in connection with a study to explore OPM's simplification initiatives, the Merit Systems Protection Board (MSPB) concluded that: [T]he OPM initiatives which agencies thought were the most effective were those which the agencies felt would assist in the hiring of high-quality employees and those that expedited the hiring process. Clearly, the provision of prompt recruitment and placement services to operating officials is a priority in agencies' personnel programs.(6) Can today's civil service hiring system meet the needs of federal managers for the 21st century? Most would maintain that the system cannot even meet current needs, and that reinvention is already long overdue, for the reasons summarized below. Need for Change *************** The need for change is well documented. When describing the federal hiring system in 1988, OPM Director Constance Horner noted, "The current system is slow; it is legally trammelled and intellectually confused; it is impossible to explain to potential candidates. It is almost certainly not fulfilling the spirit of our mandate to hire the most meritorious candidates."(7) In that same year, the Hudson Institute's Civil Service 2000 predicted that . . . hiring and retention [will become] much more competitive in the years ahead. Because these tight labor markets are likely to develop in different ways in different states and to shift quickly in response to economic and population changes, it is essential to decentralize responsibility and to provide more flexibility in hiring and personnel management than is characteristic of the current system.(8) Dwindling resources, shifting markets, and emerging technologies compound the need to ensure that every single employee becomes a vital partner in mission attainment and program delivery. Thus, identifying the impediments to carrying out an effective hiring program and exploring the extent to which these impediments can be alleviated become an absolute business necessity to ensure an organization's survival. The problems with the hiring system fall into the following major categories: Lack of Accountability. The single greatest failing of the hiring system is lack of managerial involvement in the front-end recruitment and evaluation of candidates for employment--in other words, lack of accountability. Managers who do attempt to participate in the external recruitment process in most cases must send potential applicants to OPM or to delegated examining units to be examined, in striking contrast with the ability of private industry recruiters to make immediate offers of employment to qualified candidates and to establish closer ties to professional and community recruitment sources. Managers must wait to receive candidates who have been rated and ranked by OPM or delegated examining units, and are required by law to choose from among the top three available candidates. When considering internal candidates, they make selections from among candidates who have been determined by others to be the best qualified. Managers are then able to blame the system for undesirable outcomes, such as perceived inequity or underrepresentation, if they have followed all of the rules. Failure to Meet Customer Needs. In 1989, the National Commission on the Public Service observed that, "Even when the public sector finds outstanding candidates, the complexity of the hiring process often drives all but the most dedicated away."(9) In 1990, MSPB observed that, "Potential applicants are frequently discouraged by the confusion they experience when trying to get a job with the federal government."(10) The system is time consuming and unresponsive; despite improvements in the automated delivery of examining services, the best candidates frequently go elsewhere before federal managers are able to make firm offers of employment. The fact that managers are forced to send some potential applicants to OPM to be examined is of particular concern at remote field locations where access to OPM services is necessarily limited. The issue is not merely convenience; more importantly, the public's perception of the federal government as a responsive employer suffers tremendously when agency managers are forced to send applicants to OPM for examination, with no guarantee they will ever be within reach for positions at that agency on a centralized register. In 1989, the National Commission on the Public Service found that: Government faces an enormous challenge in recruiting America's top college graduates. On the one hand, outstanding graduates doubt that the public sector can fulfill their dreams of meaningful, challenging careers. On the other hand, they find that the complexity of entry makes public sector jobs among the toughest to get.(11) Restricted Competition. Qualified candidates are automatically eliminated from managers' consideration based on narrow point score distinctions reflecting only some of the attributes of individual candidates. The system undermines recruitment initiatives as managers recruit candidates who may not be within reach on certificates of eligibles, and are therefore unavailable for selection. Overly restrictive qualification standards and time-in-grade requirements can eliminate candidates who are in fact able to perform the duties of the position. When centralized OPM registers are filled and examinations are closed, candidates are prevented from applying for position vacancies. Temporary employees as a rule may not apply to be considered for vacancies being filled under internal (merit promotion) procedures. Thus, the open competition required by the merit system principles becomes subject to arbitrary limitations. Obtaining excellence is more a matter of luck and persistence than design. Complexity. The system is so complex and rule-bound that managers are unable to explain to applicants how to get a federal job. Staffing law, regulations, and Federal Personnel Manual guidance comprise hundreds of pages, to which departments and agencies add their own interpretive guidance and implementing directives. The system is overly constrained by statute and regulation; over 300 appointing authorities provide little useful management information and require interpretation by personnel specialists. This complexity has evolved over time as particular statutes, regulations, and related guidance were developed and implemented to address specific situations or perceptions of mismanagement. For example, the law requires that temporary assignments to other positions (details) be made in 120-day increments(12) as a means to control the internal movement of employees. However, the centralized and highly controlled systems designed to ensure the equitable delivery of examining services in fact serve to prevent managers and applicants from either understanding or making full use of available options. In 1993, the National Research Council concluded, "The federal civil service system, with its strong emphasis on internal equity, has long hampered the government's abilities to compete for scarce talent in the labor market and to reward exceptional individual performance."(13) The Ideal System. An ideal hiring system would enable managers to hire, develop, and retain a quality, diverse, productive, and ethical workforce in constantly changing labor markets; empower managers to balance the competing demands of multiple stakeholders; and hold managers accountable for adherence to principles of merit and equal opportunity through a performance-based assessment of staffing outcomes. The ideal system would be decentralized to create a link between an agency's recruitment efforts and those candidates who are actually hired. A decentralized system would permit agencies to establish their own priorities for agency-based recruitment initiatives. Tailored approaches designed to tap into local labor markets could provide managers with expanded opportunities to increase the diversity of the candidate pool. Flexible and responsive agency-based systems would permit managers to adapt to fluctuations in the labor market. Federal recruiters would be empowered to compete with private sector recruiters. A significantly enhanced, automated employment information system could immediately link candidates with nationwide, or communitywide, job opportunities by occupational specialization. Freed from constraining layers of mind-numbing regulations, personnel specialists would be able to become partners with management in the development of staffing initiatives to support overall strategic planning objectives. Experience has shown that such a system can be successful. In July 1990, a formal demonstration project to test an alternative staffing system was implemented within the Department of Agriculture (USDA) at approximately 140 experimental and 80 comparison locations nationwide within the Forest Service and the Agricultural Research Service. The project's key initiatives include a streamlined, agency-based recruitment and hiring system that completely replaces the OPM register process; recruitment incentives; and an extended probationary period for research scientists. In connection with its ongoing responsibility to conduct a formal evaluation of project impact and implementation, the Pennsylvania State University reported that "the demonstration initiatives are widely seen as providing a flexible and responsive set of recruitment and selection procedures that are preferable to pre-existing procedures (e.g., central registers). The reported benefits from the demonstration project include increased access to the local labor market, greater control over the hiring process, and increased likelihood of quality candidates in the candidate pool, among others."(14) The evaluators proceed to describe "a possible unanticipated benefit associated with increased recruitment of labor from local labor markets . . . the sense that public perceptions of the agency as an employer and community member have [improved]."(15) The emphasis on merit that characterizes the actions that follow is designed to ensure that the professional career service remains free from political influence and that human resource management is based on and embodies the merit system principles. Actions ******* 1. Authorize agencies to establish their own recruitment and examining programs. Abolish central registers and standard application forms.(16) (3) By fall 1994, the director of OPM should forward draft legislation to Congress delegating to federal departments and independent agencies full and complete authority to develop and implement merit systems for employee selection and advancement based on the merit system principles. Legislation should be enacted to allow departments and agencies to conduct examinations for positions that are common to agencies in the federal government, and to redefine the roles of OPM and agencies with respect to the examining process. Within 30 days of enactment by Congress, OPM should develop the broad policies and general principles through which the new legislation would be implemented. Federal departments and independent agencies should establish merit systems for recruiting and evaluating candidates for selection and advancement. These systems should be based on the policies and principles established by OPM in accordance with applicable statutes and reflect the input of the federal human resource management community. Individual federal departments and agencies should be permitted to conduct examinations for positions that have requirements common to agencies in the federal government. OPM should be able to compete with departments and agencies to provide examining services. Department secretaries and agency heads should be responsible for holding managers accountable for the judicious use of these authorities. OPM would be responsible for (1) notifying department secretaries and agency heads if violations are identified, and (2) ensuring that corrective actions are taken, as appropriate. In cases where violations are identified that involve secretaries and agency heads, OPM should be authorized to conduct an investigation and recommend an appropriate course of action to the President. Completely decentralizing the hiring process will result in the establishment of agency-based, market-driven hiring systems, which will, in turn, improve managers' ability to hire, develop, and retain a quality workforce, reflective of our nation's diversity. Streamlined, agency-based systems will permit more timely offers of employment and be more readily understandable to applicants. Access to increased numbers of candidates will facilitate the attainment of workforce diversity goals and objectives. How will accountability be defined in the context of decentralization and substantially increased delegation of authority? Some may believe that increased flexibility will lead to increased incidence of merit system abuse. However, decentralization of responsibility for recruitment and examining is expected to increase managers' participation in and control over the staffing process, thereby reducing their ability to blame the system for unsatisfactory outcomes. Managers will become even more accountable for adherence to merit principles and for preventing prohibited personnel practices as increased flexibility leads to correspondingly increased performance expectations. An April 1993 National Academy of Public Administration report described this shift in the definition of accountability: The means for accountability focuses on the exercise of leadership and judgment within broad guidelines, rather than on detailed rules and procedures and prior controls . . . [deriving from] clear principles of fairness, equity and individual rights. . . . Accountability measures should be mission oriented and results driven. . . . [T]he new framework emphasizes measuring accountability by: measuring accomplishment of mission, goals and objectives; assessing results, e.g., product and service quality and customer satisfaction; assessing public trust (customer satisfaction) and institutional health (e.g., employee morale, attrition rates); and evaluating compliance with civil service laws, regulations and policy.(17) Managers' responsibility for ensuring adherence to merit principles and preventing prohibited personnel practices will increase as they become more closely involved in all phases of recruitment and hiring. Extensive training must be provided to ensure that managers understand how the merit principles are applied in the context of making personnel decisions. The success of managers' efforts will be evaluated using performance-based outcome measures, for example, employee morale and workforce diversity. Experience has shown that greater flexibility permits managers to become more involved in and, therefore, more accountable for program results. The Pennsylvania State University reported that, using the decentralized approach being tested under the USDA demonstration project, "both managers and personnelists reported greater participation in the recruitment process, and viewed manager-personnelist interactions as more important in determining the success of the hiring process."(18) 2. Allow federal departments and agencies to determine that recruitment shortages exist and directly hire candidates without ranking.(19) (3) By fall 1994, the director of OPM should forward draft legislation to Congress to allow OPM, and departments and agencies, to establish categories in which candidates can be directly hired to coincide with the establishment of decentralized, agency-based hiring systems. Federal departments and agencies will have the authority to directly hire candidates without ranking when recruitment shortages exist after considering the following factors, as applicable: --- the failure of recent efforts to recruit high-quality candidates for similar positions, --- recent turnover in similar positions, --- labor market factors that may negatively impact the ability of the agency to recruit high-quality candidates for similar positions now or in the future, or --- special qualifications needed for the position that are in short supply. OPM should establish additional categories where candidates may be directly hired, for example, persons with targeted disabilities, candidates with outstanding academic qualifications, or other categories as appropriate. 3. Reduce the number of competitive service appointment types to three.(20) (3) By fall 1994, the director of OPM should forward draft legislation to Congress to streamline and redefine appointments in the competitive service and redefine the length of the initial probationary period. By fall 1994, OPM should revise its regulations to redefine the length of the probationary period for initial appointment to a supervisory or managerial position. Appointments to positions in the competitive service should fall into one of the following categories: --- Permanent: appointment leads to career status, employees receive full benefits; --- Temporary indefinite: appointments are temporary, but without time limitation; employees receive full benefits; or --- Temporary not to exceed (NTE): appointments are made not to exceed one year, with option to renew for one additional year; benefits are limited. Temporary NTE appointments are used to meet short-term staffing needs. Temporary indefinite appointments are not permanent but will be made without time limitation to permit agencies to more easily adjust staffing levels to meet fluctuations in workload that may extend beyond the two-year time limit on temporary NTE appointments. Employees serving under temporary NTE or temporary indefinite appointments are not subject to governmentwide rules on reduction in force.(21) Agencies will involve employee representatives in determining the length of temporary indefinite appointments through collective bargaining. Agency flexibility to design merit-based hiring systems will substantially reduce the need for the majority of excepted service appointments currently established under Schedules A and B.(22) Excepted appointments will continue to be used for positions of a confidential or policy-determining character (Schedule C), or positions for which eligibility depends upon factors other than education and experience, for example, family income (such as student aid), local residence, or acceptability to foreign officials. To provide an adequate period of time in which to make retention decisions, the duration of the initial probationary period upon permanent appointment without time limitation to a position in the competitive service and the probationary period upon initial appointment to a supervisory or managerial position will be extended from one to a maximum of three years. Agencies would be permitted to determine an appropriate length of time for specific occupations or positions, which will be announced to candidates in advance. Agencies will involve employee representatives in determining the length of the initial probationary period upon permanent appointment without time limitation through collective bargaining. 4. Permit nonpermanent employees to compete for permanent positions under agency procedures for internal placement.(23) (3) By fall 1994, the director of OPM will forward draft legislation to Congress to allow nonpermanent employees who were initially hired using competitive procedures to be considered along with internal candidates for permanent positions being filled under merit promotion. Following two years of performance that meets established expectations within a five-year period, temporary NTE and temporary indefinite employees will be permitted to apply to be considered for selection and appointment to permanent positions under internal placement procedures. Within 30 days of enactment, OPM should issue appropriate guidelines for implementation. 5. Abolish the time-in-grade requirement. Create a general qualifications framework that permits agencies to augment or modify qualification standards for both internal and external placement actions. (1) By spring 1994, the director of OPM should revise the regulations to abolish the time-in-grade requirement.(24) In addition, OPM should revise its guidance concerning governmentwide qualification standards.(25) OPM should continue to implement a framework of generic qualification standards that permits agencies to identify and develop experience requirements for specific series. Agencies would be permitted to modify standards for both external and internal placement actions, including promotions, when the agencies determine that candidates can successfully perform the work of the position although they may not fully meet the qualification requirements in the generic standards. Agencies may augment standards with selective placement factors (for example, foreign language proficiency) but may not require additional amounts of education or experience beyond those required by the standards. Decisions to either augment or modify standards should be made before vacancy announcements are issued and will be publicized in the announcement. 6. Eliminate all statutory rules on detailing employees to temporary assignments.(26) (3) By fall 1994, the director of OPM should forward draft legislation to Congress to repeal the statutory time limitation on details of employees. Within 30 days of enactment of the legislation, OPM should issue appropriate guidelines for implementation. The 120-day limitation on details will be removed, and agencies will have the authority to determine the appropriate duration of a temporary assignment. 7. Create a governmentwide employment information system to inform the public of job opportunities. Coordinate the development and operation of common automated systems to facilitate agency staffing policies and operations. (1) By September 1994, the director of OPM should develop and implement an expanded job information service featuring a user-friendly, state- of-the-art electronic information network to which customers can easily gain access. By September 1994, OPM and agencies should collaborate in developing a core automated personnel operations support network to reduce the cost and inefficiency of separate agency systems. A substantially refined and expanded automated employment information system should be installed to which applicants can gain telephone or electronic access. Services provided at Federal Job Information Centers should be expanded, and agency access to the Central Personnel Data File (CPDF) increased. CPDF should be extensively reconfigured to provide management information for the purpose of monitoring workforce statistics, including those which relate to managerial accountability, such as employee turnover and selection data by race, gender, and disability categories. Cross References to Other NPR Accompanying Reports ************************************************** Department of Justice, DOJ12: Streamline Background Investigations for Federal Employees. Department of the Treasury/Resolution Trust Corporation, TRE13: Streamline Background Investigations for Federal Employees. Improving Financial Management, FM06: "Franchise" Internal Services. Endnotes ******** 1. Title 5, United States Code, Government Organization and Employees (April 1993), sec. 2301. 2. Title 5, United States Code, sec. 2302. 3. Title 5, United States Code, sec. 2302(c). 4. Title 5, United States Code, sec. 2301(b)(1). 5. U.S. General Accounting Office, Does Veterans' Preference Need Updating?, GAO/GGD-92-52 (Washington, D.C.: U.S. General Accounting Office, March 1992), p. 27. 6. U.S. Merit Systems Protection Board, Delegation and Decentralization: Personnel Management Simplification Efforts in the Federal Government (Washington, D.C., October 1989), p. 18. 7. Horner, Constance, quoted in Leadership for America (Washington, D.C.: National Commission on the Public Service, 1989), p. 29. 8. Hudson Institute, Civil Service 2000 (Washington, D.C., June 1988), p. 27. 9. Leadership for America, p. 28. 10. U.S. Merit Systems Protection Board, Attracting and Selecting Quality Applicants for Federal Employment (Washington, D.C., April 1990), p. 1. 11. Leadership for America, p. 26. 12. Title 5, United States Code, sec. 3341. 13. National Research Council, Improving the Recruitment, Retention, and Utilization of Federal Scientists and Engineers (Washington, D.C.: National Academy Press, 1993), p. 37. 14. The Pennsylvania State University, U.S. Department of Agriculture Personnel Management Demonstration Project Second Annual Evaluation Report (The Pennsylvania State University, April 1993), p. vii. 15. Ibid., p. 12. 16. Title 5, United States Code, sec. 1104; 1302; 3304; 3305; 3324; and 3325. 17. National Academy of Public Administration, Leading People in Change: Empowerment, Commitment, Accountability (Washington, D.C., April 1993), p. 18. 18. The Pennsylvania State University, p. 22. 19. Title 5, United States Code, sec. 1302; 3304; and 3361. 20. Executive Order 10577; Title 5, Code of Federal Regulations, Administrative Personnel (January 1, 1993), Part 315. 21. Title 5, United States Code, Chapter 35, and Title 5, Code of Federal Regulations, Part 351. 22. Title 5, Code of Federal Regulations, Part 213. 23. Title 5, United States Code, sec. 3304. 24. Title 5, Code of Federal Regulations, Part 300, Subpart F. 25. See U.S. Office of Personnel Management, Handbook X-118, Qualification Standards for Positions under the General Schedule (Washington, D.C., December 1991). 26. Title 5, United States Code, sec. 3341. *********************************** HRM02: Reform the General Schedule Classification and Basic Pay System *********************************** Background ********** Approximately 1.6 million federal civilian employees--about 75 percent of the nonpostal civilian workforce--are covered by the General Schedule (GS) classification and basic pay system. (The remaining 25 percent are covered under a variety of special pay systems, the largest of which is the Federal Wage System, which covers over 300,000 blue-collar employees in trades and crafts occupations.) The GS system was established in 1949 and was intended to provide a standard framework for establishing the pay hierarchy for federal employees in white-collar occupations. The central core of the GS classification system is codified in law. The law establishes 15 grades and describes the level of work at each grade. As stated in the law, the purpose of the classification system is to ensure that equal pay be provided for substantially equal work (by ensuring equal grade for equal work) and that work be classified based on its difficulty, responsibility, and qualification requirements. The law provides the Office of Personnel Management (OPM) with a central role in establishing classification standards and reviewing agency classification actions (through periodic audits and hearings of employee appeals). OPM has final authority in classification matters. OPM has established over 450 separate job categories called series. For example, there are 34 different series in the field of biological sciences alone, including such series as Plant Pathology, Plant Physiology, Plant Protection and Quarantine, Soil Science, and Irrigation System Operation. For many of these 450 series, OPM has published classification standards that agencies must apply in assigning grades to jobs. The series-specific classification standards describe the nature of work and set forth criteria or rules for determining the appropriate grade level. Series standards tend to be fairly detailed and can require considerable time and classification expertise to apply. Many of the standards have not been revised for many years and are viewed as out-of-date.