OPM pushes Homeland Security to move on pay for performance

The Homeland Security Department should build on its personnel reforms by beginning to implement the pay-for-performance and job classification portions, the Office of Personnel Management argues in a new report.

The report, issued May 1, assessed DHS' progress since April 12 on the performance management part of its new personnel system, now called the Human Capital Operational Plan. The report noted that the department's strategy is to use the performance management system as the foundation for other changes, including pay for performance.

The department is preparing to implement the appeals and adverse actions aspects of the system, but so far, the pay for performance and classification parts have remained stagnant. The labor relations portion was blocked last summer, after an appeals court upheld a ruling that it did not provide adequate collective bargaining rights for employees.

The report said DHS has made progress on providing adequate and up-to-date information on the personnel system, considering employee feedback and executing a comprehensive training strategy. But some weaknesses remain, OPM said.

"At the present time, the evidence suggests DHS is not keeping employees committed to the organization," the report stated. OPM also found that the system does not differentiate between high and low performers, and thus, does not promote a high-performance workforce.

DHS has faced challenges since its creation in 2003 that may have influenced its decision to only focus on performance management, OPM noted. The massive merger of 22 agencies into one department and a significant turnover in its chief human capital officer and other senior positions were major impediments, the report said.

But it also noted the 2002 Homeland Security Act requires OPM and DHS to implement a performance-based, market-sensitive pay system, along with greater flexibility in how employees are evaluated. "DHS should have taken the opportunity to implement the remaining systems, in addition to the performance management system, to meet its statutory obligation," the report said.

In February, the department announced plans to move more cautiously on pay for performance in particular, amid opposition and anxiety from federal labor unions and agency employees. It announced that for the time being, only intelligence employees would move to performance-based pay, under an initiative developed by the Office of the Director of National Intelligence.

Officials pledged to hold off on switching other agency employees until 2009, and even then such a move would be contingent on the success of the pilot initiative.

In a letter included in the OPM report, DHS Chief Human Capital Officer Marta Brito Perez called the assessment incomplete. She charged that some of OPM's conclusions create the "incorrect impression" that DHS has done little to prepare for the implementation of the remaining components of the system.

"This assessment provides limited insight into the extensive preparation work completed by DHS, particularly in the areas of leadership engagement, employee outreach and the inclusion of many of our stakeholders," Perez wrote.

The National Treasury Employees Union criticized OPM's recommendations Friday, arguing that OPM and DHS should recognize that the system is misguided and lacks fairness, transparency and objectivity.

"I find it extremely disappointing that OPM both recommends and is ready to support DHS implementation of the remaining segments of the system 'as soon as possible' to take advantage of 'existing program momentum,' " said NTEU President Colleen Kelley. "The fact is, the DHS personnel system is a failed system, and there is no momentum to take advantage of."

OPM recommended that the department put a program management office in place to make the reforms a corporate goal rather than a human resource initiative. DHS officials should also review data to discover what is behind the decline in employee morale and commitment, the report said.

At a hearing last month, Rep. Mike Rogers, R-Ala., recommended that the department conduct monthly surveys to ensure that any new personnel changes are having a positive effect.

DHS spokesman Larry Orluskie said Friday that he is unaware of any additional reviews of the system or employee morale surveys in the near future.

"We always welcome oversight, and the department gets an awful lot of it," Orluskie said. "It's always good to have an outside look at what our successes are."

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