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Members of a House subcommittee on Thursday questioned why the Homeland Security Department has continued to move forward with its controversial personnel system in the face of charges that it has caused employee morale to plummet.

At a hearing of the House Homeland Security subcommittee on management, lawmakers sought to discover whether DHS' shift from developing a controversial system known as MaxHR to a new approach called the Human Capital Operational Plan was more than simply a name change.

Marta Perez, the DHS chief human capital officer, assured lawmakers that the new plan will implement many important initiatives that MaxHR did not address, including hiring, retention, training and vocational efforts. "What we have done in the operational plan is define new priorities to make sure we have the right talent in place," she said.

But lawmakers expressed concern over portions of MaxHR that are continued in the new system. Last spring, an appeals court ruled the labor relations portions of MaxHR illegal, and while the court did not rule against the regulations on appeals, adverse actions and performance management, it did label them as unfair, lawmakers said. The Human Capital Operational Plan seeks to implement the portions of MaxHR not struck down by the court.

"These regulations effectively gut employee due process rights, putting in serious jeopardy the agency's ability to recruit and retain a capable workforce," National Treasury Employees Union President Colleen Kelley told the subcommittee. She offered strong support for legislation recently passed by the committee that would repeal the DHS system in its entirety.

Perez argued that failing to implement the personnel system would adversely affect many of the department's critical human resources programs, including student loan repayments, training and recruiting, and would result in even lower morale.

Lawmakers pointed to a report card recently issued by the full committee that gave DHS a failing grade for employee morale. The report highlighted the results of the Office of Personnel Management's most recent federal workforce survey, which rated the department at or near the bottom in the areas of leadership, performance management, talent and job satisfaction.

In the 2007 Best Places to Work rankings issued by the Partnership for Public Service and American University Thursday, Homeland Security ranked 29th out of 30 large agencies. The rankings were based on OPM's data.

"We have seen the survey results, and they're bad," said Rep. Bennie Thompson, D-Miss., chairman of the full Homeland Security Committee. "We've listened to the employees, and they say MaxHR was bad. We must turn this around, because too much is at stake."

But Perez attributed many of the department's troubles to the fact that it is still young. "We know from research that mergers create a great deal of anxiety for the workforce and that initial resistance is common. DHS is only four years into this journey," she said, adding that the department has come a long way on its personnel reforms since OPM's survey was conducted last year.

Rep. Mike Rogers, R-Ala., recommended that the department conduct monthly surveys to ensure that any new personnel changes are having a positive effect. This will put the department in a much better position when OPM conducts its annual survey, Rogers said.

Perez said the department plans to roll out surveys that measure turnover, attrition, quality of new employees and the success of training programs. She added that DHS also plans to conduct focus groups with employees "in order to learn more and act on their concerns on key issues such as leadership and communication."

Max Stier, president of the Partnership for Public Service, said the Human Capital Operational Plan appears to be a step in the right direction for DHS. "The starting point is better communication," he said. "I don't think there's a shared sense of where the department is going."