(1) The GS basic pay structure is directly based upon the grades in the classification system. There are 15 overlapping pay ranges that correspond with the 15 grades. Until passage of the Federal Employees Pay Comparability Act of 1990 (FEPCA), the GS basic pay structure consisted of a single nationwide pay schedule (although higher special salary rates could be paid in response to significant recruitment and retention problems).(2) However, FEPCA now provides for locality-based comparability payments based on average pay disparities between federal and non-federal workers.(3) The same locality pay percentage will apply to all employees in a given local pay area, thus maintaining on a local basis the pay relationships among all jobs in the GS hierarchy of grades, consistent with the equal pay principle. By law, basic pay rates within any GS grade are set at one of 10 fixed step rates. Employees performing at an acceptable level of competence progress through the rate range in accordance with statutory waiting periods (one to three years depending on the step). In addition, employees may receive additional step increases--called Quality Step Increases (QSIs)--based on outstanding performance, subject to a limit of one QSI per year. While a special merit pay progression scheme applies to managerial employees covered by the Performance Management and Recognition System (PMRS), that system expires on October 31, 1993. In recent years, several federal agencies have been conducting, with some success, special demonstration projects that tested broadbanding classification systems within the GS framework. A broadbanding system involves both the consolidation of job categories (job banding) and the merging of grades or pay ranges (grade banding). Tailored within- band pay progression schemes were also developed for each project. The oldest and most well-known broadbanding demonstration project is a Department of the Navy project covering two research laboratories in Southern California (commonly referred to as the China Lake project). Need for Change *************** A strong case can be made that the current federal classification and basic pay system is in need of significant reform. The problems with the current system are summarized below: Lack of Mission Focus. The GS classification system was premised on the idea that internal equity would help the government more effectively and efficiently accomplish its various missions by ensuring that employees are compensated based on the difficulty and responsibility of their work, by addressing employee concerns about pay fairness, by reducing interagency competition for employees based on pay, and by simplifying the pay setting process. Over time, the ideal of internal equity has emerged as the supreme goal of the system, instead of being viewed as a means to attaining the larger goals associated with effective government. Consistent with the focus on internal equity, system administrators have sought to achieve greater precision, even though the additional precision did not result in--and perhaps even worked against--more effective government. A new and better balance is needed--a balance that can be achieved by a less precision- oriented classification system that provides for greater agency flexibility and is more supportive of agency missions without undermining the long-term governmentwide interests that originally prompted establishment of the system. As a recent National Academy of Public Administration (NAPA) report notes, "The degree of precision with which jobs are classified under this [the General Schedule classification] system is neither warranted by the methodology nor necessary to support pay equity or to organize work efficiently."(4) Low Credibility. According to a recent survey of federal employees conducted by OPM, only 31 percent of employees agree that their pay is fair considering what other people in their organization are paid.(5) Thus, despite all the attempts to build precision into the system through central control and rules, the fairness of the system appears to be questioned by the vast majority of the people whose opinion is perhaps most important. Ironically, it appears that the more precision that is sought in job evaluation, the more likely that the measurements of equity will be incomplete (because equity factors that could be considered under a less precise approach have been eliminated) and open to criticism (due to the specificity of the measurements as well as the high expectations created by the precise approach). Furthermore, a precise system that cannot be easily enforced invites rule bending and breaking, which further undermines system credibility. In meetings with federal managers and personnel specialists, National Performance Review (NPR) staff were repeatedly told how agency managers are able to beat the system to get the results they want. There is a strong argument that the classification system would be viewed as more fair by employees if it were less precise but more honest about its reliance on human judgment. According to James E. Colvard, former Deputy Director of OPM, "The current classification system allows the manager to be precisely wrong. What the manager needs is the opportunity to be roughly right."(6) Complexity. The GS classification system is difficult to understand and to use. This prevents managers--who actually best know the work being classified and its value to the organization--from assuming the primary role in classifying jobs. Instead, the system is largely run by OPM and agency personnel specialists with classification expertise (2,000 of whom are classified in a special Position Classification job series). The system's complexity promotes excessive paperwork and slow, cumbersome administrative procedures. It also makes it difficult to maintain currency. Over 7 percent of the standards are more than 20 years old.(7) As the NAPA report notes, "In an era of growing pressures for efficiency, productivity, flexibility, customer satisfaction, and goal-directed results, the [General Schedule] classification system is mired in expensive, time-consuming, rule-driven complexity."(8) Fragmented Accountability. Accountability for classification is fragmented among OPM, agency personnel offices, and agency program managers. Not only does this fragmentation produce tension and conflict among the parties, but it also prevents any one party from assuming responsibility for the consequences of classification decisions. Since many federal managers do not operate under a fixed payroll budget or a total operating cost budget, they do not necessarily feel an obligation to consider the long-term cost consequences of classification actions. On the other hand, OPM and agency personnelists do not have to face the consequences that classification actions have on program missions. There is a clear need to consolidate accountability for mission and classification in one place. This suggests giving classification authority to line managers while ensuring that they are accountable for managing budget dollars prudently and paying employees fairly, in accordance with governmentwide standards. The Federal Section of the International Personnel Management Association states that "the role of the personnel professional must be redefined to emphasize the desired shift to a consultative relationship with managers, rather than the heretofore traditional role of classification decision-maker."(9) Inflexibility. One-size-fits-all rigidity characterizes the GS classification and pay system. Agency managers point out that agencies have diverse missions, challenges, organizational structures, values, and cultures, and that they must respond to ever-changing external conditions. The classification system must not be so immutable that it cannot respond to new ways of designing work, the changing value of jobs, or changes in the work itself. While some flexibilities have been incorporated within the pay system (e.g., special salary rates and entry pay above the minimum rate) to compensate for the classification system's rigidity, the restrictions that accompany many of these pay flexibilities severely limit their usefulness. Even if the classification system is made more flexible, additional pay flexibilities are needed to allow agencies to respond to localized labor market fluctuations and to use pay progression schemes that better fit the culture and goals of the organization. As the Merit Systems Protection Board noted, "These [General Schedule] grade level criteria have come to be viewed as 'cast in stone' . . . [r]esulting in virtually fixed and therefore unresponsive standards. . . . Since the classification standards aren't readily adapted to changes which may occur in how society values certain kinds of work, the classification system can rarely, if ever, be a proactive tool of personnel management policy."(10) Hierarchical Orientation. As currently administered, the GS classification system seems to facilitate or reinforce hierarchical structures. Part of the reason may lie in the reliance on specialized, narrow jobs, which tends to lead to the creation of organizational stovepipes structured by function instead of by mission. Perhaps more important is the fact that the classification system more readily provides higher grades for supervisory work than for expert-level nonsupervisory work. NPR staff heard from many different sources that supervisory positions are frequently created as a means of providing employees with higher grades. All of this suggests that a more flexible classification system designed to encourage more broadly defined jobs and to more readily permit dual career ladders could facilitate the streamlining or delayering of federal organizations. Billions of dollars in precious tax revenues are squandered annually to support a federal management structure that is excessively bloated and that is unavailable to perform "front line production work." These needless layers upon layers of management are not benign. They significantly delay work product getting out timely and they micromanage to justify their existence thereby ultimately creating customer (public) dissatisfaction. The related pay and classification problems have contributed to this "pyramiding" of supervisors upon supervisors to justify grade levels.(11) The interrelated problems described above point to the need for a new mission-driven classification and basic pay system--a system that achieves a better balance between flexibility and accountability, that is simpler to understand and administer, and that can be used proactively as a tool to help reshape the federal government. To achieve change in the classification and pay area without producing chaos, it is essential to develop a flexible system that allows agencies to take incremental steps based on their needs and levels of readiness to assume greater responsibilities. Actions ******* 1. Remove all grade-level classification criteria from the law while retaining the 15-grade structure. (3) The director of OPM should submit proposed legislation to Congress by fall 1994 that would repeal the classification criteria for the 15 grades in the General Schedule system now codified in law.(12) The statutory classification criteria have remained essentially unchanged since 1949.(13) The government should have the flexibility to make changes in the classification criteria in response to changes in the work world without going through the legislative process. Initially, OPM should administratively adopt the existing criteria and then make changes as warranted. In addition to providing needed flexibility, removing the classification criteria from the law would also help reinforce the idea that, like private sector employees, federal employees do not have a statutory entitlement to a precise grade or pay level. 2. Provide agencies with flexibility to establish broadbanding systems built upon the General Schedule framework. (3) The director of OPM should submit proposed legislation to Congress by fall 1994 that would (1) authorize OPM to approve the banding of GS grades (and associated pay ranges), subject to the condition that the content definition of any band be linked to the GS grade-level definitions, and (2) reduce the restrictions on the demonstration project authority so that it can be a more proactive management tool. The proposed legislation should also include provisions making clear that matters relating to the setting of base pay rates are not conditions of employment subject to collective bargaining. Within one year of enactment of this legislation, OPM should publish detailed information on the initial set of options available to agencies under these new authorities. OPM should work with agencies to develop standard banding patterns that incorporate job banding, grade banding, and within-band pay progression schemes. Some of these standard patterns may permit the incorporation of blue-collar jobs now under the Federal Wage System. Agencies can choose among the menu of standard patterns without need for OPM approval. In addition, agencies will be able to request OPM approval of minor variations in the standard patterns. OPM approval of these minor variations would not be time-limited. Unique broadbanding systems that do not fit under one of the standard patterns should be approved under a revised demonstration project authority. The demonstration project authority should be revised by eliminating (1) the limit on the number of employees covered by any project, (2) the limit on the number of active demonstration projects permitted, (3) the requirement that Congress be notified regarding the tentatively approved project plan 180 days in advance of the beginning of the project, and (4) the requirement that OPM promulgate regulations.(14) OPM regulations on demonstration projects will be repealed and replaced with written guidance.(15) OPM will require only the minimum amount of data needed to evaluate the project, and overly burdensome quantitative research methodologies will not be imposed. Demonstration projects will be approved by OPM for a five- year test period, after which a successful project will be converted to a permanent alternative system. For broadbanding demonstration projects, OPM will publish special project approval criteria so that any agency meeting the criteria will be assured of approval.(16) Based on tests in the federal government (e.g., the Navy's China Lake demonstration project) and on the experience of private sector companies with broadbanding systems, broadbanding does not appear to be a panacea. It carries its own set of challenges and may not be a good fit for every organization or every occupational group. Broadbanding can meet resistance in organizations in which hierarchical rank is important. It can also lead to increased salary costs if the organization does not have (1) managers who are skilled at managing employee pay, (2) an effective performance management system, or (3) appropriate budget controls. However, broadbanding does offer many potential benefits, including simplified classification procedures, empowered managers, more broadly skilled employees, greater lateral job mobility, more flexibility in establishing dual career ladders, and the opportunity to redesign work and create flatter organizations.(17) The recommended approach allows agencies that are ready to move toward broadbanding under a structured approach that manages the associated risks. It would also allow OPM to assume the role of facilitator and promoter of innovation. 3. Modify the standard 15-grade classification system that applies to those employees not covered by a broadbanding system. (3) The director of OPM should submit proposed legislation to Congress by fall 1994 that amends the classification law to give employing agencies authority to make final classification decisions and to eliminate OPM's review and compliance authority, effective one year after enactment. During the one-year interim period, agencies should give appropriate training to line managers who will be given classification responsibilities and develop appropriate decision support systems (e.g., human resource planning and costing models). OPM should immediately begin the process of simplifying the standard classification system by reducing the number of job categories used for classification purposes and by developing abbreviated standards that focus solely on full-performance (i.e., journey) levels of work. In addition, as recommended earlier in HRM01, OPM should issue regulations by spring 1994 deleting the requirements that employees serve some minimum amount of time at a lower grade level to qualify for a higher grade (i.e., time-in-grade requirements).(18) OPM should be responsible for developing and maintaining the classification tools to be used by agencies participating in the modified standard 15-grade classification system. OPM should publish the primary classification standard setting forth the basic evaluation criteria that will guide all classification decisions. In the first stage of the simplification effort, it should also publish 30 to 50 job-specific classification standards that cover only the most populous jobs and selected benchmarks. Eventually, all paper standards will be eliminated and replaced by a manager-friendly automated classification program. Since OPM standards will focus solely on full-performance levels of work, agencies will be free to assign grades to entry and developmental levels under their own authority and standards, consistent with job qualification requirements.(19) Agencies should classify full-performance level jobs using the OPM standards, subject to a requirement that final classification decisions be made at a level of management that operates under a fixed budget that includes all pay-related costs. OPM will not have authority to overrule an agency classification action. Each department or agency should be required to provide for internal reviews of a position's classification when requested by an employee. A classification decision would be appealable to a body outside the agency, such as the Merit Systems Protection Board, only on the limited grounds that the decision constituted a prohibited personnel practice; the agency's judgments as to the value of different types of work would not be subject to review.(20) A governmentwide job titling system should be retained to support a governmentwide human resources database and external salary surveys; however, job categories should be consolidated to the maximum extent appropriate. It is expected that the number of job series (currently over 450) would be reduced by one-half or more. The modified standard classification system is expected to greatly simplify the job classification process and provide agencies and their line managers with greater flexibility along with accountability for proper administration. The link between classification and budget will be strengthened. With the elimination of its review and compliance authority, OPM would no longer have the role of classification police. The elimination of the time-in-grade requirements will allow managers to promote qualified employees without delay; in addition, since the minimum time-in-grade requirements seem to be viewed by many employees as length-of-service requirements triggering automatic promotion, their elimination may help reinforce the principle that promotions are based on qualifications and abilities, not longevity. 4. Provide agencies under the standard 15-grade system with additional flexibilities in setting base pay rates. (3) The director of OPM should submit proposed legislation to Congress by fall 1994 that will modify the GS within-grade pay progression scheme. In addition, OPM should submit proposed legislation to Congress by fall 1994 that will provide employing agencies with certain additional flexibilities in setting base pay rates, effective one year after enactment (to correspond with the effective date of the classification system modifications). This latter piece of legislation will include provisions making clear that agency decisions to use or stop using any of the new pay flexibilities are not subject to collective bargaining. The 15-grade pay structure and a standard within-grade pay progression scheme similar to the current scheme will be retained. However, the rigid 10-step framework for progression within each pay grade will be abandoned. Within-grade increases will be equal in dollar value to the current step increases and the waiting periods will remain essentially the same.(21) The main differences will be that Quality Step Increases or QSI's (perhaps renamed as Exceptional Performance Increases) can be less than a full within-grade increment and that an employee's initial rate in grade (upon hire or promotion) will not be required to equal a fixed step rate. This modified standard within-grade progression scheme will also apply to GS-13 to -15 managerial employees who are now covered by PMRS, which expires on October 31, 1993. Agencies should also be able to establish special, alternative within-grade pay progression schemes through a revised demonstration project authority. For example, agencies may wish to experiment with schemes that base within-grade pay progression on the acquisition of specific skills and competencies or that move toward greater use of variable pay (i.e., one-time bonuses and awards) instead of base pay adjustments. Agencies should be given discretionary authority to approve a base pay differential of 10 percent (of the GS base rate) for mission- critical positions with a grade no higher than GS-14 that, in the agency's judgment, are significantly undervalued under the standard classification criteria, based on the value assigned by the agency to those mission-critical positions relative to the value (i.e., grades) of other positions in the agency. Agencies should be given discretionary authority to set entry pay up to 10 percent higher than the minimum rate of the entry grade if, in the agency's judgment, it is necessary to meet its recruitment goals. (The authority to set entry pay at any rate in the entry grade based on superior qualifications will also continue.) Agencies should be given discretionary authority to establish, for grades GS-14 and below, local special rate schedules up to 10 percent higher than regular rates (including any locality pay adjustment) for occupations in which recruitment and retention efforts are significantly handicapped due to inadequate pay levels. These special rates can be phased out, at agency discretion; however, the phase-out must be conducted in a way that prevents any employee from suffering an absolute reduction in pay. Thus, agencies should be required to time the phase-out of a special rate to coincide with the effective date of general pay increases. (OPM's authority to approve higher special salary rates upon agency request will also continue. However, the rules for administering OPM-approved special rates should be modified expressly to allow agencies to phase out special rates at their discretion, consistent with the rules for agency-approved special rates.)(22) The intent of the recommended changes is to provide agencies with greater flexibility. While the modifications to the standard within- grade pay progression scheme are not dramatic, they will eliminate unnecessary rigidity and allow agencies to make finer distinctions with respect to certain pay decisions. Also, those agencies that wish to adopt a special pay progression scheme can do so through the liberalized demonstration project authority, which will allow for permanent adoption of a successful project as an alternative system. The new flexibilities to increase base pay (subject to overall budget constraints) will permit agencies to respond quickly to special situations and reduce the temptation to manipulate the classification system. Given the visibility of the proposed pay flexibilities, agencies would have strong internal and external incentives to use them prudently. OPM evaluation and reporting on agency pay practices would reinforce accountability. The new rules for phasing out special salary rates would make clear that special rates are paid at agency discretion and are not a matter of statutory entitlement. 5. Establish reporting requirements that apply to both the modified standard system and any broadbanding system. (3) In conjunction with the law changes proposed above, the director of OPM should submit proposed legislation to Congress by fall 1994 that would expressly authorize OPM to collect compensation data from agencies and require advance public notice of significant classification and pay actions. OPM will develop specific reporting requirements, including the following: --- Agencies will be required to issue a 60-day advance public notice regarding their intention to upgrade or downgrade any group of positions with 100 or more incumbents, or to authorize special salary rates or a mission-critical differential. --- Agencies will be required to provide OPM with data on compensation practices. To the maximum extent possible, the data will be collected through OPM's Central Personnel Data File system, which will be enhanced as necessary. OPM will issue an annual public report providing selected compensation data (e.g., number and percentage employees in full performance level grades or bands by job category and agency, average and median salaries by job category and agency, total payroll costs by job category and agency, etc.), with historical data also provided for comparison purposes. The overall fiscal impact of the proposed changes to the classification system (i.e., broadbanding and decentralization) can be monitored and controlled within agency budget constraints. Agency decisions could produce additional costs in some areas while providing offsetting savings in other areas. As the classification system is simplified and automated and as line managers assume responsibility for classifying positions, the amount of staff years devoted to classification by personnelists (and associated administrative costs) should be significantly reduced in the long term. No cost estimate can be assigned to the special pay flexibilities being proposed since they are discretionary. It is presumed that agencies will have to absorb within their budgets any increased costs associated with use of these discretionary authorities. It should be noted that elimination of the fixed steps in the GS pay system would prevent $80 million in conversion costs (not anticipated in the President's budget) that would otherwise result from slotting PMRS- covered managers back into a fixed-step schedule. Cross References to Other NPR Accompanying Reports ************************************************** Improving Financial Management, FM04: Increase the Use of Technology to Streamline Financial Services. Endnotes ******** 1. National Academy of Public Administration (NAPA), Modernizing Federal Classification: An Opportunity for Excellence (Washington, D.C., July 1991), pp. 20-21. 