Compensation and Classification
Although the demise of both NSPS and MaxHR represent a setback for those who regard the provisions of Title 5 as out of date, pressures for reform of the civil service system have persisted. The General Schedule system of compensation and classification has been subject to particular criticism. The General Schedule (GS) is widely regarded as outdated, overly rigid, not compatible with the needs of an increasingly professional workforce, and insufficiently sensitive to performance in matters of pay setting (Office of Personnel Management 2002).
In a 2012 report entitled “Bracing for Change: Chief Human Capital Officers Rethink Business as Usual,” the Partnership for Public Service (PPS) reported that “nearly all CHCOs [chief human capital officers] agreed that the current 1949-era GS pay and classification system is outdated and doesn’t meet the needs of a dynamic and changing 21st century workforce” (Partnership for Public Service 2012a: 16). The chief human capital officers expressed preference instead for a system of “paybanding.” With paybanding the narrow grades that characterize the General Schedule would be replaced with broad salary bands and managers would be permitted more discretion in setting the pay of their subordinates (Thompson 2007b). Under this approach there is less need for classification experts from the personnel office to make fine distinctions between the relative responsibilities of positions at different grade levels. Instead, a supervisor or manager equipped with some technical support can decide the band to which a position is assigned. Paybanding was first introduced to the federal sector in 1980 at a naval research facility in California and has subsequently been implemented in a number of additional agencies and units with generally positive results (Thompson and Seidner 2008).
The Renewal of Labor-Management Partnerships
In no area has the contrast between the Bush and Obama administrations been greater than in the area of labor-management relations. The Bush administration took a generally hostile stance toward the federal employee unions as exemplified by the proposed MaxHR and NSPS personnel rules, which would have significantly compromised the collective bargaining rights of employees in those two agencies. In 2001, soon after taking office, President Bush issued Executive Order 13203 repealing an executive order issued by his predecessor that mandated the creation of labor-management partnership councils throughout the government.3 In 2002, the Bush administration denied collective bargaining rights to employees in the newly created Transportation Security Administration.
As an early indicator of the Bush administration’s general demeanor on labor-management matters, the repeal of President Clinton’s executive order on partnerships took on special importance. Labor-management relations in the federal government have traditionally been adversarial in character. In 1993, as part of his effort to “reinvent” the federal government, President Clinton issued Executive Order 12871 creating a National Partnership Council and directing that similar councils be created within each of the major departments and agencies.4 The intent was to encourage an attitude of collaboration between labor and management in addressing workplace issues. A 2001 evaluation of the program found that the partnership initiative had improved the labor-management climate in many agencies and had resulted in a reduced number of grievances and unfair labor practice charges (Office of Personnel Management 2001). However, President Bush’s 2001 executive order dissolved the National Partnership Council and rescinded any “orders, rules, regulations, guidelines, or policies implementing or enforcing” EO 12871.
The partnership concept proved resilient, however. During his first year in office, President Obama issued Executive Order 13522 directing the creation of a new National Council on Federal Labor-Management Relations to include both union and management representatives and led by the director of the Office of Personnel Management (OPM) and the deputy director of OMB. With more than 60% of the Executive Branch unionized, a significant proportion of all federal employees are represented on the Council. Similar to the Clinton program, Obama’s executive order directed the creation of agency-level “forums” to “promote partnership efforts between labor and management in the executive branch.”5 Also similar to the Clinton program, attention has been directed to section 7106(b) of Title 5, which lists matters on which agencies may choose to bargain but on which they are not required to bargain. When President Clinton directed that bargaining take place on these “permissive” subjects of bargaining as part of EO 12871 he met with resistance from agencies. President Obama took a different approach, creating a set of eight “pilots” “to evaluate the impact of bargaining over permissive subjects under 5 U.S.C. 7106(b)(1).” Performance management practices (discussed further below) have also been a subject of discussion within the Council, with several unions partnering with their respective agencies to improve employee engagement and organizational effectiveness.
