[Joint House and Senate Hearing, 108 Congress]
[From the U.S. Government Publishing Office]
S. Hrg. 108-91
THE HUMAN CAPITAL CHALLENGE: OFFERING SOLUTIONS AND DELIVERING RESULTS
=======================================================================
JOINT HEARING
before the
OVERSIGHT OF GOVERNMENT MANAGEMENT,
THE FEDERAL WORKFORCE AND THE DISTRICT OF COLUMBIA SUBCOMMITTEE
of the
COMMITTEE ON
GOVERNMENTAL AFFAIRS
UNITED STATES SENATE
and the
SUBCOMMITTEE ON CIVIL SERVICE AND AGENCY ORGANIZATION
OF THE
COMMITTEE ON GOVERNMENT REFORM
HOUSE OF REPRESENTATIVES
ONE HUNDRED EIGHTH CONGRESS
FIRST SESSION
__________
APRIL 8, 2003
__________
Serial No. 108-28
__________
Printed for the use of the Committee on Governmental Affairs and the
Committee on Government Reform
Available via the World Wide Web: http://www.gpo.gov/congress/house
http://www.house.gov/reform
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WASHINGTON : 2003
87-717 PDF
For Sale by the Superintendent of Documents, U.S. Government Printing Office
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COMMITTEE ON GOVERNMENTAL AFFAIRS
SUSAN M. COLLINS, Maine, Chairman
TED STEVENS, Alaska JOSEPH I. LIEBERMAN, Connecticut
GEORGE V. VOINOVICH, Ohio CARL LEVIN, Michigan
NORM COLEMAN, Minnesota DANIEL K. AKAKA, Hawaii
ARLEN SPECTER, Pennsylvania RICHARD J. DURBIN, Illinois
ROBERT F. BENNETT, Utah THOMAS R. CARPER, Delaware
PETER G. FITZGERALD, Illinois MARK DAYTON, Minnesota
JOHN E. SUNUNU, New Hampshire FRANK LAUTENBERG, New Jersey
RICHARD C. SHELBY, Alabama MARK PRYOR, Arkansas
Michael D. Bopp, Staff Director and Chief Counsel
Joyce Rechtschaffen, Minority Staff Director and Chief Counsel
Darla D. Cassell, Chief Clerk
------
OVERSIGHT OF GOVERNMENT MANAGEMENT, THE FEDERAL WORKFORCE AND THE
DISTRICT OF COLUMBIA SUBCOMMITTEE
GEORGE V. VOINOVICH, Ohio, Chairman
TED STEVENS, Alaska RICHARD J. DURBIN, Illinois
NORM COLEMAN, Minnesota DANIEL K. AKAKA, Hawaii
ROBERT F. BENNETT, Utah THOMAS R. CARPER, Delaware
PETER G. FITZGERALD, Illinois FRANK LAUTENBERG, New Jersey
JOHN E. SUNUNU, New Hampshire MARK PRYOR, Arkansas
Andrew Richardson, Staff Director
Michael D. Dovilla, Professional Staff Member
Marianne Clifford Upton, Minority Staff Director and Chief Counsel
Cynthia Simmons, Chief Clerk
COMMITTEE ON GOVERNMENT REFORM
TOM DAVIS, Virginia, Chairman
DAN BURTON, Indiana HENRY A. WAXMAN, California
CHRISTOPHER SHAYS, Connecticut TOM LANTOS, California
ILEANA ROS-LEHTINEN, Florida MAJOR R. OWENS, New York
JOHN M. McHUGH, New York EDOLPHUS TOWNS, New York
JOHN L. MICA, Florida PAUL E. KANJORSKI, Pennsylvania
MARK E. SOUDER, Indiana CAROLYN B. MALONEY, New York
STEVEN C. LaTOURETTE, Ohio ELIJAH E. CUMMINGS, Maryland
DOUG OSE, California DENNIS J. KUCINICH, Ohio
RON LEWIS, Kentucky DANNY K. DAVIS, Illinois
JO ANN DAVIS, Virginia JOHN F. TIERNEY, Massachusetts
TODD RUSSELL PLATTS, Pennsylvania WM. LACY CLAY, Missouri
CHRIS CANNON, Utah DIANE E. WATSON, California
ADAM H. PUTNAM, Florida STEPHEN F. LYNCH, Massachusetts
EDWARD L. SCHROCK, Virginia CHRIS VAN HOLLEN, Maryland
JOHN J. DUNCAN, Jr., Tennessee LINDA T. SANCHEZ, California
JOHN SULLIVAN, Oklahoma C.A. ``DUTCH'' RUPPERSBERGER,
NATHAN DEAL, Georgia Maryland
CANDICE S. MILLER, Michigan ELEANOR HOLMES NORTON, District of
TIM MURPHY, Pennsylvania Columbia
MICHAEL R. TURNER, Ohio JIM COOPER, Tennessee
JOHN R. CARTER, Texas CHRIS BELL, Texas
WILLIAM J. JANKLOW, South Dakota ------
MARSHA BLACKBURN, Tennessee BERNARD SANDERS, Vermont
(Independent)
Peter Sirh, Staff Director
Melissa Wojciak, Deputy Staff Director
Rob Borden, Parliamentarian
Teresa Austin, Chief Clerk
Philip M. Schiliro, Minority Staff Director
Subcommittee on Civil Service and Agency Organization
JO ANN DAVIS, Virginia, Chairwoman
TIM MURPHY, Pennsylvania DANNY K. DAVIS, Illinois
JOHN L. MICA, Florida MAJOR R. OWENS, New York
MARK E. SOUDER, Indiana CHRIS VAN HOLLEN, Maryland
ADAH H. PUTNAM, Florida ELEANOR HOLMES NORTON, District of
NATHAN DEAL, Georgia Columbia
MARSHA BLACKBURN, Tennessee JIM COOPER, Tennessee
Ex Officio
TOM DAVIS, Virginia HENRY A. WAXMAN, California
Ronald Martinson, Staff Director
B. Chad Bungard, Deputy Staff Director/Chief Counsel
Chris Barkley, Clerk
Tania Shand, Minority Professional Staff Member
C O N T E N T S
------
Opening statements:
Page
Senator Voinovich............................................ 1
Representative Jo Ann Davis from the State of Virginia....... 2
Representative Danny K. Davis from the State of Illinois..... 4
Eleanor Holmes Norton, a Delegate in Congress from the
District of Columbia....................................... 5
Representative Tom Davis from the State of Virginia and
Chairman of the House Committee on Government Reform....... 6
Senator Carper............................................... 16
Representative Chris Van Hollen from the State of Maryland... 17
Senator Lautenberg........................................... 19
Senator Durbin............................................... 63
WITNESSES
Tuesday, April 8, 2003
Hon. David M. Walker, Comptroller General of the United States,
General Accounting Office...................................... 7
Hon. Dan G. Blair, Deputy Director, Office of Personnel
Management..................................................... 21
Bobby L. Harnage, Sr., National President, American Federation of
Government Employees, AFL-CIO.................................. 33
Colleen M. Kelley, National President, National Treasury
Employees Union................................................ 34
Carol A. Bonosaro, President, Senior Executives Association...... 36
Karen Heiser, Treasurer, Chapter 88, Federal Managers Association 38
Hannah S. Sistare, Executive Director, National Commission on the
Public Service................................................. 49
Steven J. Kelman, Ph.D., Weatherhead Professor of Public
Management, John F. Kennedy School of Government, Harvard
University..................................................... 51
Max Stier, President and Chief Executive Officer, Partnership for
Public Service................................................. 53
Jeff Taylor, Founder and Chairman, Monster....................... 55
Major General Robert A. McIntosh, USAFR (Ret.), Executive
Director, Reserve Officers Association of the United States.... 57
Alphabetical List of Witnesses
Blair, Hon. Dan G.:
Testimony.................................................... 21
Prepared statement with an attachment........................ 97
Bonosaro, Carol A.:
Testimony.................................................... 36
Prepared statement with attachments.......................... 155
Harnage, Bobby L., Sr.:
Testimony.................................................... 33
Prepared statement........................................... 113
Heiser, Karen:
Testimony.................................................... 38
Prepared statement........................................... 190
Kelley, Colleen M.:
Testimony.................................................... 34
Prepared statement........................................... 144
Kelman, Steven J., Ph.D.:
Testimony.................................................... 51
Prepared statement........................................... 229
McIntosh, Major General Robert A., USAFR (Ret.):
Testimony.................................................... 57
Prepared statement........................................... 259
Sistare, Hannah S.:
Testimony.................................................... 49
Prepared statement........................................... 218
Stier, Max:
Testimony.................................................... 53
Prepared statement........................................... 239
Taylor, Jeff:
Testimony.................................................... 55
Prepared statement........................................... 254
Walker, Hon. David M.:
Testimony.................................................... 7
Prepared statement........................................... 71
Appendix
Daniel J. Finnigan, Senior Vice President, YAHOO!, and Executive
Vice President and General Manager, Hot Jobs, prepared
statement...................................................... 262
Responses to questions submitted for the record from:
Mr. Walker................................................... 265
Mr. Blair.................................................... 276
Mr. Harnage.................................................. 292
Ms. Kelley................................................... 296
Ms. Bonosaro................................................. 299
Ms. Heiser................................................... 304
Ms. Sistare.................................................. 308
Mr. Kelman................................................... 313
Mr. Stier.................................................... 316
Mr. Taylor................................................... 320
THE HUMAN CAPITAL CHALLENGE: OFFERING SOLUTIONS AND DELIVERING RESULTS
----------
TUESDAY, APRIL 8, 2003
U.S. Senate,
Oversight of Government Management, the Federal
Workforce and the District of Columbia
Subcommittee, of the Committee on Governmental
Affairs, joint with the Committee on Civil
Service and Agency Organization, Committee on
Government Reform,
Washington, DC.
The Committees met, pursuant to notice, at 9:38 a.m., in
room SD-342, Dirksen Senate Office Building, Hon. George V.
Voinovich, Chairman of the Committee on Governmental Affairs,
presiding.
Present: Senators Voinovich, Durbin, Carper, and
Lautenberg; Representatives Jo Ann Davis of Virginia, Tom Davis
of Virginia, Chairman of the House Committee on Government
Reform, Danny Davis of Illinois, Chris Van Hollen of Maryland,
and Eleanor Holmes Norton, a Delegate in Congress from the
District of Columbia.
OPENING STATEMENT OF SENATOR VOINOVICH
Senator Voinovich. The hearing will come to order.
Good morning, and thank you all for coming. Today the
Senate Subcommittee on Oversight of Government Management and
the Federal Workforce and the House Subcommittee on Civil
Service and Agency Organization are meeting to examine the
Federal Government's human capital challenges. This is the OGM
Subcommittee's 12th hearing on this issue over the last several
years.
I am very pleased that Representative Jo Ann Davis is co-
chairing this hearing. Her presence here today represents an
ongoing partnership that we have forged as counterpart
Subcommittee Chairmen since the beginning of this Congress. I
believe that the 108th Congress represents a real opportunity
to enact major personnel reform for the Federal Government. I
am also pleased that Senator Susan Collins and Representative
Tom Davis, the Chairmen of our respective full Committees, have
expressed a strong interest in moving these important issues
forward this year. I think this could be a great year.
Today's hearing represents an ongoing Subcommittee effort
that is now in its 5th year. One of the reasons I ran for the
U.S. Senate was to transform the culture of the Federal
workforce, something I conscientiously undertook with the city
and State workforces when I was Mayor of Cleveland and Governor
of Ohio. Having worked with the Federal Government as an
``outside force''--as president of the National League of
Cities and chairman of the National Governors Association--I
observed that investing in personnel was not a priority in the
Federal Government. As GAO Comptroller General Walker has
observed--and we are very happy to have you here with us--for
too long Federal employees have been seen as ``costs to be cut
rather than assets to be valued.''
By pursuing a strategy of legislative reform and outreach,
we have made considerable progress in raising the profile of
strategic human capital management for the Federal Government.
Last November, as part of the Homeland Security Act,
Congress enacted key elements of our legislation, the Federal
Workforce Improvement Act of 2002. This was the first major
governmentwide human capital reform legislation since the Civil
Service Reform Act of 1978, a quarter century ago. Our bill
reflected the consensus of a wide variety of public, private,
and nonprofit stakeholders.
In the homeland security debate, we took the first step to
address the pervasive problem by discussing some of the
critical personnel issues in the Federal workforce. Now it is
time to build on that debate and continue working with the
General Accounting Office and the Bush Administration on the
issue. GAO's High-Risk List and the President's Management
Agenda both recognize strategic human capital management as
their No. 1 priority.
This year, Chairwoman Davis and I have introduced
legislation that will advance our reform agenda. We introduced
the Federal Workforce Flexibility Act, the Senior Executive
Service Reform Act, and the Presidential Appointments
Improvement Act in the Senate and the House. These bills will
help provide the tools the Federal Government desperately needs
to maximize the effectiveness of its workforce.
At a press conference in this room last Wednesday,
Representative Davis and I outlined in greater detail the
provisions of these bills. Today, we are eager to receive the
input of an array of witnesses on our legislation and other
reforms that they might recommend. I thank our four panels of
witnesses for joining us today. They represent some of the
Nation's foremost experts on personnel management, and I look
forward to their testimony.
I now yield to the Co-Chair of this hearing, Chairwoman
Davis, for an opening statement.
STATEMENT OF JO ANN DAVIS, A REPRESENTATIVE IN CONGRESS FROM
THE STATE OF VIRGINIA
Mrs. Davis. Thank you, Chairman.
I want to begin by thanking Senator Voinovich for hosting
this important joint hearing and our invited guests for joining
us here today. Many words have been spoken over the last few
years about the Federal Government's human capital crisis. In
fact, it is now unusual to hear the phrase ``human capital''
not followed by the word ``crisis'' when discussing the Federal
workforce.
This problem takes many forms: There is the potential wave
of retirements as the workforce ages; the struggle for many
agencies to recruit, hire, and retain talented employees,
particularly in technical or scientific fields; the lack of
training and career development; and as we will hear today, the
concern of employees that their work is not valued.
The Federal Government simply cannot function properly
without good employees and managers who have the necessary
tools to do their jobs for the American people. Meeting the
Federal Government's workforce challenges is critical to the
success of the Federal Government's core mission today and in
the future.
Just last week, as Senator Voinovich said, he and I stood
in this very same room and announced that we were introducing
several pieces of legislation that begin to address some of
these challenges by giving managers more flexibility to manage
their agencies, streamlining the cumbersome Presidential
appointments process, and relieving pay compression at the
senior levels.
Allow me to highlight some aspects of the bills.
The Presidential Appointments Improvement Act streamlines
but does not weaken the financial disclosure requirements, puts
a process in place to reduce the number of political
appointees, and enlists the Office of Government Ethics in an
attempt to find a balance between necessary ethics requirements
and unnecessarily intrusive ones.
The Federal Workforce Flexibility Act provides agencies
with enhanced abilities to undertake management demonstration
projects, permits agencies to pay out larger recruitment,
retention, and relocation bonuses under certain circumstances,
and enhances training by requiring agencies to link employee
training programs with performance plans and strategic goals.
Finally, the Senior Executive Service Reform Act not only
alleviates pay compression for senior executives,
administrative law judges, Board of Contract Appeals members,
and other senior government workers, but it also moves the SES
to a broader pay for performance system and simplifies some
hiring provisions.
I also want to repeat what I said last week. The Senator
and I fully intend to work with the employee groups and the
administration in shaping these bills as we move forward. That
is why we are here today, to listen to and to gather ideas from
our witnesses. I look forward to hearing your comments, and I
thank you for coming.
[The prepared statement of Mrs. Davis follows:]
PREPARED STATEMENT OF MRS. DAVIS
I want to begin by thanking Senator Voinovich for hosting this
important joint hearing, and our invited guests for joining us today.
Many words have been spoken over the last few years about the Federal
Government's human capital crisis--in fact, it is now unusual to hear
the phrase ``human capital'' not followed by the word ``crisis'' when
discussing the Federal workforce.
This problem takes many forms. There's the potential wave of
retirements as the workforce ages, the struggle for many agencies to
recruit, hire and retain talented employees--particularly in technical
or scientific fields--the lack of training and career development, and,
as we will hear today, the concern of employees that their work is not
valued.
The Federal Government simply cannot function properly without good
employees and managers who have the necessary tools to do their jobs
for the American people. Meeting the Federal Government's workforce
challenges is critical to the success of the Federal Government's core
mission, today and in the future.
Just last week, Senator Voinovich and I stood in this very same
room and announced we were introducing several pieces of legislation
that begin to address some of these challenges--by giving managers more
flexibility to manage their agencies, streamlining the cumbersome
presidential appointments process and relieving pay compression at the
senior levels.
Allow me to highlight some aspects of the bills:
LThe Presidential Appointments Improvement Act
streamlines--but does not weaken--the financial disclosure
requirements, puts a process in place to reduce the number of political
appointees, and enlists the Office of Government Ethics in an attempt
to find a balance between necessary ethics requirements and
unnecessarily intrusive ones.
LThe Federal Workforce Flexibility Act provides agencies
with enhanced abilities to undertake management demonstration projects,
permits agencies to pay out larger recruitment, retention and
relocation bonuses under certain circumstances, and enhances training
by requiring agencies to link employee training programs with
performance plans and strategic goals.
LFinally, the Senior Executive Service Reform Act not only
alleviates pay compression for senior executives, administrative law
judges, Board of Contract appeals members, and other senior government
workers, but it also moves the SES to a broader pay-for-performance
system and simplifies some hiring provisions.
I also want to repeat what I said last week: The Senator and I
fully intend to work with the employee groups and the Administration in
shaping these bills as we move forward. That is why we are here today,
to listen to and gather ideas from our witnesses. I look forward to
hearing your comments. Thank you.
Senator Voinovich. Thank you.
I now yield to Danny Davis, ranking member of the Civil
Service and Agency Organization Subcommittee, for an opening
statement.
STATEMENT OF DANNY K. DAVIS, A REPRESENTATIVE IN CONGRESS FROM
THE STATE OF ILLINOIS
Mr. Danny Davis. Thank you very much, Senator Voinovich,
Chairwoman Davis--a lot of Davises in this particular group--
Chairman Davis, and Ranking Member Durbin. It is a pleasure to
be here today at a joint hearing to consider civil service
reform and the General Accounting Office's designation of the
Federal Government's human capital as high risk.
Over the last several years, the Senate Subcommittee on
Oversight of Government Management and the Federal Workforce
has held numerous hearings on civil service reform. I am
pleased that this session the House Civil Service and Agency
Organization Subcommittee will be equally vigorous in examining
civil service reform issues.
What is emerging from these hearings on civil service
reform proposals is once again that the devil is indeed in the
detail. To effectively reformed Federal operations and the
workforce, we must first understand the logic and reasoning
behind the outdated and outmoded rules and regulations. If not,
we are destined to reform everything and improve nothing.
For example, if the current system is to be reformed to
give managers more flexibility, how can we ensure that a new
system will be fair and equitable and free from political
influence?
Efforts to reform civil service that are based on the need
for more flexibility may indeed be valid, but offering more
flexibility without accountability is simply something that we
cannot afford to do.
Legislation that offers flexibility without accountability
should not be considered unless it specifies how decisionmakers
in the government will be held accountable for their actions
and the decisions they make.
I look forward to working with my counterparts in the
Senate, Federal employee unions, research organizations, and
others as we work together to improve the efficiency and
effectiveness of the Federal Government and to place a higher
premium on civil service.
Thank you so much, Senator, and I yield back the balance of
my time.
Senator Voinovich. Thank you very much.
We welcome Eleanor Holmes Norton. Eleanor, it is nice to
have you here with us. Do you have an opening statement that
you would like to make.
OPENING STATEMENT OF ELEANOR HOLMES NORTON, A DELEGATE IN
CONGRESS FROM THE DISTRICT OF COLUMBIA
Ms. Norton. Thank you very much, Senator Voinovich. I would
like to say just a few words.
First of all, I would like to thank you and Chairman Davis
for this joint hearing. I remember, Senator Voinovich, your
calling just such a joint hearing, perhaps a couple years ago
when you chaired this Subcommittee, and beginning perhaps a
tradition of our working together on this really huge problem
of human capital in our Federal workforce. Beginning with that
flexibility in the SES makes some sense. I am concerned with
human capital up and down the Federal workforce, including, of
course, those who manage the system.