2. Title 5, United States Code, sec. 5305. 3. Title 5, United States Code, sec. 5304. 4. NAPA, Leading People in Change: Empowerment, Commitment, Accountability (Washington, D.C., April 1993), p. 38. 5. U.S. Office of Personnel Management, Survey of Federal Employees (Washington, D.C., May 1992), p. 60. 6. NAPA, Modernizing Federal Classification, back cover. 7. U.S. Merit Systems Protection Board (MSPB), OPM's Classification and Qualification Systems: A Renewed Emphasis, A Changing Perspective (Washington, D.C., November 1989), p. 12. 8. NAPA, Leading People in Change, p. 38. 9. International Personnel Management Association, Federal Section, "Critical Personnel Management Issues: Position Classification," February 1991, p. 6. 10. MSPB, p. 10-11. 11. Letter from John N. Sturdivant, National President of the American Federation of Government Employees, to Roy Tucker, member of the National Performance Review staff, May 14, 1993, p. 6. 12. Title 5, United States Code, sec. 5104. 13. Minor changes to the GS-5 and GS-7 definitions were made in the Federal Employees Salary Increase Act of 1958. 14. Title 5, United States Code, sec. 4703. 15. Title 5, Code of Federal Regulations, Part 470. 16. In the case of occupational fields that do not fit well in the standard GS classification and pay framework, special governmentwide occupational systems can be approved by the President's Pay Agent (i.e., the director of OPM, the director of OMB, and the Secretary of Labor) under current law. See 5 U.S.C. 5392. 17. Braddick, Carol A., Michael B. Jones, and Paul M. Shafer, "A Look at Broadbanding in Practice," Journal of Compensation and Benefits (July-August 1992), pp. 28-32; and U.S. Office of Personnel Management, Broad-banding in the Federal Government: Management Report (Washington, D.C., February 1993), pp. 14-22. 18. See also "HRM01, Create a Flexible and Responsive Hiring System," action 5. 19. Ibid. 20. Title 5, United States Code, sec. 2302. 21. See "HRM05, Strengthen Systems to Support Management in Dealing with Poor Performers," regarding proposed change that would bar a period of inadequate performance from being counted toward the waiting period for a within-grade increase. 22. Under current law, employees' special rates can be reduced or terminated; however, such employees are covered by statutory pay retention rules that may provide entitlement to partial annual increases. At the same time, the law can be read to limit agencies' discretion to not apply general increases in pay and, thus, to effect a phase-out of special rates without absolute reductions in basic pay entitlement. Under the proposal, the law would be amended to make it clear that employees are not entitled to have a special salary rate automatically adjusted when there is a general increase in General Schedule rates. ****************************************** Enable Managers to Empower, Develop, Train, Reward, and Discipline Employees ****************************************** ******************************************************** HRM03: Authorize Agencies to Develop Programs for Improvement of Individual and Organizational Performance ******************************************************** Background ********** Following the lead of the private sector, the Civil Service Reform Act of 1978 established governmentwide performance management systems for federal employees that linked employee pay to individual performance. The system was designed to serve as a vehicle to improve agency and individual performance through improved communications of performance expectations between employees and supervisors. A yearly work plan, consisting of critical elements and performance standards, was envisioned to support agency planning and accomplishment of work. Ongoing feedback from the supervisor, including a formal, end-of-the- year appraisal, would provide feedback to the employee. Management decisions on promotions, awards, training, and retention were to be linked directly to the performance management process.(1) Currently, there are separate performance management systems for supervisors and general managers (GM) included in the Performance Management and Recognition System (PMRS), and employees included in the General Schedule (GS). PMRS expires on October 31, 1993; thus, new legislation is required. Congress established a PMRS Review Committee as part of the PMRS Amendments of 1991 to advise the Office of Personnel Management (OPM) on improvements to PMRS. Congress reaffirmed its commitment to the linkage of pay and performance in the Federal Employees Pay Comparability Act (FEPCA) of November 5, 1990, and directed OPM to establish a Pay for Performance Labor Management Committee to advise OPM on the design and establishment of pay for performance systems for GS employees. In May 1993, OPM circulated a working draft proposal for changes in performance management systems titled "Principles and Features of Performance Management Reform." The OPM recommendations are similar to the National Performance Review recommended actions. Need for Change *************** Performance management systems for GS and GM employees, in the view of virtually all observers (e.g., the General Accounting Office, Merit Systems Protection Board, National Academy of Public Administration, National Research Council, and academic researchers such as Perry and Ingraham), have not resulted in the desired improvements in individual and organizational performance. The failure of performance management systems to improve performance results from several factors: --- Performance management systems were designed to meet multiple, sometimes conflicting purposes (performance, pay, retention, development), and as a result meet none of them. --- Systems are governmentwide, inflexible, and not responsive to the varying needs and cultures of diverse federal agencies. --- Systems are not owned by managers who must make them work but are, instead, seen as belonging to OPM. --- There is an overemphasis on dealing with the poor performer, and insufficient emphasis on improving the performance of the majority of employees who meet expectations now but can do even better in the future. --- Systems are perceived as top-down control mechanisms rather than tools for empowering employees and supervisors to improve performance. --- Systems emphasize individual performance and do not support emerging efforts to manage group and organizational performance. --- Employees report that too frequently there is inadequate communication of performance expectations and feedback on performance. --- There are perceived inaccuracies in performance ratings, perceived rating quotas, and negative perceptions of the fully satisfactory rating. --- The performance appraisal is often threatening to employee and supervisor alike, inhibiting the opportunities for meaningful communication. --- Performance ratings are generally thought to be inflated, e.g., the average rating for a GM employee in 1991 was 4.1 on the required five-point scale; for GS employees, the average rating was 3.95. --- Performance ratings are unevenly distributed by grade, gender, occupation, geographic location, ethnic group, and agency. The ideal performance management program will have one objective: improvement of individual and organizational performance. Agencies will be required to develop performance management programs that meet their unique needs and are consistent with the culture of their organization. Performance management programs will seek to improve the performance of all employees, both the majority of employees who meet performance expectations now and the few who do not. Employees and their representatives will be involved in design and implementation of performance management programs and with development of performance expectations. Feedback on performance--during and at the end of the period--should be developmental in nature, focusing on how to improve future performance. To reinforce the emphasis on improvement of future performance, performance ratings and awards should be disassociated and independent of each other; i.e., after a determination is made that performance meets expectations, a further determination would be made to decide which of the employees who meet expectations will receive special recognition. Decisions about recognition could include factors unique to work group and organization mission and culture. Action ****** Authorize agencies to design their own performance management programs. (3) By fall 1994, the director of OPM should submit draft legislation to Congress to authorize agencies to design and implement performance management programs based on the following principles: --- Performance management is a developmental tool with one objective: improvement of individual and organizational performance. --- Employees and/or their representatives must be fully involved in design and implementation of performance management programs and in development of performance standards; in the case of employees represented by a union, collective bargaining will be required. --- Employees must be involved in development of performance expectations and receive feedback for improvement of future performance. --- At least two levels of performance must be identified: meets and does not meet expectations. Complete decentralization of performance management within a framework of broad, governmentwide principles is expected to result in development of agency-based performance management programs that meet each agency's unique needs. Agencies should be able to develop performance management programs that seek improved performance of all employees. Development of agency-based programs will result in programs that are owned by agency managers. Involving employees and their representatives in development and implementation of performance management programs should result in programs that are owned by employees. Identifying a single objective for performance management makes it easier to achieve that objective, and to evaluate the success of performance management programs. Disassociating performance ratings and awards reinforces the emphasis on the objective of performance improvement. Agency heads, who are responsible for organizational performance, should be held accountable for development and use of performance management programs. Results-oriented accountability factors include improvements in organizational performance, ownership of the system by employees and supervisors, and the vigilance of employee unions and associations of management-level employees. Endnote ******* 1. International Personnel Management Association, Federal Section, "Critical Personnel Management Issues: Performance Management," December 1989, pp. 1-2. *************************************************************** HRM04: Authorize Agencies to Develop Incentive Award and Bonus Systems to Improve Individual and Organizational Performance *************************************************************** Background ********** Federal law provides for monetary awards for various categories of employees and requires the Office of Personnel Management (OPM) to issue regulations to govern agency awards programs. OPM has issued supplemental guidance for use by agencies in designing and managing productivity gainsharing programs. Agencies also establish nonmonetary and honor award programs under their own broad administrative authority. Since 1978, Congress, following the lead of the private sector, has attempted to link pay and performance through merit pay and other pay for performance programs. The current merit pay system for nonmanagerial General Schedule (GS) employees provides that employees with a fully successful rating receive within-grade step increases at scheduled intervals (from one to three years depending on position in rate range). In addition, employees may, no more than once a year, receive additional step increases--Quality Step Increases--based on outstanding performance. The Performance Management and Recognition System (PMRS) applies to supervisors and managers at grades 13-15. Employees covered by PMRS who are rated fully successful receive the general GS increase and an annual merit increase and are eligible for performance awards. Employees rated less than fully successful receive a partial or no general increase and are not eligible for merit increases and performance awards. Congress reaffirmed its commitment to pay for performance in the Federal Employees Pay Comparability Act of 1990. In May 1993, OPM circulated a working draft proposal, "Principles and Features of Performance Management Reform," which describes reform of employee performance planning, assessment, and incentive systems. In 1991, two congressionally mandated committees made recommendations for improving pay for performance for federal government employees in "Advancing Managerial Excellence: A Report on Improving the Performance Management and Recognition System," which looked at PMRS for managerial employees, and "Strengthening the Link Between Pay and Performance: Report of the Pay for Performance Labor Management Committee," which considered pay for performance for nonmanagerial employees. PMRS expires on October 31, 1993. As a result, legislation will be needed to provide a substitute performance incentive system for GM employees. Need for Change *************** Pay for performance programs have had mixed results in both the public and private sectors. After several years of experience and study, informed observers (e.g., the General Accounting Office (GAO), the Merit Systems Protection Board, the National Research Council) agree that (1) there is insufficient empirical evidence that pay for performance programs are effective, and (2) variable pay or bonuses are superior to base pay adjustments for improving employee performance. Federal employees generally do not believe that pay and performance are in fact linked, and the majority of employees do not believe they were treated fairly with regard to awards. Governmentwide incentive programs are not responsive to organization- specific needs and objectives, workforce characteristics, and agency cultures. The emphasis is primarily on incentives and awards for individual performance, not those that recognize organizational or team performance, or even individual contributions to team accomplishments. The current approach promotes competition, with winners and losers, rather than cooperation and cohesion, which are important elements in most successful government programs. Productivity gainsharing is not widely used even though it has proven to be an effective tool for improving organizational performance. Agencies do not approach bonuses and awards in a comprehensive manner--each award or award category is seen as independent of all other bonuses and awards. Monetary awards tend to be emphasized and non-monetary awards deemphasized. Finally, it is generally believed that pay for performance initiatives have been insufficiently funded, which contributes to their lack of effectiveness. A promising but relatively little-used approach to linking awards with improved performance is productivity gainsharing. GAO defines gainsharing as "incentive systems that measure gains in employee productivity and share the savings generated between employees and the organization."(1) Typically about half of the savings or gains are retained by the organization, and the other half are divided among the employees who were responsible for those savings. GAO looked at 18 gainsharing programs in the Department of Defense (DOD) and found that all of them reported documented cost savings ($7,000 to over $1 million) and indirect benefits such as decreased sick leave usage and reduction in overtime costs.(2) They concluded: "DOD's gainsharing efforts to date demonstrate that individual/small group programs can generate cost savings and other related improvements."(3) GAO also looked at private gainsharing efforts and found similar success. GAO identified three major trends in private sector gainsharing: "gainsharing programs based on organizationwide productivity measurements are replacing programs based on individual or small group productivity measurements . . . organizational "gainsharing programs are achieving high success rates . . . [and] private sector firms are increasingly using employee participation systems in their gainsharing programs."(4) An ideal performance incentive system provides managers with the tools they need to reward and motivate excellent performance. Base pay adjustments are predictable--which is important to employees; variable pay or bonuses can be used as an incentive for improving employee performance--which is important to managers. The awards available are both monetary and non-monetary and are designed to be consistent with the unique characteristics of the work, the workforce, and culture of the organization. Individuals, teams, and organizations are rewarded and recognized for performance. Productivity gainsharing is used as an incentive to improve organizational performance. Actions ******* 1. Authorize agencies to develop their own incentive programs. (3) By fall 1994, the director of OPM should submit draft legislation to Congress to authorize agencies to develop their own incentive programs. Agency-based incentive award and bonus programs should be based on the following principles: --- The objective of incentive programs is improvement of individual and organizational performance. --- An employee who meets performance expectations is eligible for recognition through an incentive program that includes monetary awards or bonuses and/or non-monetary awards (base pay adjustments are discussed in HRM02, "Reform the General Schedule Classification and Basic Pay System"). --- Employees and their representatives will be involved in development of incentive programs, which, in the case of employees represented by an employee union, will be through collective bargaining. --- Departments and agencies are encouraged to experiment with alternatives to traditional employee incentive programs, such as organizational and team recognition and non-monetary recognition (e.g., increased authority, additional resources, or a menu of reward options from which employees or teams of employees can choose). Complete decentralization of incentives within a framework of governmentwide principles is expected to result in development of agency-based incentive systems that are unified, consistent with agency cultures, and owned by managers and employees who will help develop them. Employee and union involvement will be required. Base pay adjustments should remain predictable and uniform, in keeping with the recommendation of the Pay for Performance Labor Management Committee. Variable pay in the form of non-monetary and monetary incentives would be available as a tool for performance improvement. 2. Encourage agencies to establish productivity gainsharing programs called Federal Performance Sharing to support the reinvention and change effort. (1) The director of the Federal Quality Institute should form, sponsor, and support a temporary team of government experts to plan and implement a six-month campaign to encourage establishment of gainsharing programs, called Federal Performance Sharing, by agencies governmentwide. To achieve its objective, the team may conduct briefings, develop training programs, organize conferences, consult/provide technical assistance, develop information systems, develop reporting systems, and organize interagency networks. Performance sharing should be a cooperative effort between employees and managers. Employees and their representatives must be involved in the creation, design, and implementation of agency-based Federal Performance Sharing, which, in the case of employees represented by an employee union, will require collective bargaining. Performance sharing could be an important incentive for employees and managers to implement National Performance Review (NPR) recommendations; if by implementing NPR recommendations, employees and managers can make government work better and cost less, they can share in the savings. Performance sharing emphasizes results, mission accomplishment, and empowerment, and is an appropriate incentive for reinvention. Cross References to Other NPR Accompanying Reports ************************************************** Mission-Driven, Results-Oriented Budgeting, BGT02: Effectively Implement the Government Performance and Results Act of 1993. Endnotes ******** 1. U.S. General Accounting Office, Gainsharing: DOD Efforts Highlight an Effective Tool for Enhancing Federal Productivity, GAO/GGD-86- 143BR (Washington, D.C.: U.S. General Accounting Office, September 1986), p. 2. 2. Ibid., p. 2. 3. Ibid., p. 21. 4. Ibid., p. 10. ****************************************** HRM05: Strengthen Systems to Support Management in Dealing with Poor Performers ****************************************** Background ********** The General Accounting Office (GAO) and the Merit Systems Protection Board (MSPB), after collecting data through surveys and/or site visits, concluded that effective federal managers can and regularly do deal with poor performers, either rehabilitating them or removing them. MSPB reported that about 64 percent of the federal supervisors they surveyed had dealt with at least one poor performer in the past two years; 90 percent said they counseled and worked with poor performers informally; and 88 percent said they would take formal action if and when such informal actions fail.(1) Similarly, GAO reported, "Contrary to general perceptions, supervisors were generally willing to deal with their poor performers and expressed a willingness to deal with them in the future."(2) However, GAO also reported that supervisors view the process for dealing with poor performers as unduly difficult and time-consuming. GAO found that an average supervisor spent about five hours per week working with each poor performer under his or her supervision and that this time commitment could last for months. Furthermore, GAO found that the slowness of the process discouraged some supervisors from taking any serious action against a poor performer.(3) GAO noted that supervisors have the greatest difficulty dealing with employees who are rated minimally satisfactory. This rating falls between unsatisfactory and fully satisfactory in five-level rating systems. There are few actions that a supervisor can take to deal with employees who are rated minimally satisfactory, and, as a result, some employees remain at this level for extended periods of time. One option that GAO proposed for consideration was eliminating the minimally satisfactory rating.(4) The Civil Service Reform Act of 1978 (CSRA) sought to make it easier for managers to deal with poor performers by developing better performance management systems and reforming the appeals and grievance processes to make them less of a deterrent to employee discipline. As noted in HRM03, CSRA and post-CSRA performance management systems have not resulted in improved individual and organizational performance. CSRA did modify the burden of proof necessary to sustain a performance-based adverse action. Whereas the burden of proof in an adverse action because of misconduct is the preponderance of evidence standard, there is a lower standard of proof on an agency in an appeal of a performance-based adverse action--the substantial evidence standard. Legal experts explain: "This means, in practice, that even if the employee presents a good argument that he performed his job, the supervisor's judgment that the employee did not accomplish his job will be accepted unless the supervisor's opinion is unreasonable or has no factual support. This evidentiary standard has resulted in nearly all performance-based adverse actions being sustained by the MSPB . . ."(5) They also point out potential difficulties: "The most frequent reason an agency has difficulty sustaining a performance-based adverse action is an inadequately developed performance standard."(6) Need for Change *************** There are improvements in systems, culture, and skill that can help managers deal more effectively with poor performers. Improved Systems. As noted in HRM03, current performance management programs have multiple conflicting objectives and as a result meet none of them-- most importantly, the objective that performance improve. In addition, performance management programs were not designed to be consistent with or supportive of agency culture and are not owned by agency managers. The actions contained in HRM03 are designed to result in agency-based performance management programs that seek improvement in the performance of all employees and identify poor performers for appropriate action. Agencies would, for example, be able to design performance management systems that do not include the minimally satisfactory rating. Agencies can use the performance incentives described in HRM04 to motivate employees to improve their performance. Agencies also need to develop their own approaches to help poor performers improve their performance so it meets expectations, and take appropriate action if performance expectations are not met after assistance is provided. It is also important that changes be made in performance systems to reduce the amount of time it takes to deal with poor performers. For example, the length of time that poor performers are given to demonstrate improved performance is often considered excessive. The 30-day notice period that the law requires before removal or certain other adverse actions can be taken is also too long. After action is taken against poor performers, there can be a lengthy review and appeal process. While an employee's right to due process must be protected, there is a need for streamlining the current processes. The actions outlined in HRM08, "Improve Processes and Procedures Established to Provide Workplace Due Process for Employees," if adopted, would contribute to streamlined appeals processes, especially if agencies adopt alternative dispute resolution methods. Cultural Changes. GAO recommended that "agency management . . . focus on creating an environment within which supervisors are encouraged and motivated to identify poor performers and are properly trained and supported when they attempt to deal with them."