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The Case for Civil Service Reform

November 19, 2014
Over the last several years, it seems that the media reports every few months on a major incident of gross mismanagement or failure in the federal government, from the improper targeting of certain advocacy organizations by the IRS, to the flawed launch of HealthCare.gov, to the revelation of data manipulation at Department of Veterans Affairs medical centers. What one does not hear much about, however, is the outdated personnel system used to manage the federal workforce, which underlies nearly all of these stories of government incompetence.

By Zack Piaker CAS’15

Today, approximately 1.5 million civilian, white-collar employees operate under the General Schedule (GS) pay and classification system. The GS has 15 grades ranging from GS-1, the lowest, to GS-15. Each grade is further subdivided into 10 step rates. (Office of Personnel Management, “General Schedule Overview”) These grades and steps are what determine each federal employee’s pay.

The GS system was established in 1949, at a time in which both the federal workforce and broader labor market looked very different than they appear today. Six decades ago, over 70 percent of federal employees performed low-level administrative or clerical work. In today’s knowledge-based economy, federal workers’ jobs are very different; but the job classification system established by the GS has not kept up with the pace of change. (Partnership for Public Service and Booz Allen Hamilton, 16) Furthermore, the distinctions agencies are forced to make between the work of, say, a GS-12 and a GS-13 accountant are often arbitrary or opaque. (Government Accountability Office, 6)

United States Office of Personnel Management - courtesy of WikipediaAnnual, across-the-board salary adjustments do not allow the government to compete with the private sector for top talent, especially in certain mission-critical fields such as STEMM (Science, Technology, Engineering, Math, Medical). The federal government is unable to effectively compare its own employees’ compensation relative to comparable private-sector work under the current classification system. By law, the Office of Personnel Management (OPM), the agency with responsibility for overseeing the federal workforce, is supposed to review “from time to time” each agency’s placement of positions into grades and classes to ensure that they meet the standards set by OPM. However, the Government Accountability Office (GAO) recently found that OPM has not conducted such a review since the 1980s. OPM’s ability to effectively oversee the classification system is severely limited; today there are only six full-time classification policy specialists tasked with maintaining the standards, down from 16 in 2001 and many more in the 1980s. (GAO, 6-7)

Due to the difficulty in filling certain positions, many agencies have gone to Congress or OPM to receive special pay or hiring authorities that allow them to bypass the GS structure. While these authorities allow these agencies to address critical needs, the overall result is federal workforce, which is increasingly governed by a confusing hodgepodge of critical pay authorities, special pay rates, and excepted service hiring authorities. (OPM, Handbook, 41-51)

This often means that government competes with itself for talent. For example, one problem that has emerged during recent congressional hearings into the VA scandal is that the Department of Defense’s medical system has been able to hire health care providers away from the Veterans Health Administration. (Review of Awarding Bonuses to Senior Executives at the Department of Veterans Affairs)

The problems with the current civil service framework go beyond an outdated pay and classification system, however. At the heart of nearly all of the government failures cited above lies an ineffective federal performance management framework. Top performers are not adequately recognized or rewarded, while poor performers suffer little to no consequences for failing to meet expectations. Most federal managers and employees view performance management as a meaningless exercise in paperwork and red tape. Meanwhile employees’ annual performance ratings have little bearing on pay or career advancement—a far cry from their private-sector counterparts. (Partnership and Booz, 23) According to the 2013 Federal Employee Viewpoint Survey, about two-thirds of federal employees do not believe promotions in their work unit are based on merit. (OPM, FEVS) The current system provides insufficient incentives for exceptional performance, while also failing to hold poor performers accountable. Only 26 percent of federal employees feel that steps are taken to deal with poor performers who will not or cannot improve. In fact, last year less than .5% of federal employees were terminated. (Partnership and Booz, 24)

I recently had the chance to sit in on a House Oversight and Government Reform subcommittee hearing on the federal workforce, titled “Is the Federal Government’s General Schedule (GS) a Viable Personnel System for the Future?” Just about all of those present, from the members to the witnesses, agreed that the current system is broken and in need of serious reform. (Is the Federal Government’s General Schedule (GS) a Viable Personnel System for the Future?) Of course, there remains much disagreement as to what a new system should look like.

