Discussion Paper: 1999 Civil Service Improvements

"We need a workforce that will be held accountable for real results" - REGO VP speech

• The government's employee performance management system should shift its focus away from an existing emphasis on individual process inputs to achieving results, to improvement, and to group performance.
• The performance management system should support options like linking executive and manager pay to a balanced set of measures (e.g., balanced scorecard).
• These changes permit further options for more direct pay for performance initiatives, designed by agencies, and tailored to their needs.
• The 1998 NPR employee survey results suggest that employees need more clarity about how good performance is defined.
• There was consensus that SES recertification has not achieved its intended purpose, and stakeholders preferred to strengthen the annual performance appraisal as a more effective way of assessing executive performance.
• Regulations would be streamlined to support this change.

• Change title to Performance Management to emphasize full range of performance management-planning, developing, assessing, and rewarding- as opposed to individual performance appraisal.
• Permit a greater variety of performance assessments, particularly for linking performance to pay.
• Create specific requirement to establish goals and objectives at individual, group, and/or organizational level, consistent with planning methods such as GPRA, to support performance improvement and accountability.
• Retain appropriate OPM oversight and control.
• Abolish SES recertification because it duplicates current statutory provisions for assessing individual and organizational performance, and focus on more effective methods of supporting performance improvement and accountability.

"Help managers deal with poor performers" - REGO Proceedings

• Although, as [OPM's] poor performer study shows, managers do address poor performers and there are fewer poor performers than thought by many, perceptions persist, and we know that managers need continuing support and tools such as OPM's CD-ROM and booklet.
• The system must retain individual accountability under Merit Principle #6 which says only employees who meet required standards should be retained.
• These changes recognize that managers need increased confidence in the credibility of the performance system if we are going to push for them to more actively address performance issues.
• These changes make it easier to manage the good employees (largest group) and also easier to manage the process for dealing with poor performers (small group),
• This change also puts into law our recent regulatory change to eliminate repeated improvement periods on the same element ( the "roller coaster" employee).
• Our changes are designed to support a performance management system that works best for all employees, and that shifts the focus to better supervisor-employee dialogue for performance improvement.

• Require that agencies address unacceptable performance.
• Further improve process for actions when taken (e.g., clarify use of retention standard at start of opportunity period as basis for appealable action).
• Establish a clear, 1-year period during which a second failure to meet a retention standard can be basis for removal without another opportunity to improve.
• Make changes consistent with other pay-for-performance change (e.g., under broadbanding, allow an option to reduce pay within a pay band).
• Maintain the requirement for a Performance Improvement Period (PIP), if agency continues to use Chapter 43 as the basis for action about poor performance.
• Maintain employee appeal rights, under any system.

"Permit flexible pay systems so pay can be more performance-oriented" - REGO Proceedings

1. Broadbanding Systems

• Government experience with broadbanding has effectively demonstrated that adjustments to individual employees' pay can be more directly linked to performance that the existing system of within-grade step increases.
• The key element to establishing more performance-oriented adjustments is the use of "open range," i.e., not fixed steps for pay progression.
• In addition, broadbanding supports streamlined career-oriented classification.

• Establish a new authority to establish broadbanding systems, within the General Schedule.
• Broadbanding structure to include the following parameters: linked to minimum/maximum pay rates for GS grades; work within a band must be of similar level of difficulty and responsibility; involuntary movement to a lower band is considered an appealable action; OPM to regulate number of grades in a band.
• Additional pay administration parameters for broadbanding, would also apply to open range systems (see below): No loss of pay on conversion; pro-rated- WIGI or career promotion adjustment OK, but not required; locality pay rates will be used; agency sets policy for pay on initial appointment, promotion, change of position or appointment; agency sets policy for giving scheduled (January) increase, but minimum rate must be paid; agency sets policy for pay progression and control points are OK; pay may be reduced based on performance/misconduct - appealable action; supervisor/team leader differentials are OK if subordinates in same or higher band; OPM to regulate conversion between systems and back to GS to ensure consistency.
• Make necessary conforming changes elsewhere in Chapter, e.g., oversight and appeals.

• Agencies should have the option to consider alternatives to longevity-based WIGI's without necessarily moving to broadbanding.

• Create option to establish alternative, performance-oriented, pay progression schemes for General Schedule positions.
• See pay administration features described under Broadbanding above.

• Even though agencies have access to significant flexibilities now, why need to do more to apply modern compensation practices and link results achievement to lump sum payments, particularly for managers;
• Bonuses are an effective way to focus on group performance, e.g., as defined and measured using a balanced scorecard approach.

• Give agencies more flexibility to pay larger cash awards, without external approval; set award limits using indexed values.
• Provide an explicit authority for group incentive plans.
• Retain the authority for honorary awards and add reference to informal recognition awards (but not nonmonetary awards).
• Reorient language to support incentive vs. after-the-fact recognition.