(7) Similarly, 25 percent of the supervisors surveyed by MSPB reported that lack of management support was an obstacle to taking action against poor performers. Managers and supervisors must be more effectively supported in dealing with poor performers. Agency management must be held accountable for establishing a culture that supports high performance and development of excellent performance management programs. Managers and supervisors throughout an agency must be held accountable for using culture and programs to achieve organizational goals, improve employee performance, and rehabilitate or remove poor performers. Moving to a more results-oriented management culture will support this change. Improved Knowledge and Skills. Training can be an effective way to improve supervisory skills. The most critical skills are the interpersonal skills that a supervisor needs to communicate with an employee to develop performance standards, provide performance feedback, and improve employee performance. Supervisors also need skill in performance planning and performance management. Knowledge of performance management and disciplinary policies and procedures should be part of a comprehensive training effort and made readily available to managers or supervisors through written or electronic job aids that explain the rules and how to apply them. Managers and supervisors also need technical assistance from knowledgeable consultants with expertise in this area. Actions ******* 1. Reduce by half the time required to terminate federal managers and employees for cause. Make other improvements in the systems for dealing with poor performers. (3) In designing performance management programs as outlined in HRM03, agencies should include methods through which the time frames for terminating employees for cause will be reduced by half. To support this effort, the director of OPM will develop legislation to change the required time for notice of termination from 30 days to 15 days. This legislation should also require the waiting period for a within- grade increase to be extended by the amount of time an employee's performance does not meet expectations; that is, only the time that an employee's performance meets expectations will be creditable toward the required waiting period. 2. Develop a culture of performance that supports supervisors' efforts to deal with poor performers. (1) Agency heads should create an organizational culture in which high performance is expected and performance management programs are seen as tools for achieving high performance. Agency heads should hold managers and supervisors accountable for dealing with poor performers--ensuring that managers (1) give assistance to employees who fail to meet performance expectations, and (2) take appropriate action (e.g., reassignment, demotion, or removal) if the employee's performance does not improve. Agencies should develop methods and procedures for monitoring how managers and supervisors deal with poor performers and use the information collected to identify issues that require the attention of top management, such as changes in the performance management system or skill deficiencies that can be addressed through training. 3. Improve supervisors' knowledge and skills in dealing with poor performers. (1) Agency heads should give managers and supervisors training as needed in performance management, including development of performance standards and the interpersonal skills required for successful management of performance. Agencies should give managers and supervisors support (such as job aids or expert systems) and assistance (e.g., consultation as needed) in improving the performance of all employees, especially the poor performers, and in removal of employees if performance does not improve. Developing effective systems that are focused specifically on performance improvement, creating a culture where high performance is expected and recognized and poor performance dealt with effectively and expeditiously, and ensuring that supervisors have the knowledge, skills, and support they need to improve employee performance are expected to enhance the efforts of supervisors to deal with poor performers. Requiring agencies to monitor efforts to deal with poor performers and using that information to improve systems, culture, and support for performance improvement should help keep attention focused on this critical issue. Endnotes ******** 1. U.S. Merit Systems Protection Board, Federal Personnel Policies and Practices--Perspectives from the Workplace (Washington, D.C., 1987), pp. 9-12. 2. U.S. General Accounting Office (GAO), Performance Management: How Well is the Government Dealing with Poor Performers?, GAO-GGD-91-7 (Washington, D.C.: U.S. General Accounting Office, October 1990), p. 2. 3. Ibid., pp. 32-33, 37. 4. Ibid., p. 28. 5. Shaw, Jerry G., and William L. Bransford, The Federal Manager's Handbook: A Guide to Rehabilitating or Removing the Problem Employee (Washington, D.C., 1992), p. 82. 6. Ibid., p. 85. 7. GAO, p. 3. ******************************************************************* HRM06: Clearly Define the Objective of Training as the Improvement of Individual and Organizational Performance; Make Training More Market-Driven ******************************************************************* Background ********** The Government Employees Training Act (GETA) of 1958 authorizes agencies to manage their own training, determine their own training needs, and select and fund training to meet those needs. The Volcker Commission offered the following assessment of agency effectiveness in exercising that authority: [F]ederal training is suffering from an identity crisis. Agencies are not sure what they should train for (short-term or long-term), who should get the lion's share of resources (entry level or senior level), when employees need additional education (once a year or more often), and whether mid-career education is of value. . . . Career paths are poorly designed, executive succession is accidental and unplanned, and real-time training for pressured managers is virtually nonexistent. At both the career and presidential level, training is all-too-often ad hoc and self-initiated.(1) To strengthen training in government, the Office of Personnel Management (OPM) assumed a more active leadership role and, in 1992, developed a series of human resource development policy initiatives including requirements for comprehensive training needs assessment, employee orientation, and management development. In the high-performing organization, training is seen as an investment in a strategic resource and thus is funded to the extent required for achievement of organizational mission; these excellent organizations are often called "learning organizations." The ideal training program is designed to improve individual and organizational performance. Training must be based on a careful needs assessment and rigorously evaluated to ensure that it is cost-effective. Based on a training needs assessment, one or more tools may be selected to help employees, individually or in teams, develop the knowledge, skills, and abilities they need to improve performance. Some of the more common learning methodologies include coaching, counseling, on-the- job training, developmental job assignments, computer-based instruction, job aids, expert systems, independent study, and classroom instruction. Need for Change *************** Training is not always seen primarily as a tool for improving individual and organizational performance; GETA cites "increasing economy and efficiency in the Government" as the purpose of training. GETA places a series of limitations on use of training from non- governmental sources, which results in regulations on how training is to be managed. Limitations appropriate in 1958, when training was in its infancy in both government and the private sector, are no longer relevant. GETA requires that training be related to the official duties of an employee, which has been interpreted by some to preclude retraining and multi-skilling of government employees. Training is too frequently ad hoc and employee-originated, and seldom linked to strategic or human resource planning. Information for more strategic management of training is generally not available. Managers generally are not able to determine the effectiveness of or the return on their investment in training. Interagency training is frequently perceived by agency managers as not responsive to their needs and too costly when compared to other sources of training. Many observers believe that training in the federal government is inadequately funded; the Volcker Commission found that in 1989 the government spent "about three-quarters of 1 percent of its payroll dollars on civilian training, compared with 3 to 5 percent in the most effective private firms."(2) Training is usually seen as a cost, not an investment. Training costs are not generally included in cost estimates for new systems or programs, and usually are not a part of the budget process. Training is too often a quick fix even though it may not be the best solution to a performance problem or the best way to impart knowledge about a regulation or requirement. Training is frequently seen as something that happens only in the classroom, and, as a result, other methods for improving performance such as job aids, expert systems, on-the-job training, coaching, mentoring, developmental work assignments, job redesign, and computer-based instruction are not considered. Actions ******* 1. Deregulate training and make it more responsive to market sources. (3) The director of OPM should submit draft legislation to Congress by January 1994 that would amend GETA to: --- identify the objective of training: improvement of individual and organizational performance, --- change the requirement that training be related to performance of official duties to relate it to mission achievement, and --- eliminate the distinction between government and non-government training. Clarifying the purpose of training in GETA will strengthen the emphasis on performance improvement and results. Linking training to the mission of the department or agency rather than the official duties of the employee will facilitate retraining and multi-skilling during a period of transition and change. Removing the distinction between government and non-government training will help deregulate training and make it more responsive to market forces. 2. Give agencies the flexibility to use savings realized from reinvention to increase their investment in employee training and development. (1) Agencies are encouraged to invest part of the savings resulting from implementation of National Performance Review recommendations and actions in training and development of employees, supervisors, and managers to support further reinvention and change. Training funded in this manner might include quality improvement, benchmarking, performance measurement, customer service, reengineering and leading/managing change. Training could also be provided to help employees acquire the knowledge and skills they need to do their current jobs better, or retrain them for different jobs. Authorizing agencies to use savings resulting from reinvention to finance employee training and development provides additional incentive for reinvention, increases the funds available to invest in employee training, and helps ensure that the federal workforce becomes more effective and productive. Cross References to Other NPR Accompanying Reports ************************************************** Creating Quality Leadership and Management, QUAL02: Improve Government Performance through Strategic and Quality Management; and QUAL03: Strengthen the Corps of Senior Leaders. Improving Regulatory Systems, REG10: Provide Better Training and Incentives for Regulators. Reengineering Through Information Technology, IT13: Provide Training and Technical Assistance in Information Technology to Federal Employees. Rethinking Program Design, DES04: Commission Program Design Courses. Transforming Organizational Structures, ORG01: Reduce the Costs and Numbers of Positions Associated with Management Control Structures by Half. Endnotes ******** 1. The National Commission on the Public Service, Leadership for America: Rebuilding the Public Service (Washington, D.C., 1989), p. 43. 2. Ibid. *********************************************************** Enable Employees to Manage Work and Family Responsibilities *********************************************************** ************************************************************** HRM07: Enhance Programs to Provide Family-Friendly Workplaces ************************************************************** Background ********** The federal government has traditionally been viewed as a family- friendly employer with many programs in place to help employees balance work and family responsibilities. The Federal Employees Flexible and Compressed Work Schedules Act of 1978 gives agencies the authority to provide flexible and compressed work schedules for their employees.(1) The Federal Employees Part-time Career Employment Act of 1978 requires federal agencies to increase part-time opportunities for federal employees at all grade levels.(2) In 1990, Congress again tried to increase the availability of part-time employment for interested individuals by requiring the Office of Personnel Management (OPM) to establish a job sharing program. The Federal Employees Leave Sharing Act of 1988 authorizes agencies to participate in voluntary pilot leave transfer and leave bank programs.(3) The federal government does not provide short-term disability benefits for its employees, except for job-related illness and injuries, so leave sharing helps employees maintain some or all income through a period of temporary disability or family medical crisis. The Family and Medical Leave Act of 1993(4) provides up to 12 administrative workweeks of unpaid family and medical leave for federal employees.(5) In January 1990, the General Services Administration (GSA) and OPM implemented the Federal Flexible Workplace Pilot Project (Flexiplace) to gain experience and information from work-at-home programs, satellite work center programs, and flexiplace accommodations for disabled workers. Congress demonstrated continued support for the Flexiplace project in September 1992, when it appropriated $5 million to GSA to establish three telecommuting centers. The telecommuting centers will provide alternate worksites for federal employees who currently commute long distances between their homes and worksites in the Washington, D.C., area. Need for Change *************** Changes in societal values and demographics indicate that family- friendly policies and workplaces will become increasingly critical for recruitment, retention, and improved productivity of employees. Family-friendly policies serve the needs of a diverse workforce struggling to manage child care, elder care, family emergencies, and other personal responsibilities while at the same time remaining committed to professional development and advancement. Governmentwide implementation of these policies will enable agencies to foster a quality work environment that meets the emerging needs of their employees and customers. The benefits of family-friendly policies are well documented: Recent studies of such companies as Johnson & Johnson and American Telephone & Telegraph show that helping employees resolve work and family conflicts boosts morale and increases productivity. The J&J study found that absenteeism among employees who used flexible time and family-leave policies was on average 50% less than for the work force as a whole. It also found that 58% of the employees surveyed said such policies were very important in their decision to stay at the company--the number jumped to 71% among employees using the benefits.(6) In 1991, the Conference Board concluded: Flexitime improves basic work conditions by allowing adjustments in commuting times, reducing anxiety about tardiness, and shifting management's focus away from monitoring attendance. . . . [F]lexible work schedules increase employee responsibility, independence and growth potential, thus motivating the employee. . . . Flexitime was typically mentioned as the arrangement found most advantageous in reducing absenteeism and turnover.(7) A federal employee writing to the National Performance Review stressed that part-time employment and job sharing is an important option for many federal employees. [W]orkers should be offered a chance to convert to part-time status whenever possible, if they think their finances will permit it, in order to have more time with young children or aging or infirm parents, or to attend to their own health problems, or to continue their education to stay abreast of changing technology. . . . Some individuals might want part-time work as an alternative or precursor to full retirement.(8) The Progressive Policy Institute's Mandate for Change emphasized that the federal government should take a leadership role in flexiplace work arrangements, including telecommuting. The federal government, which as one of the nation's largest employers led the way in the use of flex-time schedules, should begin to offer telecommuting options to qualified interested employees. In addition to the parenting advantages that telecommuting provides for families with small children, it offers economic and environmental advantages for society by reducing the number of commuters.(9) Flexiplace and telecommuting reduce individual and family stress, save valuable commuting time, reduce commuting and work-related costs for the employee, and increase civic involvement and volunteerism in nearby communities. Flexible work arrangements will generate environmental and energy conservation benefits by alleviating traffic congestion, reducing air pollution, and reducing consumption of fossil fuels. Evaluation of the federal government's Flexiplace pilot found that vehicle usage decreased for 82 percent of participants during rush hour and 35 percent of participants during non-rush hour; sick leave usage decreased for 45 percent of participants.(10) The evaluation went on to say: "More than 90 percent of the supervisors and 95 percent of the participants judged that Flexiplace job performance was either unchanged or improved relative to pre- Flexiplace performance levels."(11) OPM's final evaluation of the Flexiplace pilot concluded: Flexiplace shows promise as a mechanism for reducing Federal operating and health care costs. Indications of improved job performance (productivity), reduced usage of sick leave (benefits), improved health (health care), and reduced vehicle usage (transportation/energy issues) for a significant portion of the participant group suggest long run reduction in costs associated with these areas.(12) The evaluation found that the actual organizational costs of Flexiplace were minimal. More than 80 percent of supervisors reported no additional costs.(13) Significant monetary savings will occur as agencies begin to include flexible workplace arrangements in their federal building planning and technology purchasing strategies. "[W]e anticipate long run reductions in facility costs with expanded utilization of Flexiplace. The ability of agencies to implement successful Flexiplace pilots with minimal funding, however, is a strong indication of the applicability of Flexiplace to diverse organizations."(14) The federal government should be viewed as a model employer in the availability and flexibility of quality of worklife programs that emphasize the tools employees at all levels need to manage their work responsibilities and personal lives more effectively.(15) Successful programs will foster interagency and intergovernmental partnerships, encourage cooperation between management and employees, spark collaborative ventures between public and private organizations, and bring harmony to the workplace and community in which they reside. Some of the problems and barriers faced by agencies and employees include: Legislative Barriers to Innovation. Federal agencies are stymied in their efforts to address emerging employee needs because most employee benefit policies are codified into law--literally requiring an act of Congress to modify them. Legislation bars most agencies from experimenting with different benefit policies; therefore, the governmentwide implications of options such as cafeteria benefit plans and flexible spending accounts are not known. In a 1992 report, the General Accounting Office stated: The likelihood of federal agencies falling behind their nonfederal counterparts in the work/family area may be even greater in the future. The rapid growth of nonfederal work/family programs, such as flexible benefits, flexible spending accounts, and child care assistance, suggest that these programs could well become standard employment policies in the future. Thus, whereas the adoption of work/family programs today may give an employer a competitive advantage, in the future, employers may need to offer these programs just to avoid being at a competitive disadvantage.(16) Legislative barriers prevent many agencies from implementing flexible work arrangements with their employees; some of the barriers for Flexiplace were waived for the duration of the pilot project when Congress passed legislation in November 1990.(17) Some examples of the limitations placed upon agencies attempting to provide dependent care services include a law that limits agencies to providing the facility and services related to the maintenance and operation of child care centers located solely in federally owned or leased space, and a September 31, 1992, decision of the U.S. Comptroller General that the law prohibits agencies from using appropriated funds for adult day care programs or contributing any financial resources to private adult day care centers.(18) Lack of Clear Agency Support and Implementation of Available Programs. Many agencies have not developed policies advocating the use of flexibilities available to help employees balance work and family responsibilities. In a recent survey of federal employees conducted by OPM, only 53 percent of employees with dependent care needs believe their agencies understand and support family issues. Approximately 38 percent of employees indicated that their agencies do not provide any dependent care services beyond Employee Assistance Programs. Approximately 77 percent of employees with dependent care needs who are currently working fixed schedules are interested in working compressed/flexible schedules.(19) OPM found that: [T]he employee survey data suggest that certain agencies may have internal barriers that make supervisors reluctant to approve employee requests to work part-time. Of the supervisors who have denied employee requests to work part-time, at least 19 percent did so because of internal barriers, i.e., the agency's internal systems made it difficult and/or that their agency stressed full-time employment.(20) Actions ******* 1. Implement family-friendly workplace practices while continuing to ensure accountability for quality customer service. (2) The President should issue an Executive Order in summer 1994 advocating (a) adoption of compressed/flexible, part-time, and job sharing work schedules; and (b) implementation of flexiplace and telecommuting where appropriate. 2. Provide telecommunications and administrative support necessary for employees participating in flexiplace and telecommuting work arrangements. (3) By fall 1994, OPM and GSA should submit proposed legislation to Congress repealing section 1348 of title 31, United States Code, "which prohibits federal agencies from paying for telephone installation and service in private residences with appropriated funds . . . installing residential phone lines to connect to the new [Federal Telecommunications System] FTS 2000 service [and] FTS 2000's fiber optic network which will carry a varied mix of voice, data, and video services on a single line . . . [and] purchasing a fax machine for installation in a private residence."(21) A temporary provision allowing agencies to use appropriated funds to pay for telephone installation and service in private residences was included in the fiscal year 1994 Treasury-Postal appropriations bill. 3. Expand the authority to establish and fund dependent care programs. (3) By fall 1994, the director of OPM should submit proposed legislation to Congress removing statutory limitations on dependent care programs and giving agencies the authority to focus on the needs of their employees and develop programs that will enhance organizational effectiveness and improve employee productivity.(22) Agencies should work with employees to develop the most effective and beneficial ways to meet the needs of a workforce struggling with the responsibilities of child care, elder care, and caring for ill family members. Agencies could decide to implement sliding fee payment schedules for dependent care, contribute financial resources to privately led consortia, allow reimbursement of dependent care expenses incurred as a result of emergency assignments or emergency travel, and/or permit employees to use official time to carry out responsibilities associated with membership on a federally sponsored center's board of directors. 4. Allow employees to use sick leave to care for dependents.(23) (1) The director of OPM should issue regulations by spring 1994 that will allow employees to use accrued sick leave to care for sick or elderly dependents. OPM should also propose legislation that will allow employees to use accrued sick leave to make adoptive arrangements. The definition of child, spouse, and parent should be consistent with definitions contained in the 1993 Family and Medical Leave Act. This policy indicates that the federal government recognizes the burden family illness places on employees and was recommended in part by the Merit Systems Protection Board in 1991.(24) The Bureau of Labor Statistics found that in the private sector, 36 percent of employees can use sick leave to care for a sick child.(25) OPM found that in the public sector: Forty-six State governments, whose sick leave accrual policies generally are more comparable to those of the federal government, allow use of sick leave for [family illnesses]. The State of New York, for example, implemented such a policy by regulation in 1957. New York State allows employees to use up to 15 days of sick leave each year in the event of family illness or death and reports that this benefit has not generated administrative problems or pressure to expand the circumstances under which sick leave may be used.(26) 5. Give returning employees credit for previously accrued unused federal sick leave. (1) The director of OPM will issue regulations by spring 1994 that would recredit unused sick leave to employees who have been separated and subsequently reemployed by the federal government, regardless of the length of separation. Current regulations recredit sick leave only if employees return to federal service within 3 years and do not take into account the changing needs of employees and the change in demographics since their implementation in 1962. Although only a relatively small number of employees are affected by the 3-year limitation, OPM found that "about 60 percent of all Federal employees who are reemployed after a break in service of more than 3 years are women, and about 65 percent are reemployed in grades GS-1 through 7."