In another labor relations matter, the Obama administration reversed the decision by the Bush administration to deny collective bargaining rights to the 40,000-plus airport screeners employed by the Transportation Security Administration. In November 2012, those employees approved a contract negotiated by the American Federation of Government Employees, which the employees had selected as their bargaining agent (Davidson 2012).
The “Deprivileging” of Federal Employees
Until 2011, federal employees had experienced only limited repercussions from the effects of the Great Recession of 2008–2010. Government data shows that whereas the number of state and local government employees dropped by over 500,000 between July 2008 and July 2011, federal government employment actually increased by 86,000 jobs during this same period.6 This disparity could be attributed to the fact that unlike state and local governments, the federal government can run budget deficits. In fact, the Obama administration made deficit funding a part of its strategy for counteracting the effects of the recession. However, by 2011, political pressure to reduce the size of the deficit grew and as part of deficit reduction negotiations between Congress and the president, the pay of federal employees was frozen effective January 1, 2011. The pay freeze was subsequently extended for three years, ending when federal employees were granted a 1% increase in 2014. Also as a consequence of the deficit reduction negotiations, federal employees hired after December 31, 2012, will contribute 3.1% of their pay to the cost of their pensions, up from.8% for employees hired before that date (Lunney 2012a).
Proponents of the pay freeze have contended that federal employees are overpaid relative to their private sector counterparts. A 2010 study by the Heritage Foundation concluded that the total compensation of federal employees with health and retirement benefits included is 30%–40% higher than that of their private sector counterparts (Heritage Foundation 2010). A subsequent report by the Congressional Budget Office found that while employees at lower pay levels were overpaid relative to their private sector counterparts by approximately 15%, employees at higher levels were underpaidby as much as 25% (Congressional Budget Office 2010).
The debate over federal pay and the imposition of a freeze on federal pay signifies a sharp departure from past practices. In the past, with the federal workforce widely distributed geographically, political considerations had mitigated in favor of an attitude of accommodation between the two parties with regard to federal pay. The change symbolized by the 2011 pay freeze and subsequent pronouncements critical of federal employees was driven in part by the aggressive antigovernment ideology espoused by members of Congress associated with the Tea Party movement.7 For federal employees the shift in attitudes has meant that positive aspects of the federal work environment once taken for granted are increasingly at risk.
Workforce Planning and Management
A central element of President Bush’s “President’s Management Agenda” was the “strategic management of human capital,” to which workforce planning was central (Office Management and Budget 2002). Although such planning remains a priority, its execution has proved problematic in light of the turbulent political environment. Congress did not pass a single timely budget during the first six years of the Obama administration. Instead, each year saw “continuing resolutions” that simply pushed decisions forward for several months. Further, each such resolution kept funding at the same level as the previous period, thus equating to cuts in agency budgets because of the failure to reflect increased costs built into contracts, inflation, and unforeseen costs.
Between 2009 and 2013 the federal government was within hours of shutting down three different times because of budget disputes with the threat finally becoming a reality in October 2013. Occasional furloughs have occurred at agencies such as at the Federal Aviation Administration where more than 3,000 employees were sent home after their 26th temporary budget failed to pass in Congress. The most notorious of the budget scuffles started with the 2011 debate over the debt-ceiling limit. What is normally a procedural move to approve an increase in the debt ceiling morphed into an epic political debate over the size of government. Agencies were left to plan for a possible government shut-down. The settlement, dubbed “sequestration,” called for $109 billion in automatic, across-the-board spending cuts on January 2, 2013, that would translate to a cut of approximately 8.5% for most departments. Instead of thinking 5–10 years ahead as rational planning would dictate, agencies have been left in constant crisis mode with decisions required about each project and employee. Senior leadership in each agency has had to divert their attention to this effort, and employee morale has plummeted.