I believe that the Federal Government has rested on its
human capital laurels now for decades. The Federal Government
was a natural magnet for the smartest people in the society,
for the management jobs, and all up and down the line. From the
New Deal on, government was exciting. But the Federal
Government over the past two decades has failed to wake up to
the fact that it now has become competitive with other
employers. And the real indication of that is if you go into
the public schools of the United States and ask people what
they want to be, you will have a hard time finding somebody
that says, ``I want to work for the Federal Government,'' or
``I want to have a job that is associated with the Federal
Government.'' That is a problem. That is a problem whether you
are talking about the SES or the line worker, and some of us
happen to be at least as interested in the line workers who
deliver the service and who are evaporating, having been
trained by us and now going to market their skills elsewhere.
I could not be more empathetic with the notion to have
managers who have the flexibility to do what needs to be done
because I ran a very troubled agency and had to reconstruct it
from the ground up, the Equal Employment Opportunity
Commission, who had a humongous backlog and literally had to
change everything within the agency. I have a keen appreciation
for what managers have to do.
What I think we have to look at is a discipline that we
have in the Federal Government that no other workforce has, and
that is that you have to work within a civil service merit
system. And how do you get the flexibility that is necessary to
manage the system while being true to merit system principles?
That is the challenge, and that is the challenge I think we
should ourselves be accountable to. Thank you very much, Mr.
Chairman.
Senator Voinovich. Thank you, Eleanor.
I would like to welcome the Chairman of the House
Government Reform Committee, Representative Tom Davis. Tom, it
is very nice that you came this morning. Would you like to
share some opening remarks.
STATEMENT OF TOM DAVIS, A REPRESENTATIVE IN CONGRESS FROM THE
STATE OF VIRGINIA, CHAIRMAN OF THE HOUSE COMMITTEE ON
GOVERNMENT REFORM
Mr. Tom Davis of Virginia. Senator, just very briefly. I am
just here because this is real important to our Committee, and
we are just pleased at your interest in this, and we are hoping
maybe this is the session that we can get some things moving.
This is a huge problem that faces the Federal Government in the
out-years. We are going to hear a lot from our witnesses today.
I used to work for a company out in the Beltway, a billion-
dollar IT company, and our most important asset wasn't our
computers, wasn't our buildings, and it wasn't our patents. It
was our people. They walked out the door every night, and we
prayed they came back the next day. That was our asset, and how
we rewarded and retained those people was very important to our
staying competitive and staying ahead of the curve.
It is the same with the Federal Government. That is our
most important asset, and I think it is sometimes
underutilized. And I think we will hear some great ideas today
on some of the things we need to do in a proactive manner so
that this human capital crisis that we face in the out-years
perhaps doesn't come to pass.
So thanks for your leadership; thanks to Mrs. Davis for
hers. And I am just glad to be here.
[The prepared statement of Hon. Tom Davis of Virginia
follows:]
PREPARED STATEMENT OF CHAIRMAN TOM DAVIS, HOUSE COMMITTEE ON GOVERNMENT
REFORM
Despite best intentions, reform of the civil service system is a
long debated topic with very little progress to show for it. With the
exception of a few minor steps forward, there is surprisingly little
difference between today's civil service system and the original system
created fifty years ago. Unfortunately, the job market outside of
government has changed drastically over the last half century,
necessitating that Congress and the Administration take a careful look
at the civil service system to determine what changes can and should be
made in order to recruit and retain the best and the brightest civil
servants.
The Administration has already taken the first step on this issue,
assigning ``strategic management of human capital'' as one of five
government-wide initiatives in the FY 2002 President's Management
Agenda. More specifically, the President's Management Agenda calls upon
agencies to (1) establish performance-oriented compensation systems,
(2) adopt information systems that will minimize the ``brain drain''
should a wave of retirements occur in the next decade, and (3) take
full advantage of existing personnel flexibilities in order to
determine what statutory changes are necessary.
The recently issued final report by the National Commission on the
Public Service (the ``Volcker Commission'') iterated the importance
that the Bush Administration has placed on the strategic management of
human capital. The Volcker Commission recommended that (1) the Federal
workforce be rooted in new personnel management principles that rely
more heavily on government performance, (2) a more flexible personnel
system be adopted, in terms of rewarding effective employees and
disciplining underperformers, (3) the process of recruiting new hires
be streamlined, and (4) agency managers be given the flexibility to
more closely tie compensation to current market comparisons. We held a
hearing with several of the members of the Commission (Volcker,
Carlucci and Shalala) who all told us the importance of a new system.
The Congress must work to determine which civil service system
improvements must be accomplished in the coming years and legislate
such improvements.
Senator Voinovich. Well, thanks very much.
Will the witnesses that are going to be testifying today
stand? It is the custom of this Subcommittee that we swear in
all witnesses. If you will, raise your right hand. Do you swear
that the testimony you are about to give before this
Subcommittee is the truth, the whole truth, and nothing but the
truth?
Let the record note that the witnesses have answered in the
affirmative.
The sole witness of our first panel is the Hon. David M.
Walker, Comptroller General of the United States of America. It
is a pleasure that Comptroller General Walker's mother and
father are here with us. We welcome you to this hearing.
Two years ago, Mr. Walker appeared before the Subcommittee
to discuss the designation of strategic human capital
management as a new item on GAO's government high-risk list.
Today, the Subcommittee is interested in learning what progress
has been made on this issue and to receive Mr. Walker's
recommendation for strengthening human capital management so
that it can be removed from the high-risk list.
I would ask all witnesses, if possible, to limit their oral
statements to 5 minutes each, and I remind you that your
complete statements will be entered into the record.
Mr. Walker, we would like to hear from you this morning.
Thank you for being here.
TESTIMONY OF HON. DAVID M. WALKER,\1\ COMPTROLLER GENERAL OF
THE U.S. GENERAL ACCOUNTING OFFICE
Mr. Walker. Thank you, Chairman Voinovich, Chairwoman
Davis, Chairman Davis, Ranking Member Davis, Ms. Norton--you
are right; there are a lot of Davises here today. It makes it a
lot easier, though, quite frankly. And as you noted for the
record, Chairman Voinovich, my parents are here today, and for
the record I want to thank them for all that they have done to
help me be where I am today.
---------------------------------------------------------------------------
\1\ The prepared statement of Mr. Walker appears in the Appendix on
page 71.
---------------------------------------------------------------------------
It is a great pleasure to appear before you today to
discuss the Federal Government's greatest asset: Its people.
Since GAO designated strategic human capital management as a
governmentwide high-risk area in January 2001, Congress, the
administration, and the agencies have taken a number of steps
to address the Federal Government's human capital shortfalls.
In fact, my major point today is, I believe, that we have made
more progress in addressing the government's longstanding human
capital challenges in the past 2 years than in the last 20. And
I am confident that we will make even more progress in the next
2 years than the past 2 years.
Despite the building momentum for comprehensive and
systematic reforms, it remains clear that today's Federal human
capital strategies are not yet appropriately constituted to
meet current and emerging challenges or to drive the needed
transformation across the Federal Government. Committed and
sustained leadership and persistent attention on behalf of all
interested parties will continue to be necessary to build on
the progress that has been made and is being made if lasting
reforms are to be successfully implemented.
Congress has had and will need to continue to have a
central role in improving agencies' human capital approaches.
As part of the oversight and appropriations process, Congress
can continue to examine whether agencies are managing their
human capital to improve programmatic effectiveness and to
encourage agencies to use the range of appropriate
flexibilities available under current law--and, yes, Mr. Davis,
in fact, to hold them accountable, to make sure that they are
using the flexibilities in a reasonable manner and a manner
that does not result in abuse.
Congress will also play a critical role in determining the
nature and scope of any additional human capital flexibilities
that will be made available to agencies while assuring that
adequate safeguards are incorporated to prevent abuse. Congress
also has the responsibility to ensure the reasonableness and
adequacy of financial resources that are made available to
agencies for their most valuable asset, namely, their people.
Congress is currently considering several pieces of
legislation to help agencies address their current and emerging
human capital challenges. I believe that the basic principles
underlying these legislative proposals have merit, and
collectively they would make a positive contribution to
addressing high-risk human capital issues and advancing the
needed cultural transformation across the Federal Government.
I also believe that certain additional safeguards and
provisions should be considered by the Congress, and we look
forward to working with this Subcommittee and the Congress in
that regard.
Mr. Chairman, as you know, I have a lengthy statement which
I would like to have included in the record, and it includes a
number of specific examples about additional safeguards and
possibly other provisions that this Subcommittee may want to
consider.
For example, in our view, the SES needs to lead the way in
the Federal Government's effort to better link pay to
performance. However, in our view, agencies should be required
to have modern, effective, credible, and, as appropriate,
validated performance management systems in place before they
are granted authority to significantly link pay to performance
for broad-based employee groups. In this regard, the Congress
should consider providing specific statutory standards that
agencies' performance management systems would be required to
meet before OPM could approve any such pay-for-performance
effort. Our own experience at GAO in implementing such reforms
and the practices of other leading organizations, which was the
subject of a report issued by the two Chairs last week, could
serve as a starting point for such consideration.
We, at GAO, believe that it is our responsibility to lead
by example. We seek to be in the vanguard of the Federal
Government's overall transformation efforts, including in the
critically important human capital area. We are clearly in the
lead at the present time, and we are committed to staying in
the lead.
We have identified and made use of a variety of tools and
flexibilities, some of which were made available to us in the
GAO Personnel Act of 1980, and some of which were made
available by the Congress in 2000. But many of the
flexibilities we have are available to every Federal agency.
Overall, we have implemented a number of human capital
initiatives, including a number outlined in my testimony, some
of which are recent, some of which are longstanding, and others
of which are planned or in progress.
Many of these required one-time investments to make them a
reality. We worked with Congress to present a business case for
funding a number of these initiatives, and fortunately the
Congress has supported these and other GAO transformation
efforts.
In that regard, as you know, we expect in the coming weeks
to be formally approaching Congress with recommendations to
provide GAO with additional statutory flexibilities in order to
help us better manage our people. The legislation we are
planning to recommend would, among other things, facilitate
GAO's continuing efforts to recruit and retain top talent;
develop a more performance-based compensation system; help
better align our workforce; and facilitate our succession
planning and knowledge transfer efforts. We believe that these
authorities will strengthen our efforts to serve the Congress
and the American people.
As has been the case in the past, we also expect that the
use of our authorities will provide valuable lessons for the
Congress and other agencies on how human capital flexibilities
can be used in a way that provides reasonable flexibility but
incorporates appropriate safeguards to prevent abuse, including
reasonable transparency and appropriate accountability
mechanisms.
Mr. Chairman, Ms. Chairman, all other Members present here
today, that concludes my oral statement. I would be more than
happy to answer any questions you may have. Thank you.
Senator Voinovich. Thank you very much, Mr. Walker.
Your testimony discusses the need to reform the current
Federal pay system to reflect the knowledge-based workforce of
the 21st Century versus the heavy clerical workforce of the
1950's. To that end, the Bush Administration included in the
2004 budget a $500 million pay-for-performance fund to
complement the annual cost of living adjustment.
This proposal has not been that well received. I have a
concern about it, and that is, whether agencies have the
infrastructure to fairly administer a pay-for-performance
system. Now, you alluded to that in your testimony, but would
you comment on what steps agencies need to take to effectively
implement such a system?
Mr. Walker. Senator, I believe a vast majority of Federal
agencies do not have the infrastructure in place in order to
effectively and fairly move to a more performance-based
compensation structure. I think we ought to start with the SES,
and I think that agencies need to, with regard to the broad-
based workforce, develop modern, effective, credible, and as
appropriate, validate performance appraisal systems that are
based on key competencies, linked to their strategic plan, tied
to the desired outcomes and the core values of their respective
agencies. We have done that at GAO.
I also believe that it is important to be able to
supplement that new modern, effective, and credible performance
appraisal system with such other safeguards as paneling
processes comprised primarily of career executives to try to
assure equity and consistency in application. I believe it is
also important to make sure that offices of opportunity and
inclusiveness such as ours and human capital offices are
involved up front before final decisions are made on
performance appraisals, pay, and promotion decisions, to make
sure that they are being applied, as much as is humanly
possible, consistently, in an equitable manner and in a manner
that prevents discrimination or abuse.
These are some of the things that I believe it is important
to have in place. Conceptually, I believe that the
administration is right that we need to move more towards pay
for performance, but I think agencies need to have the
infrastructure in place before they operationalize related
authories. I also question the adequacy of the amount of
performance based pay they are proposing in addition to the 2-
percent base.
Thank you.
Senator Voinovich. Would you be willing to share with us
some statutory language that could be a precondition to
proceeding with such a system? We would be very interested in
having that.
Mr. Walker. We would be happy to provide technical
assistance to these Subcommittees in that regard, Mr. Chairman.
Senator Voinovich. Congressman Davis.
Mrs. Davis. Thank you, Mr. Chairman. Which Congressman, him
or me?
Senator Voinovich. Mr. Chairman Davis.
Mr. Tom Davis of Virginia. I will just be brief. Let me
ask----
Senator Voinovich. I am glad they worked that out.
Mr. Tom Davis of Virginia. The administration's proposal
right now, your concerns about it are, first, we don't have the
infrastructure really to move this ahead in an appropriate
fashion. Second, I am concerned about pay parity issues. When
you start giving military one and the civilian branch another,
it just makes it look like this is the raise that we would have
gotten and now you are going to have to earn it. And I think it
creates a whole difficulty in implementing it.
Let me just get your comments. You have expressed some
concern about it, and I wonder if you could elaborate.
Mr. Walker. I think pay parity is an important issue. My
view is there is no question that we need to move more towards
a performance-oriented compensation system and a more market-
oriented compensation system. The pay parity system that we
have right now, quite frankly, treats everybody the same,
virtually. It assumes that the pay gap, for example, is the
same for every position, every locality, every skill and
occupation, and that is just not true. That is factually wrong.
And so I think that clearly we need to move more towards a
system that pays more based upon skills, knowledge, position,
and performance rather than the one that we have which is
basically largely a one-size-fits-all approach, so I agree that
we need to move that way, but I think that one of the
safeguards needs to be that before agencies would be allowed to
do that for a broad cross-section of their workforce, they need
to demonstrate that they have the infrastructure in place to be
able to implement pay for performance in a fair, equitable, and
reasonable manner.
Mr. Tom Davis of Virginia. Do you think they need some
additional legislation to do that, or could that be done
administratively?
Mr. Walker. I think that you could do that as part of
legislation that would provide specific statutory safeguards
that would say, for example, in order for OPM to approve an
agency being able to use more performance-based compensation,
they would have to meet these certain statutory standards that
they could then administer.
Mr. Tom Davis of Virginia. Also, isn't it a fact, I mean,
in some areas every time there is a vacancy, there are hundreds
of applications and there is no problem getting people at a
certain pay level, and in other areas, we have difficulty
getting people. We train them a little bit and we lose them. So
there is disparity throughout the Federal system, and we don't
treat the system that way. We seem to have a one-size-fits-all.
Is that accurate?
Mr. Walker. That is correct. There are certain critical
occupations where you need to be able to use additional tools
in order to attract and retain people, and I think that our
system needs to recognize that. It does to a certain extent.
Agencies have the ability to pay recruiting bonuses and
retention bonuses, and I know that one of the provisions in the
legislation under consideration would enhance that with regard
to certain critical occupations. I think that has intellectual
merit as long as you have adequate safeguards to make sure that
people are using the authority when it is justified and not
doing it in situations where it is not.
Mr. Tom Davis of Virginia. I also am concerned about so
much work is being outsourced simply because we don't have an
in-house capacity. We don't have any in-house check and it is
going out the door because of a capacity issue. And we are
having difficulty particularly in some technical areas
recruiting, training, and retaining people in some of these
areas.
Mr. Walker. Well, the sourcing issue is a very important
issue. As you know, I chaired a panel last year, the Commercial
Activities Panel, that make some recommendations on sourcing
strategy. There are several contracting areas in the Federal
Government that have been on our high-risk list for years--
NASA, IRS, DOD, DOE, just as an example, where they have
contracted out a significant amount of activities without
providing an adequate number of Federal workers who have the
skills and knowledge, to be able to manage cost, quality, and
performance. It is critically important that the Congress adopt
the recommendations of the Commercial Activities Panel, that
the administration follow them, and that we have an adequate
number of people to be able to manage whatever we decide to
contract out.
Mr. Tom Davis of Virginia. Thank you, and I am proud to
claim you as a constituent.
Mr. Walker. Thank you, Mr. Chairman.
Senator Voinovich. Representative Davis.
Mrs. Davis. Thank you, Mr. Chairman. Thank you, Mr.
Chairman.
Mr. Walker, the Homeland Security Act of 2002 which was
enacted on November 25 requires the appointment of chief human
capital officers in the major agencies. The chief human capital
officers are to advise and assist the agency head and other
agency officials in carrying out the agency's responsibility
for selecting, developing, training, and managing a high-
quality, productive workforce, as well as implementing the
rules and regulations of the President and OPM and the laws
governing the civil service within the agency.
These chief human capital officers are to be appointed by
the agency head within 180 days of the enactment of the
Homeland Security Act, which would be May 24, 2003.
Do you know how that process is coming along?
Mr. Walker. I am going to be meeting with OPM Director Kay
Coles James this afternoon on several topics. That is one of
the issues that I plan to discuss with her. I believe it is
critically important that we get this right rather than do it
quick. These positions need to be filled with the right type of
people. This is a strategic position. It is one that is
fundamentally different from many of the types of personnel or
human resource positions that we have had in the Federal
Government in the past. And I think it is important that we
have a governmentwide approach that assures some consistency in
how we are filling these jobs. In other words, I think it is
important, and hopefully OPM is playing an active role in
working with the agency heads, to make sure that the type of
people that they are proposing to appoint in fact are the type
of people that are necessary to get the job done. And I will be
making that inquiry this afternoon. But in the final analysis,
I think it is much more important to do it right than to do it
quick.
Mrs. Davis. Could you, after you meet with OPM, get back to
us with a report on where they stand on these appointments?
Mr. Walker. I would be happy to do that.
Mrs. Davis. Thank you, Mr. Chairman.
Senator Voinovich. Would you now like to call on your
Ranking Member?
Mrs. Davis. Yes. Now I will call on my Ranking Member,
Danny Davis.
Mr. Danny Davis. Thank you very much, Madam Chairman.
Mr. Walker, it is good to see you again. I want to thank
you so much, and especially I want to thank you for the
responsiveness of your agency to inquiries and requests that I
have made for information, analysis, and studies. We really
appreciate that.
I appreciated your comments relative to emphasis on
leadership and accountability as well as the idea that
financial resources must be available in order to have the kind
of capital structure that we need in terms of the ability to
take care of the human elements that must be employed.
I also appreciated the idea that the Federal Government has
to be and should, in fact, be the leader, and that leadership
has to go in the areas of recruitment, development, and
especially inclusivity, that is, being able to reach out
throughout the breadth and depth of America and make sure that
our workforce seriously looks like America in a real kind of
way.
It is my understanding that the Managing Director of the
Office of Opportunity and Inclusiveness reports directly to
you. Could you tell us what the value of having this person or
this office report to you is?
Mr. Walker. Thank you, Mr. Davis. We are happy to support
your requests. You have had some very good ones
Ron Stroman, who is our Managing Director for Opportunity
and Inclusiveness, reports directly to me. He is directly
responsible for trying to make sure that our agency is taking
affirmative steps to reach out to hire a diverse workforce,
that we have appropriate policies, procedures, systems, and
safeguards in place to maximize opportunity for all of our
employees and to prevent discrimination. It has helped
tremendously because, first, Ron is a first-class professional.
He is one of the top people in his field in the country, not
just in the Federal Government. Second, by having him report
directly to me and by having us work together on an ongoing
basis, it demonstrates clear commitment from the top of the
agency to this important element of human capital strategy. And
we have made considerable progress in the recent past, in part
as a result of the efforts of Ron and his team.
Mr. Danny Davis. Does each agency or government unit have
such an individual internally?
Mr. Walker. Well, my understanding is there are a number of
offices that have Offices of Civil Rights. My view is those
terms are somewhat outdated. It is really about what you said.
It is about opportunity, equal opportunity, and inclusiveness,
and it is taking affirmative steps to try to achieve that while
at the same point in time not compromising standards and
assuring reverse discrimination.
And so the answer is no, I do not believe that each agency
has something like we do. And to the extent that they have an
office, it may not be approaching its duties and
responsibilities in the same way that we are. I am not saying
that ours is right or necessarily even the best, but it is
fundamentally different from what I saw when I headed two
Executive Branch agencies.