(27) 6. Expand the demonstration project authority to allow projects on employee benefits and leave.(28) (3) By fall 1994, the director of OPM should submit proposed legislation to Congress removing the statutory limitations on employee benefits and leave in the demonstration project authority.(29) Removal of these limitations would authorize agencies to develop innovative projects that meet the needs of their employees while addressing the tax and revenue implications of flexible spending accounts, dependent care assistance programs, and cafeteria benefit plans. Agencies could also choose to combine sick leave and annual leave into a personal leave system or provide short-term disability coverage. 7. Reauthorize voluntary leave transfer/bank programs. (3) Congress should reauthorize the Federal Employees Leave Sharing Act of 1988, which terminates October 31, 1993, with minor technical changes. This legislation is currently before Congress with minor technical changes to improve program operations, including a provision to eliminate the restriction that prohibits interagency transfers of annual leave between agencies covered by the leave transfer and leave bank programs.(30) Voluntary leave transfer programs enable employees who experience a personal or family medical emergency and who exhaust all their available annual paid leave to receive donated annual leave from their fellow federal employees. Employees in voluntary leave bank programs make contributions of annual leave to their agency leave bank and can receive annual leave from their agency leave bank if they experience a personal or family medical emergency and have exhausted all their available paid leave. James King, Director of OPM, indicated that: Agencies like the leave sharing program largely because it enables them to retain valuable employees throughout a personal or family emergency. Agencies have reported that this benefit far outweighs any hardship caused by employee absences. In many cases, employees who were leave recipients under the leave sharing program were able to work intermittently while participating in the program. Several agencies have experienced a decline in the number of employee requests for leave without pay and advanced leave as a result of leave sharing.(31) During fiscal years 1991 and 1992, the program served more than 23,100 employees, and over 3,742,600 hours of annual leave were donated/used.(32) "More than 96 percent of Federal employees with dependent care needs are satisfied with the Federal leave sharing program," OPM reported.(33) Cross References to Other NPR Accompanying Reports ************************************************** Department of Transportation, DOT13: Create and Evaluate Telecommuting Programs. Endnotes ******** 1. Title 5, United States Code, sec. 6120-6133. 2. Title 5, United States Code, sec. 3401-3408. 3. Public Law 100-566. 4. Public Law 103-3. 5. Title II of the Family and Medical Leave Act of 1993 pertains to most federal employees covered by the annual and sick leave system established under chapter 63 of title 5, United States Code, and certain other employees covered by different federal leave systems. Title I covers non-federal employees and certain federal employees not covered by Title II. 6. Galen, Michele, Ann Therese Palmer, Alice Cuneo, and Mark Maremont, "Work & Family," Business Week, no. 3325 (June 28, 1993), p. 82. 7. Friedman, Dana, Linking Work-Family Issues to the Bottom Line (New York: The Conference Board, 1991), p. 51. 8. Letter from Marilyn S.G. Urwitz, federal employee, to President Bill Clinton, March 4, 1993. 9. Kamarck, Elaine Ciulla, and William A. Galston, "A Progressive Family Policy for the 1990s," in Will Marshall and Martin Schram, eds. Mandate for Change (New York: The Berkley Publishing Group, 1993), p. 174. 10. U.S. Office of Personnel Management (OPM), The Federal Flexible Workplace Pilot Project Work-at-Home Component (Washington, D.C., January 1993), p. v. 11. Ibid., pp. iii, iv. 12. Ibid., p. 45. 13. Ibid., p. 31. 14. Ibid., p. 32. 15. U.S. Merit Systems Protection Board (MSPB), Balancing Work Responsibilities and Family Needs: The Federal Civil Service Response (Washington, D.C., November 1991), p. 82. 16. U.S. General Accounting Office, The Changing Workforce: Comparison of Federal and Nonfederal Work/Family Programs and Approaches, GAO/GGD-92-84 (Washington, D.C.: U.S. General Accounting Office, April 1992), p. 15. 17. Public Law 101-509. 18. Title 40, United States Code, sec. 490(b). 19. U.S. Office of Personnel Management, Report to Congress: A Study of the Work and Family Needs of the Federal Workforce (Washington, D.C., April 1992), pp. 5, 6, 20. 20. OPM, Report to Congress, p. 26. 21. President's Council on Management Improvement, "Guidelines for Pilot Flexible Workplace Arrangements," Washington, D.C., January 1990, p. 19. 22. Title 40, United States Code, sec. 490(b); and Title 18, United States Code, sec. 203(a). 23. Title 5, Code of Federal Regulations, sec. 610.401. 24. MSPB, Balancing Work Responsibilities and Family Needs, p. 79. 25. U.S. Department of Labor, Bureau of Labor Statistics, Employee Benefits in Medium and Large Private Establishments (Washington, D.C.: U.S. Government Printing Office, 1991), p. 16. 26. U.S. Office of Personnel Management, "Options for Leave Reform," Washington, D.C., September 1991, p. 5. 27. Ibid., p. 6. 28. U.S. Merit Systems Protection Board, Federal Personnel Research Programs and Demonstration Projects: Catalysts for Change (Washington, D.C., December 1992), p. xi. 29. Title 5, United States Code, sec. 4703(c). 30. Title 5, United States Code, sec. 6373. 31. U.S. Congress, House, Committee on Post Office and Civil Service, Subcommittee on Compensation and Employee Benefits, "Leave Sharing Programs in the Federal Government," testimony by Jim King, Director of OPM, May 13, 1993. 32. U.S. Office of Personnel Management, Report to Congress on the Federal Employees Leave Sharing Act of 1988, Public Law 100-566 (Washington, D.C., April 30, 1993), p. 1. 33. OPM, Report to Congress, p. 35. ****************************************** Hold Managers Accountable for Adherence to Principles of Merit and Equal Opportunity ****************************************** ************************************************************* HRM08:Improve Processes and Procedures Established to Provide Workplace Due Process for Employees ************************************************************* Background ********** Workplace due process includes the various avenues of redress that employees may pursue when they believe agency management has treated them unfairly. For example, the equal employment opportunity (EEO) complaint process is available to employees who believe an action is discriminatory. An individual who has been suspended, reduced in grade or pay, or removed may file an appeal. An employee may protest other management actions by using an administrative or negotiated grievance procedure. Unions (or management) may file unfair labor practice charges or negotiability disputes. These various avenues of redress are governed by separate legal and regulatory authorities. Due process is typically pursued first within the employing agency and, failing resolution, may then be taken before a third party for adjudication. Since enactment of the Civil Service Reform Act in 1978, four agencies adjudicate disputes between employees and agency management: the Merit Systems Protection Board (MSPB), the Office of Special Counsel (OSC), the Equal Employment Opportunity Commission (EEOC), and the Federal Labor Relations Authority (FLRA). It is possible for a mixed case arising from the same set of circumstances to be pending at the same time before two or more of these agencies. Decisions by these agencies may be further appealed to the courts. The United States Court of Appeals for the Federal Circuit has exclusive jurisdiction over most appeals from MSPB decisions. Equal employment opportunity (EEO) and labor cases are handled by other courts, usually based on geography. These courts may conflict with one another in deciding similar cases, causing uncertainty in the law as it applies to federal employees.(1) Internal agency processes and procedures that must be used prior to access to the third parties vary by subject matter. They also tend to be functionally stovepiped, with grievances handled by employee relations specialists, EEO complaints handled by EEO specialists, and unfair labor practice charges dealt with by labor relations specialists. In addition to stovepiping, internal agency systems of redress tend to be driven to inflexibility by adherence to process and procedural correctness. Managers are advised of this necessity based on the fear of being overturned in a third party forum due to harmful error. Strict adherence to established administrative procedures governing the large number of appeals and complaints filed by federal employees every year has also contributed to high cost and lengthy delays involved in exercising due process rights. Implementation of National Performance Review recommendations will dramatically change the workplace, for managers in particular. Increased flexibility and elimination of mandatory processes and procedures will give managers greater freedom to exercise judgment. For managers and employees alike, this represents high risk and an unprecedented culture change. Managers must be held accountable for their actions, and employees must have ways to take issue with perceived unfair or discriminatory treatment. Sensitive, responsive, and fast avenues of due process protect the rights of both managers and employees and provide a powerful mechanism for ensuring that managers are held accountable for their human resource management decisions. Many federal agencies are turning to alternative dispute resolution (ADR) methods as a way to improve their internal systems of redress, with the clear objective of solving problems at the worksite and reducing the number (and the associated costs) of cases appealed to third parties. In 1990 Congress enacted two federal laws that endorse the use of ADR in the way agencies resolve disputes.(2) According to the authors of a recent article: Both the scope and the goals of the Administrative Dispute Resolution Act are ambitious. In effect, the new law endorses the use of facilitation, mediation, and other more formal procedures (such as arbitration) as means to resolve the conflicts that inevitably arise in the conduct of federal government business. The goal of the legislation is to encourage agencies to use dispute resolution techniques that can achieve more cost-effective and satisfying results than traditional administrative procedures or litigation.(3) The Department of Health and Human Services has made noteworthy progress with interest-based problem-solving approaches to ADR developed in cooperation with the National Treasury Employees Union. Their methods include a Negotiated Discrimination Complaint Arbitration Process, the Early Complaints Resolution Process, and the Departmental Appeals Board Mediation Service. Need for Change *************** Critics of the current forums and mechanisms for due process have recommended the establishment of a single adjudicatory body for federal employee appeals, complaints, and labor disputes. The primary reason cited for change is the issue of overlapping jurisdiction in the processing of complicated mixed cases, which causes confusion and frustration on the part of everyone involved.(4) An additional complication is the jurisdiction of the federal courts with review authority over federal EEO and labor matters. While the Court of Appeals for the Federal Circuit has exclusive jurisdiction of appeals from MSPB, jurisdiction of the other courts in other areas is often based upon geography. Thus, federal employees governed by common nationwide policies and laws may "receive inequality of justice as a result of nothing more than their residence in different parts of the country."(5) Additionally, the lack of nationally uniform resolution of issues in EEO and labor matters may contribute to legal confusion about the governing laws from circuit to circuit, may increase the cost of litigation, and may be wasteful and inefficient.(6) In addition to the procedural constraints, internal agency systems of redress are often adversarial in nature and do not have the confidence of managers or employees. They are costly and time consuming. Workplace problems that are not resolved in a timely and sensitive way impair productivity and morale and impede mission accomplishment. Use of ADR methods during the informal or early stages of due process can alleviate these problems, thereby improving the workplace climate, reducing the number of formal cases pending before third parties, and reducing the costs of litigation. Actions ******* 1. Eliminate jurisdictional overlaps. (2) By fall 1994, the President should issue a memorandum directing the MSPB Chair to establish a working group to examine and make recommendations for eliminating jurisdictional overlaps in administrative due process cases. The memorandum should also direct EEOC, FLRA, and OSC to provide staff to the working group, which will draft any legislative proposals needed to eliminate mixed-case processing and submit proposed administrative and legislative proposals in a final report by spring 1995. By separate memorandum, the President should direct the Attorney General to examine the feasibility/desirability of creating a single court of appeals with nationwide jurisdiction over all people issues, such as EEO, labor relations, veterans affairs, civil service, et al. A single court would ensure greater consistency of decisions, focus legal and judicial expertise, and alleviate the workload problems in the circuit courts caused by escalating criminal and other litigation. The results of this examination should be presented to the President by spring 1995. 2. All agencies should establish alternative dispute resolution (ADR) methods and options for the informal disposition of employment disputes. (1) By December 1994, each agency head should make available to all worksites methods and options for resolving disputes that are alternatives to established procedures governing EEO complaints, labor disputes, grievances, and appeals. The director of the Office of Personnel Management (OPM) should eliminate, by December 1994, all regulations governing internal agency grievance and appeal procedures, thus freeing agencies to tailor ADR techniques to various situations. EEOC should continue to provide guidance and assistance in application of ADR to the complaint process and should eliminate regulations requiring specific processes to be used in the informal stage, thus also freeing agencies to creatively apply ADR. OPM and EEOC should jointly develop comprehensive training programs for managers, employees, and dispute resolution specialists. Training should cover ADR techniques and options and should be made available to agencies, for example as train-the-trainer, to eliminate duplication of effort among agencies. Cross References to Other NPR Accompanying Reports ************************************************** Department of Labor, DOL04: Expand the Use of Alternative Dispute Resolution by the Department of Labor. Improving Regulatory Systems, REG03: Encourage Consensus-Based Rulemaking; and REG06: Encourage Alternative Dispute Resolution when Enforcing Regulations. Endnotes ******** 1. U.S. Judicial Conference Committee on the Bicentennial of the Constitution of the United States, A History, 1982-1990 (Washington, D.C.: The United States Court of Appeals for the Federal Circuit, 1991), p. 3. 2. Administrative Dispute Resolution Act (Public Law 101-552) and Negotiated Rulemaking Act (Public Law 101-648). 3. Lawrence E. Susskind, Eileen F. Babbitt, and Phyllis N. Segal, "When ADR Becomes the Law: A Review of Federal Practice," Negotiation Journal, vol. 9, no. 1 (January 1993), p. 59. 4. Feder, David L., "Pick a Forum--Any Forum: A Proposal for a Federal Dispute Resolution Board," Labor Law Journal (May 1989), p. 268. 5. U.S. Judicial Conference Committee, p. 3. 6. Ibid., p. 4. *************************************************** HRM09: Improve Accountability for Equal Employment Opportunity Goals and Accomplishments *************************************************** Background ********** It is the policy of the U.S. Government to provide equal opportunity in employment for all persons, to prohibit discrimination in employment because of race, color, religion, sex, national origin, age, or handicap, and to promote the full realization of equal employment opportunity through a continuing affirmative employment program in each agency.(1) However, several factors in federal agencies indicate a lack of adherence to this policy. Those factors include glass ceilings, barriers to Americans with disabilities, the lack of management accountability, and negative attitudes and perceptions. Glass Ceilings for Women and Minorities. "Despite a dramatically growing presence in the workplace . . . progression into the middle and senior levels of management has been elusive for minorities and women. . . . There is a [glass] ceiling. . . . The term glass ceiling refers to invisible, yet real or perceived, barriers which appear to stymie advancement opportunities for minorities and women."(2) Constance Berry Newman, former Director of the Office of Personnel Management (OPM), said that ". . . the percentages of women and minorities in the SES [senior executive service] and the pipeline to the SES are unacceptable."(3) Most of the SES positions are held by white men. Women hold only 12 percent of these positions, and minorities hold only 9 percent.(4) A fundamental means of enabling qualified women and minorities to be appropriately represented in the pipeline to the SES is to ensure that they are appropriately present in agencies' key jobs--jobs that can lead to middle and upper management positions.(5) There is a great disparity in the promotion rates for women and minorities in administrative and professional occupations at the grades 9 and 11 levels. This disparity has a significant impact on the number of women and minorities in high-graded jobs, as grades 9 to 11 are the gateways between entry-level jobs and senior-level jobs for most federal government employees.(6) "At a September 1991 national conference . . . officials from [the Equal Employment Opportunity Commission (EEOC)], OPM, the Merit Systems Protection Board, and the Federal Labor Relations Authority said in public forums that shattering the glass ceiling in the federal government will depend on (1) getting women and minorities into the job tracks that lead to top management and (2) providing them with the necessary training and development opportunities to progress within those job tracks."(7) Doing this will require leadership from the top and accountability for results. Americans with Disabilities. Females and ethnic minorities are not alone in their underrepresentation in the federal workforce. The largest underemployed minority group in America is Americans with disabilities.(8) Persons with disabilities are underrepresented at all levels. Passage of the Americans with Disabilities Act of 1990 heightened the awareness of federal managers, supervisors, and employees on the issues of employment, training, and advancing people with disabilities.(9) However, in 1990 only 6 percent of federal employees had disabilities and only 1 percent had severe disabilities.(10) Federal agencies must, and have begun to, develop and implement effective strategies to ensure that persons with disabilities are given equitable employment opportunities in the federal government. Under Project Able Beneficiaries Link to Employers, OPM, the Social Security Administration, and state vocational rehabilitation offices in Virginia, Maryland, and the District of Columbia are working in partnership to create a new referral system that will place employees in direct contact with qualified potential employees with disabilities. In addition, OPM, in cooperation with the Department of Veterans Affairs, announced in June 1993 the implementation of a nationwide Job Ready Disabled Veterans Connection, which enables federal agencies to have rapid access to referral lists of job ready disabled veterans. The current initiatives are commendable, but the federal government must continue to implement effective systems to increase the representation of job ready Americans with disabilities. There is a very real opportunity today for OPM to facilitate employment, training, and advancement of people with disabilities through a major campaign aimed at those managers and supervisors who make these key decisions.(11) Lack of Management Accountability. This administration has clearly demonstrated its commitment to equal opportunity and valuing workforce diversity. However, the longstanding lack of management accountability is a critical flaw in and barrier to current efforts to accomplish equal opportunity in the federal workforce. Currently, there is neither a consequence system for agency heads and their managers who do not plan, develop, and implement creative ways in which to accomplish equal opportunity goals nor a reward system for those who do.(12) While it is important to deregulate, decentralize, and provide a certain degree of management flexibility, increased flexibility in the absence of appropriate accountability could undermine equal opportunity and affirmative employment efforts. Numerous reports issued by the General Accounting Office cite discrimination within the government.(13) Accountability must be encouraged by the President's reaffirmation of top-down commitment. Agencies must review, evaluate, and control managerial and supervisory performance in such a manner as to ensure a continuing affirmative application and vigorous enforcement of the policy of equal opportunity, and provide orientation, training, and advice to managers and supervisors to ensure their understanding and implementation of the equal employment opportunity policies and programs.(14) Equal opportunity and workforce diversity should be an integral part of the mission of each and every federal agency. Constance Berry Newman states that "real equal employment opportunity will come about only when each and every executive, manager, supervisor, and employee is committed to and held accountable for equal opportunity. . . . Agency heads must hold their managers and supervisors responsible for EEO [equal employment opportunity] by building it into their performance agreements and standards."(15) Negative Attitudes and Perceptions. Negative attitudes and perceptions are very powerful barriers to equal employment opportunity and workforce diversity. According to Linda Winikow, corporate policy expert, "On the one hand, civil rights legislation has done an enormous amount to wipe out the legal impediments to inequality. But all too many of the attitudes that prevented the flowering of diversity still exist. Executives have an obligation to recognize that this isn't simply a side issue. It is a fundamental management issue. A manager's first job is to manage--to bring people to their full potential. The glass ceiling does exist, but senior management's job is to do everything possible to provide the training and the climate for success."(16) EEOC recognizes that treating EEO functions as side issues fosters perceptions of a conflict of interest. EEOC reiterated this concern in an October 1992 management directive that states: In order for the agency to implement a continuing affirmative employment program to promote equal employment opportunity and to identify and eliminate discriminatory practices and policies, the agency shall appoint a director of Equal Employment Opportunity, who shall be under the immediate supervision of the agency head. Agencies must avoid conflicts of position or conflicts of interest as well as the appearance of such conflicts. . . . In order to maintain the integrity of the EEO investigative and decision making processes, those functions must be kept separate from the personnel function.(17) In addition, the Code of Federal Regulations states that ". . . the EEO director shall be under the immediate supervision of the agency head . . ."(18) Yet, some federal agencies still treat EEO as a side issue rather than as a fundamental management issue with identifiable accountability. Experts who have spent many years actively advocating equal opportunity in the federal workforce are also concerned about the effect of negative attitudes and perceptions. Dr. Harriett Jenkins, Director, Office of Senate Fair Employment Practices, says, "Employees must perceive that there are credible efforts to eradicate discriminatory barriers and resolve complaints, [and] those efforts must be real and visible. . . . Because personnel and EEO are inextricably related, it is sometimes incorrectly assumed that EEO should be a sub-part of personnel or human resource offices. This reflects a lack of understanding of the managerial functions of the director of EEO, whose authority flows directly from the head of the agency." "The director serves as an advisor to the head of the agency and other levels of managers. She or he is a catalyst and implementer of sensitive organizational assessment, corrective management strategies, and ongoing oversight and monitoring of the agency's EEO progress. He or she has the responsibility of assisting the agency head and other levels of managers to comply with civil rights laws, remove barriers to full integration, eliminate subtle and overt discrimination, adjudicate allegations of discrimination, affirmatively reach out to all groups, and ensure that all personnel management decisions are made on merit. . . . Whoever has responsibility for EEO functions has to have the agency head's imprimatur to help the line managers bring about constructive change and full integration of the organization. It is the managers and supervisors in every part of the agency who can determine the successful achievement of the agency's EEO objectives."(19) Need for Change *************** Agency heads and their managers must be held accountable to the President, Congress, and the American public for creating, developing, valuing, and maintaining a workforce that is reflective of our nation's citizenry.