Enable Managers to Create and Maintain a Quality, Diverse Workforce
The system through which applicants are considered for competitive appointment to positions in the federal government is a merit system- -candidates are selected based on their relative ability to perform the job without regard to nonmerit factors, including political affiliation. There are nine merit system principles, covering (1) recruitment to achieve a work force from all segments of society, and selection and advancement following fair and open competition; (2) employment without regard to nonmerit factors; (3) equal pay for work of equal value; (4) standards of conduct; (5) efficient and effective use of the federal work force; (6) retention and separation based on performance; (7) effective education and training; (8) protections against arbitrary action and prohibition against interfering with an election; and (9) protection against reprisal for disclosing violations or mismanagement.(1)
The law also defines prohibited personnel practices, including discrimination on the basis of nonmerit factors such as nepotism, political affiliation, and marital status.(2) It stipulates that "the head of each agency shall be responsible for the prevention of prohibited personnel practices, for the compliance with and enforcement of applicable civil service laws, rules and regulations, and other aspects of personnel management."(3)
The first merit principle deals with recruitment and hiring. The merit system requires that (1) individuals be qualified; (2) appropriate sources be identified; (3) all segments of society be represented in the work force; (4) selection and advancement be determined solely on the basis of relative ability, knowledge, and skills; and (5) fair and open competition be afforded to ensure that all receive equal opportunity.(4)
The Merit Hiring System. The competitive examining system for external candidates that has developed around these requirements is controlled by the Office of Personnel Management (OPM). Although OPM may delegate examining authority to agencies, by law OPM must conduct examinations for positions that are common to agencies. With OPM approval, agencies may directly hire candidates in a limited number of occupations where recruitment shortages have been identified--that is, where there is potentially a job for every qualified applicant.
Throughout the year, OPM issues general notices or open announcements soliciting applications for particular occupations for which it retains examining authority. Managers wishing to fill vacancies from external sources must ask the personnel office to submit to OPM a request for a certificate of eligibles. Using an internal, unpublished rating scale, OPM rates and ranks candidates, whose names are then forwarded to the manager in ranked order. The actual list of candidates forwarded to the manager may not represent the best candidates, as higher-ranking individuals may have already been referred out to another agency. The rules surrounding selections are exactly the same for both OPM-generated certificates of eligibles and certificates issued by agencies with delegated examining authority.
Although the certificate may contain many names, the manager is bound by law to select one of the top three available candidates, and may not pass over a veteran to select a nonveteran unless a request to pass over the veteran for reasons of qualifications or suitability is approved. Although authority to approve requests to pass over veterans is delegated to agencies, OPM must rule on requests to pass over veterans who are 30 percent or more compensably disabled. Managers may choose to interview all, some, or none of the candidates, but in no case may they subject candidates to further examination. Certificates may be returned unused when managers determine that candidates are unsatisfactory, which can result in significant time delays in filling positions, as alternative methods must then be considered. The General Accounting Office found in 1992 that managers returned 57 percent of certificates and chose to use alternate means.(5)
Merit Promotion. OPM rules that govern competition among internal candidates, commonly termed merit promotion, are found in Federal Personnel Manual Chapter 335. Agencies typically construct internal rating and ranking procedures in order to identify the best qualified. Candidates are evaluated by personnelists, a subject matter expert, or a panel of subject matter experts, then either named to the selecting official as best qualified or eliminated from further consideration for that vacancy based on a cutoff score established by the evaluator(s). In most agencies, the selecting official does not participate in the rating, ranking, and referral process. Managers are free to select any candidate from among those referred by the panel.
In 1989, in connection with a study to explore OPM's simplification initiatives, the Merit Systems Protection Board (MSPB) concluded that:
The OPM initiatives which agencies thought were the most effective were those which the agencies felt would assist in the hiring of high-quality employees and those that expedited the hiring process. Clearly, the provision of prompt recruitment and placement services to operating officials is a priority in agencies' personnel programs.(6)
Can today's civil service hiring system meet the needs of federal managers for the 21st century? Most would maintain that the system cannot even meet current needs, and that reinvention is already long overdue, for the reasons summarized below.