Mr. Danny Davis. And, finally, Mr. Chairman, if I might,
following up on a line of questioning by Chairman Davis
relative to outsourcing, and privatizing, I have always
wondered whether much of our activity in outsourcing is
philosophical or is it based upon need, or do we have the
ability to develop the competencies that are needed in certain
lines of activity? And do we have enough call for that
internally so that our own workforce would be able to provide
those services effectively and efficiently and if there aren't
some areas where we really don't use the talent as effectively
as we could?
Mr. Walker. Several answers. First, I think at times it has
been philosophical. For example, in the Eisenhower
administration, the policy was if it could be done by the
private sector, it should be done by the private sector.
Sometimes it is political because of campaign promises that are
made that deal with this issue. But there are market factors as
well. The fact of the matter is that the government, even if it
wanted to be able to attract and retain people to perform
certain functions, if because of its compensation policies or
practices or whatever else, it can't attract and retain an
adequate number of people, then you have to go to the private
sector. You don't have a choice but to do that.
And sometimes the government hasn't adequately invested in
its human capital, in its own people, and that has served to
undercut its capabilities, and there is an opportunity cost
there. So I think it is multidimensional.
Mr. Danny Davis. Thank you very much, Mr. Chairman.
Senator Voinovich. Madam Chairman.
Mrs. Davis. Now I would like to call on Ms. Norton for
questions.
Ms. Norton. Thank you, Madam Chairman.
Mr. Walker, I appreciate your testimony. I myself perhaps
by training, particularly when embarked on a new adventure, I
am impressed by the power of precedent. You spoke in your
testimony of existing flexibilities that the Federal Government
has had. I would be most interested in how those existing
flexibilities might inform this far more contentious notion of
pay for performance.
For example, you even say in your GAO report that the GAO
has been leading by example, and you cite examples of that--
broadbanding, voluntary early retirement, recruiting, and a
number of other examples.
Of course, those are not nearly as contentious as telling
people they are going to be paid by what somehow somebody says
they have performed, especially when we were told in a prior
hearing that this is really a case study for use on the entire
workforce.
So I would like to know what you have done to look at the
flexibilities that the government already has, whether they
have been evaluated, and what they tell us already about
flexibility and how it is working in the Federal Government.
Mr. Walker. Well, first, I do not believe that agencies are
coming close to using all the flexibilities that are available
to them, but there are various reasons why they may not. In
some cases, they may not understand them. In some cases, they
may not have the funding.
For example, student loan repayment, which Congress passed,
GAO has the second largest student loan repayment program in
the Federal Government, yet we only have 3,200 employees, which
is very small as compared to most departments and agencies.
Yet, we have the second largest student loan repayment program
in the Federal Government.
In addition to that, we have done a number of things in the
recruiting area to use some of the flexibilities with regard to
retention bonuses, recruiting bonuses, things of that nature
that are available to others, and others may not have done
that.
We have broadbanding. That is something that we were
granted in 1980. Most agencies don't have that. I think that is
something that----
Ms. Norton. Mr. Walker, has anybody looked at anybody's
version of the flexibilities for outcomes to see whether they
work or not? I recognize what you are saying, that agencies for
various reasons haven't always implemented them. But we have
got flexibility. We are now going to even greater flexibility.
I am trying to find out whether GAO or anybody else has looked
at what flexibility has done for us already.
Mr. Walker. We are doing some work in that regard, and I
imagine that OPM can probably comment on what they are doing.
There are case studies out there. There are case studies where
there have been demonstration projects in the past, where
people have been granted certain flexibilities and have used
them, and I think it is important that they help to inform the
Congresss' decision going forward.
Ms. Norton. Should this be a demonstration project? You
certainly start with the SES at the smaller and top element of
the government. Again, going back to my own experience, when I
had to undertake huge changes in an agency, the reason I think
it succeeded was that we didn't do it all at one time, that we
did what we called a pilot project, in this case in various
regions, learned from that project, kept from making the
mistakes writ large.
Is it your recommendation that pay for performance be
implemented straight out throughout the SES or that some
smaller version or pilot project which would allow us to
discover mistakes be started once we have the appraisal system
that you think is the prerequisite for starting it all?
Mr. Walker. Well, first, I think that we need to learn from
the demonstration projects we have already had, and that is one
of the things that we are looking at, and hopefully OPM as
well--those that have been given some flexibilities, what have
they done?
Ms. Norton. I am talking about pay for performance.
Mr. Walker. I understand that. I am talking about that,
too. There are situations where others have been given
flexibility in that regard, and we ought to study that.
Ms. Norton. And we have no outcome from that that has
already been evaluated?
Mr. Walker. We are doing some more evaluation, but some has
already been done. I think the SES is the logical place to
start.
Ms. Norton. With the whole SES?
Mr. Walker. I think it is also important that you have
modern, effective, and credible performance appraisal systems
for the SES before you implement it as well. And I am not
convinced that many Federal agencies have that.
My view is that if you can end up incorporating statutory
safeguards that must be considered by OPM before they could
approve an agency being able to use it either for their SES but
especially for the rank-and-file, if you could do that as a
condition of being able to operationalize additional pay for
performance authority. It would be very substantive.
Ms. Norton. Now, you said certified--I think you used the
word ``certified''--appraisal systems or performance management
systems. What do you mean by ``certified''?
Mr. Walker. I mean that OPM would have to certify that in
their view the statutory conditions have been met. Let me give
you an example in the case of GAO. For us, we have developed a
modern, effective, and credible performance appraisal system
that is based on competencies, tied to our strategic plan, and
for our broad-based workforce, the competencies were validated
by the employees before we implemented it.
It is not perfect. It is a huge change from the last prior
system. But our employees actively participated. They validated
the competencies, and, therefore, I think that is something
that is desirable and a best practice.
Ms. Norton. The validation, the notion of validation
studies and validation seems to me is going to be absolutely
critical, or else this system--we know what this workforce is.
It is highly educated. It is conscious of its rights. And one
of the first outcomes could be a whole bunch of grievances in
court suits if, in fact, there is not a validated system put in
place.
Thank you very much, Madam Chairman.
Senator Voinovich. Senator Carper.
OPENING STATEMENT OF SENATOR CARPER
Senator Carper. Thanks, Mr. Chairman.
To General Walker, welcome. Good to see you again. Thank
you for joining us.
To our House colleagues, to Representative Davis and to
Representative Davis and each of the other Representatives, we
welcome you and thank you for coming to this end of the
Capitol.
As an old Governor, I was one who was interested in trying
to introduce pay for performance for our State employees in
Delaware. I suspect former Governor Voinovich had some interest
in Ohio along those lines as well.
Interestingly enough, it was our legislature which
generally blocked our efforts. We made some progress but not to
the extent that we wanted to.
There are some States and probably some cities that did
better than we did in the 8 years I was Delaware's chief
executive. Delegate Norton was talking about pilot projects and
that sort of thing. I wonder if there are some pilot projects
out there that you might be aware of within State or local
governments so we can almost use them as a pilot project
because of their role as laboratories of democracy. Are you
aware of any that are especially----
Mr. Walker. Not off the top of my head, Senator, but I will
tell you that is something that we can look into, if we are not
already. One of the things that we are doing increasingly at
GAO is trying to partner with State and local officials,
especially the auditor generals, State auditors and county and
city auditors, to try to share knowledge and information. And
this is one I could follow up on.
Senator Carper. You may know, there is an organization of
State budget directors and State personnel directors as well
who have a lot of interest in these kinds of issues.
Let me just ask, to back up a little bit, if you could give
us a road map of sorts.
What might be the appropriate next steps for us as
legislators as we consider pay for performance, something that
actually rewards good performance but something that tries to
provide safeguards for employees?
Mr. Walker. My view is start with the SES with some type of
standards that would even have to be met within the SES. Look
to some demonstration projects, and provide for additional
demonstration projects for broad cross-sections of the
workforce within the Executive Branch, and also the Legislative
Branch, GAO specifically. But, again, they should have to
demonstrate that they have these safeguards before they end up
implementing the pay-for-performance system.
We have done that at GAO. We have them for most of our
workforce. It is not a promise. We believe in the Missouri
principle, ``Show me,'' and we can show you.
And so I think if you do that, what will happen is that we
will see what works and what doesn't work. We will learn some
valuable lessons. One of the concerns that I have is if you go
too fast on pay for performance before people have their
systems in place, then you can end up having a bunch of
disastrous experiences which could taint the whole concept. And
I believe the concept is right. I believe we need to place
increased emphasis on pay based on skills, knowledge, position,
and performance, but we need to be careful how we do it, or
else we are going to get off to a bad start, and that is not
going to be in anybody's interest.
Senator Carper. Last year, we debated and voted on some
proposals by Senator Voinovich and Senator Akaka with respect
to flexibility for Federal agencies, in the context of the
creation of a new Department of Homeland Security.
Could you make some comments on what we did legislatively,
what kind of extra flexibility that gives to Federal agencies
and how that might be used?
Mr. Walker. Well, as you know, Senator, not only did you
provide certain additional flexibility to the Department of
Homeland Security, which was controversial and contentious. If
you will recall, that was kind of the last thing that got
resolved in the legislation.
Senator Carper. I recall that.
Mr. Walker. Yes, I am sure. I didn't have much hair that I
could lose, but some may have lost some as a result of that.
But, in any event, in addition to that there were
provisions that Chairman Voinovich proposed that were adopted
governmentwide and they provided additional flexibilities.
I might note for the record that some of those were ones
that GAO had already demonstrated could be successfully
implemented, such as the ability to provide voluntary early-
outs and buyouts to realign the workforce rather than to
downsize the workforce. So I think it was a positive step
forward.
Senator Carper. All right. Good. Thanks very much.
Senator Voinovich. Congressman Davis, do you want to call
on your next witness?
Mrs. Davis. Yes. Mr. Van Hollen.
STATEMENT OF CHRIS VAN HOLLEN, A REPRESENTATIVE IN CONGRESS
FROM THE STATE OF MARYLAND
Mr. Van Hollen. Thank you, Chairman Davis, Senator
Voinovich. Welcome, Mr. Walker, It is great to have you with us
today. As you may know, I represent an area of the Washington
suburbs where we have lots of Federal employees, and so this
whole topic is, of course, of great interest to them and to
myself.
Just to follow up on Congresswoman Norton's comments with
respect to demonstration projects and phasing this in, we had a
hearing on our Subcommittee recently where we got into the pay-
for-performance issue, and one of the things that came out, as
I understood it, was that even now we are talking about phasing
in these new performance standards and linking them, obviously
pay to performance. But there is really not any set of sort of
uniform standards now that we can apply. Is that right?
Mr. Walker. That is correct. I think the one thing that
agencies need to do that doesn't require any legislation at all
is to develop modern, effective, and credible performance
management systems and to put them in place. There is no
legislative action necessary for that to happen.
Mr. Van Hollen. And that is my point. Why not as a first
step at least get the standards in place before we establish
the next link, which is to tie it to pay? I mean, let's at
least get these performance measures in place on a uniform
basis. That in itself is going to be a large task. I appreciate
the fact that you have done it at GAO. I think that is
terrific. But I think we should begin to do it in the agencies,
give that time, give people time to adjust to those performance
standards before you take the next step. And I wonder if you
could respond to that.
Mr. Walker. Well, and my point on that is I think you can
do that reasonably expeditiously among the SES, and I think
that it would make sense for you to be able to allow for some
additional demonstration projects with appropriate statutory
safeguards that would have to be met. For other agencies to do
it as a test, for a broad cross-section of their workforce, I
do think that would be appropriate.
But, again, I think that the agency should have to
demonstrate that they have these systems and controls in place
before they should be allowed to implement any additional pay
flexibility. But ultimately I think this flexibility should be
broad-based throughout the government.
Mr. Van Hollen. I guess my point is, the administration has
introduced legislation on this issue, but they have got a lot
of freedom right now to do a lot of things without the
legislation that they have not done. And it just seems to me to
make sense to allow people to become comfortable with the
standards before you begin the linkage.
Mr. Walker. They do, but in fairness, Congress last year,
for example, passed a 4.1-percent pay raise, but only funded
3.1 percent. There was a 1-percent unfunded mandate which
somehow has to be made up. And in addition to that, that 4.1
percent was given to every Federal worker, no matter what their
skills, knowledge, performance, and position was, even people
that were unacceptable performers, which is a very small
percentage. Unacceptable performers got the same thing as the
top person in the agency. That is just wrong.
And so ultimately we need to move towards a more modern,
effective, and credible system, but we need to be careful how
we do it.
Mr. Van Hollen. Right. Well, I am not sure the fact that
the full 4 percent wasn't originally provided is the reason the
administration can provide for not going forward. After all,
they never requested the 4.1 percent for the civil service.
And, in fact, in this year's appropriation, they have only
requested 2 percent. So I think it is difficult for them to
point to that as a reason they are not moving forward.
Let me just ask you one other question with respect to the
Senior Executive Service because, on the one hand, I understand
the reasons for moving forward with the Senior Executive
Service first. On the other hand, sometimes with other jobs in
the Federal Civil Service, it is easier to measure performance.
Sometimes at higher levels, certain types of jobs--Deputy
Assistant Secretary for the Near East or South Asia--it is
harder to measure the performance, more difficult than, for
example, if you are measuring against a procurement contract
and savings in that kind of area.
What do you think the dangers--and this is true of a
Republican or a Democratic administration. But obviously, in
the Senior Executive Service you have much more interaction
between the political appointees and the members of the Senior
Executive Service. How do you analyze the dangers of really
just compensating people based on willingness to support a
particular political position within an administration? This is
a danger in either administration. I just would like you to
evaluate that.
Mr. Walker. I would recommend that you do it using a
competency-based approach, which actively involves employees
and their unions as appropriate in developing what those
competencies ought to be. I think you also have to not only
have an appropriate performance appraisal system, I think you
have to have things like paneling processes, which are
comprised primarily, if not exclusively, of career officials
that will end up taking that information and others to try to
make recommendations on pay, promotions, and other types of
human capital issues.
So I think there are a number of things that can and should
be done. In most cases, we have already done them at GAO, and
selected other people may have as well.
Mr. Van Hollen. Thank you, Mr. Chairman.
Senator Voinovich. I would like to point out to Members of
the House and Senate here this morning that Mr. Walker has to
be at a hearing on the House side at 10:30.
Mr. Walker. And I do not believe in cloning. [Laughter.]
Senator Voinovich. Senator Lautenberg, would it be all
right with you if we excused him, or would you like----
OPENING STATEMENT OF SENATOR LAUTENBERG
Senator Lautenberg. Yes, if he agrees with us, absolutely.
[Laughter.]
I understand that Mr. Walker takes a somewhat cautious view
of the quick conversion to commercial or to the private sector
side. And I will just say, Mr. Chairman--I commend you for
holding this hearing--that I have spent much of my life in the
corporate world and I built a large company and saw people hard
at work. I then came here and saw people work for a lot less
money, who were equally committed, dedicated folks. I think we
have to keep that in mind before we arbitrarily decide that we
can put out everything on the cheap and hire the lowest-cost
labor that we can find. That is no way to do things.
So I concur, Mr. Chairman, as long as I can put my
statement in the record as if read.
PREPARED STATEMENT OF SENATOR LAUTENBERG
Mr. Chairman, I commend you for holding this hearing and for your
recognition of the looming human capital crisis in the Federal
Government.
Today's joint hearing is about people. Civil servants are the
backbone of our government and we should remember that the skills,
talent, and professionalism of the men and women in the Federal
workplace are the best in the world.
The overwhelming majority of civil servants are dedicated to their
jobs. Many of them could make more money in the private sector but they
work in the government because they see public service as a higher
calling.
It's crucial that we all hold civil servants accountable for the
jobs they do. But it's also important that we avoid demeaning and
denigrating them. Too often, administration officials, political
appointees, and Members of Congress take potshots at career Federal
employees who can't defend themselves and that does nothing but lower
morale.
As a former businessman, I appreciate the administration's need for
flexible recruiting, hiring, and retention policies.
But as a public official I am equally aware of the fact that
``flexibility'' should not mean undermining basic civil service job
protections. The Civil Service was created as a remedy to the rampant
political excesses and abuses of the previous system. While the Civil
Service may need to be modernized, at its core it has served this
country well over the years.
I must say that I am very concerned about the administration's
announced intention to ``complete'' 127,500 Federal jobs by September
30, 2003.
I am particularly concerned about the administration setting an
arbitrary quota and an impossible deadline for privatization, and then
deliberately withholding from agencies the financial resources they
need to conduct the public/public competitions.
I get the impression that the administration has determined in
advance the way these competitions should go, and that's to the private
sector.
We need to address the way in which we plan to balance
privatization--the contracting out of Federal jobs--with Federal
employee recruitment, retention, and morale.
Beyond the issue of deciding what to contract out, there is
something even more fundamental: That's giving agencies the personnel
and the other resources they need to do their jobs. If we don't do
that, we are just setting them up to fail.
I'll give you an example of what I mean: We have created the
Department of Homeland Security (DHS) but the administration has
repeatedly submitted appropriation requests that are--frankly--
insufficient to enable DHS to achieve its mission to protect Americans
here at home.
Government should be as efficient as possible but we simply can't
expect government to do its job ``on the cheap.''
There is an old saying, ``You get what you pay for.'' To continue
recruiting and retaining skilled and dedicated civil servants, the
Federal Government needs to offer competitive wages, health benefits,
and retirement plans.
Many people correctly point out that taxpayers are the owners of
the Federal Government and deserve the most effective and efficient
government possible. I agree, but I would also point out that Federal
employees are taxpayers, too, and they have ``invested'' even more than
their taxes--they have invested their working lives. They deserve to be
treated fairly and with respect. Doing so will maximize all taxpayers'
value.
Mr. Walker. Mr. Chairman, I am happy to answer any
questions for the record or meet with any Member on this issue
if they so desire. And I appreciate your understanding.
Senator Voinovich. Thank you very much, and I think Senator
Lautenberg is very valuable in this because of his experience
in the private sector. He has some insight into it that a lot
of us don't have.
Thanks for being here again.
Mr. Walker. Thank you. My pleasure.
Senator Voinovich. Our next witness is the Hon. Dan G.
Blair, Deputy Director of the Office of Personnel Management.
Dan, I want to welcome you back to the Senate.
Prior to his appointment with the Bush Administration, Mr.
Blair served as senior counsel to Senator Fred Thompson, former
Chairman of the Governmental Affairs Committee. He brings
nearly two decades of experience in personnel and government
management to his position, and we are glad to have you here
this morning. Dan, you may proceed with your statement.
TESTIMONY OF HON. DAN G. BLAIR,\1\ DEPUTY DIRECTOR, OFFICE OF
PERSONNEL MANAGEMENT
Mr. Blair. Thank you, Mr. Chairman, Madam Chairman, Members
of the Subcommittees. Thank you very much for the invitation to
testify this morning.
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\1\ The prepared statement of Mr. Blair appears in the Appendix on
page 97.
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On behalf of OPM Director Kay Coles James, I am pleased to
provide the Subcommittees with an overall assessment of the
state of the Federal workforce. I have a rather lengthy written
statement, and with your indulgence, I will gladly summarize.
So, where do things stand today, some 2 years after GAO
first put the Federal workforce on its high-risk list? Back
then, almost all the news was bad. We saw an impending
retirement wave which threatened a debilitating brain drain as
well as the risk of outstripping the capacity of agencies to
find skilled applicants to take their place.
Now there is some good news to report. While the number of
retirement-eligible employees remains high, we haven't seen the
mass exodus that was predicted. Indeed, separation rates have
declined. Further, our recent human capital survey showed that
over 90 percent of our employees think that their work is
vitally important, and a similar percentage said they believed
their work contributes to their agency missions. Hence, the
importance of the President's Management Agenda and its
priority in placing the strategic management of human capital
as first on the list.
The President directed OPM to take the lead responsibility
for assessing how well the departments and agencies managed
their most vital asset--their people. We measure our success by
the progress agencies make in placing the right people in the
right jobs and managing them in ways that help achieve mission
goals.
OPM, the Office of Management and Budget, and GAO
collaborated this past year in adopting the ``Human Capital
Standards for Success'' \2\ to help agencies address their
human capital management more strategically. These are the
standards we use to score agency performance each quarter, and
the scoring process has eliminated agency efforts to better
manage their workforces. As a result, most agencies recognize
the need to assess the strategic value of their position and
the competencies required to perform that function. Managing
the workforce effectively is recognized as a means to achieving
mission goals.