(20) While improvements have occurred and the current administration has set the stage for equal opportunity and diversity, the current federal civilian workforce does not reflect the nation's diverse working population. Overall, the federal government has not been successful at eradicating discriminatory barriers, and attracting, retaining, and advancing members of all segments of society at all grade levels. It has been even less successful at integrating members of underrepresented groups into middle and upper management. Much work is still needed to ensure that equal opportunity becomes an integral part of each federal agency's strategic business plan and that management is held accountable for achieving results. Government is paying an enormous cost for the glass ceiling that keeps qualified women, minorities, and disabled persons underrepresented at all levels in the federal government. It is underusing a major segment of its human resources and delaying attainment of an important goal of the Civil Service Reform Act of 1978 and other civil rights laws--full representation of all segments of society at all grade levels in government. As noted by the Council for Excellence in Government, "The federal government needs a career executive leadership cadre reflecting the diversity of America's population. . . . Today there is neither sufficient leadership nor adequate diversity among career executives. . . . The government can develop a diverse group of leaders, but it must take dramatic action to mount an effective governmentwide program and to hold management responsible for achieving results."(21) It is imperative that federal agencies parallel the push for diversity that this President has started with his political appointments. The government should reaffirm its commitment to equal employment opportunity. Whoever has the primary responsibility for EEO functions must be a full, active member on the agency's senior management team that has responsibility for the allocation of the agency's resources. Federal agencies must focus on action and results and must institute a real system of accountability. Action ****** Charge all federal agency heads with the responsibility for ensuring equal opportunity and increasing integration of qualified women, minorities, and persons with disabilities into all levels and job categories, including middle and senior management positions. (2) The President should issue an Executive Order to all agency heads by fall 1994 stating his commitment to attaining a diverse federal workforce and increasing the representation of qualified minorities, women, and disabled persons at all levels, including higher levels at which they are most underrepresented. The Executive Order should also establish the requirement that each agency head should: --- build EEO and affirmative employment elements into the agency's strategic business plan and include effective measurements for impact and change; --- require executives, managers, and supervisors to develop, implement, monitor, and evaluate the organization's affirmative employment plans; --- ensure that a critical element on EEO, affirmative employment, and diversity is built into the performance plans and evaluations of all managers and supervisors; --- ensure that the director of EEO reports directly to the agency head and is a full participant on the senior management team(s) responsible for all resource allocations; --- demonstrate a commitment to EEO and affirmative employment and provide employees a visible sign of credible efforts through such actions as annual policy statements on equal employment opportunity and affirmative employment; --- identify qualified, as well as high-potential, women, minority, and disabled candidates and implement developmental programs to provide opportunities to effectively prepare them to compete for and hold executive leadership positions; and --- provide recognition of those managers and organizations that consistently perform well in the EEO and affirmative employment areas, and ensure appropriate disciplinary action in cases where there is a finding of discrimination. Presidential leadership and an Executive Order that mandates management accountability for equal employment opportunity goals and accomplishments will reassure employees, applicants, and the American public that there is governmentwide commitment to and accountability for creating a federal workforce that reflects America's diverse citizenry. Endnotes ******** 1. Title 29, Code of Federal Regulations, sec. 1614.101. 2. Dominquez, Cari M. "The Challenge of Workforce 2000," The Bureaucrat, Vol. 20, no. 4 (Winter 1991-92), p. 16. 3. U.S. General Accounting Office (GAO), Federal Workforce: Continuing Need for Federal Affirmative Employment, GAO/GGD-92-27BR (Washington, D.C.: U.S. General Accounting Office, November 1991), p. 3. 4. Council for Excellence in Government, Bringing Leadership and Diversity Into the Federal Career Executive Ranks (Washington, D.C., June 14, 1993), p. 2. 5. Ibid. 6. U.S. Merit Systems Protection Board, A Question of Equity: Women and the Glass Ceiling in the Federal Government (Washington, D.C., October 1992), p. 37. 7. U.S. General Accounting Office, Federal Affirmative Employment: Status of Women and Minority Representation in the Federal Workforce, report no. GAO/T-GGD-92-2 (Washington, D.C., October 23, 1991), p. 11. 8. U.S. Office of Personnel Management, U.S. Equal Employment Opportunity Commission, President's Committee on Employment of People with Disabilities, and U.S. Department of Education, A Call to Action: A Report on Increasing the Employment of People with Disabilities in the Federal Sector (Washington, D.C., July 1992) Appendix, p. iii. 9. Ibid., p. 1. 10. Ibid., p. 5. 11. Personal Interview with Dick Whitford, Acting Assistant Director, Affirmative Recruiting and Employment, Office of Personnel Management, Washington, D.C., August 1993. 12. Personal Interview with Oceola Hall, Director, Discrimination Complaints, National Aeronautics and Space Administration, Washington, D.C., July 1993. 13. See for example, U.S. General Accounting Office, Equal Employment: Minority Representation at USDA's National Agricultural Statistics Service, GAO/GGD-91-31BR (Washington, D.C.: GAO, March 18, 1991); Health and Human Services: Hispanic Representation and Equal Employment Practices in Region VIII, GAO/HRD-91-6 (Washington, D.C.: GAO, November 20, 1990); EDA: Treatment of Blacks at the Economic Development Administration in the 1980's, GAO/HRD-90-148 (Washington, D.C.: GAO, September 26, 1990); and Voice of America: Selected Personnel Practices Warrant Management Attention, GAO/NSIAD-89-160 (Washington, D.C.: GAO, July 12, 1989). 14. Title 29, Code of Federal Regulations, sec. 1614.102. 15. Personal Interview with Constance Berry Newman, Under Secretary, Smithsonian Institution, Washington, D.C., August 1993. 16. Linda Winikow, Vice President for Corporate Policy and External Affairs, Orange and Rockland Utilities, Inc., quoted at the Women's Bureau Conference, Washington, D.C., October 23, 1990. 17. U.S. Equal Employment Opportunity Commission, EEO Management Directive 110 (EEO MD-110) for Title 29, Code of Federal Regulations, Part 1614 (Washington, D.C., October 29, 1992), p. 1. 18. Title 29, Code of Federal Regulations, sec. 1614.102. 19. Personal Interview with Dr. Harriett Jenkins, Director, Office of Senate Fair Employment Practices, U.S. Senate Washington, D.C., July 1993. 20. Interview with Oceola Hall, Washington, D.C., July 1993. 21. Council for Excellence in Government, p. 3. ********************************************** HRM10: Improve Interagency Collaboration and Cross-Training of Human Resource Professionals ********************************************** Background ********** Total integration of equal employment opportunity (EEO) into every aspect of human resource management policy and practice in the selection, placement, training, and advancement of civilian employees of the federal government is vital to creating and maintaining a federal workforce that is truly reflective of our nation's diverse citizenry. In order to accomplish this integration, there must be effective collaboration among federal supervisors, managers, personnel professionals, civil rights professionals, and equal opportunity professionals. EEO and Affirmative Employment Reporting. "Strong EEO and Affirmative Action plans play vital roles in the management of diversity. They are stepping stones to valuing diversity wherein differences are identified and an atmosphere is created that promotes respect for these differences as well as ways to benefit from them."(1) However, current EEO and affirmative employment (AE) reporting requirements are fragmented. While agencies must submit data to the Office of Personnel Management (OPM) Central Personnel Data File (CPDF), similar data must be submitted to the Equal Employment Opportunity Commission (EEOC). The Civil Service Reform Act of 1978 created the Federal Equal Opportunity Recruitment Program (FEORP), which requires agencies to conduct affirmative recruitment for those occupations and grades in which women and minorities are underrepresented. The act assigned to OPM the responsibility for assisting agencies in their affirmative recruitment efforts and for overseeing FEORP.(2) Executive Order 12067 (June 30, 1978) assigned to EEOC responsibility for providing coherence and direction to the government's EEO efforts. It also provided for standardized data collection procedures. EEOC requires federal agencies to submit multi-year AE plans and annual accomplishment reports to evaluate the representation of minorities, females, and disabled persons in the federal workforce. In addition, OPM requires agencies to submit FEORP plans and reports, as well as disabled veterans affirmative action program plans and reports. There needs to be one comprehensive assessment of agency EEO/AE goals, objectives, and accomplishments. Agencies must integrate EEO/AE into their overall strategic business plans, which are developed, evaluated, and monitored by management. Agencies must build their plans around barrier analysis, develop goals, implement strategies to achieve these goals in a specified time frame, and hold managers and supervisors accountable for results. Cross-Training. Cross-training is the first step to creating a competent federal human resource management team. Personnel professionals must understand and adhere to basic EEO and civil rights guidelines in order to ensure that personnel functions and actions are fair and equitable for all employees and applicants. Likewise, EEO and civil rights professionals must understand and adhere to the basic personnel guidelines. The roles and responsibilities of EEOC and OPM present an opportunity for them to work together to provide leadership and training necessary to integrate EEO into every aspect of human resource management policy and practice. These two agencies must make a concentrated effort to ensure ongoing communications and understanding of EEO and AE efforts to achieve a diverse, competent, and productive federal work force. They must provide joint leadership to EEO, civil rights, and personnel professionals to create, develop, review, and improve effective ongoing governmentwide efforts. Need for Change *************** It is imperative that EEOC and OPM collaborate to jointly provide the necessary leadership and cross-training to ensure an effective approach to and outcome of federal human resource management efforts. These efforts must include effective EEO and AE initiatives. EEO/AE plans and accomplishment reports foster agency commitment to and awareness of EEO/AE efforts within organizations and guide the way to increased employment opportunities for qualified women, minorities, and disabled persons. However, there needs to be one comprehensive, automated EEO/AE report for federal agencies. An inordinate amount of resources are devoted to preparing duplicative reports. More importantly, treating the four groups (women, minorities, disabled persons, and disabled veterans) separately is contradictory to the vital mission of accomplishing overall workforce diversity and streamlining government functions. Although each agency must be personally responsible for internal EEO/AE goals and accomplishments, EEOC must continue to fulfill its responsibility under Executive Order 12067--to provide coherence and direction to the government's EEO efforts. EEOC must seek out, identify, recognize, and reward best EEO and AE practices in federal agencies. EEOC must perpetuate those best practices throughout the federal government. In addition, OPM must ensure that the CPDF can generate necessary data and that the capabilities of the CPDF are fully used. For example, the collection of minority college and university information in the CPDF is essential for conducting affirmative employment analysis.(3) Actions ******* 1. Establish an Interagency Equal Employment Opportunity and Affirmative Employment Steering Group under the joint chair of EEOC and OPM. (2) The President, by memorandum, should direct the Chair of EEOC and the director of OPM to establish an Interagency Equal Employment Opportunity and Affirmative Employment Steering Group. The purpose of the group should be to: --- provide to human resource professionals governmentwide equal opportunity and affirmative employment leadership, communication, and coordination in workforce diversity planning; --- identify and perpetuate best EEO/AE practices throughout the federal government; and --- aid, among equal opportunity, civil rights, and personnel professionals, communication that focuses on EEO/AE concerns and issues and shares successful initiatives. This steering group will comprise directors of equal employment opportunity, personnel, and civil rights from a cross- section of federal agencies, including small agencies. The committee will convene monthly for the first 6 months. After that, the EEOC chair and OPM director will establish the appropriate schedule for meetings, conferences, and seminars. 2. Require appropriate cross-training for human resource management professionals. (1) The first and most important purpose of the EEO/AE Steering Group should be to advocate effective cross-training and rotational assignments for EEO, civil rights, and personnel professionals. Agency heads should be required to ensure that federal EEO and civil rights professionals receive cross-training and rotational assignments in federal personnel management before being promoted to supervisory and management positions. They should also ensure that personnel professionals receive cross-training and rotational assignments in federal EEO and civil rights before they are promoted to supervisory and management positions. EEOC and OPM should jointly identify the appropriate core training, as well as the time frame in which the training should be obtained, to foster human resource management competence throughout federal agencies. Collaboration between EEO, civil rights, and personnel professionals will assist agencies in understanding, evaluating, and preventing practices that give rise to EEO complaints. 3. Combine all equal opportunity and affirmative employment reports into one comprehensive assessment of the total workforce EEO/AE data. (2) By memorandum, the President should direct the Chair of EEOC, in coordination with the director of OPM, to blend the reporting requirements for agencies to compile one comprehensive assessment of their equal employment opportunity and affirmative employment efforts, including specific actions needed to eradicate barriers and increase representation of minorities, women, and disabled persons at all levels, including middle and upper management levels. EEOC and OPM should conduct a thorough examination of all current EEO/AE reporting requirements to ensure the appropriateness and effectiveness of the new comprehensive agency assessment report. These changes should be effective with the fiscal year 1995 submission requirements. 4. Modify the Central Personnel Data File to enable total automation of the EEO/AE data reporting requirements. (2) By memorandum, the President should direct the director of OPM, in coordination with the Chair of EEOC and a working group of agency officials, to ensure that the necessary data resources, including any appropriate changes to the CPDF, are used to generate all data needed to meet EEO/AE reporting requirements. All current EEO/AE data reporting requirements should be examined for necessity and value. This examination of requirements and subsequent redesign of the CPDF should begin immediately and should be completed during fiscal year 1995. Implementation of these actions will decrease duplicated efforts and redundancy within and across federal agencies. It will reduce, simplify, and automate the reporting requirements, while maintaining the requirement for agencies to submit the necessary information. There will be a substantial reduction in the administrative costs of EEO and AE programs. This will be tremendously beneficial to the overall federal EEO/AE efforts since agencies will be able to spend more time and effort focusing on results rather than on paper processes. In addition, implementation of these actions will foster coordinated, governmentwide commitment to creating, implementing, and accomplishing equal opportunity and affirmative employment goals to create a federal workforce that is reflective of the American citizenry. Implementation of these actions will require ongoing commitment and coordination between EEOC and OPM. This partnership is critical to the accomplishment of a competent, productive, and diverse federal workforce.(4) Endnotes ******** 1. The National Treasury Employees Union, "Strategic Plan for Agency Diversity Management," Washington, D.C., p. 3. 2. U.S. General Accounting Office, Federal Workforce: Continuing Need for Federal Affirmative Employment, GAO/GGD-92-27BR (Washington, D.C.: U.S. General Accounting Office, November 1991), p. 1. 3. Personal Interview with Dick Whitford, Acting Assistant Director, Affirmative Recruitment and Employment, Office of Personnel Management, Washington, D.C., August 1993. 4. The following individuals made significant contributions to this section: Nilda I. Aponte, Director, Civil Rights Office, General Accounting Office; Ronnie Blumenthal, Director, Office of Federal Operations, Equal Employment Opportunity Commission (EEOC); Barbara Burdge, Leader, Career Opportunities, Department of Health and Human Services; Arthur E. Cizek, Chief, Compliance Division, Department of Commerce; Robert Franco, Acting Director, Office of Advocacy and Enterprise, Department of Agriculture; Dr. Yvonne Blanchard Freeman, Associate Administrator, Equal Opportunity, National Aeronautics and Space Administration (NASA); Kathleen M. Gause, Head of Affirmative Employment, Department of the Navy; Oceola Hall, Director, Discrimination Complaints, NASA; Harriett G. Jenkins, Director, Office of Senate Fair Employment Practices; Fran Lopes, former Assistant Director, Affirmative Recruiting and Employment; Office of Personnel Management (OPM); Gerald R. Lucas, Director of Civil Rights, Department of Commerce; Alfonso J. Ludi, Special Assistant to the Associate Administrator, NASA; Lynne McGlew, Executive Assistant to Director of Civil Rights, Department of Labor; Constance Berry Newman (Former Director of OPM), Under Secretary, Smithsonian Institution; Valerie Olsen, Counsellor/Mediator, Office of Senate Fair Employment Practices; Luther L. Santiful, Director, EEO, Department of the Army; Jim Troy, Director, Office of Program Operations; EEOC; Dick Whitford, Acting Assistant Director, Affirmative Recruiting and Employment, OPM; and Grant B. Williams, Jr., Director, Civil Rights, General Services Administration. *************************************************************** Create a System That is Self-Renewing and Continually Improving *************************************************************** ***************************************************************** HRM11: Strengthen the Senior Executive Service So That It Becomes a Key Element in the Governmentwide Culture Change Effort ***************************************************************** Background ********** The Civil Service Reform Act of 1978 established the Senior Executive Service (SES) as a separate personnel system. Incumbents of the SES include most of the top policy and managerial positions in the executive branch except for those requiring Senate confirmation. SES executives potentially serve as key links between the top political appointees and the rest of the career civil servants that staff federal agencies. By September 1992, about 8,800 SES positions had been allocated by the Office of Personnel Management (OPM), and 8,200 positions had been filled. About 700 of these were filled by political appointees. The political appointees provide the necessary policy controls, while the career SES managers provide a politically neutral, responsive, skilled group of managers and leaders. As originally envisioned, SES members [s]erve the twin objectives of change and continuity: on the one hand, helping the top officials of a new administration to steer their agencies in the directions set by the newly elected President; on the other, carrying forward the institutional memory of Government and maintaining high standards of public service. It is a balancing act of great delicacy.(1) Need for Change *************** OPM's role. The original vision of the SES, as outlined above, is still valid. Missing, at this juncture of its history, is an institution and process to give its members a focus and mission that takes them beyond their individual job and organization performance concerns. OPM's role has been more administrative and technical; as a result, the SES has not evolved to the extent originally envisioned. If the SES is to evolve, OPM's role must become more facilitative and consultative, working in concert with the agencies. Change involves a long-term commitment. The SES can provide the continuity and long-term tenacity required for significant change governmentwide. This change will involve the federal government culture. Managers at all levels will have to view their roles differently than many do now. A recent Brookings Institution report called for "[a] performance-driven federal government . . . staffed by managers and administrators imbued with a new entrepreneurial spirit. . . . What matters is the ability of the leaders to inspire, to infuse value. . . . Such leaders are in short supply."(2) The Complex Mix of SES Positions and Roles. It was intended that the SES consist of generalist managers with the ability and incentives to take on assignments where they would be most effective in accomplishing agency missions. For many reasons, however, this objective has not been met. There is a small group of senior executives who occupy key leadership positions linking the President's top appointed officials with those charged with carrying out public policy. These key executives can be career or non-career. They will play a pivotal role in the success of government programs and policies and in reinventing the executive branch. The majority of senior executives, however, now serve in the SES because of their technical expertise, often as key advisors and managers of support staffs or as operational managers responsible for parts of line (legislative) programs, rather than as agency-level leaders and program executives. While all are important positions, this mixture of roles makes it difficult to develop and manage the SES as a resource for agency management as originally intended. Tensions Between Career Senior Executives and Political Appointees. Both the Merit Systems Protection Board and the General Accounting Office have pointed to the poor relationships that often exist between career SES members and political appointees.(3) These relationships often emerge as significant management problems. A certain amount of tension is natural; however, there are a number of aggravating circumstances that should be alleviated. Over the years there has been an increase in the number of non-career SES appointees. This in turn has meant fewer career executives in key leadership positions and fewer career jobs that are meaningful.(4) In addition, the short tenure of political appointees means that they provide less program stability and continuity because of the abbreviated time frames in which they operate. Change in large organizations takes time, is usually incremental, and needs tenacious and persistent leadership over a period of years. Agency Weaknesses in Managing the SES. Compounding this problem has been agency behavior in selecting, developing, using, and rewarding executives. Whereas some agencies have done a good job in creating an effective executive cadre, others have not treated their senior executives as a key resource or integrated the selection and development of their executives with their vision of a more effective agency. Because OPM can continually allocate additional SES positions, agencies have less incentive to rethink their current use of SES positions. In many cases, the focus needs to be changed from creating more SES positions to better use of current positions. The need to more effectively select and develop agency SES cadres is compounded by the expected exodus of SES members in the coming years. A National Academy of Public Administration study estimates that over "one third of the SES--or 2,600 executives--will be eligible to retire" by January 1994.(5) Most will also have completed three years at their highest salary rate, thus creating another incentive to retire. This not only provides opportunities to select executives who can contribute quickly to agency change efforts, but allows agencies to improve the diversity of their SES membership. To achieve this, agency leadership must focus on these needs and incorporate solutions into their strategic planning efforts. The SES as a Culture Change Force. For the most part, the executive branch projects an image of a hierarchical, highly conservative, and risk-averse culture. Trust levels are low at all levels of government and in most organizations. Most employees including executives are uncomfortable with this situation and are ready to work toward solutions. Vice President Gore has offered one alternative. He expects that the National Performance Review will result in and require significant culture change in the executive branch. The real drivers of change will have to be the career and non-career executives. In other words, significant culture change must rely on leadership. The reinventing government effort intends to decentralize authority and accountability to a greater extent. Management will have fewer rules, will be held accountable for results, and will be responsible for significant changes in the years to come. Because culture change on a scale as envisioned by the President, Vice President, and Cabinet is a long-term endeavor, institutions and processes must be developed to support this change. The SES should be managed as a strategic resource to bring about change governmentwide and at the agency level. If institutional leadership means cultivating a shared view of a new direction and culture, then OPM and its director must create new vehicles that help build such a shared view and remove the perception of OPM as a controller and regulator. The following actions have been developed to support these culture changes. Agency leadership must bear a large measure of responsibility for culture change and the creation of very different management values and behaviors. These changes cannot be made immediately; rather, they will take time to allow for adequate research, experimentation, learning, and consultation with an array of stakeholders. The actions provide for such a beginning. Actions ******* 1. Create and reinforce a corporate perspective within the Senior Executive Service that supports governmentwide culture change. (1) To change the culture of the executive branch, a corporate approach to managing executive resources will be needed. Although agencies have primary responsibility for engendering change within their own organizations, the director of OPM is an important link between the government as a whole and individual agencies. As a leader for change and a consultant to agency management, OPM should foster a corps of executives with a corporate vision, committed to fundamental change over the long term and, at the same time, reflective of the civil service values of merit and diversity. OPM can work toward this goal in the following ways: --- Ensuring that the corporate vision for change is adequately reflected in OPM's governmentwide management development curricula (e.g., the Federal Executive Institute and the Management Development Centers); OPM will ensure that management development emphasizes the vision of government in the 21st century, the ways executives will foster that change effort, and concepts for a more effective executive SES corps. --- Recommending governmentwide SES policies and management development strategies in support of government culture change efforts. --- Overseeing an executive information system that both supports the executive search process and provides status reports on the SES in support of policy decisions, agency succession planning, and development efforts. 