Reform Trickles In

Proposals to overhaul the rule-bound federal service system abound, but most are simmering on Congress's back burner.

When Vice President Gore released his blueprint for reinventing government two years ago, he singled out the federal civil service system for particularly harsh criticism.

"Year after year, layer after layer, the rules have piled up" in the personnel system, said Gore's National Performance Review report. The document lamented the "cumbersome red tape" of personnel regulations, called the performance appraisal process a "meaningless exercise" and said the hiring system "is so complex and rule-bound that most managers cannot even advise an applicant how to get a federal job."

"To create an effective federal government," the report concluded, "we must reform virtually the entire personnel system: recruitment, hiring, classification, promotion, pay and reward systems."

Despite such tough talk, though, the Clinton Administration has made little progress in the past two years toward achieving its goal of revamping the civil service.

It finally got out of the blocks in May of this year, when it distributed to agencies a 160-page draft of a comprehensive civil service reform bill. The Federal Human Resource Management Reinvention Act, as the draft was named, would decentralize the government's civil service system, giving agencies more autonomy in hiring, paying and classifying employees. The proposal also would make it easier to penalize federal workers for poor performance and to transfer employees from one job to another.

The White House draft was quickly attacked from all sides. Federal unions were upset with provisions allowing mangers to cut workers' pay for poor performance. On Capitol Hill, both Democrats and Republicans said the Administration had failed to make the case for a complete overhaul of the civil service system.

"The bill doesn't have a whole lot of support on either side of the aisle," said a Democratic staffer on the Senate Governmental Affairs Committee this summer. Without such support, comprehensive civil service reform has little or no chance of being passed this year-or next, when presidential politics are likely to put the issue on the back burner.

Some Members of Congress continue to say they will press for limited reforms this year and will take up the idea of a thorough overhaul of federal personnel management in 1996. But any efforts to reform the system at this point will come relatively late in the game of reinventing government. Federal managers already have had to cut thousands of jobs and restructure their operations within the context of a rigid civil service system that makes it difficult to hire, supervise, promote, reward and fire employees. And with next year's expected austere budget, more cuts are on the way.

So, experts say, civil service reform is already overdue. "If we're going to continue to downsize and restructure the government at the rate we are now," says Frank Cipolla, project director of the Human Resource Management Center at the National Academy of Public Administration, "we simply have to do something that significantly changes the civil service system."

The Bill

The Clinton Administration has taken some steps to deregulate the civil service system since the NPR report was issued. In January 1994, Office of Personnel Management director Jim King announced the "sunset" of the 10,000-page Federal Personnel Manual and said agencies would be allowed to create their own sets of personnel regulations. And since January of this year, agencies have not been required to use the traditional SF-171 job application form for hiring. But in addition to such actions, the Administration also has promised a thorough overhaul of federal personnel laws.

The Federal Human Resource Management Reinvention Act delivers on that promise, says Michael Cushing, chief of staff at OPM and one of the authors of the bill. He calls it "the most significant change in civil service law in a century."

The most recent attempt to overhaul the federal personnel system was the Civil Service Reform Act of 1978, which abolished the Civil Service Commission and created OPM to enforce civil service statutes. The law also established the Merit Systems Protection Board, made it easier for managers to fire incompetent employees, defined merit principles for hiring, promoting and payment, and gave employee unions the right to collectively bargain on certain personnel practices and policies.

But many federal managers say the law did little to make the system more responsive to their needs. "A lot of the problems that the law was supposed to correct we're still looking at today," says a civil service expert. "The NPR report was deja vu all over again."

Administration officials say their bill will finally get the job done. Most of its provisions can be summed up in two words: increased flexibility.

"The government in the 21st century is going to need to be more flexible and more entrepreneurial," says Elaine Kamarck, Gore's senior staffer on NPR. "That means procurement rules, the way we budget and the way we hire and fire people have to be more flexible and entrepreneurial."

In hiring, for example, OPM currently administers tests for about half the jobs filled in the federal government. Under the bill, agencies would take over the testing responsibility or develop their own systems to rate job candidates.

Agencies also would be allowed to hire temporary workers, with fewer job protections than permanent employees, who could work in assignments for up to five years. The bill would give agencies more leeway in setting up experimental personnel systems-as long as OPM approved them. It also would abolish the statutory definitions for the 15 grades in the General Schedule pay system and replace them with broader criteria developed by OPM. Agencies also would be permitted to implement a "broad-band" pay system, which allows managers to promote employees to higher pay levels without having to satisfy the restrictive definitions of the present pay grades.

Finally, federal managers would have more flexibility in penalizing employees for poor performance. Under the bill, an employee's pay could be cut up to 25 percent for poor performance, and employees could no longer appeal to the Merit Systems Protection Board if denied a within-grade pay increase.

Most of the bill's language was drawn from the NPR report, as well as a January 1994 report issued by the National Partnership Council, a panel made up of Administration officials and representatives of federal labor unions. The Partnership Council recommended decentralizing the federal government's hiring, classification and performance management systems so managers and union representatives could work together on structuring separate personnel systems in each agency.

In another union-friendly provision, the bill would codify unions' bargaining rights in some areas. Agencies would be required to set up labor-management partnership councils to negotiate performance standards, pay, use of technology, how work would be performed and other issues. If agreement on these issues could not be reached, the bill would require binding arbitration.