---------------------------------------------------------------------------
\2\ The information referred to submitted by Mr. Blair appears in
the Appendix on page 109.
---------------------------------------------------------------------------
To aid the agencies, OPM developed a human capital and
accountability framework to help agencies better understand
exactly what we are looking for when we are assessing them. We
use it as a tool in assessing the agencies as well as making it
widely available as a self-assessment tool. This shared
framework has made our discussions more focused and more
productive.
While red scores still predominate on the scorecard, the
scores reflect the need for agencies to operate better.
Agencies spent their first years concentrating on linking human
capital practices to mission results. Workforce planning
strategies are being used to identify and anticipate skills
gaps, and agency leadership is taking ownership of the
initiative. Aligning human capital strategies with departmental
mission goals has been challenging, yet progress has been made.
While green is the ultimate goal, achieving yellow status
indicates significant progress. Agencies that have shown
progress include the Department of Energy and the Department of
Labor for successfully linking performance expectations for
managers to agencies' strategic plans and mission objectives.
Their performance appraisal systems are designed to make
meaningful distinctions by rewarding high performance. Other
agencies have also shown improvement in workforce planning,
identifying competencies for mission-critical occupations, and
other human capital strategies.
Just as the GPRA, Government Performance and Results Act,
directs agencies to track organizational performance, we
believe the government must adopt compensation practices
designed to spur and measure individual employee performance.
Indeed, performance-oriented pay is embraced by the merit
system principles which call for appropriate incentives and
recognition for excellence in performance.
To bolster these efforts, the administration has proposed
allocating $500 million to the new Human Capital Performance
Fund to allow agencies to give extra pay raises based on an
employee's superior performance or possession of skills
critical to the agency's mission. The Fund provides an
incentive for agencies to begin making meaningful distinctions
in and rewarding superior individual performance.
While progress is needed in developing robust performance
appraisal systems, the Departments of Energy and Labor show it
can be done. Further signs of progress can be found in last
year's Homeland Security Act, which included a number of
significant governmentwide human capital reforms. Thank you,
Mr. Chairman and Members of the Subcommittees, for work that
you performed in obtaining enactment of those very important
legislative initiatives.
Included in these reforms were the ability for agencies to
replace the rule of three with category ranking and hiring
assessment and for limited direct hire ability for critical and
shortage occupations. Further, the workforce shaping tools of
voluntary early retirement and governmentwide buyout authority
will help agencies address skills and balances.
The most attention, however, will be paid to the actions of
the OPM Director and the Department of Homeland Security
Secretary in designing new pay and personnel systems to bring
together the employees of the 22 agencies that now make up the
Department of Homeland Security.
Your letter of invitation also asked that we address
specific legislative proposals. First, I am pleased to report
that OPM supports many of the provisions of the Federal
Workforce Flexibility Act of 2003, S. 129 and H.R. 1601. We
recognize that the proposal builds on the Managerial
Flexibility Act from the last Congress, and we look forward to
working with you in the Congress on this important legislation.
We also look forward to working with you to refine the
proposed Senior Executive Service Reform Act of 2003, noting
that the basic features of the proposal were included in the
President's budget for fiscal year 2004.
Again, thank you for your leadership and the opportunity to
address these important issues. I am pleased to answer any of
your questions.
Senator Voinovich. Thank you very much, Mr. Blair.
OPM's recent human capital survey of Federal employees
pointed out something that was rather astonishing to me, and
that is that only 27 percent of Federal employees feel that
poor performers are dealt with. As you know, S. 129 and H.R.
1601, the Federal Workforce Flexibility Act of 2003, includes a
provision to provide special training to managers to help them
deal with poor performers. I suspect, however, that legislation
alone will not solve the problem.
I would like to know what you have done across the board to
provide managers with the tools, resources and knowledge to
effectively handle poor performers.
Mr. Blair. Well, I think training, as you recognize, is a
very important component of any performance management system,
and training in government oftentimes has lagged behind what
our expectations should be.
Given that, the Director is very committed and has put
forth in the scorecard efforts ways of rating and ranking the
agencies--not ranking, but rating the agencies in terms of what
they are doing in performance and what they are doing to train
managers to perform better.
This is extremely important if we are going to have a
successful performance management system.
Senator Voinovich. Well, you heard the testimony from David
Walker. The administration is talking about going forward, and
if you have only 27 percent of Federal employees that feel that
poor performers are being handled properly, how in the world
can you possibly go to a new system that is going to provide
pay for performance across the Federal Government?
Mr. Blair. Well, let's recognize that right now our pay
systems have very little performance component to it. There is
very little incentive for agencies or for managers to exercise
vigorous performance management because we don't back it up
with real money or real dollars. The creation of the Human
Capital Performance Fund actually puts real dollars behind what
our efforts will be and says that we want you to rank your
employees, we want you to look at individual performance and
assess it accordingly, and if you are performing in a superior
manner, we are going to pay you for it. Our systems don't allow
us to do it right. There is no incentive to do so.
Senator Voinovich. Well, you heard the testimony from David
Walker talking about the effort that they made in GAO to get
ready for pay for performance, and then his comments about the
posibility of conducting some demonstration projects to test
this concept in other agencies. And we were just talking about
the Senior Executive Service. The general opinion is that
across the board, apart from the SES, there is no
infrastructure in place to really do pay for performance. And
what I just heard from you is that if we simply provide this
additional money, all of a sudden, voila, we are going to have
a pay-for-performance system because there will be incentive
for it.
The President has announced this initiative. I would like
to know specifically what do you have in place to handle this
system in the event that it would become a reality.
Mr. Blair. Well, we have this scorecard process in place in
which we are assessing agencies on how well they perform
performance management. It is a key component in an agency's
effort to get from red to green. We are in the process of doing
that.
In addition, the Homeland Security Department last year, in
order for agencies to raise the total aggregate compensation
cap, they were asked to--OPM and OMB were asked to develop
regulations in order to certify the agencies can make those
meaningful distinctions. So processes are already beginning to
be in place, but you have to remember that in order to move to
a system like this, you have to provide the incentive.
The Human Capital Performance Fund doesn't jettison the
General Schedule. The General Schedule remains in place. Step
increases remain in place. And the President has also provided
2 percent across the board. And so it builds on the present
General Schedule system.
However, we strongly believe that we need to put more than
just words behind our efforts at better performance management,
and that is why we say let's dedicate some real dollars to it.
And that is what the Human Capital Performance Fund would do.
Senator Voinovich. Well, I would like to see the letters
and recommendations to the departments. I would like to see the
standards that you have set for whether or not agencies have
pay-for-performance systems in place and whatever else you have
done to prepare for this, because this is a major undertaking
to go forward with it. I have been through it. And unless you
have had some real significant training for people in that
process, you are setting it up for failures. I guess the
suggestion here, and you might carry it back to Director James,
is that a lot of us believe--and this is in a bipartisan
basis--that we are not prepared to go forward with this system,
perhaps even in the Senior Executive Service. We might have to
just pick out certain areas in the Senior Executive Service
where we have really validated that they do have a real
performance-based pay system in place before we would move
forward with it.
Mrs. Davis. Thank you, Mr. Chairman. I have to agree with
you. I almost feel like we are getting the cart before the
horse. And I may be wrong on that, but I am anxious to see what
you do have in place. And I have a lot of questions here with
regard to the $500 million Human Capital Performance Plan, and
I am going to submit them for the record because I don't have
time to ask them all. But just for instance, the compensation
that OPM would allot to the different agencies would depend on
the strength of the plan that the agency puts forth, which to
me is contrary to the whole performance-based merit system that
you are talking about for the individual's work because it
wouldn't have anything to do with the individual's work. It has
got to do with the plan, the strength of the plan that the
agency comes forward with.
And you heard me ask the question to Mr. Walker about the
chief human capital officers, and I would be curious if you
could get back to us on what OPM has done for guidance, if you
have been involved at all with the guidance, and when you
expect them to come out.
Mr. Blair. We will be putting out further guidance on that.
In addition, the legislation calls for the council to be up and
running by May 24, I believe, and we are on schedule to meet
that deadline.
Mrs. Davis. You are. As far as the SES goes, in our hearing
last week we heard testimony that they would prefer that--the
SES would prefer that we not do a one-band pay schedule, but
they would prefer to see something like a three-band. Is it the
administration's policy--do you believe that they would be
looking at reducing the pay of some of the SES with that one--
--
Mr. Blair. Well, under the proposal as it is written, no
member of the SES would receive a reduction in pay the first
year. And we certainly are not about in our proposal stripping
or taking away current safeguards. We want to make sure that
there are safeguards in place, and we believe that we can do so
by regulation to ensure against arbitrary and capricious
behavior on the part of agency managers.
But let's remember the context in which this proposal is
being made. We are talking about pay compression, and we are
talking about giving significant raises to members of the
Senior Executive Service. The quid pro quo here is that the
raises are going to be based on performance and merit, and we
need to tell it to the American people that, yes, in order to
justify these raises, we can justify them based upon the good
performance and that these executives are helping their
agencies meet their critical mission goals, and we think that
is very important. It shouldn't be across-the-board pay raises.
Mrs. Davis. Let me get to an issue that I don't know if you
can answer or not, but on the monster.com website, there is a
very interesting section on diversity and inclusion. It
mentions that in 2001 women earned 76 percent of what men
earned, according to the Bureau of Labor Statistics. Further,
it mentions that though the gap has been closing, it is still a
reality in the American workplace. This has been attributed to
the fact that most women do not negotiate their compensation,
though they are better at negotiating for others than they are
for themselves.
Does the Federal sector have as abysmal a record as the
private sector in the pay gap area for women? And if not, has
this been indicated in the recruiting materials that are
available to potential hires, not just the equal opportunity
information that you have to give?
Mr. Blair. I believe GAO may have done some work on this
issue back in the late 1980's and early 1990's in looking at
female-dominated occupations. I can't exactly remember the work
they did in this area.
I do know that in the Federal Government we have an
abundance of what we call internal equity within our system,
and that means that we look at the job and we pay the job
according to not who you are but on what you do. And so we can
provide for the record information on what the pay gap--if it
exists in the Federal Government, what that would be, and for
possible reasons for that.
Mrs. Davis. I would like to see that diversity across the
board, not just women but diversity totally, because I do hear
from folks that we just don't have enough in the Federal
workforce, and I haven't seen any reports on it so I can't
speak to it.
Thank you, Mr. Chairman.
Senator Voinovich. Congressman Davis.
Mr. Danny Davis. Thank you, Mr. Chairman.
Mr. Blair, you began your testimony with the good news that
there had been a decline in separation from what was projected
2 years ago. Has there been any effort to determine why this
declination is occurring beyond the fact--I mean, you did
mention that the economy had been flat and that may have had
some impact. But has there been any effort to determine other
factors that may have attributed to this decline?
Mr. Blair. Well, I think we can look at the events of
September 11 and people realizing the work that they were doing
was important, and it contributed to the agency's mission. We
saw in the human capital survey that overwhelming numbers,
large numbers of Federal employees believe that the work that
they did contributed immensely to the work of their agencies.
So I think that is good news, and projecting retirement
rates in the future always has an element of chance to it. A
flat economy means that there aren't the opportunities out
there. However, the flip side of that is that once the economy
starts to become robust again, are we going to find ourselves
facing a huge retirement wave? And one of the things we did
also find out in our human capital survey is that we don't do a
good job in government of rewarding good performance. And so
those are some of the things that we are trying to change in
government.
I think things have improved for the better over the last 2
years. The attention that the House and Senate have paid to
this issue, the attention that GAO has paid to this issue, the
President's Management Agenda listing the strategic management
of human capital as first on the list, I think all put together
it spells good fortune for us.
That said, we have a long ways to go, and we are working
hard making sure that we have further improvements.
Mr. Danny Davis. Mr. Walker in his testimony stated that
OPM plays a central role in helping agencies tackle the broad
range of human capital challenges. Are the agencies coming to
OPM seeking guidance and really asking for your assistance,
help, and direction?
Mr. Blair. We are going out there and giving it. We
recently restructured at the Office of Personnel Management,
and effective March 1, we have an OPM which is structured with
the intent to more effectively deliver our goods and services
to our customers. And we view chief among our customers as the
agencies and departments that we serve.
We have a new division for Human Capital Leadership and
Merit System Accountability which is the driver of the
President's scorecard. At the same time, they are also the ones
out advising agencies who are seeking help on better ways to
effectively manage their human capital.
Mr. Danny Davis. So you are saying you are going out to
them more than they are coming to you?
Mr. Blair. We are going out to them and they are coming to
us. As a matter of fact, we have had requests in over the past
year to the Director from different agencies on specific HR
issues, and we have sent out strike forces to the agencies to
help them address those in terms of hiring or in terms of
performance management. And so it is a two-way street. We see
the communications as improving, and that is what we are there
for, is to help them improve, to better improve their
performance.
Mr. Danny Davis. Does OPM have its own performance
management system in place?
Mr. Blair. Yes, we do. We have a performance management
system in which we evaluate our executives. In addition, I am
the second-level review on a number of employees' evaluations,
and so employees are given their expectations at the beginning
of the year; mid-year, managers get back with them to tell how
they are doing. Keep in mind, however, that managers and
supervisors and front-line employees are constantly in
communication, and so if there is a particular problem or a
particular success, that may be followed up in writing. In
addition, at the end of the year, evaluations are given at that
time.
Mr. Danny Davis. Let me just ask you, the administration
indicated that it wanted to contract out 850,000 Federal
employee jobs and diminish collective bargaining in some
instances.
Do you see this impacting one way or the other the ability
to recruit the human capital that we need?
Mr. Blair. Well, I think to perform effective outsourcing,
you are going to need to have in place good contract managers.
If you are going to be involved in labor negotiations and labor
relations, you need to have people who are skilled in labor-
management, skilled in backgrounds associated with labor-
management relations.
We are open for employment at the Federal Government. As
far as competitive sourcing is concerned, those are issues that
are best addressed by my colleagues at the Office of Management
and Budget. However, I know that is being done pursuant to the
FAIR Act, which asks that agencies identify those jobs which
are not inherently governmental. And so this is the atmosphere
in which we are operating, and I think that we are doing a good
job. We are doing a good job of making improvements, and we
want to keep on that track.
Mr. Danny Davis. Thank you very much.
Senator Voinovich. Delegate Norton.
Ms. Norton. Thank you very much, Mr. Chairman.
Mr. Blair, I need to know where you come down on the GAO
testimony that we have just heard. You heard Mr. Walker--and I
am going to look directly now at his testimony and report--that
he apparently agrees with the administration, and I am quoting
from him, ``We must move beyond this outdated, one-size-fits-
all approach to paying Federal employees,'' etc.
Then he says, ``However, agencies should be required to
demonstrate to OPM's satisfaction that they have modern,
effective, credible, and validated performance management
systems before being able to adopt broader pay-for-performance
systems for non-SES personnel.''
Now, do you agree that should also be the case for SES
personnel as he testified?
Mr. Blair. Well, we have performance management to a better
degree in the SES, but what the President proposes to do is to
say that future pay raises for the SES will be performance-
based. Remember, the Senior Executive Service is comprised of
approximately 7,000 individuals in a workforce of 1.8 million
people. It gives us a better laboratory, if you want to use a
better word, so to speak, in which we can really implement a
pay-for-performance system.
Ms. Norton. But you agree there should be a validated
system of accountability before pay for performance?
Mr. Blair. I am not sure what we mean by ``validated.'' Is
that certified or----
Ms. Norton. I asked him what ``validated'' meant. Were you
here when I asked him what ``certified'' meant? And he is going
to leave it to you, if you listened to him, to indicate what
``certified'' is. So if you don't know what it means, that
really makes me wonder whether or not we are going to be----
Mr. Blair. Well, that is why I wasn't using those terms.
Let me just----
Ms. Norton. What terms would you use, Mr. Blair?
Mr. Blair. Well, I would say that we can certainly develop
within a regulatory scheme a performance management system
which can effectively guide agencies in the way that they
evaluate and compensate their Senior Executive Service.
Ms. Norton. But you are using this system as a kind of
demonstration project for the entire Federal workforce. You are
seeing if it works here, and then you are going to take as much
of it as you can and apply it to the Federal Civil Service
System if you can.
Mr. Blair. Well, I would almost say--I would be stronger
than that in saying that if we can't effectively do it for our
senior executives, then it doesn't bode well for the rest of
the workforce in applying performance management principles.
Ms. Norton. So it is a test case, it is your pilot project.
Mr. Blair. It is a foundation.
Ms. Norton. Given the state of the Federal workforce today,
my colleague just indicated we had to fight--the Chairman has
talked about pay for parity, had to fight to get it in the last
budget, the retirements, the difficulties with recruitment. If
you look at the Civil Service Reform Act of 2003, in order of
priority which do you think should come first: Increasing the
pay gap, dealing with the pay range, or pay for performance?
Mr. Blair. I kind of feel like you are asking which of our
children is our most favorite. It is----
Ms. Norton. In other words, you regard them as of equal
importance to do----
Mr. Blair. I think that they are all equal at this point.
We want to be able to work with the Committees in both the
House and the Senate to see that we can work towards these
reforms. I am not prepared at this point to identify a priority
because things may change in the next few months. But I think
that it shows--the introduction of this legislation at the
hearing today and hopefully continued progress on this front
shows Congress' continued commitment to improving the way that
we effectively manage our workforce.
Ms. Norton. Well, one of the things you have to do is put
yourself in the place of the workforce you are talking about,
and if you are talking about taking the pay cap off, before you
even talk about that, you are talking about giving increased
pay to only a relatively small number of people. One might want
to consider the effects on the workforce itself, not simply
what----
Mr. Blair. Well, let's remember the context in which that
is being proposed though: That executive pay has been linked to
congressional pay over the years, and when Congress has denied
itself a pay raise, it has effectively capped the top rates for
the SES. The result has been over the years that the six levels
have been compressed, and in a number of the localities around
the country many levels are being paid at the same rate despite
varying degrees of difficulty and responsibility.
That is the reason for the SES pay proposal, is to more
effectively manage the SES through the use of pay, and by
making those distinctions.
Ms. Norton. I can understand that, and, of course, that is
a real problem that we have to deal with, and I couldn't agree
with you more.
I am going to ask you if you would write to the Chairman,
considering your answer to me, on a certified performance
management system, what the OPM regards as certification so we
can be clearer on validation and certification.
Mr. Blair. Certainly.
Ms. Norton. Finally, let me just say, Madam Chairman, I am
on the Select Committee on Homeland Security, and I see you
have at page 13 of your testimony, I think quite appropriately,
a discussion of what you are having to go through to design a
new pay and personnel system, as you say, to bring together the
employees of the 22 agencies that now make up the Department of
Homeland Security. I do not envy you.
Let me ask you, in light of that, wouldn't you at least
recommend that you put off dealing with SES pay on top of all
the pay problems you are going to have to deal with in bringing
22 agencies together. Do you think all of this should be taken
on at one time plus pay for performance in this new agency?
Mr. Blair. I think it is incredibly important that we take
on the two proposals that I mentioned, and we will meet all our
statutory obligations required under the Homeland Security Act.
We can't allow other pressing issues to remain an excuse
for the status quo, and the status quo is that we, in the past
year, have awarded over $5 billion in an across-the-board pay
adjustment of which performance was not a component at all. I
think that is inexcusable, and I don't find a way to justify
it. Neither does the administration. And so that is why we are
proposing to move aggressively in incorporating pay-for-
performance proposals across the board. We would like to do it
for the SES, and we would like to do it by virtue of enactment
of the Human Capital Performance Fund.
At the same time, we are moving aggressively forward in
meeting our responsibilities in homeland security. As I said,
as we meet today our design team is meeting at OPM in hammering
out these very important issues.
Ms. Norton. Thank you, Madam Chairman.
Mr. Blair. Thank you.
Mrs. Davis. Mr. Van Hollen.
Mr. Van Hollen. Thank you, Madam Chairman.
Just to follow up on this issue of to what extent the
Executive Branch is prepared to move forward with pay for
performance in terms of performance appraisal and evaluation
systems, you single out in your testimony two departments--the
Department of Energy and Department of Labor. Getting back to
Congresswoman Norton's question about validation, are those two
performance systems that you have evaluated them and you
determined that they meet whatever criteria you set forth? Is
that right?
Mr. Blair. We have looked at the Department of Labor, and
they have done a good job at better linking performance
expectations for their managers to the strategic plans. This is
really a follow-on to the efforts that were first identified in
the Government Performance and Results Act in which we asked
agencies to identify their mission goals and to evaluate how
well they are doing it.
