Agencies stepping up use of personnel flexibilities, officials say

OPM touts increased use of early retirement incentives and buyout authority to reshape workforce.

Agency officials painted a rosy picture Wednesday of their efforts to implement new flexibilities aimed at improving federal hiring, retention, and personnel practices.

In testimony before the Senate Homeland Security and Governmental Affairs Oversight of Government Management, the Federal Workforce, and the District of Columbia Subcommittee, representatives from the Office of Personnel Management, Environmental Protection Agency and Departments of Health and Human Services and Commerce indicated that the troubles agencies reported a year ago are a thing of the past.

"I think we've made a great deal of progress," said Marta Brito Perez, OPM associate director for human capital leadership and merit system accountability. Agencies, she said, have made the greatest strides in using early retirement and buyout authorities to reshape their workforces and smooth out impending retirement waves.

But agency officials also stressed their efforts to better evaluate performance and improve hiring. Jeffrey K. Nulf, deputy assistant secretary for administration at Commerce, said that since the agency instituted a new performance rating system for its senior executives, the percentage receiving "outstanding" ratings dropped from 81 percent in 2003 to 49 percent in 2004.

Vicki A. Novak, NASA's assistant administrator for human capital management, said the agency has taken advantage of new authorities granted in the 2004 NASA Workforce Flexibility Act. It gave the agency the ability to offer higher starting salaries, scholarships to students who agree to work for the agency, relocation reimbursement, and more vacation time. She said the authorities would help the agency pursue President Bush's goal of expanding manned space exploration.

In the area of hiring, where agencies have been granted numerous flexibilities in recent years, Perez said that 73 percent now are making an offer to a job applicant within 45 days of the time a vacancy announcement closes.

She said agencies also are beginning to use category rating, which allows managers to consider a broader range of qualified candidates; direct hire authority, which allows officials to waive competitive hiring rules for hard-to-fill positions; and student loan repayment.

A year ago, OPM was criticized by agencies for failing to provide guidance on the use of these flexibilities, which Congress granted over the last few years. At the time, the Government Accountability Office found that few agencies were using the new authorities and Perez criticized agencies for their slowness. Talking then about the possibility that agencies should be granted even more flexibility, she said it "begs the question: What else do you need if what you have, you're not using?"

Since then, OPM has launched a major training initiative, Perez said Thursday, and has worked with some agencies on a one-on-one basis to help them improve hiring procedures. Still, she said that neither agencies nor OPM necessarily should be condemned for not using authorities. "Agencies are using flexibilities as they see they are appropriate," she said.

And at the hearing, Perez endorsed the idea of moving forward with governmentwide personnel reforms akin to those now being implemented at the Departments of Homeland Security and Defense. Those departments plan to scrap the General Schedule pay and classification system for a pay-for-performance model, while also tightening disciplinary rules, and limiting union bargaining.

Regardless of whether those authorities are granted to all agencies, starting in May, thanks to the 2004 Workforce Flexibility Act, agencies will have expanded authority to increase the number of employees eligible for bonuses, offer retention bonuses to employees who plan to transfer agencies, and give hiring bonuses equivalent to 100 percent of a new employee's starting salary.