• Current aggregate compensation limits hamper agencies' ability to use flexibilities provided by the 105th Congress that raised the amount of SES Rank Awards and enlarged SES performance award funding pool limits in order to fully compensate executives for excellent performance.

• Raise the aggregate compensation limitation for employees paid at rates of basic pay above the General Schedule to an amount equal to the Vice President's rate of basic pay.

• The pay system should be clear and understandable to employees.
• Situations should be reduced where employees receive windfalls or losses that are inequitable due to system constraints and that are not performance related
• Government overtime practices should be consistent with private sector overtime practices
• Conforming changes, including final PMRS termination, are necessary to enhance readiness for new performance-oriented pay systems.

• Establish in Chapter 53 an equitable "highest applicable rate" principle to govern pay setting when employees move between systems or geographic areas.
• Amend overtime provisions in Chapter 55 for FLSA-exempt employees to fix overtime pay cap problems.
• Amend Chapter 53 to cover promotions between systems.
• End grade retention but enhance pay retention features.
• End the use of the GM pay plan designator.
• Make necessary conforming changes elsewhere.

"Provide agencies with flexible policies for hiring and retaining a high-quality workforce" - REGO Proceedings

1. Category Ranking

• Government experience shows this is an effective tool for identifying will-qualified candidates while protection veterans preference.
• Agencies need other options for making merit-based competitive selections, while preserving veterans preference.
• Agencies need more choices among equally qualified applicants, including veterans, to best fill individual positions.
• Current practices described in law no longer match conditions for which they were designed (i.e., many applicants for unspecified jobs and central registers).

• In Chapter 33, Examination, Selection, and Placement, authorize agencies to use an alternative raking and selection procedure (like Agriculture demonstration).
• Applicants are divided into quality groups based on minimum qualifications and job-related criteria.
• Veterans preference within each quality group is absolute.
• Selections are made from the highest category.

• Agencies need tools to respond quickly to critical hiring needs (e.g., CFO occupations)
• Competing employers are able to make offers to high-quality candidates in shortage and critical need occupations before agencies can.

• Add authority for shortage and critical needs hiring to Chapter 33.
• OPM, with agency consultation, will predefine criteria for shortage and critical needs.
• Authority will be used under OPM oversight.
• NOTE: New authority does not apply to occupations/grades covered by the Luevano consent decree.

• Agencies need alternate selection procedures for hiring high-quality entry-level employees for selected occupations, e.g. Accoutants

• Establish program through Executive order.
• Model program after the Presidential Management Intern (PMI) or other similar programs.
• NOTE: Executive order would not apply to occupations/grades covered by the Luevano consent decree.

• Documentation requirements for inter-agency vs. intra-agency details are inconsistent.

• Amend Chapter 33 to strike the requirement to document intra-agency details.

• Existing pay authorities designed to address changing labor market conditions for recruiting and retaining need further flexibility.
• Stakeholders cite annual leave accrual as one of the disincentives for attracting high quality executives form the private sector.

• Create further flexibility in Chapter 57, Travel, Transportation, and Subsistence, for designing and delivering recruitment, relocation, and retention payments, e.g., better options for service agreements, paying lump sums, higher ceilings.
• For broadbanding and open range pay systems, create in Chapter 53 a "staffing supplement" to be used in lieu of special rates for categories of employees; use an improved special rate authority of rest of General Schedule.
• Amend Chapter 63, Leave, to give SES members an 8-hour annual leave accrual on appointment and provide annual leave credits as a recruitment tool for agency use on a selected basis as a hiring incentive.

• In today's competitive employment market, agencies need more tools to recruit, develop and retain a high-quality workforce.
• Training flexibilities would also be useful in work force restructuring and reshaping.

• Amend Chapter 41, Training, to remove the prohibition against an agency paying costs associated with an academic degree,
• Add language to Chapter 41 to authorize an agency to pay for training that leads to licensure or certification.

• With delegation of examining authority and to support merit-based staffing, it is particularly important to have a clean, accessible statutory structure for agency use.

• Update and reorganize Chapter 31, Authority of Employment, and Chapter 33 to improve their accessibility and ease-of-use.

• Agencies need flexibility to structure their workforces to meet specific, changing needs.
• A significant portion of the workforce (10%) already is nonpermanent.
• The majority of these (ratio of 10 to 1) are on temporary appointments and lack certain appeal rights and benefits.
• Legislative change is to simplify systems and increase equity over existing temporary and term authorities.
• Creation of new authority versus continued "tweaking" of existing authorities removes the issue of winners and losers; all current non-permanent term employees would be grandfathered under their existing appointment; all new non-permanent hires would be under new authority.
• FERS was created to recognize today's increased workforce mobility; other policies have not done this.
• Access to benefits should be based on length of service and not type of appointment.
• Providing immediate access to health and life insurance benefits with the guarantee of a Government contribution after a year will put the Government in a sound competitive position in the labor market.
• Use of merit-based competitive procedures for initial selection into these non-permanent positions continues to support workforce quality.