The Retirement “Tsunami”
The continuing crisis over the federal budget may have been a factor in the decision of many retirement-age feds to finally pull the plug. The so-called retirement “tsunami” had been anticipated since the early 2000s as large numbers of baby-boom generation employees approached retirement age. Little evidence of such a tsunami emerged until 2011, however, when 105,000 retirement applications were filed by federal employees, a 24% increase over 2010 levels. From January 1–September 30, 2012, OPM processed more than 93,000 retirement applications, 10,000 more than they had in a comparable period the year before (Lunney 2012b). With retirements continuing at an annual rate of approximately 100,000, the federal government is losing about 5% of its workforce each year.
The retirements have left some agencies stretched thin. Agencies generally aren’t allowed to hire until the incumbent has officially left the payroll, meaning there is no chance to train a replacement in the interim. Further, agencies have been reluctant to hire in light of continuing uncertainty over the budget.
Continuities
Notwithstanding these “discontinuities,” in some areas of activity the Obama administration has built on the work of its predecessor including those of workforce engagement and the “blended” or “multisector” workforce.
Workforce Engagement
The issue of worker engagement has gained prominence in the federal HRM community in recent years largely as a consequence of the efforts of the Partnership for Public Service (PPS), a nonprofit organization that promotes government service. Beginning in the mid-2000s, PPS has issued an annual report entitled Best Places to Work in the Federal Government.8 The report compiles data from the Office of Personnel Management’s Federal Employee Viewpoint Survey (FEVS) to calculate a Best Places to Work “score” for each federal agency based on an index that measures employees’ agreement or disagreement with three statements included in the survey:
· I recommend my organization as a good place to work.
· Considering everything, how satisfied are you with your job?
· Considering everything, how satisfied are you with your organization?
The PPS describes its index as one of “employee satisfaction and commitment” rather than as one of “engagement.” However, the job attitudes assessed correspond to those used in other studies where worker engagement is a focus. For example, the Merit Systems Protection Board (MSPB) issued a 2008 report entitled “The Power of Federal Employee Engagement” in which it devised a measure of engagement based on “pride in one’s work or workplace,” “satisfaction with leadership,” “opportunity to perform well at work,” “satisfaction with the recognition received,” “prospects for future personal and professional growth,” and “a positive work environment with some focus on teamwork” (Merit Systems Protection Board 2008).9 According to the MSPB, “engaged employees are absorbed intellectually and emotionally in their work and vigorously invest their best efforts in producing the outcomes needed for the organization to achieve its goals” (Merit Systems Protection Board 2009: i).
The Best Places to Work report has garnered attention in part as a consequence of the rankings generated. Separate rankings are generated for large agencies, medium agencies, small agencies, and agency “subcomponents.” The media have picked up on the results to highlight those agencies at both the top and bottom of the rankings. Particular prestige is accorded those agencies that score well.
The rankings have also served to stimulate some agencies to make improving engagement a priority. For example, the U.S. Department of Transportation (DOT) ranked near the bottom of the rankings in 2009. Then-Secretary LaHood set as a priority the goal that the department be among the top-rated large agencies. A constant focus on improvement led to programs such as IdeaHub, a portal where any employee can make a suggestion on which other employees are then allowed to vote. If enough employees agree, the secretary’s Innovation Council explores implementation. DOT implemented more than 40 suggestions in three years. Also, SES members were required to adopt new employee communication tactics, including hosting listening sessions to hear feedback. Since DOT started to focus on engagement, it has become one of the top ten places to work in government.
In part as a consequence of the continued attention being directed at working conditions, employee engagement was made one of the metrics in the President’s Management Agenda. Also, whereas results of the FEVS were only available at the agency level, OPM now releases FEVS results for more than 20,000 organizational units, along with trend data and index scores for employee engagement and global satisfaction. Agencies are increasingly able to use the data to link to mission outcome and target specific areas for improvement.
