Agency for International Development

Recommendations and Actions

AID03: Overhaul the AID Personnel System


Personnel management issues are consistently reported as problems in studies about the Agency for International Development (AID) and in interviews with AID staff. Complaints reflected in this NPR report concern the conflicts between the Foreign and Civil Service systems, workforce diversity, recruitment, assignment, training, evaluation, and overseas support.

AID currently maintains three distinct personnel systems to manage its direct-hire employees. These are the Foreign Service (FS), the Civil Service General Schedule (GS), and the Foreign Service National (FSN) systems. Fully incorporated into AID in 1980, the Foreign Service principally manages staff at overseas posts and senior management positions in Washington.(1) In 1980, every position in Washington was designated as either a GS or FS position. The Civil Service is used for support staff, technical experts, and some senior management positions in Washington. Except in limited circumstances, GS employees are not assigned abroad, although they can travel overseas. FSN employees are non-U.S. citizens working at overseas posts.

AID has approximately 1,700 FS employees--about 1,100 located overseas and 600 in Washington. All of AID's nearly 1,000 direct-hire FSNs serve overseas. All of AID's more than 1,500 GS employees serve in the United States. Besides its direct-hire employees in the three personnel systems, AID will employ about 4,500 personal service contractors (PSCs) in fiscal year 1993 to perform a wide range of duties, primarily overseas. These include project implementation, evaluation, monitoring, and other tasks that do not statutorily require performance by a direct-hire employee. About 10 percent of the PSC workforce consists of U.S. citizens.

Workforce management has been raised as a problem at AID in most of the major studies of the agency. The AID personnel system has been criticized as complex, costly, and unsuited to accomplishing the mission of the agency.(2) The 1992 President's Commission on the Management of AID Programs (the Ferris Commission report) summed up the situation by stating: "AID needs to change the ways it recruits, assigns, trains and develops its staff."(3)

Recent responses to a worldwide information cable sent by AID management suggest strong dissatisfaction with AID's personnel system.(4) According to one response, "The personnel system is hopelessly antiquated, slow, perverse, and unproductive." The FS evaluation system came in for special criticism, with the response from one overseas post suggesting that it needed revision to improve morale, and that "missions are almost put out of business in April/May each year in order to complete the requirements." Another post criticized the evaluation process because it is "time consuming, expensive and--most importantly--does not work." One employee suggested that staff should evaluate managers. Another post noted the lack of minorities in decision making roles.

Dual Foreign Service/Civil Service General Schedule System. Operation of the dual FS/GS system was cited often in recent analyses of the agency and in interviews (both inside and outside AID) as a source of morale problems, management difficulties, rigidity, and wasteful bureaucracy. Important differences exist between the two systems because they are designed to fill different needs. The Foreign Service is largely an up-or-out system. Employees typically come in through the bottom, as in the military, and advance upward through the grades in an established schedule. If they remain in one class for longer than a certain period without promotion, they come up against FS time-in-class rules and are subject to separation. In the past, however, limited career extensions (LCEs) have been granted almost routinely, extending many senior employees beyond their time- in-class, further contributing to a personnel structure already criticized as top-heavy. In contrast, the Civil Service can be entered at any level through open competition, but advancement is only possible if a position at the next grade is available.

The compensation structures of the two systems differ in ways that bring them into conflict. FS employees are compensated on a rank-in- person basis rather than rank-in-job as in the Civil Service. The rank-in-person system was designed to accommodate rotational assignments. The GS system, on the other hand, is designed to focus greater levels of specialization in the workforce. The GS salary structure is based on traditional measures, like specialist skills, breadth of responsibility, and number and type of employees supervised. FS employees are promoted based on the results of an annual performance review.

These two systems often collide, especially where they coexist in the same unit. For instance, GS employees serving side-by-side with headquarters FS staff have more difficulty receiving promotions for similar work if they do not have supervisory responsibilities. They are reviewed based on different standards and systems. Conflicts have also arisen over the numbers and types of positions reserved for FS staff.(5)

The two systems have different types of probationary periods. AID career FS staff are tenured. To achieve tenure the employee must complete at least three fully successful years (of which two must be overseas) within five years, receive satisfactory proficiency in a relevant language, and be reviewed by a tenure board. Tenure boards meet twice a year. During the most recent board deliberations, 21 employees were recommended for separation and five were deferred for additional evaluation.

The Civil Service has a three-year career-conditional period, after which career status is conferred. It should be noted that AID has authority to grant non-tenured FS appointments of up to five years. The FS tenure system has been criticized for impeding the agency's ability to respond to the changing development priorities of the 1990s by protecting the interests of staff with skills less suited to new challenges.