Need for Change
The need for change is well documented. When describing the federal hiring system in 1988, OPM Director Constance Horner noted, "The current system is slow; it is legally trammelled and intellectually confused; it is impossible to explain to potential candidates. It is almost certainly not fulfilling the spirit of our mandate to hire the most meritorious candidates."(7) In that same year, the Hudson Institute's Civil Service 2000 predicted that
. . . hiring and retention [will become] much more competitive in the years ahead. Because these tight labor markets are likely to develop in different ways in different states and to shift quickly in response to economic and population changes, it is essential to decentralize responsibility and to provide more flexibility in hiring and personnel management than is characteristic of the current system.(8)
Dwindling resources, shifting markets, and emerging technologies compound the need to ensure that every single employee becomes a vital partner in mission attainment and program delivery. Thus, identifying the impediments to carrying out an effective hiring program and exploring the extent to which these impediments can be alleviated become an absolute business necessity to ensure an organization's survival.
The problems with the hiring system fall into the following major categories:
Lack of Accountability. The single greatest failing of the hiring system is lack of managerial involvement in the front-end recruitment and evaluation of candidates for employment--in other words, lack of accountability. Managers who do attempt to participate in the external recruitment process in most cases must send potential applicants to OPM or to delegated examining units to be examined, in striking contrast with the ability of private industry recruiters to make immediate offers of employment to qualified candidates and to establish closer ties to professional and community recruitment sources. Managers must wait to receive candidates who have been rated and ranked by OPM or delegated examining units, and are required by law to choose from among the top three available candidates. When considering internal candidates, they make selections from among candidates who have been determined by others to be the best qualified. Managers are then able to blame the system for undesirable outcomes, such as perceived inequity or underrepresentation, if they have followed all of the rules.
Failure to Meet Customer Needs. In 1989, the National Commission on the Public Service observed that, "Even when the public sector finds outstanding candidates, the complexity of the hiring process often drives all but the most dedicated away."(9) In 1990, MSPB observed that, "Potential applicants are frequently discouraged by the confusion they experience when trying to get a job with the federal government."(10) The system is time consuming and unresponsive; despite improvements in the automated delivery of examining services, the best candidates frequently go elsewhere before federal managers are able to make firm offers of employment. The fact that managers are forced to send some potential applicants to OPM to be examined is of particular concern at remote field locations where access to OPM services is necessarily limited. The issue is not merely convenience; more importantly, the public's perception of the federal government as a responsive employer suffers tremendously when agency managers are forced to send applicants to OPM for examination, with no guarantee they will ever be within reach for positions at that agency on a centralized register. In 1989, the National Commission on the Public Service found that:
Government faces an enormous challenge in recruiting America's top college graduates. On the one hand, outstanding graduates doubt that the public sector can fulfill their dreams of meaningful, challenging careers. On the other hand, they find that the complexity of entry makes public sector jobs among the toughest to get.(11)
Restricted Competition. Qualified candidates are automatically eliminated from managers' consideration based on narrow point score distinctions reflecting only some of the attributes of individual candidates. The system undermines recruitment initiatives as managers recruit candidates who may not be within reach on certificates of eligibles, and are therefore unavailable for selection. Overly restrictive qualification standards and time-in-grade requirements can eliminate candidates who are in fact able to perform the duties of the position. When centralized OPM registers are filled and examinations are closed, candidates are prevented from applying for position vacancies. Temporary employees as a rule may not apply to be considered for vacancies being filled under internal (merit promotion) procedures. Thus, the open competition required by the merit system principles becomes subject to arbitrary limitations. Obtaining excellence is more a matter of luck and persistence than design.
Complexity. The system is so complex and rule-bound that managers are unable to explain to applicants how to get a federal job. Staffing law, regulations, and Federal Personnel Manual guidance comprise hundreds of pages, to which departments and agencies add their own interpretive guidance and implementing directives. The system is overly constrained by statute and regulation; over 300 appointing authorities provide little useful management information and require interpretation by personnel specialists.
This complexity has evolved over time as particular statutes, regulations, and related guidance were developed and implemented to address specific situations or perceptions of mismanagement. For example, the law requires that temporary assignments to other positions (details) be made in 120-day increments(12) as a means to control the internal movement of employees. However, the centralized and highly controlled systems designed to ensure the equitable delivery of examining services in fact serve to prevent managers and applicants from either understanding or making full use of available options. In 1993, the National Research Council concluded, "The federal civil service system, with its strong emphasis on internal equity, has long hampered the government's abilities to compete for scarce talent in the labor market and to reward exceptional individual performance."(13)
The Ideal System. An ideal hiring system would enable managers to hire, develop, and retain a quality, diverse, productive, and ethical workforce in constantly changing labor markets; empower managers to balance the competing demands of multiple stakeholders; and hold managers accountable for adherence to principles of merit and equal opportunity through a performance-based assessment of staffing outcomes. The ideal system would be decentralized to create a link between an agency's recruitment efforts and those candidates who are actually hired.