The Partnership for Public Service, a nonprofit organization that believes that good government starts with good people (and where I am working this summer) has put forth one such comprehensive proposal for overhauling the civil service in consultation with Booz Allen Hamilton. The proposal, which was based on two years’ worth of interviews with current and former government officials, academics, and other stakeholders, addresses many of the issues discussed above. The various special pay and hiring exceptions carved out by numerous agencies would be replaced with a unified, enterprise-wide set of human capital policies which would retain the core civil service principles of due process, non-discrimination, veterans’ preference, and remaining nonpartisan and merit-based. (Partnership and Booz, 14-15) The 15 grades of the GS system would be replaced by five broad pay bands, which in turn would allow for greater agency flexibility and transparency in job classification. This would in turn allow different occupations to be better compared with private-sector equivalents, so that pay could be set according to market rates, allowing the federal government to better compete with the private sector for top talent. (Partnership and Booz, 17-19) Meanwhile, federal managers would be held more accountable for improving employee engagement and fostering a work environment that adequately rewards excellence and deals with poor performance. (Partnership and Booz, 24-25).

Overhauling a system that governs the pay and performance management of millions of employees seems like a near-impossible task for Congress in an era of intense polarization and legislative gridlock. However, civil service reform is an issue of critical importance for the federal government moving forward, especially as its employees are tasked with ever more and ever more complex responsibilities. Failing to address these challenges means a future in which Congress is constantly struggling to put out fires (whether at the IRS, the VA, or wherever the next scandal may occur), without ever dealing with the underlying problem. There is some hope; some of the recent hearings referenced above indicate that at least some members are beginning to think about the need for reform. While this is only the beginning of what is sure to be a long legislative and policy-making effort, the end result will hopefully be a future in which one hears more about the federal government’s successes, rather than the crisis du jour.

 

Government Accountability Office. Federal Workforce: Human Capital Management Challenges and the Path to Reform. Washington, DC, July 15, 2014. http://www.gao.gov/assets/670/664772.pdf.

Is the Federal Government’s General Schedule (GS) a Viable Personnel System for the Future?: Hearing before the Subcommittee on Federal Workforce, US Postal Service and Census of the Committee on Oversight and Government Reform of the U.S. House of Representatives. 113th Congress (July 15, 2014).

Office of Personnel Management. “General Schedule Overview.” Accessed July 27, 2014. http://www.opm.gov/policy-data-oversight/pay-leave/pay-systems/general-schedule/.

Office of Personnel Management. Human Resources Flexibilities and Authorities in the Federal Government. Washington, DC, August 2013. http://www.opm.gov/policy-data-oversight/pay-leave/reference-materials/handbooks/humanresourcesflexibilitiesauthorities.pdf.

Office of Personnel Management. “2013 Federal Employee Viewpoint Survey: Employees Influencing Change.” Accessed July 27, 2014. http://www.fedview.opm.gov/2013/Reports/Responses.asp?AGY=ALL.

Partnership for Public Service and Booz Allen Hamilton. Building the Enterprise: A New Civil Service Framework. April 1, 2014. http://ourpublicservice.org/OPS/publications/viewcontentdetails.php?id=237.

Review of Awarding Bonuses to Senior Executives at the Department of Veterans Affairs: Hearing before the Committee on Veterans’ Affairs of the U.S. House of Representatives. 113th Congress (June 20, 2014).

Student Blog Disclaimer
  • The views expressed on the Student Blog are the author’s opinions and don’t necessarily represent the Penn Wharton Public Policy Initiative’s strategies, recommendations, or opinions.

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