The Blended Workforce and “Nonstandard” Work Arrangements
During the 2000s, attention within the federal HRM community was directed at what was labeled the “blended” or “multisector” workforce (Thompson and Mastracci 2005). The focus was on how federal agencies could balance the use of full-time employees with workers in alternative arrangements including part-time workers, seasonal workers, and contract workers. As an example, agencies such as the Internal Revenue Service and the National Park Service that experience seasonal fluctuations in workload have found it advantageous to make extensive use of seasonal employees. The Naval Research Laboratory enters into contracts with staffing firms whereby individuals with specialized skills are brought in on a temporary basis to work alongside regular employees on a research project. Once the project is complete, the contract worker can be reassigned or simply released.
From the agency perspective, the use of contract workers in place of permanent employees offers significant advantages. First, staffing firms are not bound by federal hiring and pay restrictions and thus have recruitment advantages over the agencies. Second, permanent employees cannot be let go at the end of a project without going through lengthy reduction-in-force procedures. After the September 11 terrorist incident, the intelligence community relied heavily on contract employees in responding to congressional and executive branch demands that it ramp up its counterterrorism activities. By 2007, it was estimated that contract employees made up a third of the CIA’s workforce (Pincus 2007). Although the Bush administration was generally sympathetic to the use of contract employees, subsequent to 2006 when the Democrats took control of the House of Representatives, pressure was exerted to reduce the proportion of contract employees in favor of hiring more federal employees. In 2010, the Office of Federal Procurement Policy issued a policy memo instructing agencies to “avoid an overreliance on contractors for functions ‘closely associated with inherently government’ or that are ‘critical’ for the agency’s mission” (Brodsky 2010).
The Obama administration added a new element to the blended workforce discussion when a new policy facilitating the use of phased retirement was approved in 2012. Phased retirement is when a full-time employee retires but continues to work on a part-time basis. The new law permits agencies to allow select employees to retire but to remain employed on a half-time basis. These employees collect half their full-time salary as well as a corresponding proportion of their retirement annuities. The advantage of phased retirement from the perspective of the agency is that it is able to retain the knowledge and experience that long-time employees bring to the workplace. For example, some agencies use the part-time retirees to train or mentor new employees. Many older employees in turn prefer to remain active while working less than a full-time schedule.
The Obama administration has also promoted the use of telework by federal employees and in 2010 Congress passed the Telework Enhancement Act. Telework arrangements allow employees to work from their homes or from a remote location. Studies have shown that telework can assist with employee retention and recruitment, for example by reducing commuting time. Telework can also facilitate continuity of operations in case of an emergency or natural disaster. OPM has updated its procedures to direct employees with a telework agreement to work from home when the government closes an office for weather or as a consequence of other emergency conditions. Previously employees were provided administrative time off for those days. By the end of 2013, about half of federal employees were eligible to telework (Office of Personnel Management 2013).
New Directions
Hiring Reform
One area of activity where the Obama administration has left its mark is that of hiring reform. Hiring reform was a natural issue in which to get involved in light of the president’s appeal to members of the millennial generation and because of his interest in promoting public service. The slow and opaque nature of the federal government’s hiring process has long been identified as a deterrent to government service for newer workforce entrants. In 2006, the Merit System Protection Board issued a report in which it reported that “promising candidates interested in public service turn away from careers with the Federal Government because they cannot decipher the application process, cannot wait 6 to 9 months for a hiring decision, or cannot find a job offer that is competitive with other employees” (Merit Systems Protection Board 2006: 1).
In May 2010, President Obama issued a memorandum on “Improving the Federal Recruitment and Hiring Process.”10 The primary goal was to improve the notoriously complex hiring process while simultaneously making working for the government “cool again.” The president’s mandate made explicit demands that agencies overhaul the technical and structural aspects of hiring. Specifically, it mandated “plain language” and shorter job announcements, resume-only applications, expanded assessment and applicant referral (known as “category rating”), and significantly reduced time-to-hire periods. From a cultural standpoint, hiring reform requires that managers be held accountable for their role in the hiring process as part of their performance evaluation. Within a year, OPM announced that the average time-to-hire had dropped from 160 days to 105 days and that nearly 90 % of job announcements were five or fewer pages long.