Drafters of the bill, however, also included provisions that anger the unions. In May, the heads of the American Federation of Government Employees, the National Treasury Employees Union, the National Federation of Federal Employees and the Public Employee Department of the AFL-CIO sent a letter to Kamarck expressing "grave concerns" about the bill. The union chiefs called the 25 percent pay-reduction authority "draconian," argued that the bill would give unions no bargaining rights in developing new classification systems and opposed giving OPM alone the power to define job categories. "Simply put," the letter stated, "we would be forced to publicly oppose this bill in the strongest possible terms should it be sent to Congress for action."

In the Republican-controlled Congress, the bill's partnership provisions are likely to be its biggest liability. "People who sit in negotiations over performance requirements have their own interests at heart, not the taxpayers' interests," says a House GOP staff member. Many Democrats don't like the partnership councils or other aspects of the bill, either. "Even if Democrats still controlled Congress," says a human resource management expert, "this bill would be in serious trouble."

What's Wrong?

Objections to the Clinton Administration's civil service reforms run deeper than just opposition to docking pay and setting up labor-management councils. The Administration's critics say it has done a poor job of cataloguing all that is wrong with the civil service system.

Staffers on the House Government Reform and Oversight Committee's Civil Service Subcommittee say it's impossible to make a case for comprehensive reform of the system without a complete accounting of all its problems. "What the Administration has done is engage in an academic discourse and given a few anecdotes, rather than zeroing in on the problems," says one.

GOP staffers on the subcommittee met with NPR officials in February and again this summer to ask for a specific list of problems with the civil service system-an "indictment," as they call it.

Kamarck insists the NPR has identified the problems with the personnel system in its "accompanying reports" to the NPR report. In one such report, "Reinventing Human Resource Management," 14 specific recommendations for civil service reforms are listed, each of which includes a short section identifying and describing problems.

For example, under a proposal to reform the General Schedule and basic pay systems, the report outlines six problems, one of which is inflexibility. The report states the classification system takes a "one-size-fits-all" approach, which doesn't work well because agencies "have diverse missions, challenges, organizational structures, values and cultures, and
. . . they must respond to ever-changing external conditions."

Such descriptions, say congressional staffers, aren't specific enough. A Republican House staffer argues that while Administration officials say they would like a more flexible system, "they haven't laid out exactly what the inflexibilities are." A Democratic staffer agrees: "I certainly want to see some more information on what's wrong with the system before we jump and pass something."

Of course, compiling a specific list of all that is wrong with the civil service system would be a monumental task. Over the years, the General Accounting Office has issued numerous reports analyzing problems with the structure of the federal government's personnel system. "But we've tended to do this sort of thing piecemeal because doing even one aspect of the system across many agencies is a very labor-intensive," says Nancy Kingsbury, who follows federal human resource management issues for GAO. "To take on the system as a whole is a little scary."

And just documenting the problems won't necessarily make the solutions self-evident. "The fact that the system doesn't work as efficiently as it could is not altogether the fault of the system itself," Kingsbury says. "It's the fault of the way agencies manage the system or the procedures that they put in place. That leads you to a completely different kind of solution."

Alan "Scotty" Campbell, the first head of OPM and one of the authors of the Civil Service Reform Act of 1978, agrees. Campbell says the decentralization of much of the personnel system proposed by NPR already is permitted under present law. "It's a matter of administration, not a matter of law," he says. "What's needed here are management decisions on what should be centralized and what should be decentralized. The easy slogans, like 'decentralize the system,' don't get you too far."

What's Next?

The lack of consensus on how to proceed with civil service reform is causing some groups to call for a fresh approach to the problem.

In August, the National Academy of Public Administration released a report on reforms agencies could implement that do not require new legislation. The report analyzes human resource systems implemented by private companies and foreign governments and gives agencies diagnostic tools to determine whether they should implement such reforms as broad-band pay systems.

Another reform effort was being prepared this summer by the Council for Excellence in Government, a nonprofit group in Washington. In conjunction with the Maxwell School of Citizenship and Public Affairs at Syracuse University, the council was working to secure funding for a series of seminars that a proposal says would "start with a clean slate, asking a number of fundamental questions that do not take the basic assumptions of the present civil service system as given."

On the Hill, House Republicans already are moving ahead with piecemeal civil service reforms. Rep. John Mica, R-Fla., chairman of the House Civil Service Subcommittee, recently held hearings on the difficulty of demoting or firing incompetent employees. Mica chose to focus on this first largely because proposals to address the issue have bipartisan support.

Mica would also like to tinker with rules governing federal reductions-in-force (RIFs). Smaller budgets and program eliminations contained in appropriations bills currently moving through Congress will likely force many agencies to conduct RIFs during the next couple of years.

In determining whom to lay off, managers currently are required to give preferential treatment first to veterans, then to employees who have the most seniority and third to employees who have good performance records. Such rules hamper agencies' efforts to retain the best-performing employees and hurt efforts to diversify the workplace, because most veterans and senior-level employees are white males. Mica is considering holding hearings sometime next year on veterans preference and other workplace rules and has asked GAO to report by next spring on all personnel and administrative laws that may hamper downsizing.

But whether Mica can actually move legislation dealing with poor performers or RIF rules this year or next is questionable. Veterans' preference, for example, has always been politically popular. Acknowledging this, the Clinton Administration chose not to touch the issue in its bill.

Moreover, with the upcoming battle over the budget and next year's presidential campaigns, civil service reform "isn't even on the radar screen," says a Senate aide. Supporters of reform probably won't be able to muster up much interest in the idea until 1997. By then, Gore's pledge to "reform virtually the entire personnel system" will be nearly four years old.

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