• Establish a new authority for nonpermanent appointments to replace temporary and term authorities
• Appointments beyond 4 years must be approved by OPM.
• Conversion to permanent appointment provided that: the non-permanent appointment was done competitively; the vacancy announcement stated opportunity; the conversion is to the same line of work and same position; the appointee has satisfactory performance; and the nonpermanent appointment served for two years.
• Option to use merit promotion if more that one nonpermanent employee is eligible for the conversion opportunity, OR if the permanent position is different.
• Clearly establish that appropriate use of this authority is under OPM oversight. In the competitive and excepted service:
• "Nonpermanent" terminology same as competitive service.
• Same benefits (see below).
• Same appeal and RIF rights (see below).
• Health and Life Insurance - immediate access for health and life insurance; Government contribution for both after 1 year.
• Retirement - immediate right to make TSP contributions, up to 5% of pay, with no Government match; after 2 years, participation in retirement system and TSP on same basis as other employees.
• Appeal Rights: same for both competitive and excepted service, i.e., after 2 years (preference eligibles after 1 year); grandfather current term appointees.
• RIF rights: non for 2 years, then place in lowest tenure group

• Current provisions for SES limited appointments make it difficult for agencies to meet current and future short-term executive staffing needs.

• Amend Chapter 31 to give agencies more flexibility to meet a broader range of short-term executive staffing needs and authorize SES limited appointments to career reserved positions of individuals from career or career-type appointments. Amendments will address concerns about safeguarding merit system principles.

"Agencies…will require management tools to restructure their workforces and achieve greater efficiencies." - FY2000 Budget

• Agencies need tools to deal with current and future changes in mission, funding, etc.
• Fairness to employees at the same time remains a value to be preserved.
• Available tools should allow for ongoing consolidations, agency restructuring, and some additional downsizing, using voluntary tools that are more cost-effective, preserve diversity gains, and maintain employee morale and productivity.
• The Government should be seen as an employer who values its employees and treats them with concern even under downsizing/restructuring condition.
• Career transition approaches should empower employees to apply for jobs for which interested and well-qualified.

• Establish buyout authority through 9/30/2001
• Amend early out authority to permanently fix Torres
• Authorize non-reimbursable "tryout details" inside and outside Government for surplus employees.
• Authorize paying relocation costs for surplus employees who separate voluntarily.
• Establish statutory responsibility to provide career transition assistance
• Authorize agencies to share interagency training costs
• Authorize payments to non-Federal employers for retraining costs
• Amend regulations to make the Reemployment Priority Lists (RPL's) application based (like the ICTAP).

• As the largest employer in the country, the government should continue to set the standard for effective benefits design and administration
• Introduce national policy initiatives at Federal level
• Fixes specific inequities (e.g., FE Benefits Act)

• FEHB Children's Equity Act (H.R.)
• Long-Term Care Insurance (H.R.110)
• Support Federal child facilities (H.R.)
• FE Benefits Act (H.R.)

". . . the right kind of partnerships between labor and management." - REGO VP Speech

• Successful reinvention of Government will continue to require effective relations between workers and managers
• Government experience with cooperative arrangement partnerships, has been positive, but more support and emphasis are needed.

• Emphasize ADR and authorize additional dispute resolution approaches as alternative to statutory procedures.
• Create permanent structures to support improved methods for effective labor-management relations (permanent NPC, require agency councils, FACA exemption)
• Authorize means of bargaining unit level.
• In either Chapter 71 or elsewhere, define means of union involvement, e.g., via written agreements or expanded scope of bargaining.

• OPM's redefined role is to provide leadership and help ensure that all Executive branch agencies manage their human resources effectively within the core values of the merit principles.
• Automation leadership will facilitate movement of electronic HR data across Government, and will ensure consistency and accuracy of the applications of HR programs/processes Federal Governmentwide.
• As HRM authority continues to be deregulated and decentralized, the Executive branch must have the ability to obtain workforce information from, and review the effectiveness of, all agency HRM programs.
• Current demonstration project law is much too restrictive and cumbersome, which discourages experimentation with innovative HRM approaches.
• OPM and agencies need a method to implement tested, successful HRM flexibilities without seeking legislation.

• Clarify OPM role and responsibilities in statute, including leadership role in HR automation.
• Authorize OPM to collect workforce information throughout Executive branch.
• Authorize OPM to review the effectiveness of HRM programs throughout the Executive branch.

Amend Chapter 47, Personnel Research Program and Demonstration Projects, to:

• Streamline, expand, and improve OPM's authority to conduct demonstration projects.
• Authorize agencies to establish alternative personnel systems, with OPM approval.