A workable example of a unified foreign affairs personnel system exists. The Central Intelligence Agency (CIA) maintains a Civil Service-based unitary personnel system that is highly responsive to the need for flexibility in overseas assignments. The CIA assigns staff both in the United States and abroad, often in situations of extreme hardship. There are no restrictions as to geographic assignment, employees carry rank-in-person, and retirement compensation relates to months of actual field or hardship service.(6) In the Foreign Service, on the other hand, once tenure has been granted, waivers may permit the FS employee to serve exclusively in Washington and still be eligible for retirement after only 20 years of service.

Length of Overseas Assignment. Concerns were raised during interviews that overseas tours at AID are too short. FS employees serve two- and four-year tours, depending on the post. This assignment structure is seen as having a major negative impact on staff effectiveness, program continuity, and transfer and training costs. The current system does not realize a full return on the overhead investments (e.g., training and relocation) the agency makes in its employees.

Foreign Service Assignment Process. The FS assignment process was criticized as unresponsive to the needs of the agency and unfair to the employees who are subject to it. The Ferris Commission report described the informal assignment process that has developed, noting that the bulk of the assignments are negotiated without the participation of the personnel office. Critics contend that only the less desirable assignments are made according to the established guidelines.(7)

International Development Intern Program. AID's International Development Intern (IDI) program is a proven success. The number of positions funded each year, however, has fluctuated in response to the rise and fall of AID staffing funds. The graduates of the IDI program are a "Who's Who" of successful AID managers. Given the nationwide trend to reduce middle management positions, the historical pathway for advancement is being closed off to many employees. The IDI program is an effective vehicle for improving workplace diversity and is a reliable source of managerial talent. This program is an effective way for AID to enrich its workforce.

Interdisciplinary Rotations. Mandatory, interdisciplinary rotation (e.g., program operations to administration, implementa-tion to evaluation, or headquarters to field) of junior officers is common in the foreign affairs and military communities. AID is a notable exception, partly because many AID officers come in at mid-career level. Because of a new agency emphasis on results-based performance measurements and recent congressional legislative initiatives in the area of mandatory performance standards and strategic planning, cross-training in evaluation methodology, resource allocation, and management is an essential element in future career development. Rotations offering training in these areas should be mandatory for promotion purposes and seen as a normal part of career development.

Use of Tandem Couples. Overcoming historical problems with dual assignments (assignments where married FS officers serve at the same post) will become more important in the deficit reduction environment of the 1990s. Overhead savings (e.g., storage of household effects, housing expenses, transportation of things, travel and education for dependents, family medical care) can be substantial by hiring couples. Liberalizing hiring of spouses at post is an important step forward in attracting professional couples and supporting the professional and personal interests of FS families.

Federal law and regulation are quite stringent about nepotism. Assignments must be made carefully so that spouses are not operationally accountable to each other, or serve in positions where normal separation of duties is called for because of potential for financial or other conflicts of interest. Experience has shown that smaller country programs tend not to allow the required separation.

Overseas Compensation. Overseas compensation, tied largely to the Foreign Service Act, has been criticized as too generous. FS staff and U.S. contractors are eligible for U.S. holidays, local holidays, annual leave, home leave, and compensation for rest and recuperation (R&R) trips in selected posts (staff assigned in both Barbados and Bangkok are, for example, eligible for R&R away from these posts). In addition, staff are eligible for up to 25 percent pay differential based on hardship and cost of living. In some countries, they receive commissary privileges or shipment of consumables--goods purchased in the United States and shipped at government expense to post for the employee's use.

In 1989, GAO reviewed State Department plans to augment housing standards for FS officers. The study concluded that for State Department employees alone housing costs would increase by at least $10.9 million--much more if other foreign affairs agencies followed suit. The study noted that many government employees were living in housing that exceeded current standards.(8)

Training. Deficiencies in training are mentioned in interviews and recent management studies of AID. The 1992 Joint OMB-AID SWAT Team report on AID operations suggested that project management was the greatest weakness in training.(9) The Ferris Commission noted the ad hoc nature of training at AID and the low commitment of resources.(10) The agency has begun pilot training programs in project and contract management, with a view toward certifying project officers beginning in fiscal year 1995. The agency also has a vigorous language training program and should continue to emphasize language proficiency.

Performance Evaluation. In 1992, the Ferris Commission criticized the use of both the FS and the GS evaluation systems.(11) The Ferris Commission report indicated serious problems with the functioning of the personnel evaluation system, particularly in the Foreign Service, stating: "Because of AID's collegial culture, a system has evolved over time where each individual employee manages his/her assignments, training, career, and frequently even drafts input into annual performance ratings. GS employees tend to be ignored or little involved in career development and training."(12) The FS appraisal system is also criticized for not being linked to accomplishment of the goals of the agency.