Really, the next step in this is to have that cascade down
through an agency and making agencies link their senior
executives and have them link their goals to the overall agency
mission and strategies, and from there to carry that down to
the front-line agencies as well.
Mr. Van Hollen. Right.
Mr. Blair. And to evaluate that, and that is what we would
like to do. That is our intent, and we see some agencies making
progress in that area, specifically the Department of Labor and
the Department of Energy.
Mr. Van Hollen. OK. But as I understand it, you singled
them out really for that first part then, linking their agency
mission with different personnel decisions.
Mr. Blair. Exactly.
Mr. Van Hollen. Not the next step, which is the individual
performance pay appraisals. Is that right?
Mr. Blair. They appear to have done a good job of linking
their senior executives, but the front-line managers, they are
still in the process of doing that.
But remember that under the current system we don't have
incentives for agencies to do that, and we talked earlier about
are we putting the cart before the horse. Well, you need to put
the carrot before the horse in order to get the horse to move,
and that is what we are trying to do with the Human Capital
Performance Fund.
Right now, if an agency doesn't have an incentive, if there
is no incentive existing to have a robust performance
management system, then why will agencies do it other than
being told that they have to do it? One of the best ways of
incentivizing organizations like this is to put real money with
real results and real actions behind it, and that is what we
are trying to do. Again, we didn't jettison the current pay
structure for Federal employees. The General Schedule remains
in place. Step increases remain in place. Given that, however,
we are saying if you possess skills of immense value to your
agency, if you perform admirably at your job in a superior
fashion, the current structure of classification doesn't allow
you to move from a GS-14 to a GS-15 because what you are doing
is still at the skills level of a GS-14, but you are doing it
in a very exemplary way, why don't we reward you? And our
current system doesn't allow us that flexibility. The Human
Capital Performance Fund would.
Mr. Van Hollen. Let me just follow up, Mr. Chairman, then I
will finish. It seems to me we would want to have at least in
place the performance criteria for everyone to look at, to
become comfortable with before you take the next step, which is
to make the linkage between the pay, and I think you said that
it is a terrible thing we haven't moved in this direction, but
it seems to me the administration has a lot of flexibility and
leeway to do a lot of this on its own without passing
legislation. If you wouldn't mind, if the Chairman wouldn't
mind requesting, I would be very interested in you providing
the Committee information as to what performance criteria the
Department of Labor and the Department of Energy have in place
that you think provide a model, as I understand it, for the
rest of the Federal agencies.
Mr. Blair. We will be happy to provide that.
Mr. Van Hollen. I would be very interested in seeing that,
if you wouldn't mind, Mr. Chairman. That is all. Thank you.
Mr. Blair. Thank you.
Senator Voinovich. Mr. Blair, you, I think, heard from all
of us that there is a little skepticism about going forward
with pay for performance, and I think that it would be wise for
you to carry that message back. In fact, I am going to be
sending a letter off or calling Kay and talking to her about
this. Unless there is some major effort made to identify next
steps and a more complete plan, this is not going to happen
this year. I hope that came across to you, and I know that you
have got this goal in mind, but we don't think agencies are
ready. And I think at this stage of the game it would be good
to drop back and put together what the plan is. Even for the
Senior Executive Service, there is some issue about whether or
not they have a verifiable system in place. What are there,
8,000 or 9,000 members in the Senior Executive Service?
Mr. Blair. Roughly 7,000.
Senator Voinovich. Yes, that they in some instances in some
of those agencies there are not real pay-for-performance
systems in place. So it is a question of identifying agencies
that are ready. Maybe we need to conduct some demonstration
projects on this. If you feel that the Department of Labor and
some others have a good system in place and they are ready to
do this, perhaps those could be appropriate demonstration
projects. That is just a little humble recommendation that you
ought to fall back and regroup the troops on this and maybe
come back with a different proposal.
Mr. Blair. Well, I want to emphasize that our concern is
that we don't maintain the status quo, that the status quo is
unacceptable in terms of awarding $5 billion in pay raises,
none of which are performance-based, or that you have your top
executives all making the same amount of money and you can't
use your most strategic tool, which is pay, in order to
recognize differentiations in performance levels. I think we
are all on the same scorecard--not scorecard--song sheet there,
and we will work with you. But I can't overemphasize that we
think that more progress needs to be made on the human capital
front. I know that you agree with us on that, and that we want
to begin taking the next steps of incorporating performance as
a key element in the way we pay our employees.
Senator Voinovich. Well, one of the provisions of the bills
that we have creates broadbanding of the Senior Executive
Service which would provide a lot more flexibility and enhance
the whole concept of pay for performance. But I think the worst
thing that could happen is to get started with this thing, and
then have it become a disaster to which everybody points and
says, ``I told you so, it wouldn't work.'' For those of us that
have been through the mill--and I have on a couple of occasions
as mayor and governor--this is something you really have to
spend a lot of time on to do it right.
Thank you very much for coming here today.
Mr. Blair. Well, thank you, sir.
Mrs. Davis. Mr. Chairman.
Senator Voinovich. Yes, I am sorry.
Mrs. Davis. I would just like to make a comment. Being a
horsewoman myself, if you give that horse the carrot and you
don't hook the cart up properly, you have a problem.
[Laughter.]
Senator Voinovich. OK. Thank you very much.
Mr. Blair. Thank you very much.
Senator Voinovich. Our third panel of witnesses is composed
of four individuals who represent the interests of Federal
employees at a variety of levels. During the past few years, I
have worked closely with these and other Federal employee
groups to ensure that their voices are heard in the debate over
personnel reform. During my 18 years as Mayor of Cleveland and
Governor of Ohio, I developed a firm belief that in order to
have reform truly take root in any organization, the front-line
employees must be involved in the decisionmaking process. This
kind of employee empowerment is essential at the Federal level
as well.
Our witnesses are Bobby Harnage, National President of the
American Federation of Government Employees; Ms. Colleen
Kelley, President, National Treasury Employees Union; Ms. Carol
Bonosaro, President of the Senior Executives Association; and
Ms. Karen Heiser, Treasurer, Chapter 88, of the Federal
Managers Association.
We are pleased to have all of you here today. I think you
have all been here to hear the other witnesses' testimony, and
my feeling is that, in terms of pay for performance, we have
really given it a whole lot of attention. If in your testimony
you want to mention it, that's fine, but I sure would like to
hear what you think about these three pieces of legislation
that we have introduced, because we have pretty much spent all
of our time on pay for performance.
I will now call on Bobby Harnage. Bobby, we are glad to
have you here with us today.
TESTIMONY OF BOBBY L. HARNAGE, SR.,\1\ NATIONAL PRESIDENT,
AMERICAN FEDERATION OF GOVERNMENT EMPLOYEES
Mr. Harnage. Thank you. It is my pleasure. I appreciate the
invitation. On behalf of the more than 600,000 Federal
employees represented by AFGE, I thank you for the opportunity
to testify today.
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\1\ The prepared statement of Mr. Harnage appears in the Appendix
on page 113.
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I will focus my remarks on two items. The written
testimony, as it goes quite in detail on your question, so I
will deal with two items, the provisions of the bills providing
various expansions and managerial authorities, and the larger
issue of how to resolve the government human capital crisis.
Federal employees will view these legislative proposals
from the vantage point of a workforce under siege. The
administration is pursuing an aggressive policy of mandatory
privatization quotas aimed at up to 850,000 jobs. It is not
only ignored but constantly criticized for principles of
comparability that is supposed to go in Federal pay. It has
tried to define the traditional civilian/military pay parity
three times at the same time that it has reintroduced big
bonuses for political appointees and proposed letting
management spend 20 percent of the meager amount set aside for
salary adjustments any way it wants.
The administration has stripped various Federal workers of
their collective bargaining rights, and insisted on taking away
five chapters of Title 5 from the law that covers Homeland
Security. Finally, they have questioned the patriotism,
loyalty, and love of country of the members of my union. Will
the authority to pay slightly bigger recruitment and retention
bonuses to a few lucky employees and embark on a huge
demonstration project undo these unmistakable messages of
hostility and encourage new people to come build a career at
Federal agencies? Not likely.
Allowing larger bonuses and demos and streamlined critical
pay is not objectionable unless one considers the proposals in
the context of either solving the self-inflicted human capital
crisis or the more pressing needs of Federal employees and
agencies. We believe that the financial incentives for
recruitment and retention in the legislation are at best
incomplete and at worst misplaced. Salaries are too low, not
just for prospective employees or for employees who threaten to
leave if they do not get a bonus. Salaries are too low for all
Federal employees.
There is a law on the books that will solve the pay
problem. It merely has to be enforced and funded. FEPCA, passed
just over a decade ago, introduced a very long list of pay
flexibilities--and I list those in my testimony--in spite of
the insistence of today's would-be reformers that it is a rigid
or inflexible system. Indeed, FEPCA introduced the existing
recruitment and retention bonus authority that has almost never
been used because it has never been funded. The legislation
also takes the limits off the number of workers covered by
demos. AFGE strongly opposed this measure. It effectively
allows entire agencies to be under alternative to Title 5. It
has taken away congressional right to approve such changes. It
also undermines the very idea of demos, since without limits on
the number of workers they cover, there will not be an adequate
baseline against which to compare the outcome of the demos.
We support the provisions of the legislation that provide
training for managers and other employees. We applaud the
recognition that failure to deal with poor performers is not a
matter of any absence of authority, but rather a problem of
either reluctance or poor training. Further, it recognizes
dealing with poor performers as a management problem and a
discipline problem, not a pay system problem.
It is well known that DOD is shopping legislation that will
allow it to waiver parts of Title 5 and impose a pay-for-
performance system on its workforce. They are eager to get
these authorities before the outcome of the grand experiment at
DHS is done. Federal employees recognize these efforts as
hostile to their interest and understand that DOD pay-for-
performance schemes will require substantial financial
sacrifice for them and their families. The government human
capital crisis is not like the weather. It did not just happen.
It was a result of misguided policies, and a reversal of those
policies is what is necessary to solve it.
To that end, AFGE recommends the following: Require full
funding and implementation of FEPCA's comparability provisions
as a trigger for the exercise of the expanded bonus authority
in the proposed legislation; enact legislation that would put
an end to privatization quotas that would guarantee Federal
employees the chance to compete in defense of their jobs, and
that would prohibit OMB's controversial rewrite of A-76 to go
forward; pass legislation already introduced in the House and
the Senate to improve the funding formula for Federal
employees' health insurance; resist the temptation to jump onto
anti-employee pay-for-performance bandwagon whether for DOD,
DHS, or any other Federal agencies or department. Pay for
performance is a recipe for mismanagement, discord and
discrimination, and will undermine the merit system principles.
This concludes my testimony, and I would be glad to answer
any questions you might have.
Senator Voinovich. Thank you. Ms. Kelley.
TESTIMONY OF COLLEEN M. KELLEY,\1\ NATIONAL PRESIDENT, NATIONAL
TREASURY EMPLOYEES UNION
Ms. Kelley. Thank you, Chairman Voinovich, Chairwoman Davis
and Members. On behalf of the 150,000 Federal employees
represented by NTEU, I appreciate the opportunity to appear
before you today.
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\1\ The prepared statement of Ms. Kelley appears in the Appendix on
page 144.
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The message often received by today's workforce is that
they are not valued. Many believe their pay is inadequate, but
they do not see a fair pay setting process on the horizon.
Based on experience, they believe their agencies will not
receive sufficient funding for training. They also know that on
any day their jobs may be contracted out from under them. It is
no wonder the government has a hard time recruiting and
retaining employees.
Although the fiscal year 2003 Federal pay raise was
recently settled, it came only after a very long and public
fight that again sent the wrong message to the Federal
workforce. Today is April 8, 2003, and the full 4.1 percent pay
raise that employees should have received in January has still
not arrived in Federal employee paychecks. There is no question
again as to what message this sends.
In its 2004 budget, the administration continues to show a
lack of concern for what failure to properly compensate public
employees means for the future of public service. Ignoring
bipartisan calls for pay parity, the administration recommended
a 2 percent Federal pay raise. The message again that this
sends to civilian employees, even to those on the front lines
of securing our Nation's borders, is that their work is not as
important, not as valued, and not as vital as that of their
military counterparts.
Instead of pay parity, the administration proposes a $500
million human capital performance fund. Funding for this
gimmick comes at the expense of the 2004 Federal pay raise, and
would give managers unfettered discretion to give incentive pay
to a fraction of the Federal workforce. Benefits, too, are key
to the government's ability to attract and retain the
workforce.
The Federal health program is in crisis. This year's 11
percent premium increase marked the fifth year in a row of
steep rate increases. Many employees have been forced to give
up their health insurance and those considering employment with
the Federal Government are turned off. Private sector employees
continue to pay on average less for their health insurance in
terms of percent of premium and in terms of cost.
Employee training is another critical piece of the pie.
Unrealistic funding levels have restricted the ability of
agencies to adequately train their employees to perform their
missions effectively. Without proper training everyone loses.
Customers do not receive the best service and employees do not
find their work rewarding or challenging.
The administration's march to contract out 850,000 Federal
jobs through arbitrary quotas is another disincentive to
Federal employment. One-size-fits-all quotas are being forced
down agencies' throats without thought to their impact on the
government's ability to recruit and retain employees. Employees
have told me that the message their agencies convey is this: We
may hire you; we may train you; we may even promote you; but
when it comes time to meet our contracting out quotas, we may
eliminate your job in order to meet our targets. These blind
quotas erode the morale of the Federal workforce and disrupt
agency operations.
With regard to S. 129, the Federal Workforce Flexibility
Act of 2003, NTEU is not opposed to the use of demonstration
projects. We believe, however, that the collective bargaining
process must be used to ensure that both management and
employees understand the nature of the project and are
committed to its success. The legislation also proposes the
expanded use of bonuses. Expanding the availability of these
incentives makes little sense without the resources to
accomplish the goal, and, NTEU has concern about expanding
critical pay authority. NTEU believes that properly
compensating the Federal workforce would make further critical
pay authority unnecessary.
We welcome provisions drawing attention to the government's
need to properly train its employees. Again, however, the bill
does not address the resource problems that have prevented
agencies from providing training to their employees. Proposals
to enhance annual leave for certain new Federal employees need
further review. If Congress believes that annual leave limits
are a barrier to hiring, then the system should be reformed for
all employees.
In summary, NTEU thinks the messages we must send employees
are these. We want you to come to work for the Federal
Government. We want you to be successful. We want to
appropriately compensate you for what you do. We value what you
do every day for the American public, and we want to treat you
with the dignity and the respect that you deserve. I, and all
of NTEU look forward to working with all of you in the House
and the Senate toward this end.
I thank you again for the opportunity to appear today, and
would be glad to answer any questions you might have.
Senator Voinovich. Thank you. Ms. Bonosaro.
TESTIMONY OF CAROL A. BONOSARO,\1\ PRESIDENT, SENIOR EXECUTIVES
ASSOCIATION
Ms. Bonosaro. The Senior Executives Association appreciates
both the invitation to testify and the Subcommittee's interest
in and concern for Federal human capital management. We are
especially grateful to Senator Voinovich and Representative Tom
Davis for their legislative efforts to address civil service
issues, both in this and the last session.
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\1\ The prepared statement of Ms. Bonosaro with attachments appears
in the Appendix on page 155.
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We welcome the proposal contained in the President's budget
with regard to SES compensation because this is the first time
in 10 years that an administration has addressed this issue.
That proposal and the Senators' bill can alleviate pay
compression which has reached the point, as you know, where 70
percent of all career executives are now paid the same. We look
forward to resolving this issue indeed after many years of
effort.
What we seek, however, with regard to executive pay, is
stability, so we need not keep returning to this issue as we
have over 20 years, and due process rights for career
executives to ensure that the merit system is protected. Thus
we recommend some tweaking, if you will, to ensure that the
administration's and the Senators' proposals meet these
objections. I think particularly because of the view of the SES
as a proving ground, it is especially important that we
maximize the possibility, the likelihood of success of pay for
performance, and minimize the possibility of, for example,
politicizing the career executive corps. The safeguards must be
in the statute, not just in regulations.
Specifically we recommend that you eliminate the cap on
locality pay so that executives can receive the full locality
pay adjustments and we prevent further pay compression based
upon the new locality cap; that you reform the Homeland
Security Act language which calls for certified performance
systems so that only OPM and not OMB promulgate the
implementing regulations; that once certified, certifications
cannot be removed for a 4-year period; that if an agency loses
its certification, pay that was set while the system was
certified will not be reduced; and the certified system cannot
force a distribution of performance ratings. I think that is
especially important. It is only fair that each individual
executive be evaluated on his or her merits and
accomplishments, and not on the basis of some normal curve.
We recommend that you include all bonuses and awards for
executives in the high-3 computation for retirement annuities,
thus creating a true pay-for-performance system; provide that
SES and all equivalent executives automatically receive the
same annual increase to base pay that the General Schedule
receives each year regardless of the cap. Such annual increases
should not be at the sole discretion of supervisors. Raise the
base pay cap each year by the amount of the annual
comparability increase, irrespective of what Congress does for
its own pay or that of the Executive Schedule; replace the wide
proposed SES pay range with three overlapping pay bands; the
lowest base pay within band one would be the current minimum
for ES-1, an amount sufficient to give a reasonable pay raise
to a GS-15/10 promoted into the SES. And executives would
receive promotions to pay bands two and three based on
demonstrated capabilities, attained executive experience and
level of responsibility. Pay band three would be set so that
its highest base salary is Executive Schedule 3.
Finally, we would like you to require the following
safeguards on SES pay: Establish a minimum pay increase of at
least 5 percent for those promoted from the General Schedule
into the SES--that would then become the executive salary
floor; provide executives denied a salary increase for
performance reasons the opportunity to appeal to their agency
Performance Review Board under the same process used currently
for appealing performance appraisals--the boards would be
required to have a majority of career members; limit any
reduction in pay within a pay band only to reasons related to
conduct or performance, and to an amount not more than 3
percent of base pay in any calendar year; provide executives
the opportunity to appeal pay reductions based upon performance
to the agency's Performance Review Board, and those based upon
conduct to the MSPB; finally, provide an executive who is
demoted to a lower pay band the right to an MSPB appeal.
Even with these recommendations, however, we have one
overriding concern. That is, if agencies have total flexibility
to set base pay, pay rates may inevitably be influenced by
budgetary considerations, namely insufficient funds for
appropriate raises. FAA executives have already experienced
that situation. In tight budget times their performance based
system has not been funded and awards not paid, while annual
increases in awards remain funded for lower-level employees.
What will you do to ensure that result is not repeated across
the entire Senior Executive Service corps?
In closing, we hope to work with the Subcommittees and the
administration to implement these recommendations. We surveyed
our members about the administration proposal and provided the
Subcommittee with a compilation of those comments which I will
appreciate being placed in the record along with my full
statement.\1\ Those observations from the government's highest
ranking career employees express substantial concerns with
regard to the administration's proposal, concerns which we
think can be addressed with the reasonable changes we
recommend.
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\1\ The survey referred to appears as Attachment II of Ms.
Bonosaro's prepared statement in the Appendix on page 172.
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And finally, we also hope to work with the Subcommittees
for full consideration of our other proposals which are
detailed in my full testimony. Thank you.
Senator Voinovich. Thank you very much for being here. Ms.
Heiser.
TESTIMONY OF KAREN HEISER,\2\ TREASURER, CHAPTER 88, FEDERAL
MANAGERS ASSOCIATION
Ms. Heiser. Thank you, sir. Chairman Voinovich, Chairwoman
Davis, Members of the Subcommittees, my name is Karen Heiser.
On behalf of the 200,000 managers and supervisors in the
Federal Government whose interests are represented by the
Federal Mangers Association, thank you for inviting us to
present our views at this very important joint hearing
regarding the human capital challenges facing the Federal
Government.
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\2\ The prepared statement of Ms. Heiser appears in the Appendix on
page 190.
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I am currently the Organizational Development Manager at
Watervliet Arsenal in New York, the U.S. Department of the
Army. My statements are my own in my capacity as a member of
FMA, and do not represent the official views of the Department
of Defense or the Army.
The inability to make public sector more attractive has
made it increasingly hard for the Federal Government to recruit
and retain the high-caliber workers it needs to sustain a
strong civil service. One such deterrent is the scrutiny of
Federal functions and the lack thereof for contractor work.