Hiring the Next Generation
Consistent with its intent to make government service attractive to students and newer workforce entrants, the Obama administration overhauled the federal government’s internship programs. Prior to the new Pathways program, students interested in government employment were confronted with a confusing array of internship programs, each designed for a separate purpose. For example, under the Federal Career Intern Program (FCIP), students were hired for two-year internships that could be converted to permanent positions upon completing the program without having to compete with other applicants. The Student Temporary Experience Program (STEP) was intended to help students pay for college, while the work performed under the Student Career Employment Program (SCEP) had to relate to the academic and career goals of the student. Under STEP, the work did not have to relate to the student’s academic or career interests, and STEP participants were not eligible for noncompetitive conversion to permanent employment.
The FCIP and SCEP programs in particular were popular with agencies because of the flexibility they afforded in recruiting, assessing, and selecting job candidates. However, in 2010, the Merit Systems Protection Board found that FCIP violated provisions of Title 5 governing veterans’ preference and fair competition for jobs. Rather than revamp FCIP, President Obama determined to scrap the program along with SCEP and STEP in favor of a new set of Pathways student employment programs.
In December 2010, President Obama issued Executive Order (EO) 13562 entitled “Recruiting and Hiring Students and Recent Graduates.” The EO cites the benefits to the federal government from hiring students and recent graduates “who infuse the workplace with their enthusiasm, talents, and unique perspectives.”11 The executive order created three Pathways programs each targeting a different audience:
· Internship Program: The Internship Program is targeted at current undergraduates as well as at high school and trade school students with targeted skills sets. The primary purpose is to provide students with a means of financial support during their years in school.
· Recent Graduates Program: The purpose of the Recent Graduates Program is to promote careers in the federal government. Individuals within two years of graduation from qualifying educational institutions are eligible to apply.
· Presidential Management Fellows Program: According to the executive order, the Presidential Management Fellows Program “aims to attract to the Federal service outstanding men and women from a variety of academic disciplines at the graduate level who have a clear interest in, and commitment to, the leadership and management of public policies and programs.” To qualify, an individual must have received an advanced degree within the preceding two years. The goal is to appoint each fellow to a career-ladder position upon completion of the program. PMF graduates can generally enter the federal workforce at a level higher than others with similar qualifications and receive special recognition as prospective organizational leaders.
Unfortunately, as a consequence of continuing fiscal pressures faced by agencies, the number of internships and recent graduate hiring has plummeted, from a high of about 46,000 in 2010 to about 6,000 in 2013.
Workforce Diversity
A second area in which the Obama administration has left its mark is that of workforce diversity. Separate executive orders have been issued requiring agencies to improve the hiring of individuals with disabilities,12 Hispanics,13 Asian and Pacific Islanders,14 Native Americans,15 African-Americans,16and women.17 In the 2013 Federal Equal Opportunity Recruitment Program Report, the Office of Personnel Management reported that the federal workforce was 17.9 % Black, 8.2 % Hispanic, 5.8 % Asian/Pacific, and 1.7 % Native American. Overall minorities constituted 34.6 % of the federal workforce while women constituted 43.5 %. Figure 4.1 shows the percentage of the federal workforce represented by each group compared with the percentage each group represents in the civilian labor force as a whole. The figure shows that with the exception of Hispanics, the government’s record in hiring women and minorities is relatively strong (Office of Personnel Management 2013).
The Obama administration has extended diversity to include the hiring of veterans. Although veterans’ preference has existed since the Civil War, President Obama has placed additional demands on agencies to increase the number of veterans hired. Executive Order 13518, Employment of Veterans in the Federal Government, directed each agency to establish a Veterans Employment Program Office, to develop an operational plan for promoting veteran employment, and to provide annual training to human resource personnel on veterans’ preference.18 In 2012, OPM reported that the number of veterans employed by the federal government grew from 512,000 in 2009 (25.8% of the workforce) to 567,000 (28.3% of the workforce) in 2011.19Additionally, a new focus has centered on hiring the spouses of military members.