Awards are given liberally at AID. The Joint OMB-AID SWAT Team reported that:

In fiscal year 1991, the agency (AID) paid $2.4 million in performance based incentive awards to about 1,700 employees. In that year, 43 percent of the Foreign Service staff received awards and 59 percent of the Civil Service employees received awards. In the same year, AID separated only five people for substandard performance.(13)

AID personnel office staff recently said that 95 percent of AID Foreign Service employees received either outstanding or superior performance ratings in fiscal year 1992.

Performance Incentives. Although not unique in this regard among federal agencies, AID employees do not have routine, predictable jobs. Rather, many employees are problem solvers, confronting new and complex development problems and then, by applying a mix of information and financial resources, solve, or at least ameliorate them. Risk taking is inherent in this type of work, and because of that fact, failures are to be anticipated. Conducting meaningful performance appraisals of AID employees means acknowledging the tension between process and product. Measuring only process, however, means that performance appraisal focus is only on inputs, not on outcomes.

The AID Agency Incentives Project (conducted between July and December 1991) represented a positive effort by the agency to revitalize its employee incentives systems by acknowledging the high level of service motivation in most AID employees, shifting evaluation focus to project results, giving managers greater autonomy over incentive resources, and supporting employees with a refined statement of agency mission.

According to the project report, many employees are "frustrated by obstacles such as a lack of clear direction, cumbersome procedures, outmoded systems and facilities, and a poorly defined career path that fails to provide opportunities and rewards in a transparent, predictable and equitable manner."(14) The report criticized the awards process because the awards systems are "overly centralized, the process is less than transparent, and rewards are not made in a timely manner and are not adequately tied to performance."(15) The suggestion was made that "to be effective, the process must be decentralized, timely, equitable, and based to an increased extent on peer and subordinate input."(16) All of these steps are consistent with the basic principles of reinvention.


AID needs to determine the optimal personnel system that will contribute to the achievement of the agency's basic mission and clear priorities. The new system should ensure improvements of the current mixed systems in the following areas:

1. AID should operationally integrate all its human resource management systems, including FSN and PSC staffs, as well as FS and GS employees.

The AID Administrator should select the approach that is most consistent with the requirements of the agency.(17)

2. AID should reinvigorate the International Development Intern (IDI) Program.

AID should support this source of managerial talent and workplace diversity by ensuring stable funding for the program and including IDI rotations in agency workforce planning.

3. AID should ensure that the lengths of overseas assignments are logically related to the nature of the work performed by AID personnel.

In many cases, this will involve lengthening tours beyond the current two- to four-year period. Its net effect should be to better leverage experience gained in individual countries.

4. AID should ensure that junior officers develop management and administrative skills as part of their career development.

5. AID should invest in more training in project implementation, contract administration, financial management, and foreign language proficiency.

6. AID should encourage rotational assignments in and out of the Office of the Inspector General (OIG).

Staff from the OIG should be allowed to take assignments as project managers. Also, the agency should facilitate rotational assignments for program staff through the OIG. AID management should take measures to improve the relationship between agency managers and the OIG.

7. AID should restructure the performance review and employee incentive programs to link individual performance to organizational performance.

8. The AID Administrator should enforce the terms of the up-or-out regulations and begin reducing the excess senior management at the agency.

The Administrator should curtail the routine granting of LCE waivers to the up-or-out regulations.

9. AID should integrate qualified spouses of overseas couples into the assignment process and cultivate them as part of the overseas workforce.(18)

Assignments should be made carefully so as not to violate federal law and regulations regarding nepotism.

10. AID should initiate an interagency review of FS benefit policies among the various agencies using FS employees.

Areas for scrutiny should include but not be limited to leave policies, pay differentials, rest and recuperation policies, and housing standards.


An operationally unified personnel system will increase the effectiveness and the flexibility of the organization. It will allow selection of technically trained staff available for field service based on immediate competence, thereby reducing the time and cost of recruitment and training. Headquarters and field staff can be rotated at will, increasing opportunities to target skills at appropriate country missions.

A unified system will be more efficient to administer than the current system. Review of the overseas compensation package will show possible cost savings in areas like housing standards and differential pay. Enforcing the terms of the up-or-out regulations will make room for younger staff, facilitate improvements in workplace diversity, and allow expansion of the IDI program.

Increasing the tour length will enhance the effectiveness of the program staff at post by giving them a longer opportunity to learn about and focus on the specific problems of a country. A longer commitment to a particular country will improve project continuity and create an incentive to more carefully consider overseas assignments. Encouraging a more family-friendly overseas work environment will make more cost-effective tandem couple assignments possible.