2. Promote an agency corporate executive level succession planning model. (1) OPM, in consultation and coordination with agencies, should promote a corporate succession planning model for agencies to use in identifying, selecting, and developing their senior executive staffing resources. These efforts should be linked to each agency's strategic plans and budget, support their unique and specific needs, and incorporate such objectives as broadening the agency's skill mix and improving the diversity of the agency's SES membership. 3. Enhance voluntary mobility within and between agencies for top senior executive positions in government. (1) Data show that, prior to entering the SES, incumbents have held a variety of positions and moved functionally and geographically; yet, once in the SES, their career paths have been relatively insular, indicating that the SES corps has been underused.(6) In other words, many senior executives stay in the same functional area or agency and are not encouraged to make use of their abilities to serve in a wider range of jobs or different agencies. The National Academy of Public Administration has called for enhanced and broadened mobility strategies geared not only to agency requirements, but to the corporate objectives of the government as a whole.(7) OPM will act as a catalyst to encourage mobility of executives both within and between agencies. The purpose would be two-fold: first, to assist agencies in identifying executives who have demonstrated, through actual performance, the ability to bring about changes or manage in different circumstances and who can apply the values inherent in reinvented government principles while dealing with system realities; and second, to provide executives an opportunity to broaden their skills and perspectives and to be placed in positions where they can make their greatest contribution to a reinvented government. This proposal is intended to establish an SES cadre that not only takes a governmentwide view of its role, but is a vehicle to help individuals move to positions where their special expertise is needed. By no means does the proposal intend to make every senior executive mobile and a generalist, since there are many executives whose expertise, experience, and interests are tied to a particular agency, occupation, or position. In fact, most executives have been chosen for their technical program expertise and need to remain where they are most effective. This is normally an agency issue and needs to be left in the hands of agency management with suitable safeguards in place. Cross References to Other NPR Accompanying Reports ************************************************** Creating Quality Leadership and Management, QUAL03: Strengthen the Corps of Senior Leaders. Federal Emergency Management Agency, FEMA04: Develop a Skilled Management Team Among Political Appointees and Career Staff. Reengineering Through Information Technology, IT13: Provide Training and Technical Assistance in Information Technology to Federal Employees. Endnotes ******** 1. U.S. Office of Personnel Management, "Handbook for the Senior Executive Service," Washington, D.C., July 1993, p. 3. (Draft.) 2. DiIulio, Jr., John J., Gerald Garvey, and Donald F. Kettl, Improving Government Performance: An Owners Manual (Washington, D.C.: The Brookings Institution, 1993), pp. 73-74. 3. U.S. Congress, House, Committee on Post Office and Civil Service, Subcommittee on Civil Service, "Political Appointees in Federal Agencies," testimony by Bernard L. Ungar, Director, Federal Human Resource Management Issues, General Government Division, General Accounting Office, October 26, 1989, p. 13. See also U.S. Merit System Protection Board, The Senior Executive Service: Views of Former Federal Executives (Washington, D.C., October 1989), pp. 19- 21. 4. Ibid. 5. National Academy of Public Administration, Paths to Leadership Executive Succession Planning in the Federal Government (Washington, D.C., December 1992), p. 1. 6. Sanders, Ron, "Reinventing the Senior Executive Service," Virginia, June 1993, p. 8. (Draft.) 7. National Academy of Public Administration, Paths to Leadership, Executive Succession Planning in the Federal Government: Report Summary (Washington, D.C., December 1992), p. 4. **************************************** HRM12: Eliminate Excessive Red Tape and Automate Functions and Information **************************************** Background ********** The federal personnel system is clogged with unnecessary process constraints and thousands of pages of regulations. In 1983, the National Academy of Public Administration concluded: The present personnel management system is far too process oriented. It is much too rigid and needs major change. . . . Thousands of pages of personnel regulations tend to remold personnel managers into personnel technicians. Because of the complexity of these regulations, line managers tend to abdicate their responsibilities for personnel decisions and fail to give personnel management the high priority it deserves. Process drives out substance.(1) Ten years later, the Federal Personnel Manual (FPM) has expanded to over 10,000 pages of policies, regulations, guidance, and processing instructions. Additional agency directives parallel and often supplement the FPM. While agency directives and the FPM contain information needed by line managers, they are primarily written for the personnel administrators upon whom managers must depend for interpretation. Additionally, until recently, OPM has not led any efforts to use technology to reduce the number of manually prepared required reports or to enhance agency accountability systems. The past 10 years have also seen a technology explosion. Every agency has a data system that supports internal operations and feeds into the Central Personnel Data File (CPDF) of the Office of Personnel Management (OPM). However, agency systems are outdated and are not interoperable; while complex processes contained in the FPM or agency regulations have been automated, automation has focused primarily on internal personnel office operations almost to the exclusion of managers' needs. Need for Change *************** Managers and human resource administrators must be freed from unnecessary process constraints in order to focus on mission instead of efforts to overcome obstacles to its achievement. As process constraints are eliminated, use of technology needs to expand to eliminate manually prepared reports, provide access to information, support management decisionmaking, and monitor organizational performance. Actions ******* 1. Phase out the entire Federal Personnel Manual and all agency implementing directives. (2) The President should issue an Executive Order that declares that the FPM will be substantially revised, reduced, or otherwise eliminated by December 1994, and that --- directs OPM to involve agencies in identifying those portions of the FPM that are essential, should be retained and for whom, are useful and to whom, and are unnecessary; --- restricts agency supplementation of law and regulation; and --- requires maximum delegation of personnel management authorities to the lowest practical organizational level within agencies and to line managers or self-managed work teams operating in flattened organizational structures. The positive implications of this action are the short-term elimination of unnecessary red tape and the potential for streamlining and simplifying all aspects of the personnel system. On the other hand, additional time may be needed to implement it fully, especially in light of other National Performance Review (NPR) recommendations. However, the objective can be met if pursued as a priority and if agencies are involved in the governmentwide effort. Additionally, the process itself will ensure that all NPR personnel recommendations are addressed. 2. Replace the Federal Personnel Manual and agency directives with automated personnel processes, electronic decision support systems, and manuals tailored to user needs. (1) The director of OPM should accelerate and expand efforts already under way to streamline and automate personnel processes in coordination with the FPM review process and to avoid redundant develop-ment costs. Governmentwide deployment of the Department of Defense/Navy automated personnel action processing system application should be examined for potential cost savings. Costs for centrally developed systems or applications should be shared on a pro rata basis among all participating agencies with OPM providing seed money. 3. Identify and develop useful accountability measures that can be automated. (1) The director of OPM, with the assistance of agency managers and staff experts (personnel, planning, information management, and budget), should develop, by December 1994, automated methods or accountability measures for use by agency heads to monitor exercise of delegated personnel management authorities. A variety of data sources could be tapped, including OPM's CPDF, the Survey of Federal Employees, and any reports that may continue to be necessary. Indicators that could be used to measure accountability include cash award trends to note unusual patterns, or conversions from excepted to career appointments to identify potential violations of merit principles. Such management information systems can be powerful tools for use in ensuring that managers are properly exercising the increased delegations envisioned by NPR. They also should be an element of the reinvented oversight program called for in the NPR accompanying report on the Office of Personnel Management. Cross References to Other NPR Accompanying Reports ************************************************** Department of Defense, DOD01: Rewrite Policy Directives to Include Better Guidance and Fewer Procedures. Streamlining Management Controls, SMC08: Expand the Use of Waivers to Encourage Innovation. Strengthening the Partnership in Intergovernmental Service Delivery, FSL02: Reduce Red Tape through Regulatory and Mandate Relief. Endnote ******* 1. National Academy of Public Administration, Deregulation of Government Management Project: Personnel Management (Washington, D.C., October 1983), p. i. (Interim panel report.) ******************************************************* HRM13: Form Labor- Management Partnerships for Success ******************************************************* Background ********** The federal service labor-management relations statute, Title VII of the Civil Service Reform Act (CSRA) of 1978, provided the authority for employees to unionize, bargain collectively, and participate with agency management in making decisions that affect their working conditions. Prior to enactment of the statute, the federal labor management relations program was authorized by a series of Executive Orders. The statute was a blend of policies and approaches from Executive Order and the law governing labor-management relations in the private sector, the National Labor Relations Act. Title VII of CSRA recognizes that "labor organizations and collective bargaining in the public service are in the public interest"; establishes the Federal Labor Relations Authority to administer the program, issue policy decisions, and adjudicate labor-management disputes; prohibits strikes and lockouts; prohibits agency shop or fair share representational fees; and prohibits bargaining on issues that are the focus of most private sector bargaining such as wages, fringe benefits, and issues related to hiring, firing, promoting and retaining employees. The General Accounting Office (GAO) summarizes the differences between the federal labor-management relations program and the labor- management relations program in the nonfederal sector as follows: Bread and butter issues, such as wages, fringe benefits, and any of many other issues relating to hiring, firing, promoting, and retaining employees, which are the focus of private sector bargaining, generally cannot be negotiated in federal contracts. . . . [F]ederal sector bargaining has been generally limited to the way personnel policies, practices, and procedures are implemented. Traditional bargaining incentives, i.e., strikes and lockouts, are prohibited. Agency shop or fair share representation fees, are prohibited. Under the federal program, employees are entitled to select a union to represent them, but they cannot be compelled to join or pay a fee for the representation that the union is required to provide.(1) Currently, about 60 percent of the federal workforce--1.3 million employees--are represented by federal unions; 80 percent of the employees who are eligible for union participation are represented by an employee union. They are represented by approximately 125 labor organizations in approximately 2,200 bargaining units. The three largest federal employee unions are the American Federation of Government Employees, which represents more than 600,000 employees; the National Treasury Employees Union (NTEU), which represents more than 150,000 employees; and the National Federation of Federal Employees, which represents approximately 150,000 employees.(2) Need for Change *************** The federal workforce is changing. While the number of employees has remained constant for the past 10 years, the workforce has changed in a variety of other ways: it is much more diverse, with more minorities and women; it is better educated; it is more mobile; and more employees work in professional, scientific, and highly technical jobs than ever before. Consistent with national trends, federal employees want to participate in decisions that affect their work. Employee involvement is accomplished through a variety of means including employee unions, quality circles, quality of work life initiatives, self-managed work teams, and perhaps most significantly in recent years, Total Quality Management (TQM). The rapid expansion of TQM in the federal government has dramatically increased the opportunities for employee involvement. GAO reported that 68 percent of federal installations are working on various phases of TQM, with involvement of about 13 percent of their employees.(3) TQM experts point out that union- management cooperation is a prerequisite for a successful TQM program. GAO reported that 59 percent of the installations surveyed reported that employee unions were involved in TQM implementation. The National Academy of Public Administration (NAPA) cites as an example of labor-management cooperation the Internal Revenue Service (IRS)-NTEU Joint Quality Improvement Process, which was started in 1987, and which has spread throughout IRS, resulting in cost savings as well as improved labor-management relations. NAPA recommends that this success be replicated.(4) In a report issued in 1991, GAO concluded that piecemeal technical revisions to the federal labor-management relations program would not be appropriate and comprehensive reform was needed. The report noted that "the federal labor-management relations program is not working well . . . (1) the program is too adversarial and often bogged down by litigation over procedural matters and minutiae; (2) some dispute resolution mechanisms are too lengthy, slow, and complex; and (3) ineffective FLRA management has weakened the program."(5) These conclusions have been widely supported, for example, by NAPA in its 1993 report on federal human resource management. The following example of traditional bargaining illustrates the current state of affairs: . . . traditional negotiation techniques were used to address all term and mid-term collective bargaining matters. Union and management developed positions on issues, submitted inflated proposals to each other, argued vigorously, and concealed the degree of importance they attached to each proposal in order to demand a significant concession by the other party to drop any proposal, however inflated or unimportant. The eventual outcome or agreement was determined through a series of power plays using a number of different tactics. For example, sometimes the union or management walked out of the negotiations. Discussions focused on personalities and anecdotal data rather than the issues. On occasion, the union picketed to draw attention to its concerns. Information was withheld by both parties. Sometimes management ended the dialogue by merely declaring issues to be nonnegotiable. The net result of these tactics was a labor- management relationship built on acrimony, distrust, confrontation, and litigation. Few efforts were made to resolve problems informally. Once negotiations were concluded, problems arising during the administration of negotiated agreements were usually addressed through grievance procedures or unfair labor practice charges.(6) In developing its report, GAO solicited the views of union officials, management officials, and neutral experts at the national level, as well as union officials and managers at the local level. To summarize the views of these participants in the federal labor-management relations program: --- Federal collective bargaining has not accomplished the objectives of the statute. Bargaining processes are too legalistic and adversarial and too often lead to litigation over procedural matters and minor disputes. --- Some dispute resolution processes are too slow, lengthy, and complex. --- Over two-thirds of the national level officials and experts supported an agency shop approach whereby employees would be required to pay fees to the unions that represent them even if they do not belong to the union. Local-level union officials strongly supported agency shop, while two-thirds of local-level managers surveyed did not. --- The greatest divergence of opinion was over the scope of bargaining--the extent to which working conditions could be negotiated by union and management. Over half of the agency officials opposed any change, while all union officials and 80 percent of neutrals supported increased bargaining rights. At the local level, 96 percent of union officials wanted a broader scope of bargaining, as did 21 percent of managers. --- Most union officials, national and local, and neutral experts agreed that labor-management relations is a low priority for federal agencies; management officials disagreed. --- Agency officials and neutral experts believe that unions file too many unfair labor practice charges over minor issues, while union officials claim that the problem is FLRA's failure to take actions to deter violations by agency officials. --- Everyone agreed that more attention must be given to cooperative labor-management relations. FLRA, the Federal Mediation and Conciliation Service (FMCS), and a few individual agencies have been encouraging and facilitating labor- management cooperation and partnerships in federal labor relations. However, their efforts have been hampered by a statutory framework that focuses on the traditional adversarial model. Given bargaining processes that are too legalistic and adversarial, and dispute resolution processes that are slow, lengthy, and complex, virtually all participants consider the federal labor relations programs to be very costly and ineffective. A comment by one of the experts interviewed by GAO succinctly illustrates the prevailing view: "We have never had so many people and agencies spend so much time, blood, sweat, and tears on so little. In other words, I am saying I think it is an awful waste of time and money on very little results."(7) While there is agreement that the program is not cost-effective, it is difficult to determine the exact cost. Several agencies that were asked for information about the cost of their labor-management relations program responded that cost data were not available and that lengthy, costly studies would be required to determine them. In 1982, GAO conducted its only study of federal-labor management relations costs, estimating the cost to the government of processing the 6,448 unfair labor practices (ULPs) filed in that year to be $25.9 million.(8) The cost of processing the 8,851 ULPs filed in 1992 must be significantly greater than $25.9 million. GAO cited the need for a new labor-management relations framework that "motivates labor and management to form productive relationships to improve the public service; makes collective bargaining meaningful; improves the dispute resolution processes; and is compatible with innovative human resource management practices that emphasize employee involvement, team building, and labor-management cooperation."(9) NAPA supported the GAO recommendation for comprehensive reform, concluding, "The labor-management relationship is critical for the employee involvement so vital to organizational change. Without the improved participation and communication that comes with greater employee involvement, efforts at empowerment and commitment will flounder. Adversarial bargaining on win-lose issues will coexist with cooperative win-win bargaining. But cooperation will create more forums for joint problem solving and planning that improve results for both labor and management, and ultimately the employee and the organization."(10) The changes envisioned by the National Performance Review (NPR) will result in a government composed of high-performing organizations that are mission-driven and results-oriented with a clear focus on meeting the needs of customers. Hierarchy will give way to participation and teamwork. Employees will be highly skilled and motivated, empowered to make changes and continuously improve the quality of services provided. The transformation from the current to the desired state of government can only be achieved by transforming the labor-management relationship from an adversarial relationship to a partnership for reinvention and change. One of the first steps in reform of any system is development of a vision of the future that key stakeholders are committed to achieve. A vision for federal labor-management relations describes the desired federal government workplace of the future and, within that workplace, the labor-management relations program that is one of its essential elements. A group of union officials, managers, and neutral labor-management experts met with NPR staff to develop the following vision of labor-management relations in the year 2000.