While previous administrations have taken credit for creating
the smallest Federal Government, the illusive nature of the
government's less visible and less accountable shadow workforce
of contractors makes it nearly impossible for policy makers to
know if the current course of downsizing and contracting out is
in the Nation's best interest.
The General Accounting Office listed strategic human
capital management across government to its list of ``high-
risk'' areas over 2 years ago. In a recent update GAO noted
``Importantly, although strategic human capital management
remains high risk governmentwide, Federal employees are not the
problem.''
As part of legislation creating the Department of Homeland
Security, several positive reforms were enacted governmentwide
that will help agency recruitment and retention efforts while
highlighting the critical nature of human capital planning. On
behalf of FMA, I would like to thank you, Chairman Voinovich in
particular, for your hard work on the inclusion of these
important provisions.
Two specific notes of concern to FMA. It is worth noting
that the provision to provide Federal employees compensatory
time off for official travel was left out of the final bill.
OPM regulations do not permit comp time for credit hours unless
travel occurs during working hours. Given that most meetings
are scheduled during work hours, and travel to and from those
meetings often takes place outside working hours, FMA asks for
reconsideration of this provision.
Another issue of particular concern to FMA is the current
statutory cap on overtime pay for managers. Between 1994 and
2001 the nonpostal Executive Branch civilian workforce was
reduced by more than 452,000 positions. Much of the reduction
was arbitrary and not related to workload. One result of this
is overtime. The current cap is outdated and serves as a
disincentive to potential and current managers, as those above
GS-12, Step 6 are paid less for overtime than for regular work
hours, and managers and supervisors often earn less on overtime
than the employees they are supervising.
Mr. Chairman and Madam Chairman, you have introduced
legislation that would allow managers to use a variety of
compensation tools such as recruitment, relocation and
retention bonuses, and give agencies streamlined critical pay
authority to fill key positions. These are sensible reforms
that would begin to address the workforce problems that will
only worsen with the forthcoming retirement wave. As an
expansion of the direct hiring authority granted to agencies,
FMA recommends that full-time equivalent ceilings be made more
flexible for agencies to fill highly-needed positions without
the burden of arbitrary FTE caps.
Student-loan repayment has long been identified as a
recruitment and retention bonus that would help attract and
retain high performing employees. FMA would like to see this
benefit also extended to those seeking graduate degrees. The
``GOFEDS'' legislation would increase the student loan
forgiveness benefit by relieving Federal employees of the
obligation to pay income tax on the money provided by their
agency. Thank you again, Mr. Chairman, for your leadership in
introducing this bill.
In terms of managing this new approach to human capital,
whatever it looks like in its finished version, the numbers and
roles of Federal human resources professionals needs to be
assessed. Additional training may be necessary to prepare these
HR experts to chart future human resources needs and steer
personnel and funding accordingly. Often times, however,
agencies do not have adequate funding for such incentives, even
those that currently exist. Annual appropriations should
include additional line items for recruitment and training. The
public sector should ``walk the talk'' in appreciating that the
most valuable organizational asset is the workforce itself, and
in recognizing that ``you get what you pay for.''
Agencies must also be prepared to invest in their employees
by offering skill training throughout their career. FMA has
long recognized the need to prepare career-minded Federal
employees for the demand of the 21st Century workplace through
its establishment of the Federal Management Institute, FMA's
educational arm which sponsors valuable professional
development seminars and workshops. FMA recently teamed with
Management Concepts to offer the Federal Managers Practicum, a
professional certificate program designed for Federal managers,
and as the official development program for FMA, the Practicum
helps managers develop critical skills and enhance their
capabilities.
History has shown that training dollars have been a low
priority in many agency budgets. In fact, in the rare event
that training is available, those monies are often usurped to
pay for other agency priorities. Toward the end of reversing
this ideology, FMA supports including a separate line item for
training and agency budgets, to allow Congress to better
identify the allocation of annual training funds.
The Federal Government must once and for all take the issue
of continuous learning seriously. There needs to be a
developmental component for every position to facilitate
performance management and effective succession planning. For
agencies to perform at optimum levels, employees must have
clearly defined performance standards. These standards should
be directly linked to the agency's mission, customer service
goals, and its annual performance plan and/or strategic plan.
FMA supports implementing a more comprehensive governmentwide
appraisal system, with a pay-for-performance component. Any
system adopted must be rooted in long-held merit principles and
should not be used to undercut fair and appropriate annual
increases for Federal employees.
In conclusion, ``do more with less'' when less has been
based on numbers and not efficiency has eroded the remaining
employees' morale and dedication, and the reputation of the
Federal Government as an employer. And again, simply put, there
are fundamental services that should be deemed core to the
government. While calls are heard daily to further examine the
performance of employees of the Federal Government, there
continues to be silence in response to suggestions that the
same level of oversight be focused on its contractors.
Government leaders must now take the side of the Federal
employee.
Senator Voinovich. Your time is up, Ms. Heiser.
Ms. Heiser. Thank you, sir. I will be available for
questions if you wish.
Senator Voinovich. Thank you.
Have we made any progress? Most of you talked about FEPCA
and outsourcing. The administration has announced its goal of
850,000 jobs for public-private competition, and I suspect that
a figure was arrived at by taking the percentages that were
originally announced. I was under the impression that there had
been some backing off from those percentages, and that the
secretaries of the departments were basically told that they
ought to shape their workforce without first looking to
competition.
Health insurance is another issue that we have talked
about. From my observations of the private sector, the cost for
employees has gone up a lot more because the Nation's whole
health insurance system is out of control. That is a whole
other subject, that the system is not working. I know in my
State, when we went to HMOs and to another system, we reduced
the employee contribution from 12 to 10, and now the governor's
talking about increasing it to 20. So that is going on around
the country.
The impression that I get is some of the things in this
legislation you think are good, but you are kind of reluctant
to be supportive of some of it because of what you perceive the
administration's attitude is toward Federal employees. Is that
it in a nutshell? Does anybody want to comment on that?
Ms. Kelley. I thought it interesting, sir, that Mr. Blair--
--
Senator Voinovich. What things do you think that they could
do rapidly to--besides having honest to goodness dialogue with
you on the new Homeland Security Department--help create an
environment where you might be more supportive of some of this
legislation.
Ms. Kelley. Well, that would be a good start, and we would
welcome the conversation on Homeland Security. But in addition
to that, fully funding pay raises, proposing an appropriate pay
raise for civilian employees. Just right out of the box that
would send a very different message than what has been received
recently.
The issue around the human resource performance fund and
regardless of what they say, that money is money that can and
should have been part of the civilian pay raise that was
proposed for January 2004, and the idea that for a change,
funding is being provided for a flexibility like this, because
that of course is usually the issue, the flexibilities are
provided but no funding. So this time the funding is provided
at the expense of the civilian workforce and with no criteria
or rules around how that money will be distributed.
One of the things that amazes me is they say they need this
to reward performance for those who are performing above the
acceptable level. They have a lot of other processes in place
to do that, that are not used today, one of which is high
quality increases or quality step increases, whatever you call
them in your agency, HQIs or QSIs. These are raises that every
agency has the authority to use. They do not need legislation
to do it. They can give these to as many or as few employees as
are meeting the criteria, and most agencies are not even using
them at the average rate they are being used average across the
government, which I understand now is at between 4 and 5
percent of the workforce. And the agencies that NTEU works
with, we are working with them to try to get them up to the 4
and 5 percent range.
So they have this tool, and they do not use it, and I have
never heard them say it is because it is not funded, although I
guess they could say that. But now to see this human resource
performance fund created with no rules, and to have money just
being able to be delivered by managers with no criteria, no
credible performance appraisal system, no infrastructure, no
nothing, really adds insult to injury, when regardless of what
they say, it was at the expense of the proposed January 1 pay
raise.
Senator Voinovich. Carol, you commented that the
legislation would address the problem of SES pay compression.
Ms. Bonosaro. Well, with the kinds of recommendations we
have made as safeguards, we would be, obviously, a lot more
comfortable with it. As the administration has noted it would
not deal with compression suffered by every executive within
the current system, which did not occur because of performance,
but rather because of congressional freezes, nonetheless, we
are prepared to support that, provided those safeguards are
indeed part of it.
Senator Voinovich. Do you believe that from your
observation over the years, there are adequate, credible
performance evaluation systems across the board? On a scale of
1 to 10, if you looked at them for the 7,000 SES employees,
where would you say agencies stand in terms of having adequate
performance evaluation systems in place?
Ms. Bonosaro. I would point a couple of things out, I
suppose. First, there are a lot of differences across agencies
that we are familiar with. That the IRS has gone through the
most elaborate process of trying to develop something that is
very clear, that relates to levels of responsibility, levels of
effort, and that is shared up front with their executives, so
they know in the end what they have to do vis-a-vis the bonus
system, which is part of SES compensation right now. I
understand other agencies, such as VA, for example, have gone
through a fair amount of work with regard to their performance
systems.
On the other hand we do have just a couple of levels within
some of the agency performance management systems, and their
appraisals and rating levels are not automatic indicators of
how bonuses will be paid. There are separate systems in place.
So it is very different across government, and I think it
is very hard to come down and give you a precise answer about
where we stand.
Senator Voinovich. It would be interesting for me if you
would contact your membership at various agencies and provide
me with their opinions about where they think agencies stand in
terms of managing performance evaluations.
Ms. Bonosaro. We will be happy to do that. We will do a
quick survey and turn that around and get that back to you.
Senator Voinovich. Thank you. Congresswoman Davis.
Mrs. Davis. Ms. Bonosaro, you stated in your written
statement I think that you would not support a certified
performance appraisal system as a condition for increasing the
salary caps unless the bonuses and awards were made a part of
the annuity computation, and that without this treatment of the
bonuses and awards it would not be, ``true pay for performance
compensation system.'' Since awards and bonuses have never been
made a part of the retirement computation for employees in or
out of the general schedule, why do you believe so strongly
that they must be included in the retirement pay to go to pay
for performance?
Ms. Bonosaro. We are now placing base pay in the situation
that bonuses and awards were previously, in saying it is not
going to be automatic that you are going to have an annual
adjustment each year. Adjustments have not been automatic in
any event, given the caps within the SES, as we know. Their
base pay will be at jeopardy and therefore, arguably, I think
it is reasonable to say that the work that folks do that
enables them to in fact go even beyond that and earn bonuses
and awards, would demonstrate that we are really taking the
performance business seriously and it will have real meaning to
you, and not just in terms of this year, but in terms of your
annuity.
Mrs. Davis. You also said in your testimony that the
regulations on the pay-for-performance process must not come
from OMB but must come from OPM. I was just curious what the
reasoning is behind this, because do you believe that the
President should not have any control in his administration? If
you are concerned about political influence at OMB, I think you
would probably have the same thing at OPM. So I am just curious
as to why.
Ms. Bonosaro. Yes, we are concerned about that, to be
frank. But on the other hand, OPM has certainly got the
personnel expertise, and we think they should be left to that
job. Certainly the President has exercised authority up until
now, it is true, with regard to the pay rates for the SES. But
in any event, we think that this is a function that
appropriately belongs to OPM and should stay there.
Mrs. Davis. Just another quick one, and your testimony led
me to a few questions. That is why I am coming to you with so
much. You said that if we put this appraisal system, if it is
approved, that it needs to be in there for 4 years regardless?
I think I heard you right on that. So what if OPM comes back
and says that the agency is not implementing it correctly,
there is problems. Does that mean that OPM, that we are stuck
for 4 years and nothing can be changed?
Ms. Bonosaro. What we are concerned about, I think
obviously there is the opportunity for OPM to go to the agency,
and given the fact that you have presidential appointees in
that agency as well as OPM, presumably they should have some
influence to get the system running properly. But in any event,
what we are concerned about is that an agency might be viewed
as having given too many outstanding ratings in a given year,
and see their certification evaporate for that reason alone, to
be frank.
Our primary concern is that each executive be indeed judged
on his or her merits, and that we do not have that kind of
driver. So our view is also that, with the 4 years, that might
span administrations from time to time as well.
Mrs. Davis. Thank you. I am going to go to my colleague.
Ms. Norton.
Ms. Norton. Thank you very much, Madam Chairman.
I think listening certainly to the GAO and to your
testimony, and especially reading it closely, that we should
put aside any notion that the employee organizations are simply
opposed to any change. Indeed, many of the employee
organizations have raised the issue of a human capital crisis
generally in the workforce with retirements and early
retirements, with problems in recruitment, quite apart from the
clear problems with the existing workforce and its own
anxieties.
I think the problem we are faced with is how to use an
approach that avoids worsening a problem we are trying to fix,
and perhaps doing what successful reform generally requires,
and that is looking at a win-win approach. The reason I asked
Mr. Blair, for example, whether he saw any order of priority in
the SES 2003 act, was because I was looking for some
sensitivity that employees would be looking perhaps at one part
of the act and maybe management, meaning the administration, at
another part of the act, and maybe if you looked at both of
them you could develop a win-win approach. But instead he said,
well they are all the same and they have equal priority.
We just heard testimony from Ms. Bonosaro, for example,
that there is great concern, as anyone would expect, in pay
compression, the pay cap. But clearly the administration's
priority is pay for performance. One begins to wonder if you
can get what you want if you do not look at what this huge
workforce wants and try to find some way to get a win-win.
I am looking at your testimony. Sometimes they are rather
small things. Sometimes they are clearly larger things. For
example, Chairman Voinovich mentioned health insurance. One
begins to wonder if in fact there was some movement on what is
a critical problem, which is the increasing amount of one's pay
in effect that goes to health insurance, whether or not the
workforce would be more open to changes that the administration
may want. Or they can be smaller problems. He mentioned that
one. It can be things that may seem smaller such as the one
that was just discussed, OMB as the agency that looks at pay
for performance, and not OPM. Well, any Federal worker will
tell you that is a big no-no. OMB is a White House agency, is a
political agency. OPM comes out of the old civil service
system, and its job is to look at everything in light of merit
principles.
So if you are trying to find some way to ease the anxieties
of the workforce, after all you have appointed the OPM Director
just as much as you have appointed the OMB Director, there is
administration policy. One might look, if you are looking for a
win-win, at the agency whose job it is to put into play
something that is a complete departure, and break away in the
merit system which is pay for performance. I am just trying to
go off of your testimony. Now I am looking at Mr. Harnage's
testimony.
Says on page 4, ``Does not find the provisions highly
objectionable in and of themselves,'' and then goes on to say,
``unless one considers them in the context of far more pressing
needs of Federal employees and agencies, again, a suggestion
that there may be some way to make these proposals less
objectionable if they are too objectionable.'' I have already
indicated to Mr. Walker, that all you are going to get is a
blizzard of grievances and court suits and the rest, so what
have you accomplished with all of the lowered, with all of the
problems that brings for employees and for employers.
So I am looking at Ms. Kelley's testimony in which she says
that the NTEU is not opposed to the use of demonstration
projects, and in fact, continues to believe that demonstration
projects are a valuable method of experimenting with new pay
and work arrangements. Again, it looks like we are not dealing
with black and white here, but we are dealing with something
that says, hey, in order to do particularly massive reform, you
have got to look at all the parties and they all have to think
they are getting something out of it. Or let's take the problem
of new employees, where your testimony indicates that you have
difficulty with these new employees getting all of these
bonuses, all of these incentives, while employees who have been
waiting in line do not get anything.
There has been testimony here about training and the
failure to offer training. If existing employees thought they
were getting training, even as one was trying to deal with the
fact that 40 percent of the government can retire in 5 years,
maybe one could come to some kind of understanding that
everybody is getting something out of personnel reform and even
pay for performance.
I must say for the record, about the last way I would begin
pay for performance is giving $25,000 bonuses to political
appointees. It is all down hill from there. You have to begin
from the ground up. People who are political employees, they
come at lower pay than they may get in the private sector, but
then they leverage that to humongous pay within a year or two.
So I guess my question really goes to approach.
Mrs. Davis. Ms. Norton's time has expired about 2\1/2\
minutes ago.
Ms. Norton. Yes, but other people went over their time,
Madam Chairman, and I would like an answer. I finished my
question. My question was not a series of small questions about
this and that. I am looking for an approach that gets us to
something other than what we have here, which is apples and
oranges, and nobody is going to eat them together. So I would
like to know whether there is an approach that can bring you
together with the administration, that focuses on win-win.
Ms. Bonosaro. I would like to respond to that just because
it also will enable me to follow up on something Mrs. Davis
asked.
I think you are quite right, and I was reminded as you were
talking of the start of the Senior Executive Service, when
those of us who were in the old Super Grade system were enticed
in, if you will, because the SES was a system that, while it
indeed had far greater risk than the system we were in, also
carried the potential for a greater reward. And that is the
reason why we are suggesting, for example, if you are going to
eliminate all the ranks within the SES and really change the
structure and create pay bands, let us entice in folks and say,
but gee whiz, there is going to be an additional reward, and
that is that the bonuses, the awards you get, can count towards
your high-3, for example.
If we are going to move in to the pay-for-performance
system, let us at least adopt the kind of safeguards that we
have talked about so that people can feel more assured that
merit principles indeed will still apply. So I think there is a
way to have a win-win.
Mrs. Davis. If the others would like to respond?
Mr. Harnage. Yes. I have not had the opportunity to read
Carol's entire statement, but her oral statement, I certainly
think we can embrace. There are three matters that Chairman
Voinovich touched on that I think deals with where you are
coming from. One is the administration has not slowed down on
its quotas for privatization, and 850,000 jobs comes from the
FAIR Act, the FAIR list and the percentage of jobs that have to
be competed under this administration's quota system and their
de-rewrite of the A-76 has currently taken place in OMB.
He made a very good point that on the health insurance in
his State they have gone from 8 percent to 12 percent, and then
they might be going to ask the employees now to make a 20
percent contribution. Federal employees have been making 28
percent contributions for years, so that is just an indicator
that this would be an incentive for recruitment and retention.
Even if the State increased it to 20 percent, the legislation
we have asked for just brings the Federal employee to that same
level.
Then finally in the $500 million slush fund that is being
created by the administration--and the Subcommittee needs to
understand that in 1997 NTEU and AFGE wrote to the then
administration asking to sit down and work on pay with what the
problems were, identify the problems and find the solutions. We
never got around to that. We went from year-to-year battles
here in Congress to try to get pay to what it should be. Same
thing with this administration. Within a month of taking
office, Colleen and I wrote to this administration, asking to
sit down and work on pay. Their response was more or less they
were too busy.
We are more than willing to sit down and work with anybody.
I prefer working with Congress, and I will tell you why. I
am still looking for $200 million. When the administration came
up with a 2 percent across-the-board increase and a $500
million slush fund, the figure is 2.7 percent. Therefore there
is $200 million missing somewhere. So if they are going to
treat pay that way, I am not too sure sitting down with them
would be too fruitful, but they in effect, even with their
slush fund, where some employees are going to get that $500
million and some employees are just going to get the 2 percent
increase. There is $200 million that should be in that--
somewhere in that pay scheme it should be 2.2 percent or it
should be a $700 million slush fund.
But we are more than willing to work with anybody that will
work with us on coming up with a solution to the pay, and my
concern is that FEPCA never has been fully implemented and so
we do not know whether it would work until we first tried it.
As both of us pointed out in our testimony, there is all kinds
of incentives and managerial flexibilities in FEPCA that have
yet to be fully utilized, such as the step increase, the step
increase as both a penalty and a reward. You can withhold a
step increase if an employee's performance is not of an
acceptable level. That is rarely done, but nevertheless, that
is a tool. In the same token if you have a high performer you
can give them a quality step increase. That is a step increase
in addition or sooner than they would have otherwise gotten on.
Rarely used today.
Senator Voinovich. Thank you. We have another panel here,
and it is 12 o'clock. Representative Van Hollen.
Mr. Van Hollen. Thank you, Senator. I will be very brief. I
just want to make an observation, get a quick reaction.
It is striking, as all of you in your comments have said,
you do not oppose to use of financial incentives and bonuses to
award for performance. I mean Mr. Harnage has made that clear,
so I think it is important that no one is dragging their feet.
What is striking--and I appreciate all your testimony, and look
forward to going through it in more detail--is the amount of
flexibility and a lot of the opportunities that already exist
under the law to provide rewards. Ms. Bonosaro, in your
testimony you say not only does the Senior Executive Service
have a performance system, that it is currently a model pay-
for-performance system.
So the question really is the question of resources. It is
not that they do not have the ability, the administration does
not have the ability to provide bonuses right now. It is a
question of whether or not the funds are separately provided
for this purpose. With respect to the SES, it is a question not
of performance measures being in place and the system being in
place, it is just the fact that you have these caps in place.