A decentralized system would permit agencies to establish their own priorities for agency-based recruitment initiatives. Tailored approaches designed to tap into local labor markets could provide managers with expanded opportunities to increase the diversity of the candidate pool. Flexible and responsive agency-based systems would permit managers to adapt to fluctuations in the labor market. Federal recruiters would be empowered to compete with private sector recruiters. A significantly enhanced, automated employment information system could immediately link candidates with nationwide, or communitywide, job opportunities by occupational specialization. Freed from constraining layers of mind-numbing regulations, personnel specialists would be able to become partners with management in the development of staffing initiatives to support overall strategic planning objectives.
Experience has shown that such a system can be successful. In July 1990, a formal demonstration project to test an alternative staffing system was implemented within the Department of Agriculture (USDA) at approximately 140 experimental and 80 comparison locations nationwide within the Forest Service and the Agricultural Research Service. The project's key initiatives include a streamlined, agency-based recruitment and hiring system that completely replaces the OPM register process; recruitment incentives; and an extended probationary period for research scientists. In connection with its ongoing responsibility to conduct a formal evaluation of project impact and implementation, the Pennsylvania State University reported that "the demonstration initiatives are widely seen as providing a flexible and responsive set of recruitment and selection procedures that are preferable to pre-existing procedures (e.g., central registers). The reported benefits from the demonstration project include increased access to the local labor market, greater control over the hiring process, and increased likelihood of quality candidates in the candidate pool, among others."(14) The evaluators proceed to describe "a possible unanticipated benefit associated with increased recruitment of labor from local labor markets . . . the sense that public perceptions of the agency as an employer and community member have [improved]."(15)
The emphasis on merit that characterizes the actions that follow is designed to ensure that the professional career service remains free from political influence and that human resource management is based on and embodies the merit system principles.
1. Authorize agencies to establish their own recruitment and examining programs. Abolish central registers and standard application forms.(16) (3)
By fall 1994, the director of OPM should forward draft legislation to Congress delegating to federal departments and independent agencies full and complete authority to develop and implement merit systems for employee selection and advancement based on the merit system principles. Legislation should be enacted to allow departments and agencies to conduct examinations for positions that are common to agencies in the federal government, and to redefine the roles of OPM and agencies with respect to the examining process. Within 30 days of enactment by Congress, OPM should develop the broad policies and general principles through which the new legislation would be implemented. Federal departments and independent agencies should establish merit systems for recruiting and evaluating candidates for selection and advancement. These systems should be based on the policies and principles established by OPM in accordance with applicable statutes and reflect the input of the federal human resource management community.
Individual federal departments and agencies should be permitted to conduct examinations for positions that have requirements common to agencies in the federal government. OPM should be able to compete with departments and agencies to provide examining services. Department secretaries and agency heads should be responsible for holding managers accountable for the judicious use of these authorities. OPM would be responsible for (1) notifying department secretaries and agency heads if violations are identified, and (2) ensuring that corrective actions are taken, as appropriate. In cases where violations are identified that involve secretaries and agency heads, OPM should be authorized to conduct an investigation and recommend an appropriate course of action to the President.
Completely decentralizing the hiring process will result in the establishment of agency-based, market-driven hiring systems, which will, in turn, improve managers' ability to hire, develop, and retain a quality workforce, reflective of our nation's diversity. Streamlined, agency-based systems will permit more timely offers of employment and be more readily understandable to applicants. Access to increased numbers of candidates will facilitate the attainment of workforce diversity goals and objectives.