Fiscal Impact

The estimated costs (including overhead) to place one AID staff person in the field range from $150,000 to $300,000 per year exclusive of salary. (The direct costs are estimated at $60,000 to $105,000 per year.) AID personnel are paid up to 25 percent pay differential for overseas assignments in hardship posts. Training costs will be reduced by rotating formerly GS employees or previously language-trained professionals out into the field. Increasing normal tour length will reduce the costs associated with relocating staff. Reducing the number of highly graded employees on limited career extensions will lower salary expenses. The actual fiscal savings associated with these changes, however, depend on their timing and nature and cannot be estimated at this time.


1. The formal designation of AID positions as Foreign Service or Civil Service took place in 1979, in response to an amendment of Section 401 of the International Development and Food Assistance Act of 1978. This act required the President to submit to Congress regulations establishing a unified personnel system. A task force was assembled and charged with the responsibility of determining the correct category for each position. The determinations were to be made based primarily on the requirement of specific knowledge or experience related to the overseas development process. On May 1, 1979, President Carter submitted regulations to Congress; those regulations became effective on October 1, 1979. The regulations provide that a position in AID-Washington may be designated as a GS position, rather than a Foreign Service position, only if (1) the position is primarily of a clerical, administrative, or program support character and can be performed without significant overseas experience or understanding of the overseas development process; or (2) it requires such continuity and specialized knowledge as to make it impractical to assign the incumbent overseas.

2. From an unpublished AID working document, dated April 16, 1992.

3. The President's Commission on the Management of AID Programs (the Ferris Commission), Action Plan--Working Draft #1 (Washington, D.C., March 2, 1992), p. 10. This theme is elaborated in The President's Commission on the Management of AID Programs, A Progress Report (Washington, D.C., September 30, 1992).

4. AID cable 143458 requested field perspectives on AID's goals and priorities.

5. The process of identifying FS and GS positions was contested by the American Foreign Service Association (AFSA). The union pressed for greater representation in offices originally designated as having primarily GS employees. AFSA objected, for example, in an open letter to Congressman David Obey dated December 10, 1979, about a 10 percent loophole that would allow the administrator to assign GS employees into FS slots. The letter said: "AFSA never liked the ten percent exception, which by definition allows not fully qualified personnel to be assigned to Foreign Service-designated positions and naturally reduces assignment opportunities for Foreign Service personnel."

6. The Peace Corps compensation structure for overseas professional staff is worthy of note. Peace Corps staff interact with ministry officials like their AID colleagues, and are represented on the country team. They receive no hardship pay differentials, do not live in diplomatic-style representational housing, and receive no rest recuperation allowances.

7. Ferris Commission, Action Plan, p. 11.

8. See U.S. General Accounting Office, State Department: Proposed Overseas Housing Standards Not Justified, GAO/NSIAD-90-17 (Washington, D.C.: General Accounting Office, December 1989).

9. Joint OMB-AID SWAT Team, Improving Management at the Agency for International Development (Washington, D.C., 1992), p. 8.

10. Ferris Commission, Action Plan, p. 11.

11. There are actually six different types of employee groups covered by the employee incentive program at AID: Senior Executive Service (SES); Senior Foreign Service (SFS); Civil Service Merit Pay (GM); Civil Service General Schedule (GS); Foreign Service (FS); and Foreign Service National (FSN).

12. Ferris Commission, Action Plan, p. 10.

13. Joint OMB-AID SWAT Team, p. 6.

14. AID Incentives Project, Reforming the Incentives System (Washington, D.C., January 1992), p. 4.

15. Ibid., p. 16.

16. Ibid., p. 4.

17. Two potential approaches are to: (1) create a unified personnel system based on best practices from other agencies (the Central Intelligence Agency personnel system is a useful model); or (2) break down barriers wherever possible between the two systems. With respect to the second option, AID management can make better use of noncareer, time-limited FS appointments and excursion tours for GS employees wanting to serve abroad. The agency can reevaluate the current mix of designated FS and GS positions and identify positions in headquarters as open for both FS and GS employees unless there is a clear reason for them to be reserved for employees of one service. Grade banding (reducing the number of grades to three or four with greater ranges of salaries) for GS jobs would help bring compensation in line with FS compensation.

18. Two options for AID are: (1) to secure authority to waive full- time equivalent (FTE) limits for accompanying spouses; or (2) in lieu of the first option, AID should secure authority to count as service toward retirement the time spent accompanying (in leave without pay [LWOP] status) the AID-employed. This time could be counted as either equal to time gained from regular service or, more likely, as a fraction of the time gained from regular employment.

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