I would just like to get a very quick response from all of
you to that observation, that it is not a question of lack of
flexibility and the ability to provide bonuses. It has been a
lack of resources to make the system work
Ms. Bonosaro. I think that the one thing that we know is
yes, indeed, there are a lot of flexibilities within government
right now. I have not heard anyone really satisfactorily
explain yet why they are not all used. We know in some cases
they are not always--personnel do not always know about them.
Certainly they are not always funded. Sometimes there is simply
a lack of will, so that there are a whole variety of reasons.
The one thing I think we would be concerned about is, if
because of the view of the lack of performance management
systems being at the rate they should be, that therefore we do
not resolve the issue of pay compression within the SES. I
really think that cannot wait.
Ms. Kelley. I would say, Congressman Van Hollen, it
absolutely is an issue of resources. In fact, Senator Voinovich
and I have had this conversation many times, where I have said,
``Please do not provide any more flexibilities to the agencies
until the resources are provided because all it does is make
the list longer and longer of things that are not being used by
the agencies.''
As far as setting priorities--and I think this goes to
Delegate Norton's question about process, how we prioritize, in
order to do that, you have to have a two-way conversation, an
ongoing conversation. We do not have that with the
administration. Therefore, our discussions take place at these
forums and in the media because there is not an ongoing
conversation to try to figure out the really tough questions
about priorities and how to create a potentially win-win
situation, which is very different from working through all of
the flexibilities we have with you, Chairman Voinovich, because
we have these conversations one-on-one, over and over
throughout the year before legislation is ever introduced,
because you are interested in working with us to figure out
what the employee issues are and how they can be addressed.
That is the way that I think we can make much more progress on
behalf of the employees, the American public, and the agencies,
not the way that we do business today, but that is how we do it
today.
Mr. Harnage. I think you are right on target. OPM's own
survey indicated that less than 1 percent of the current
workforce received incentives, cash awards, and the reason for
that is that they were not funded. The agency, in order to give
one employee a cash award, had to take money away from other
employees or simply not fill a position. So that is the first
problem. It is not an incentive and it is not a reward for
performance if you are not receiving the pay that you are
entitled to to begin with, and as we have said, we have got to
bring FEPCA up to par, and then any incentive that you give is
in fact a performance award.
The second thing that you have to watch out for, if you
recall,just a couple of years ago we had to get a legislative
change in the VA system on nurses' pay because we found
hospital directors were balancing their budget on the backs of
the nurses. Instead of giving them the pay increases they were
entitled to, they were diverting that money to other parts of
the budget. So we changed the pay system of the nurses just 2
years ago. Let's not create a monster here of all civil
service.
Ms. Heiser. I would concur with my colleagues that the
incentive awards program as it currently exists needs some
further examination in terms of the tools that are available
and the effect that it could have were it properly funded. But
I would put to you that first and foremost, as we have said,
the appraisal systems really do need to be revised. Pass/fail
does not accomplish our objectives--we have to look at why
performance appraisals are done. Pass/fail should not be kept--
the carrot before the horse is not a good example in this case
because hay is not going to be the motivator for people to do a
good job of performance management. The driver for performance
management needs to be organizational improvement and employee
development. That is the way to start with this whole program.
I would also take some umbrage with the idea that a $5
billion annual increase is wasted because it is not based on
performance, and I would put to you that if we assume safely
Federal employees are performing, then it certainly is based on
performance and not wasted money. Thank you.
Senator Voinovich. We thank the panel very much for your
testimony this morning, and we will take it into consideration.
Obviously we have some systemic problems that we have had for
several years.
Senator Voinovich. Our fourth panel of witnesses includes
some of the Nation's top experts from the public, private, and
non-profit sectors, academia, and the military. I am pleased to
have met many of you at Harvard's Executive Sessions on the
Future of Public Service and that you agreed to serve on my
Washington-based human capital working group. Hannah Sistare is
the Executive Director of the National Commission on Public
Service. Hannah, I want to welcome you back to the Senate. I
enjoyed working with you during your time as Senator Thompson's
Governmental Affairs Committee Staff Director.
Again, I apologize to the fourth panel for the delay. I
hope you have enjoyed the testimony of the witnesses. It
certainly gives you a little perspective for your clean-up
role.
Dr. Steven Kelman is the Weatherhead Professor of Public
Management at the John F. Kennedy School of Government, Harvard
University. Steve, glad to have you here. Steve has had a
lifetime of public policy work, both as an educator and as a
public servant, most recently as Director of the Office of
Federal Procurement Policy at OMB during the Clinton
Administration.
Max Stier is the President and CEO of the Partnership for
Public Service. Max, I want to congratulate you on the good job
that you are doing with the Partnership. It looks to me like we
have to do a few other things to attract and retain good people
of public service, if we have listened carefully to what the
other witnesses had to say.
Jeff Taylor is the President and CEO of Monster. It was
good to meet with you, Jeff, up at the Kennedy School, and I am
eager to hear what you are doing to improve the ``USA Jobs''
website.
We are fortunate to have Major General Robert McIntosh,
U.S. Air Force Reserve (Retired), Executive Director of the
Federal Officers Association of the United States, and
appreciate you being here today.
We will start off with Ms. Sistare.
TESTIMONY OF HANNAH S. SISTARE,\1\ EXECUTIVE DIRECTOR, NATIONAL
COMMISSION ON THE PUBLIC SERVICE
Ms. Sistare. Thank you very much, Chairman Voinovich,
Delegate Norton and Representative Van Hollen. The National
Commission on the Public Service, and our Chairman Paul
Volcker, thank you for your interest in their recommendations
for the reform and the renewal of the public service. They are
encouraged by action in the House and the Senate to tackle this
critical challenge.
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\1\ The prepared statement of Ms. Sistare appears in the Appendix
on page 218.
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The title of the Commission report,\2\ ``Urgent Business
for America'' reflects their conviction that we must seize the
opportunity at hand for reform. Our 13 commissioners are of all
political persuasions and from both political parties. They
came together with a shared concern about the declining level
of public trust in government and its correlation to the
public's negative view of government performance. They were
troubled by surveys indicating that Federal workers are
frustrated in their efforts to get the job done and have
difficulty seeing how their efforts contribute to the
government's critical missions.
---------------------------------------------------------------------------
\2\ The Commission report entitled ``Urgent Business for America,
Revitalizing the Federal Government for the 21st Century,'' report of
the National Commission on the Public Service, January 2003, submitted
by Ms. Sistare, is retained in the files of the Subcommittee.
---------------------------------------------------------------------------
The Commission began its work examining the challenges
confronting Federal employees and the difficulty in attracting
and retaining the Skilled Workforce 21st Century government
demands. Soon, though, they were convinced that to be fully
effective, Federal workforce reforms must take place within a
modernized government structure.
The Commission's vision is greater consolidation of related
and overlapping agencies into mission-centered departments
brought together in an environment of more administrative and
personnel flexibility, but with strong political leadership.
The commissioners were convinced that organizational
cohesion and mission clarity would enhance the morale of the
Federal workforce and improve government performance. The goal
was not smaller government, but government that works better.
The Commission does not take lightly what it will require
to make this work. Some critical ingredients are: An Office of
Personnel Management and OMB with the resources to support
these systems; strong leadership from well-qualified and well-
trained political leaders, career executives and managers; and
as Paul Volcker repeatedly stresses, strong oversight by the
Executive and the Congress.
To optimize Congressional oversight, the Commission
recommends that Congress itself reorganize its own committees
around the key missions of the reformed Executive Branch
structure. Recognizing that this reorganization will be the
work of years, the Commission recommended that Congress pass
legislation reauthorizing the Executive reorganization
authority that Presidents had, in one form or another, from
1930 to 1984.
Now, the Commission anticipated this authority would be
exercised within a framework established by the Congress. They
recommended including the requirement that personnel systems be
governed by the established merit principles of government
employment. They also envisioned significant consultation in
the development of reorganization plans with Congress, Federal
workers and other affected parties.
The purpose of the expedited consideration, once a proposal
reaches Congress, is to protect a broadly and well-considered
reorganization plan from being pulled apart by partisan or
individual turf battles.
On the issue of pay, the Commission recommends that the
government pay reflect current market conditions so government
can retract and retain talent it critically needs. The market
for the workforce, generally, was seen to be the private
sector. The market for government's senior leadership was seen
to be the nonprofit workforce, and this latter group includes
Federal judges, political appointees and Members of Congress.
The Commission was particularly concerned with the damaging
impact of declining real pay for Federal judges.
As I indicated, the Commission was concerned about the
perception and reality of government performance and was
critical of the current GS system under which time on the job
becomes the major determinant of pay.
Some, including Members and witnesses here today, have
voiced concern that a pay-for-performance system is beyond the
capabilities of the Federal Government and will be abused by
managers.
In response, Paul Volcker would point out that clarity and
cohesion of mission is what gives managers the ability to
establish performance objectives and measures. Once agencies
have credible performance measures, it is possible to judge
individual and group performance in a transparent,
nonsubjective way. The whole process becomes much less daunting
and visibly fair.
I believe the Commission would applaud the administration
for getting the ball rolling and would also agree with the
Comptroller General on how to proceed. Furthermore, as
Secretary Donna Shalala--former Secretary Donna Shalala--noted
in her recent testimony before the House Government Reform
Committee, you have to have credible people in both political
and career management positions for the system to work. And
here again, ongoing, effective training plays a critical role.
The Commission had completed its work prior to the
introduction of the legislative reforms before the
Subcommittees. However, the members of the Commission would
enthusiastically applaud the proposals' goals of enhancing
recruitment, retention and training, linking training to
performance plans and strategic goals, encouraging flexibility
in personnel systems, alleviating pay compression for the SES
and other senior-level employees, encouraging mid-career
entrants, and improving the presidential appointments process.
The Commission would add, act with urgency. Thank you.
Senator Voinovich. Thank you. Mr. Kelman.
TESTIMONY OF STEVEN J. KELMAN, Ph.D.,\1\ WEATHERHEAD PROFESSOR
OF PUBLIC MANAGEMENT,, JOHN F. KENNEDY SCHOOL OF GOVERNMENT,
HARVARD UNIVERSITY
Mr. Kelman. Chairman Voinovich, Chairman Davis, Senator
Durbin, and Congresswoman Norton, I am not going to talk about
pay for performance. I will talk briefly about both attracting
talented young people into government--as a teacher of young
people considering careers in public service, I am interested
in that--and creating workplaces for those people to come into
government that will help us retain them and also workplaces
that deliver results for the American people.
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\1\ The prepared statement of Mr. Kelman appears in the Appendix on
page 229.
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First of all, I want to assure you I do have some good
news, Senator Voinovich. The government still retains an
ability to recruit and attract talented young people. This
year, half of our graduating students in the Master of Public
Policy program at the Kennedy School at Harvard have applied
for the Presidential Management Internship program, and
recently we were very happy to find out that 40 of our
students, out of a graduating class of 180, have been accepted
into the Presidential Management Internship program.
One more piece of good news, a student of mine, who has
been accepted into that program, Amy Dain, came by my office
last week to tell me that within 1 week of her receiving her
PMI notification, she had received communication from three
government agencies, three different agencies, seeking to
recruit her and find out if she was interested. So I think that
is a real tribute to your efforts to create interest in human
capital issues, to those of the Comptroller General, to
Director James and her team at OPM that we are making some
progress in that area.
Amy said to me that the three communications she got
included agencies she might not have thought of working for
otherwise. It has opened up some new opportunities for her.
Senator Voinovich. You had out of how many?
Mr. Kelman. Out of 180 students, about 90 applied to the
PMI and 40 have been accepted.
Senator Voinovich. And the fact is they moved very quickly.
Once they were designated, the agencies did not wait around.
They were after them right away.
Mr. Kelman. Correct. So good news.
Let me briefly comment on some of the provisions of the
proposed legislation. I essentially support everything in S.
129. The one provision I wanted to call particular attention to
is the provision in Section 302, allowing using non-Federal
service time as a base for annual leave. The idea behind this,
this is one small step in making it easier for people to enter
the Federal Government in mid-career.
Hannah pointed this out, the Partnership for Public Service
has been very interested in this. Young people no longer see
themselves as working in one place throughout their careers,
and we need to make it easier. A source of talent for the
Federal Government is people wanting to come in, maybe only for
a few years, mid-career, as one of several jobs. We make that
much too hard now in the government.
Another student of mine who is graduating this year, who
was a Teach for America person before he came to the Kennedy
School, was looking at a job in intelligence at the FBI that he
wanted to apply for. The job said, ``Open to current or formal
Federal employees only.'' He cannot apply for that job. I think
that is bad news, from the perspective of the public. I think
he would have been a very good person for that job.
The Partnership for Public Service has made a number of
excellent proposals in this area. One is to set up a mid-career
Presidential Management Internship program. I think that is a
great idea.
Let me, finally, with regard to hiring good talent, make
one suggestion for an additional provision for S. 129, that the
bill include a provision to amend Title 5, which currently
states that hiring and promotion decisions should be made on
``knowledge, skills and abilities,'' and add the word
``accomplishments.''
Right now the current language is too bureaucratic, too
formulaic, time served, things like that. I think we send a
good signal about an orientation toward results by adding that
word ``accomplishments''--knowledge, skills, abilities and
accomplishments--into the statute.
Last, just a word about the other thing, once we get these
people into the workforce, creating workplaces that inspire
them, continue their commitment to public service. The kinds of
things that you did, actually, Senator, as Mayor of Cleveland,
with your work on total quality management, I think that a lot
of the work here is going to have to be done at the agency
level. I think there are some contributions the Hill can make--
oversight hearings, looking at ways that agencies are
developing nonbureaucratic, more empowering ways of doing
business for their employees.
I would urge you to urge OPM to establish a Presidential
Management Internship Advisory Council to the President's
Management Council, to allow young, talented employees to
interact with deputy secretaries and give them ideas for how to
improve the Federal workplace.
Finally, in terms of creating good workplaces, never forget
the Hippocratic adage ``Do no harm.'' Because I think that
probably one of the biggest sources of counterproductive agency
practices that create too much bureaucracy, too much hierarchy,
is the kind of what I call ``management by scandal'' approach
that, unfortunately, a lot of current congressional oversight
encourages.
So I would urge you, as elected officials, to realize that
every time the pursuit of scandal creates more rules, more
bureaucracy and so forth, you are really decreasing the
attractiveness of Federal service to young people.
My student, Amy Dain, describes what she is looking for in
a Federal job as follows:
``I am looking for a job where I will be able to learn,
where I will be challenged, where I will find mentors who will
show me the ropes, introduce me to decisionmakers and open
doors and opportunities for me, where I will be able to work in
a team to seek solutions to complicated problems, where I will
be supported in taking risks, where I will have a sense of
making a meaningful contributions to issues I find important
and relevant and where I will find a warm community.''
Let us work towards a situation where she will not be
disappointed. Thank you.
Senator Voinovich. That is wonderful. Thank you very much.
Mr. Stier.
TESTIMONY OF MAX STIER,\1\ PRESIDENT AND CHIEF EXECUTIVE
OFFICER, PARTNERSHIP FOR PUBLIC SERVICE
Mr. Stier. Thank you very much, Mr. Chairman, Madam
Chairwoman Davis, Senator Durbin, and Congresswoman Norton. It
is a pleasure being here.
---------------------------------------------------------------------------
\1\ The prepared statement of Mr. Stier appears in the Appendix on
page 239.
---------------------------------------------------------------------------
We have heard all morning, and now coming into the
afternoon, about the human capital crisis. It is truly, I
think, best viewed as a multi-tiered problem that is going to
need a multi-tiered set of solutions. One approach that we
would propose to organize these sets of problems is to see them
as a succession of three major barriers:
The first barrier literally being lack of information, lack
of information about government jobs, public service, and the
value of those jobs and government service;
The second being a broken hiring process, which right now
takes too long, is too difficult and is nontransparent;
And the third, as Steve mentioned, are the jobs themselves,
which are not always representative of a high-performing work
environment which is so critical on the retention side and on
the recruitment side.
So I would like to talk, in my oral remarks, about some of
the things that can be done in each one of those barriers to
address them.
The first piece is what we have learned from our polling is
that the most effective way of telling the story of government
is through the story of Federal workers, individual workers.
And in that light, we have created the program called the
Service to America Medals, which recognizes excellence in the
Federal service. Eight Federal workers were honored last year.
This is done in conjunction with the Atlantic Media Group, and
we are doing the same this year.
You will notice, and hopefully--I am sure many of you take
the Metro--you will see the ad campaign that we have up. I also
have one of the brochures here from the ``Service to America
Medals,''\2\ and I cannot help but take this time as an
opportunity to ask all of you to find great Federal workers to
nominate for this program, either in your district or otherwise
in your experience.
---------------------------------------------------------------------------
\2\ The brochure entitled ``Service to America Medals,'' submitted
by Mr. Stier is retained in the files of the Subcommittee.
---------------------------------------------------------------------------
Last year, we had a nomination from a member. It is a
fabulous program that really makes a difference both for the
workers themselves, but also, most importantly, for telling the
American people the story of the Federal Government and public
service.
The second piece I would like to highlight is the fact
that, by and large, the relationship between the Federal
Government and our college and universities has been broken. To
respond to that, we started a program with the Office of
Personnel Management called ``A Call to Serve.'' To date, there
are 400 universities that have signed on, 60 Federal agencies,
to raise the profile of the Federal workforce on college and
university campuses.
One of the productions that we have created for that
network is this ``Red, White and Blue Jobs'' handbook, again,
to address the real inadequacy right now. Most young people
know a lot about private-sector options, but not about public-
sector options. And if I could, I would ask that both of these
brochures be added to the record.\1\
---------------------------------------------------------------------------
\1\ The brochure entitled ``Red White & Blue Jobs, Finding a Great
Job in the Federal Government,'' submitted by Mr. Stier is retained in
the files of the Subcommittee.
---------------------------------------------------------------------------
The third piece on the first barrier, the lack of
information on the recruitment side that I would like to focus
on, is the issue of student debt. Obviously, Chairman
Voinovich, Senator Durbin, your leadership with the GO FEDS
legislation, I think, is very important.
What we know today is that two-thirds of graduates from our
colleges and universities have student debt. The size of those
debts have increased exponentially. And even where there is
interest in public service, oftentimes, young people do not
have the choice to pursue it because of those debts, and I
think the GO FEDS legislation is an important step in
addressing that problem.
The second barrier of the broken hiring process is one that
has, again, multiple components. There is a pledge to
applicants that we have designed in conjunction with the Office
of Personnel Management which I think is very important to see
enforced that includes making sure that job vacancy
announcements are in plain English and that the process is an
easier one.
I would also note that there are many very quick things
that could be done: Internships, for example--the private
sector uses them as a critical talent pipeline into their
organizations. The Federal Government does not do a very good
job about that. In fact, it is very difficult to convert superb
interns into full-time employees. There is a distinction made
between interns that are brought in under a government program
versus a nonprofit program like by the Hispanic Association of
Colleges and Universities, and those kind of changes could be
made very easily and would result in a lot of good talent and,
in particular, diverse talent coming into the Federal
Government.
I am rushing here, and so I will jump into the third
barrier, which is fundamental and, in many ways, the hardest
nut to crack, which is the job themselves. Here, again, I would
suggest that the starting point ought to be with the management
and leadership.
We can note, from the OPM survey, which was very well done,
that only 43 percent of Federal employees hold their managers
and leaders in high regard. That is a problem. Your suggestion
on starting with the SES, I think, is the right one, and we
strongly support the proposal that is before these
Subcommittees.
We would also suggest that an additional element that ought
to be included is a requirement that agencies conduct regular
employee surveys, and this can be done agency-by-agency, with
some joint element, so that you can do governmentwide work, but
we believe that is absolutely essential.
And then, finally, I would note that it is very important
for us to focus on the flexibilities and the improvements that
have already been passed, in particular, the Chief Human
Capital Officer Act--wonderful legislation. Implementation is
really the name of the game right now, and we need to make sure
that it is done right.
Thank you very much.
Senator Voinovich. Thank you, Max. Mr. Taylor.
TESTIMONY OF JEFF TAYLOR,\1\ FOUNDER AND CHAIRMAN, MONSTER
Mr. Taylor. Chairman Voinovich and your esteemed team, I
want to thank you for an opportunity to come here today. I have
a mission to help people love their jobs, and a big part of
this for me has been to try to educate to the government about
the window of opportunity that I see, and this is really
competing with the private sector for talent.