How will accountability be defined in the context of decentralization and substantially increased delegation of authority? Some may believe that increased flexibility will lead to increased incidence of merit system abuse. However, decentralization of responsibility for recruitment and examining is expected to increase managers' participation in and control over the staffing process, thereby reducing their ability to blame the system for unsatisfactory outcomes. Managers will become even more accountable for adherence to merit principles and for preventing prohibited personnel practices as increased flexibility leads to correspondingly increased performance expectations. An April 1993 National Academy of Public Administration report described this shift in the definition of accountability:
The means for accountability focuses on the exercise of leadership and judgment within broad guidelines, rather than on detailed rules and procedures and prior controls . . . [deriving from] clear principles of fairness, equity and individual rights. . . . Accountability measures should be mission oriented and results driven. . . . [T]he new framework emphasizes measuring accountability by: measuring accomplishment of mission, goals and objectives; assessing results, e.g., product and service quality and customer satisfaction; assessing public trust (customer satisfaction) and institutional health (e.g., employee morale, attrition rates); and evaluating compliance with civil service laws, regulations and policy.(17)
Managers' responsibility for ensuring adherence to merit principles and preventing prohibited personnel practices will increase as they become more closely involved in all phases of recruitment and hiring. Extensive training must be provided to ensure that managers understand how the merit principles are applied in the context of making personnel decisions. The success of managers' efforts will be evaluated using performance-based outcome measures, for example, employee morale and workforce diversity. Experience has shown that greater flexibility permits managers to become more involved in and, therefore, more accountable for program results. The Pennsylvania State University reported that, using the decentralized approach being tested under the USDA demonstration project, "both managers and personnelists reported greater participation in the recruitment process, and viewed manager-personnelist interactions as more important in determining the success of the hiring process."(18)
2. Allow federal departments and agencies to determine that recruitment shortages exist and directly hire candidates without ranking.(19) (3)
By fall 1994, the director of OPM should forward draft legislation to Congress to allow OPM, and departments and agencies, to establish categories in which candidates can be directly hired to coincide with the establishment of decentralized, agency-based hiring systems.
Federal departments and agencies will have the authority to directly hire candidates without ranking when recruitment shortages exist after considering the following factors, as applicable:
--- the failure of recent efforts to recruit high-quality candidates for similar positions,
--- recent turnover in similar positions,
--- labor market factors that may negatively impact the ability of the agency to recruit high-quality candidates for similar positions now or in the future, or
--- special qualifications needed for the position that are in short supply.
OPM should establish additional categories where candidates may be directly hired, for example, persons with targeted disabilities, candidates with outstanding academic qualifications, or other categories as appropriate.
3. Reduce the number of competitive service appointment types to three.(20) (3)
By fall 1994, the director of OPM should forward draft legislation to Congress to streamline and redefine appointments in the competitive service and redefine the length of the initial probationary period. By fall 1994, OPM should revise its regulations to redefine the length of the probationary period for initial appointment to a supervisory or managerial position.
Appointments to positions in the competitive service should fall into one of the following categories:
--- Permanent: appointment leads to career status, employees receive full benefits;
--- Temporary indefinite: appointments are temporary, but without time limitation; employees receive full benefits; or
--- Temporary not to exceed (NTE): appointments are made not to exceed one year, with option to renew for one additional year; benefits are limited.
Temporary NTE appointments are used to meet short-term staffing needs. Temporary indefinite appointments are not permanent but will be made without time limitation to permit agencies to more easily adjust staffing levels to meet fluctuations in workload that may extend beyond the two-year time limit on temporary NTE appointments. Employees serving under temporary NTE or temporary indefinite appointments are not subject to governmentwide rules on reduction in force.(21) Agencies will involve employee representatives in determining the length of temporary indefinite appointments through collective bargaining. Agency flexibility to design merit-based hiring systems will substantially reduce the need for the majority of excepted service appointments currently established under Schedules A and B.(22) Excepted appointments will continue to be used for positions of a confidential or policy-determining character (Schedule C), or positions for which eligibility depends upon factors other than education and experience, for example, family income (such as student aid), local residence, or acceptability to foreign officials.
To provide an adequate period of time in which to make retention decisions, the duration of the initial probationary period upon permanent appointment without time limitation to a position in the competitive service and the probationary period upon initial appointment to a supervisory or managerial position will be extended from one to a maximum of three years. Agencies would be permitted to determine an appropriate length of time for specific occupations or positions, which will be announced to candidates in advance. Agencies will involve employee representatives in determining the length of the initial probationary period upon permanent appointment without time limitation through collective bargaining.
4. Permit nonpermanent employees to compete for permanent positions under agency procedures for internal placement.(23) (3)
By fall 1994, the director of OPM will forward draft legislation to Congress to allow nonpermanent employees who were initially hired using competitive procedures to be considered along with internal candidates for permanent positions being filled under merit promotion. Following two years of performance that meets established expectations within a five-year period, temporary NTE and temporary indefinite employees will be permitted to apply to be considered for selection and appointment to permanent positions under internal placement procedures. Within 30 days of enactment, OPM should issue appropriate guidelines for implementation.