(11) Vision of Cooperative Labor Management Relations in the Federal Government In the future, the federal workforce should be valued as a full partner in decisionmaking. There should be equal access to information among management, employees, and unions. As a result, employees will be involved in decisions that affect them. Where employees are represented by an employee union, labor and management should be partners in carrying out the mission of the organization. Both labor and management should value diversity. There should be a shared sense of mission and values throughout the organization that is understood by everyone. Federal organizations should be model employers providing the private sector with exemplary models of high-performing organizations. They should place authority and decisionmaking at the lowest appropriate level of the organization--the work unit. Issues should be resolved through a single, collaborative process that is not destructive to the partnership. Given the effectiveness of federal organizations, public service should be viewed as a desirable career by both current and potential employees. There should be a partnership between union and management that enables government organizations to become high-performing organizations. This, in turn, should result in high-value, high- quality, effective government. The purpose of the partnership should be to provide an open forum for the discussion and resolution of problems, both procedural and substantive, dealing with conditions of employment that significantly affect the operation of the organization. Problem resolution should be accomplished through a deliberate, consensual team approach that is shaped by the input of all concerned partners rather than through traditional negotiating postures. The goal is to create an effective labor-management relationship based upon partnership and trust that utilizes the strengths of both parties to meet and mutually resolve issues in a way that enhances the effectiveness of both labor and management. Employees, management officials, and union leaders should be continuously trained in support of the labor-management relationship, which in turn should lead to creation of high-value, high-performing government organizations. Training should be provided in the areas of facilitation, problem-solving, negotiation, leadership, and quality. Performance should be continuously improved on an organizational and individual level throughout the entire government; unnecessary conflict should be avoided; unavoidable conflict should be recognized and channeled to closure quickly, without animus; and individual and institutional (i.e., labor-management) cooperation should be encouraged and rewarded. The appeals process should be fair, simple, determinative, fast, and inexpensive. There should be incentives for labor-management cooperation and strong disincentives for labor or management to violate the partnership or to fail to settle or resolve issues within the partnership. Union effectiveness is one of the cornerstones of the productive workplace partnership. Union effectiveness requires a strong, professional, financially secure union that represents the interests of all employees. Unions and management should work together as partners to transform the way organizations are structured, work is performed, and services are delivered. Management and unions should design systems and solutions to issues involving efficiency, productivity, quality, and how the job gets done. Placement of authority and decisionmaking in the work unit should be aided by the absence of artificial barriers to bargaining at any level. Action ****** The President should issue an Executive Order that identifies labor- management partnership as a goal of the executive branch and establishes the National Partnership Council. (2) When many people think of labor-management relations, they visualize an adversarial relationship. Depending on their viewpoint or experience, they may see management assuming a posture to protect its authority and do all it can to ensure efficiency at the cost of reduced benefits and wage cuts. Others may see unions as wanting work rules that prevent organizations or work groups from being more effective, and insisting on bargaining or grieving over the most mundane and inconsequential issues. Depending on their perspective, some people may see ideas such as labor-management partnership and cooperation simply as code words for allowing managers to bypass unions to get employees to work harder, faster, and less wisely, with fewer protections. Others may see cooperative initiatives simply as opportunities for unions to bargain over pay, organization mission, and goals, and receive more concessions in work and seniority rules, benefits, and protections for ineffective workers. The Executive Order would dispel these images. It would make it clear that the goal is an entirely new concept of labor-management relations. The Executive Order should contain two parts and be accompanied by a presidential statement, as outlined below. Executive Order, Part 1: Concepts. --- The goal of any labor-management partnership is the creation of a high-performance organization to deliver quality services to the American people in a way that integrates employee and other stakeholder interests. --- Partners work for each other, not against each other. They respect each other's contributions and have a sense of ownership of, and share in decisions that affect, the organization's products and services. --- Partners work in team environments that value contributions based on knowledge and experience, and blend these contributions to enhance quality, creativity, flexibility, and responsiveness. --- Management's role shifts from an emphasis on protecting its authority to promoting empowerment at the lowest practical levels to provide for employee and union participation. --- The union's role shifts from a reactive posture to proactive employee representation in support of agency mission accomplishment and workplace effectiveness. --- When we speak of employees and partnerships, and when employees have collectively decided to elect representatives to speak on their behalf, then the unions and employees must be treated as full partners. --- Changing the culture of the federal government requires overcoming resistance from employees and managers alike. Each naturally will believe that the change may bring certain losses of what they value. Developing a partnership in any change effort provides the institutional help to support movement to the federal workforce and organization of the future. Executive Order, Part 2: Methods. Following are some methods that should be put into place through the Executive Order to support goal attainment. The National Partnership Council may suggest other methods. --- Create the National Partnership Council to champion the partnership goal. --- Encourage the formation of similar councils or labor-management committees at appropriate levels in each agency, or adapt existing bodies to meet this purpose, and identify and/or train facilitators for these labor-management committees as needed. --- Encourage systematic training of significant portions of agency staffs (including line managers and first line supervisors) and union officials (including stewards) in alternative dispute resolution (ADR) techniques, interest-based bargaining approaches, and joint problem-solving/decisionmaking methods. The National Partnership Council. The Executive Order should provide the charter for the National Partnership Council and encourage similar partnership arrangements at a variety of levels in each agency. By October 1993, the President should announce the appointments to the council and the date it should begin its work. He should explain that achieving the partnership goal throughout the executive branch requires a knowledgeable and experienced group to champion such a change. Such change will be incremental and build on actual models and successful experiences. The council should serve as such a group and help steer the executive branch toward the partnership goal. In describing the council, the Executive Order should contain the following elements: --- Permanent members: - Deputy Secretary, Department of Labor - Deputy Director for Management, Office of Management and Budget (OMB) - Director, OPM - Chairperson, FLRA - Director, FMCS - Presidents of the three largest federal unions - Representative, Public Employee Department, AFL-CIO (to represent smaller federal unions). --- Rotating members (1-year appointments, may be extended): - Two deputy secretaries from departments other than Labor. --- Responsibilities and authority: - champion the creation and support of partnerships in the executive branch; collect and disseminate information about, and provide guidance on, partnership efforts, including results achieved; - bring together expertise both within and outside the federal government to learn about and foster partnership arrangements; - participate in the development of legislation related to the partnership goal, to include the creation of a flexible and responsive hiring system and the reform of the General Schedule classification system; and - engage in other activities that promote partnership efforts not prohibited by statute. --- Staff support and funding: - OPM, FMCS, FLRA, OMB, agencies, and unions will make staff available on a temporary or permanent basis to the council, as needed. The council will decide on the procedures for acquiring and using staff support. - The council may form permanent or temporary committees that will be responsible for specific issues or projects. --- Council's objective: the Executive Order should charge the council with proposing to the President statutory changes needed to help make the partnership goal a reality. The council should be responsible for deciding on the process for developing the proposals. The process should: - model the partnership concepts and decisionmaking techniques the council is championing; - involve stakeholders both within and outside the executive branch; - build on the work already done by the NPR multi- stakeholder problem-solving team; and - produce a strategy to build the political consensus necessary to enact major changes in the statutory framework. Agency Partnership Committees and Councils. The Executive Order should encourage each agency to foster partnerships with employee unions. This may involve creating, at various levels, processes and groups to foster partnerships, or adapting existing structures and processes to meet this need. Each agency should be responsible for the form this takes. However, agencies should be asked to ensure that their processes and groups --- foster partnerships that move the organization toward high performance and support the agencies' quality improvement and culture change efforts as well the agencies' goals and missions, --- support the efforts of the National Partnership Council, --- share the results of agency partnership efforts, --- take the lead in ensuring that agency staff gain skills and knowledge in joint problem solving, group facilitation, interest- based bargaining, and alternative dispute resolution techniques, and --- evaluate progress focusing specifically on improvements in organizational performance resulting from the partnership. Presidential Statement. The presidential statement will accompany and provide the rationale for the Executive Order and make the case for the partnership by articulating the following: --- The partnership goal means that agency mission achievement will be jointly and continually pursued through "innovative approaches that maximize the contributions of individual employees, managers and the Union" working together to achieve these objectives, as outlined, for example, in the 1992 IRS-NTEU partnership agreement. --- Collective bargaining will take place less in an adversarial setting with parties bringing their positions to the table, but increasingly through interest-based bargaining that insists upon consensus decisionmaking and trust within the partnership. --- Although grievances, complaints, and disputes are to be expected, it is envisioned that less than 10 percent of those conflicts will be settled outside the partnership. This means that formal complaint and grievance processing procedures will be used infrequently with informal dispute resolution techniques providing a foundation for the partnership. --- There is a place for disagreements, adversarial behavior, and different approaches to problems; however, these will occur prior to decisions being made because airing different viewpoints and then achieving joint decisions are the essence of partnerships. --- Requirements fixed in law will not be subject to negotiation; however, management and unions are obligated to use interest-based forms of negotiation on issues, both procedural and substantive, dealing with conditions of employment that significantly affect the operation of the organization. Cross References to Other NPR Accompanying Reports ************************************************** Department of Labor, DOL03: Expand Negotiated Rulemaking and Improve Up-front Teamwork on Regulations. Reinventing Federal Procurement, PROC05: Reform Labor Laws and Transform the Labor Department into an Efficient Partner for Meeting Public Policy Goals. Endnotes ******** 1. U.S. General Accounting Office (GAO), Federal Labor Relations: A Program in Need of Reform, GAO/GGD-91-101 (Washington, D.C.: U.S. General Accounting Office [GAO], July 1991), p. 14. 2. U.S. Office of Personnel Management, Union Recognition and Agreements in the Federal Government (Washington, D.C., January 1991), pp. 6-7. 3. U.S. General Accounting Office, Quality Management: Survey of Federal Organizations, GAO/GGD-93-9BR (Washington, D.C.: GAO, October 1992), p. 2. 4. National Academy of Public Administration (NAPA), Leading People in Change: Empowerment, Commitment, Accountability (Washington, D.C., April 1993), p. 40. 5. GAO, Federal Labor Relations, p. 2. 6. Goodwin, Larry K. "Win-Win Negotiations: A Model for Cooperative Labor Relations," The Public Manager (Potomac, MD, Summer 1993), p. 19. 7. GAO, Federal Labor Relations, p. 76. 8. U.S. General Accounting Office, Steps Can Be Taken to Improve Federal Labor-Management Relations and Reduce the Number and Costs of Unfair Labor Practice Charges, GAO/FPCD-83-5 (Washington, D.C.: GAO, November 5, 1982), p. 7. 9. GAO, Federal Labor Relations, p. 76. 10. NAPA, pp. 40-41. 11. A problem-solving team was formed under NPR auspices to develop a vision for the future of the federal workforce and federal-labor management relations, and make recommendations to achieve the desired future--more cooperative labor-management relations. Members of the problem solving team included: Joe Coffee, National Performance Review (NPR); Brian DeWyngaert, Executive Assistant to the President, American Federation of Government Employees (AFGE); Frank Ferris, Director of Negotiations, National Treasury Employees Union (NTEU); Brian Flores, Deputy Director, Federal Mediation and Conciliation Service; Phil Kete, Staff Attorney, National Federation of Federal Employees (NFFE); Frank Mason, Associate Director, Commodities Directorate, McClellan Air Force Base; Jean McKee, Chair, Federal Labor Relations Authority; Jerry Ross, arbitrator; Mark Roth, General Counsel, AFGE; John Sturdivant, President, AFGE; Jeff Sumberg, Deputy General Counsel, NFFE; Robert Tobias, President, NTEU; Roy Tucker, NPR; Robert Wenzel, Assistant Commissioner, Internal Revenue Service; and Ann Wilson, Office of Personnel Management. Bonnie Kasten, Independent Consultant, served as facilitator. ************************************************************* HRM14: Provide Incentives to Encourage Voluntary Separations ************************************************************* Background ********** Throughout the federal government, departments and agencies are being asked to work more efficiently, that is, with fewer resources. To achieve this goal, many organizations are facing potentially massive restructuring and downsizing. Incentives are needed to encourage voluntary separations, thereby reducing or eliminating the need for relocating, reassigning, or separating employees under reduction in force procedures. Need for Change *************** According to the Office of Personnel Management (OPM), voluntary early retirements among eligible employees have dropped from approximately 17 percent in the mid-1980s to 4 percent in 1992. After remaining relatively constant at approximately 36 percent during the same time period, regular optional retirements dropped to 23 percent in 1992.(1) Overall attrition from federal service is at its lowest level since 1973, when OPM began tracking these data. The federal government's recent experience with separation incentives suggests that a large percentage of employees will choose regular or early retirement if incentives are included. The Office of Thrift Supervision (OTS) and the U.S. Postal Service (USPS), in 1991 and 1992, respectively, offered lump sum payments equivalent to six months' salary to persons eligible for either early or regular retirement. In OTS, 38 percent of early retirement and 53 percent of regular retirement eligibles accepted the offer. In USPS, 27 percent of early retirement and 43 percent of regular retirement eligibles accepted. In 1993, Department of Defense (DOD) employees were offered the lesser of $25,000 or the amount the employee would otherwise be entitled to receive as severance pay. About 20 percent of early retirement eligibles and 40 percent of regular retirement eligibles have retired from DOD recently.(2) Actions ******* 1. Provide departments and agencies with the authority to offer separation pay. (3) By October 1993, OPM should forward draft legislation to Congress to permit any department or agency to offer cash payments to encourage eligible employees to voluntarily separate from the federal service, whether by retirement or resignation, to avoid or minimize the need for involuntary separations due to reduction in force, reorganization, transfer of function, or similar action. The legislation should include a comprehensive, governmentwide strategy for determining the dates during which cash payments would be offered to maximize acceptance rates. Eligible employees would be those serving under permanent appointment without time limitation for a continuous period of at least 12 months, excluding reemployed annuitants and employees who would otherwise be eligible for disability retirement. The law will include a provision requiring repayment of separation pay should the individual become reemployed by the federal government within two years of the date of separation. Departments and agencies will fund the costs of this measure from within their available appropriations. 2. Decentralize the authority to approve early retirement. (3) By October 1993, OPM should forward draft legislation to Congress to allow OPM to assess an actuarial charge against agencies to cover the estimated present value of the added cost to the retirement fund of early retirement, currently estimated at 9 percent of final pay. Once the new legislation has been enacted, OPM should delegate broad authority under the relevant section of the current law(3) to permit departments and agencies to make their own determinations using the criteria outlined in the law to allow their employees to retire early.(4) 3. Authorize departments and agencies to fund job search activities and retraining of employees scheduled to be displaced. (3) By spring 1994, OPM should convene an interagency task force to develop proposals, including legislation if necessary, by September 1994 to allow departments and agencies to fund job search activities and retraining to facilitate placement of employees who are otherwise scheduled for downgrade or separation. 4. Expand outplacement services. (1) By March 1994, OPM should develop and implement a comprehensive, readily available, state-of-the-art information system for the purpose of informing employees about the availability of federal and other public sector job opportunities. 5. Limit annual leave accumulation by senior executives to 240 hours. (3) By October 1993, OPM should forward draft legislation to Congress to delete the section of the law that exempts the annual leave accumulated by members of the Senior Executive Service, the Senior Foreign Service, the Defense Intelligence Senior Executive Service, the Senior Cryptologic Executive Service, and the Federal Bureau of Investigation and Drug Enforcement Administration Senior Executive Service from the limitation otherwise imposed by that section on annual leave accumulation.(5) Annual leave accumulation for individual senior executives will be limited to 240 hours. This limitation would bring senior executives in line with other government employees and serve as an incentive for some senior executives to take advantage of separation incentives. Cross References to Other NPR Accompanying Reports ************************************************** Improving Financial Management, FM13: Charge Agencies for the Full Cost of Employee Benefits. Transforming Organizational Structures, ORG01: Reduce the Costs and Numbers of Positions Associated with Management Control Structures by Half; and ORG02: Use Multi-year Performance Agreements between the President and Agency Heads to Guide Downsizing Strategies. Endnotes ******** 1. Office of Personnel Management, "Retirement Trends With and Without Incentives: Summary Through July 30, 1993," p. 1. (Unpublished.) 2. Ibid., pp. 1-3. 3. Title 5, United States Code, sec. 8336(d). 4. Title 5, United States Code, sec. 8336(d)(2). 5. Title 5, United States Code, sec. 6304(f). ********** Appendices ********** Appendix A: *********** Summary of Actions by Implementation Category (1) Agency heads can do themselves ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^ HRM01.5 Abolish the time-in-grade requirement. Create a general qualifications framework that permits agencies to augment or modify qualification standards for both internal and external placement actions. HRM01.7 Create a governmentwide employment information system to inform the public of job opportunities. Coordinate the development and operation of common automated systems to facilitate agency staffing policies and operations. HRM04.2 Encourage agencies to establish productivity gainsharing programs called Federal Performance Sharing to support the reinvention and change effort. HRM05.2 Develop a culture of performance that supports supervisors' efforts to deal with poor performers. HRM05.3 Improve supervisors' knowledge and skills in dealing with poor performers. HRM06.2 Give agencies the flexibility to use savings realized from reinvention to increase their investment in employee training and development. HRM07.4 Allow employees to use sick leave to care for dependents. HRM07.5 Give returning employees credit for previously accrued unused federal sick leave. HRM08.2 All agencies should establish alternative dispute resolution (ADR) methods and options for the informal disposition of employment disputes. HRM10.2 Require appropriate cross-training for human resource management professionals. HRM11.1 Create and reinforce a corporate perspective within the Senior Executive Service that supports governmentwide culture change. HRM11.2 Promote an agency corporate executive level succession planning model. HRM11.3 Enhance voluntary mobility within and between agencies for top senior executive positions in government. HRM12.2 Replace the Federal Personnel Manual and agency directives with automated personnel processes, electronic decision support systems, and manuals tailored to user needs. HRM12.3 Identify and develop useful accountability measures that can be automated. HRM14.4 Expand outplacement services. (2) President, Executive Office of the President, or Office of Management and Budget can do ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^ HRM07.1 Implement family-friendly workplace practices while continuing to ensure accountability for quality customer service. HRM08.1 Eliminate jurisdictional overlaps. HRM09.1 Charge all federal agency heads with the responsibility for ensuring equal opportunity and increasing integration of qualified women, minorities, and persons with disabilities into all levels and job categories, including middle and senior management positions. HRM10.1 Establish an Interagency Equal Employment Opportunity and Affirmative Employment Steering Group under the joint chair of EEOC and OPM. HRM10.3 Combine all equal opportunity and affirmative employment reports into one comprehensive assessment of the total workforce EEO/AE data. HRM10.4 Modify the Central Personnel Data File to enable total automation of the EEO/AE data reporting requirements. HRM12.1 Phase out the entire Federal Personnel Manual and all agency implementing directives. HRM13.1 The President should issue an Executive Order that identifies labor-management partnership as a goal of the executive branch and establishes the National Partnership Council. (3) Requires legislative action ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^ HRM01.1 Authorize agencies to establish their own recruitment and examining programs. Abolish central registers and standard application forms. HRM01.2 Allow federal departments and agencies to determine that recruitment shortages exist and directly hire candidates without ranking. HRM01.3 Reduce the number of competitive service appointment types to three. HRM01.4 Permit nonpermanent employees to compete for permanent positions under agency procedures for internal placement. HRM01.6 Eliminate all statutory rules on detailing employees to temporary assignments. HRM02.1 Remove all grade-level classification criteria from the law while retaining the 15-grade structure. HRM02.2 Provide agencies with flexibility to establish broadbanding systems built upon the General Schedule framework. HRM02.3 Modify the standard 15-grade classification system that applies to those employees not covered by a broadbanding system. HRM02.4 Provide agencies under the standard 15-grade system with additional flexibilities in setting base pay rates. HRM02.5 Establish reporting requirements that apply to both the modified standard system and any broadbanding system. HRM03.1 Authorize agencies to design their own performance management programs. HRM04.1 Authorize agencies to develop their own incentive programs. HRM05.1 Reduce by half the time required to terminate federal managers and employees for cause. Make other improvements in the systems for dealing with poor performers. HRM06.1 Deregulate training and make it more responsive to market sources. HRM07.2 Provide telecommunications and administrative support necessary for employees participating in flexiplace and telecommuting work arrangements. HRM07.3 Expand the authority to establish and fund dependent care programs. HRM07.6 Expand the demonstration project authority to allow projects on employee benefits and leave. HRM07.7 Reauthorize voluntary leave transfer/bank programs. HRM14.1 Provide departments and agencies with the authority to offer separation pay. HRM14.2 Decentralize the authority to approve early retirement. HRM14.3 Authorize departments and agencies to fund job search activities and retraining of employees scheduled to be displaced. HRM14.5 Limit annual leave accumulation by senior executives to 240 hours. Appendix B: *********** Methodology The issues and actions contained in this report were developed based on input from federal employees, managers, labor unions and personnelists; state and local government representatives; personnel management organizations and professional associations; members of the academic community and others. Data collection methods included: --- conducting individual, focus group, and other group interviews-- over 400 individuals were either interviewed by NPR staff or participated in group sessions either sponsored or attended by NPR staff; --- attending meetings, conferences, and related presentations--for example, NPR staff attended the June 1993 OPM conference, "Partners for Change: Steering Federal HRM into the 21st Century"; --- reviewing relevant literature, including the results of earlier reform efforts--over 200 sources were consulted; --- analyzing correspondence and other written materials submitted to the National Performance Review; --- creating a problem-solving team to recommend improvements to federal labor-management relations; and --- creating a problem-solving team to recommend improvements to federal equal opportunity programs. Appendix C: *********** Accompanying Reports of the National Performance Review Governmental Systems Abbr. ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^ Changing Internal Culture Creating Quality Leadership and Management QUAL Streamlining Management Control SMC Transforming Organizational Structures ORG Improving Customer Service ICS Reinventing Processes and Systems Mission-Driven, Results-Oriented Budgeting BGT Improving Financial Management FM Reinventing Human Resource Management HRM Reinventing Federal Procurement PROC Reinventing Support Services SUP Reengineering Through Information Technology IT Rethinking Program Design DES Restructuring the Federal Role Strengthening the Partnership in Intergovernmental Service Delivery FSL Reinventing Environmental Management ENV Improving Regulatory Systems REG Agencies and Departments Abbr. Agency for International Development AID Department of Agriculture USDA Department of Commerce DOC Department of Defense DOD Department of Education ED Department of Energy DOE Environmental Protection Agency EPA Executive Office of the President EOP Federal Emergency Management Agency FEMA General Services Administration GSA Department of Health and Human Services HHS Department of Housing and Urban Development HUD Intelligence Community INTEL Department of the Interior DOI Department of Justice DOJ Department of Labor DOL National Aeronautics and Space Administration NASA National Science Foundation/Office of Science and Technology Policy NSF Office of Personnel Management OPM Small Business Administration SBA Department of State/ U.S. Information Agency DOS Department of Transportation DOT Department of the Treasury/ Resolution Trust Corporation TRE Department of Veterans Affairs DVA