Figure 4.1 Comparison of Permanent Federal Workforce and Total Civilian Labor Force (September 2012)
Source: OPM (2013).
Performance Management
Performance management has long been an area of concern within the federal government. One problem has been a reluctance on the part of supervisors to make meaningful distinctions in employee performance. In a 2011 speech, then-OPM director John Berry commented that “Employees may be getting useful feedback from their manager, but the formal review process seems to take place in Garrison Keillor’s Lake Wobegon where everyone is above average” (Davidson 2011). Berry offered a “blueprint for changing the way we manage personnel performance” to include performance standards that are, detailed, objective, aligned to agency mission and goals and had employee buy-in.”
The National Council on Federal Labor-Management Relations subsequently approved a package of reforms to overhaul performance management practices in the government. The Council agreed to pilot the new program, called GEAR (Goals, Engagement, Accountability, and Results) at six agencies. The changes, more evolutionary than revolutionary, provide for quarterly reviews of employee performance and improvements to “the assessment, selection, development, and training of supervisors.”20 In a departure from the recommendations of other reform groups, under GEAR, performance ratings would not be linked to pay.
Senior Executive Service Reforms
The Senior Executive Service, consisting of the top tier of career civil servants as well as a small percentage of political appointees, was created by the Civil Service Reform Act of 1978. The intent was that SES members serve as a corps of generalist executives whose careers would traverse agency lines and who would thereby promote interagency collaboration and cooperation. In a 2012 report, the Partnership for Public Service (PPS) and McKinsey & Company cited the benefits of this model: “Executive mobility increases the government’s ability to fulfill cross-agency missions. It also allows individual agencies to build executive managerial skills, fill vacancies strategically and infuse new thinking into the organization” (Partnership for Public Service 2012b: 1). However, in concluding that “The original vision for the SES as a mobile corps of leaders has never come to fruition,” PPS and McKinsey & Co. cited data showing that only 8% of SES members have worked at more than one agency during their careers. Options for increasing mobility and listed in the report include (1) requiring SES candidates to demonstrate “multisector, multiagency or multifunctional experience,” (2) allowing agencies to pilot a variety of mobility programs, (3) having agencies report on cross-agency mobility and (4) centralizing management of SES mobility. To date, OPM has not acted on these recommendations. However, in 2012, OPM did act to create a new SES performance management system centered on the same five “core qualifications” used for selection into the SES: leading people, leading change, results driven, business acumen, and building coalition.
Perhaps the most dramatic change for the SES was the passage of the Department of Veterans Affairs Management Accountability Act of 2014 in response to scandals where leaders manipulated the wait times of veterans seeking medical care from one of the Veterans Health Administration hospitals. For the first time, an SES member could be fired with their appeal process curtailed. Previously, SES would be placed on paid administrative leave and could appeal their termination to the Merit System Protection Board (MSPB). The new law allows the secretary to immediately fire a member of the SES, and MSPB must adjudicate the appeal within 21 days.
Conclusion
As of early 2015, it was unclear whether and to what extent reform of the civil service and of HRM practices in general would be a priority during the remaining years of the Obama administration. In November 2014, Republicans won a majority of seats in the U.S. Senate giving them control of both houses of Congress. The incoming chair of the Senate Homeland Security and Government Affairs Committee expressed his support for reforms that would give agency heads “the tools and flexibility to discipline the workforce to effectively manage” (Clark 2014). Similarly, the incoming chair of the House Oversight and Government Reform Committee said in an interview that the government needs to make it easier “to root out the bad apples” in the federal workforce (Davidson 2014). He further expressed support for a measure that would extend to other agencies the authority granted the Department of Veterans Affairs to expedite the removal of senior executives. Any such changes, however, would have to secure the approval of President Obama, whose term of office extends to January 2017.