5. Abolish the time-in-grade requirement. Create a general qualifications framework that permits agencies to augment or modify qualification standards for both internal and external placement actions. (1)
By spring 1994, the director of OPM should revise the regulations to abolish the time-in-grade requirement.(24) In addition, OPM should revise its guidance concerning governmentwide qualification standards.(25) OPM should continue to implement a framework of generic qualification standards that permits agencies to identify and develop experience requirements for specific series. Agencies would be permitted to modify standards for both external and internal placement actions, including promotions, when the agencies determine that candidates can successfully perform the work of the position although they may not fully meet the qualification requirements in the generic standards. Agencies may augment standards with selective placement factors (for example, foreign language proficiency) but may not require additional amounts of education or experience beyond those required by the standards. Decisions to either augment or modify standards should be made before vacancy announcements are issued and will be publicized in the announcement.
6. Eliminate all statutory rules on detailing employees to temporary assignments.(26) (3)
By fall 1994, the director of OPM should forward draft legislation to Congress to repeal the statutory time limitation on details of employees. Within 30 days of enactment of the legislation, OPM should issue appropriate guidelines for implementation. The 120-day limitation on details will be removed, and agencies will have the authority to determine the appropriate duration of a temporary assignment.
7. Create a governmentwide employment information system to inform the public of job opportunities. Coordinate the development and operation of common automated systems to facilitate agency staffing policies and operations. (1)
By September 1994, the director of OPM should develop and implement an expanded job information service featuring a user-friendly, state- of-the-art electronic information network to which customers can easily gain access. By September 1994, OPM and agencies should collaborate in developing a core automated personnel operations support network to reduce the cost and inefficiency of separate agency systems.
A substantially refined and expanded automated employment information system should be installed to which applicants can gain telephone or electronic access. Services provided at Federal Job Information Centers should be expanded, and agency access to the Central Personnel Data File (CPDF) increased. CPDF should be extensively reconfigured to provide management information for the purpose of monitoring workforce statistics, including those which relate to managerial accountability, such as employee turnover and selection data by race, gender, and disability categories.
Cross References to Other NPR Accompanying Reports
Department of Justice, DOJ12: Streamline Background Investigations for Federal Employees.
Department of the Treasury/Resolution Trust Corporation, TRE13: Streamline Background Investigations for Federal Employees.
Improving Financial Management, FM06: "Franchise" Internal Services.
1. Title 5, United States Code, Government Organization and Employees (April 1993), sec. 2301.
2. Title 5, United States Code, sec. 2302.
3. Title 5, United States Code, sec. 2302(c).
4. Title 5, United States Code, sec. 2301(b)(1).
5. U.S. General Accounting Office, Does Veterans' Preference Need Updating?, GAO/GGD-92-52 (Washington, D.C.: U.S. General Accounting Office, March 1992), p. 27.
6. U.S. Merit Systems Protection Board, Delegation and Decentralization: Personnel Management Simplification Efforts in the Federal Government (Washington, D.C., October 1989), p. 18.
7. Horner, Constance, quoted in Leadership for America (Washington, D.C.: National Commission on the Public Service, 1989), p. 29.
8. Hudson Institute, Civil Service 2000 (Washington, D.C., June 1988), p. 27.
9. Leadership for America, p. 28.
10. U.S. Merit Systems Protection Board, Attracting and Selecting Quality Applicants for Federal Employment (Washington, D.C., April 1990), p. 1.
11. Leadership for America, p. 26.
12. Title 5, United States Code, sec. 3341.
13. National Research Council, Improving the Recruitment, Retention, and Utilization of Federal Scientists and Engineers (Washington, D.C.: National Academy Press, 1993), p. 37.
14. The Pennsylvania State University, U.S. Department of Agriculture Personnel Management Demonstration Project Second Annual Evaluation Report (The Pennsylvania State University, April 1993), p. vii.
15. Ibid., p. 12.
16. Title 5, United States Code, sec. 1104; 1302; 3304; 3305; 3324; and 3325.
17. National Academy of Public Administration, Leading People in Change: Empowerment, Commitment, Accountability (Washington, D.C., April 1993), p. 18.
18. The Pennsylvania State University, p. 22.
19. Title 5, United States Code, sec. 1302; 3304; and 3361.
20. Executive Order 10577; Title 5, Code of Federal Regulations, Administrative Personnel (January 1, 1993), Part 315.
21. Title 5, United States Code, Chapter 35, and Title 5, Code of Federal Regulations, Part 351.
22. Title 5, Code of Federal Regulations, Part 213.
23. Title 5, United States Code, sec. 3304.
24. Title 5, Code of Federal Regulations, Part 300, Subpart F.
25. See U.S. Office of Personnel Management, Handbook X-118, Qualification Standards for Positions under the General Schedule (Washington, D.C., December 1991).
26. Title 5, United States Code, sec. 3341.
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