---------------------------------------------------------------------------
\1\ The prepared statement of Mr. Taylor appears in the Appendix on
page 254.
---------------------------------------------------------------------------
I decided I would do kind of time line because I think it
shows where the opportunities are. And with the advent of the
Internet and the worldwide web and the invention in 1993, we
really launched our next mass media, radio, television and now
the Internet and, for the first time, a reason for a PC on
every desk top, and maybe more importantly, an affordable
medium to communicate.
The result, when you overlaid that on top of a tech boom
and a telecommunications boom, was 1999 tech and dot-com
euphoria, and with that, a booming economy, entrepreneurial
fever, unprecedented venture capital and IPOs, so advantaged
private-sector businesses. You ended up with 3.9-percent
unemployment, rapid pay acceleration and stock options, as
currency, which then gave the advantage to the job-seeker or
the employee.
So I look at this. In fact, there is a measurable shift in
1999 and the beginning of 2000, where employees really started,
for the first time in 100 years, to take control of their own
lives and companies were in a panic.
Then, we have April 2001. We have the dot-com and the tech
bubble is really exposed. I talk about the ``Emperor has no
Clothes,'' and by summer of 2001, we had dot-coma. I know we
are not supposed to laugh in this, but that is kind of funny,
come on. [Laughter.]
So here we are today, it is 2003. The treadmill has slowed.
I call it ``the eye of the storm.'' This is kind of the calm.
It is the reprieve in business and for government that you
never really get--6 percent unemployment, give or take 8.5
million people out of work.
Recently, President Harry Truman--well, maybe in relevant
form--said, ``If your friends are out of work, it is a
recession. If you are out of work, it is a depression.''
And I think that what we have now is longer job search
cycles, extended benefits that we have provided, which are
running out. A stable job is in fashion maybe for the first
time in 10 years.
Employee or talent attitudes are more realistic than they
have been, and I look at employers momentarily are regaining
control, but there is very little dry powder. The economy has
basically put us in a position where the private-sector
companies do not have much to go on.
So here is the opportunity. I think the government needs to
capitalize on the economic slowdown to seize talent in the
private sector. You have e-Gov initiatives right now, very
positive. You have new initiatives with TSA and Homeland
Security. I look at the positives. There are many new jobs that
are going to be created.
Go USA sentiments from the tragedy and terrorism of
September 11 comes the pride of America, and for the first time
in recent memory, for me, an opportunity to think about working
for the government and some of the stability factors that are
there in a new way.
Candidates have an open mind. A recent Monster survey of
51,000 job-seekers on Monster, 80 percent indicated that they
would consider working for the government. In a Monster survey
of our campuses--we partner with over 1,400 campuses--86
percent of students said they would think about working for the
government.
So I look at the Internet as a new mass medium. It is
inexpensive distribution. It is fast adoption by the target
groups for the government, and I look at early successes as a
way to prove this. Through a partnership with Monster, through
NCS Pearson, TSA needed security people fast. We posted the
jobs on Monster. We had over 6 million job-seekers view those
jobs, 1.7 million applicants, 417,000 went through assessment.
They hired 61,000 people through the Monster interface in a
very short window of time. We have 66,000 people that are
placed in the ready pool.
So what I am trying to show is it is not just the Internet,
but your new partners in the private sector can actually be an
answer for some of these recruiting challenges.
I look at the challenges that you have ahead are equally
daunting. The aging workforce, it has been well-covered. But it
is not just the talent, it is the knowledge that is going to
leave your ranks and your agencies. Insular recruiting, which
has been a dynamic way that you have recruited, is really going
to fail because there are not enough candidates.
Your outside systems, and what I will call ``old habits,''
I have got to challenge, I guess. According to a recent survey
done by MSPB, it is just being printed now, 300 Federal human
resource specialists were interviewed. Ninety-six percent used
the USAJOBS site to recruit, 30 percent used agency bulletin
boards, 6 percent used the newspaper, zero used the Internet
job boards that are out there.
Monster, for one, had 20 million unique visitors in our
highest month, which was in January, coming 54 million times a
month. This is the private sector that is ready to go to work
for the government.
Thirty percent of government agencies still do not accept
electronic applications. Many agencies have no staffing
automation, and this can create 4- to 6-month backlogs.
Ultimately, the vacancy announcement, the description itself is
daunting. And if you would share, this is a description--could
you bring that up here into the light, just so you see--this is
a description on Monster for the Army for one position, and you
can see that it is a little longer than your average private-
sector position.
So two last things: The brand and culture concerns,
although I am amazed at the war kind of power of the United
States, and the spirit, and the branding that is going on right
now, I think we have to transfer that to a new war which is
happening, which is the war for talent. And I look at the
window closeing. In 2008, the private-sector competition will
reenergize. Economists predict 4-percent unemployment by 2010.
The Bureau of Labor says 10 million jobs will go unfilled by
2010. Private-sector fuel, it will go back to venture capital,
rapid pay acceleration. The window will close.
I am predicting the worst labor shortage ever in our
lifetime that will start in 2008. If we do not act on some of
the things I have talked about, in my judgment, baby boomer
exit, 10-year shortening, broadened skill shortages, e-commerce
to e-business transition, where all businesses will change, and
ultimately the free agent world is going to create an
incredible scenario for the government, and it is going to be
very difficult to hire.
The window from 2002 to 2005 is where I am suggesting that
we look. We have already burned 1 year.
Senator Voinovich. Thanks very much. General McIntosh.
TESTIMONY OF MAJOR GENERAL ROBERT A. McINTOSH, USAFR [RET.],\1\
EXECUTIVE DIRECTOR, RESERVE OFFICERS ASSOCIATION OF THE UNITED
STATES
General McIntosh. Chairman Voinovich, Chairwoman Davis,
Senator Durbin, and Delegate Norton, it is certainly a pleasure
and an honor for me to be here representing the 80,000 members
of the Reserve Officers Association. I am going to shorten my
5-minute remarks in the interest of time, but I do have a
couple of things I need to cover.
---------------------------------------------------------------------------
\1\ The prepared statement of General McIntosh appears in the
Appendix on page 259.
---------------------------------------------------------------------------
S. 593, the Reservists Pay Security Act of 2003, is a
significant step toward resolving the pay hardship issue for a
portion of the Reservists who have been mobilized to support
Operation Iraqi Freedom. The bill would entitle any employee of
the Federal Government who is called to perform service as a
member of the uniformed services to receive civilian pay in the
amount, which taken together with his military pay, would be no
less than the basic pay he would then be receiving if no
interruption in his civilian employment had occurred.
Simply put, the bill would ensure that, at least
financially, no harm would be done to a mobilized Federal
employee. There are approximately 120,000 Federal employees who
serve as members of the Reserve components. A significant
number of these, between 12,000 and 13,000, are currently
mobilized, and of course that is of the total number being
mobilized of 220,000 Guardsmen and Reservists for Iraqi
Freedom.
As we noted, we predict there will be more Reservists and
Guardsmen activated over time in many contingency operations in
the future, and certainly we look toward several over the few
years in the part of the world we are now engaged.
More importantly, however, this bill is an opportunity for
the Federal Government to lead the way and to set the example
for other employers of members of the Guard and Reserves. There
are already many employers--city, State and private--who pay
all or some part of the difference between their employees'
civilian salaries and their military compensation. There could
be more.
If we are to encourage employers to help protect their
employees' financial well-being when they are serving their
country, the Federal Government must lead the way and set the
example. If the Federal Government does not do the right thing,
what kind of a message does it send to those employers whose
connection is more tenuous?
The Federal Government, whose actions in this regard can
only be legislated, must lead by example and encourage the
private sector to do what cannot, and ought not, to be
legislated in the private sector.
There is more to this issue than Federal mobilized
employees and their families, but we must start here, now at
home, as it were. This provision is a first step in
demonstrating a practical and meaningful way that the
contributions of our Reserve forces are fully recognized and
appreciated by the Nation. Thank you.
Senator Voinovich. Thank you very much.
It is interesting that my staff director for this
Subcommittee was mobilized with the U.S. Navy for the conflict
in Iraq. I just inquired about what his leave situation is, and
what he is going to receive. I think he has cobbled together
some vacation time and some other things, but after that is
over, he will be getting his lieutenant junior grade pay, which
is substantially less than he is making in his staff position
here.
You all were very patient to hear the testimony of the
other witnesses, and it seems to me that there are some
fundamental things that need to be addressed if we are going to
capitalize on, as Mr. Taylor suggests, this window of
opportunity that we have. At this stage of the game, it does
not appear that pay comparability health care costs, or
concerns about outsourcing have negatively impacted on our
recruiting.
Would anyone like to comment on that?
In other words, Steve, your Harvard graduates are coming to
work for the Federal Government. But I remember when I was up
there talking to a couple of your students, one of the things
they said to me was, when they looked at the Federal service
they were wary about the outsourcing of Federal jobs. They were
thinking about, instead of coming to work for the Federal
Government, going to work for the companies that are getting
the outsourced work.
I would just like you to comment on that, if you would, or
anybody else.
Mr. Kelman. It is interesting that they said that to you. I
actually have not heard that. When I talk to my students about
why are you thinking why might you work in the government, why
might you not work in the government, probably the two single
biggest issues that come up again, and again, and again, one is
student loan repayment because the students have very high debt
burdens, and they are often getting job offers that are much
higher in the private sector.
So one is student loan repayment, and then the second is
quality of work, and Max and I have both been talking about
this.
There is a not necessarily fully unjustified perception
that too many jobs in the Federal Government are too bound up
by rules, and procedures, and clearances, and so many things
that make it harder for an individual to feel that he or she is
making a difference. I almost hear that more than I hear even
student loans. Student loans is a very big issue for our
students, but what is the quality of the work going to be once
I get on the job is a theme that comes up again, and again, and
again.
Ms. Sistare. The surveys that the Center for Public Service
at Brookings has conducted confirm what Steve says. Even at the
Schools of Public Administration, most of the students are
looking to go perhaps to State and local government or more
likely to the nonprofit sector and, again, it is the job that
the students are primarily looking for. They are interested in
pay and the other benefits, but the ability to make a
difference really makes a difference for them.
Senator Voinovich. That is really interesting because, over
the years, the Federal Government was always more attractive
than State and local government, and in the last decade or so
there has been a shift to go to work for State and local
governments.
Mr. Stier. Chairman Voinovich.
Senator Voinovich. Yes?
Mr. Stier. I just wanted to add to that, though, that I
think this, again, is a multi-tiered problem. Clearly, it is
fabulous that people at the Kennedy School are coming to the
government or are interested in the government in greater
numbers, but you will expect that in a School of Public Policy.
There are a lot of people out there that the government
needs, whether it is IT workers or engineers or scientists, who
simply are not informed about the opportunity to come to
government or the value, and even when they are, you run into
the student debt issue.
Senator Durbin is a lawyer. We recently did a poll of
third-year law students. Two-thirds said that they could not
make the choice to go into public service or public interest
because of their debts. It is extraordinary how big of an issue
that is.
And then once they are interested, and if their debts are
not a problem, the hiring process is often an enormous
deterrent. And so, again, this is a multi-tiered set of issues,
and while all of these factors are going to influence it, even
in this day talent is always going to have choices. Even when
there is an economic slowdown, the real top talent has choices,
and we need to make sure, obviously, that we get the very best,
and therefore make sure that all of these elements line up in
the way they need to for the government.
Senator Voinovich. So the thing is, if you were going to
really do something quickly to handle this problem, you would
deal with the loan situation. I think there is legislation that
would increase the aggregate maximum from $40,000 to $60,000
and the annual cap from $6,000 to $10,000. Would that help?
Mr. Stier. I think the loan situation would absolutely
help. I think that working on making the hiring process a
faster, easier system would absolutely help, and then making
sure, once they get to those jobs, that high performers and
innovators are supported, and then starting off with the
outreach would do the trick.
Senator Voinovich. Right. But the fact is right now, to
take advantage of the situation we must address the loan
situation, get OPM to really concentrate on this very
complicated hiring process, shortening it up and making it
easier to get people in. And then once we have done those
things, we should consider the quality of the jobs.
Mr. Stier. Correct.
Senator Voinovich. But now the thing is you have to go out
and land them.
Mr. Taylor. Could I just make one comment here? Is that I
do not think we are educating the general private-sector
population about the possibilities. I think if you look at this
like a funnel, we are about to open the funnel up, and we are
letting too many employees out of the Federal Government, and
we do not have enough input coming in. So we need to make that
process easier, but we also need to work on our branding to
position the organization, the Federal Government as a whole,
all agencies, to bring new talent in. You do not have enough
young workers coming in here to basically feed the system.
We recently won the Federal contract to run USAJOBS, and we
are able to take our back-end systems and basically start to
fix some of the systems and make it so it will work, but we are
still going to have to tell the general population that we have
got jobs out there, and we are going to make it easier for them
to go through that process.
Senator Voinovich. Max is helping with branding it on the
college campuses.
Mr. Taylor. He sure is, right.
Senator Voinovich. And a lot of people are cooperating with
him. How long is it going to take you to launch that new
website?
Mr. Taylor. We are ready. So we need a formal announcement,
probably about the end of this month. We really just got the
contract at the end of January.
Senator Voinovich. That is fast action.
I have to say that I asked my staff in Cleveland to compile
a list of Federal jobs, because people call, and ask, ``What
jobs are available,'' and it is a nightmare. I do not know how
many pages of information that we had, but in terms of being
user friendly, it was awful, just awful.
Mr. Kelman. One very operational suggestion to OPM, a big
deterrent is that because of the traditional ``rule of three,''
which is now eliminated, students had to give an entire, not
just a resume, but this enormous amount of information just to
apply for a job. In the private sector, that does not happen.
You apply for the job with a simple resume, and then if they
are interested in you, you start getting more information.
In the Federal Government, we have had to do everything up
front, and students look at this and say, ``It is going to take
me 20 hours just to apply for this job, where for a private-
sector job, I just give them a resume.'' I hope that OPM is
going to be dealing with that and that the agencies will deal
with that.
Senator Voinovich. Jeff, are you dealing with that at all?
Have you made the recommendation to them, that even when they
get the website up, they still have to deal with that long list
of stuff that you just showed us? Are they aware of that
problem?
Mr. Taylor. We are actually working with the OPM Office on
a number of different dynamics. Obviously, as part of the
process of putting a website up, we have had a chance to
question some of the stuff that is going to actually be in the
content of the website, but there is a fairly complex process
surrounding this, and I think we are going to do it in phases.
I think Ms. Norton likes that kind of ``pilot project''
approach, and I am looking at USAJOBS as our pilot project to
try to help the Federal Government to attract the talented
workers.
I think what you will see is, just when we launch, there is
going to be a whole new set of steps, and working with Max and
the Partnership, we are actually trying to get a theme out
there to really expedite the whole process of applying for a
job and also how we respond back to them so they know what is
happening in the process.
Senator Voinovich. Great. I have taken too much of your
time, Congresswoman Davis.
Mrs. Davis. Thank you, Senator.
Ms. Sistare, you said that, and I am not sure I have got
your words exactly, but urgency to get with it on this pay for
performance, I guess it is.
Ms. Sistare. Well, urgency to address the problems of the
public service.
Mrs. Davis. But you said, if I heard you correctly, that
you did agree with the Comptroller General that we should not
just jump into it; we should have set things in place, and I
forget what he called it.
Ms. Sistare. The Commission's report is more of an
architectural drawing than a blueprint, but the commissioners
did feel strongly that performance needed to play more of a
role in government and then the rewarding through pay, and I
think they would applaud the administration's effort to get it
going, but you do have to have a system in place. You do have
to have measures. You have to have confidence in the system. As
Secretary Shalala said, you have to have people trained to run
the system.
Mrs. Davis. So you agree we need to do a little bit of work
before we jump into it.
Mr. Stier, your organization is actively promoting
Excellence in the Federal Workforce. Do you see any inherent
contradiction in the President's proposed management reforms
and his attempt to privatize more Federal jobs with what you
are doing?
Personally, if I was looking for a Federal job, I would be
very nervous because of privatization.
Mr. Stier. I think that one of the key issues right now is
an informational one, to make sure that the American public, as
Jeff said, really understands the value of public service and
the opportunities that are there. We did a set of focus groups,
and one of the things that we found was that, basically, people
in the labor market had no idea about government jobs. When we
gave them a list of government jobs, many of their perceptions
about the government changed.
You asked the question about privatization. The issue of
privatization, in fact, has been an ongoing one for the
government for many years. I believe that upwards over 300,000
jobs were shed from the Federal workforce during the 1990's
and, in fact, some of the workforce imbalances we are seeing
today are a result of some of that privatization that occurred.
I think that it is absolutely essential that the message go
out that Federal Government jobs are incredibly valuable, that
they offer not only something for the country, but for the
individuals that are taking them, and that it is a chance to
really make a difference.
I believe that you can, in fact, have an environment in
which the value of public service is maintained in the context
of still allowing some jobs to be open for competition, and I
think that the employee groups are open to that as well. I
think where the difficulty comes is when you start seeing
quotas that are set that are not really based on any particular
jurisdiction, and it is also, I think, really essential to
focus on the fact that where there are competitions, it does
not mean that these jobs are being privatized.
In fact, in many instances, public-sector workers win those
competitions, and that is something that, I think, ought to be
used as a demonstration of the great work that the public
sector, in fact, is doing.
So, again, I think that they do not necessarily have to be
in contradiction. Unfortunately, currently, they are, at times,
in contradiction.
Mrs. Davis. General McIntosh, the administration is
concerned about paying Federal Reservists their differential
because many times they would be out, at least it is my
understanding, many times they would be out in the field, and
they would be making more than their commanding officer, and
there is some concern that would be bad for morale and the
like, and then they would be out there with other Reservists
who are not getting the differential from the private sector.
How do you address that?
General McIntosh. Well, certainly, today we have those
differences in individuals because we have people in the field
whose companies are paying the differential because they are
such strong supporters of the Guardsmen and Reservists. We had
the same situation in Desert Shield and Desert Storm. And, of
course, those who did not get differential pay or had their own
businesses or were professionals, some of them lost their
businesses.
In Desert Shield/Desert Storm, where we had a little higher
number mobilized than we do today, we had no negative feedback
from the field, in terms of morale, and people talking in the
foxhole about difference in pay. That did not come up. It was
not an issue. The troops did not talk about it, and I would
really question the logic of saying that would be a problem.
Mrs. Davis. Well, serving on the House Armed Services
Committee and last year on the Personnel Subcommittee, I heard
that a lot, and I wish we could pay everybody, private sector
and the works, but I thank you for your service.
Thank you, Mr. Chairman.
Senator Voinovich. Senator Durbin is the Ranking Member of
our Subcommittee.
OPENING STATEMENT OF SENATOR DURBIN
Senator Durbin. Thank you. I will be very brief because I
know Congresswoman Norton has been waiting too.
Let me ask you this, Major General McIntosh. It is my
understanding that 10 percent of the Guard and Reserve in the
United States today are Federal employees.
General McIntosh. The data we have looked at, our estimates
built on estimates, show about that 120,000 of about a 1.1-
million force.
Senator Durbin. So it is a significant portion.
General McIntosh. Very significant.
Senator Durbin. Second, it is my understanding that some 6
or 7 percent of those who have been activated for Enduring
Freedom in Iraq are also Federal employees.
General McIntosh. That number is emerging, Senator, but it
is approaching that percentage, that is correct.
Senator Durbin. I think it goes back to an earlier point
that has been made over and over again in different ways, and
that is whether or not a career with the Federal Government is
going to result in treatment comparable to other jobs in life.
And the point that you made is that States, counties, cities
and many private corporations have decided that if you are
willing to make the sacrifice to serve your country in the
Guard and Reserve, and you are activated, that they are going
to make certain that your family does not suffer in the
process.
This just strikes me as a reaffirmation of the fact that
Federal public service should not be a disincentive to serving
our country in the Guard and Reserve. It should be consistent
with it and an incentive. I understand, as you said, there are
disparities in how troops are treated in the field. I hope that
this notion that we have to play to the lowest common
denominator instead of to the middle ground or higher common
denominator does not argue against this.
I have used the example of a friend of mine back in the
Midwest, leaving a job with the FAA as an air traffic
controller, facing the prospect of being activated and taking a
position serving his country, that it would cost him roughly
$30,000 a year.
Now, that is a very dramatic hit, in terms of income, and
he is going to do it one way or the other, but whether the
person is working for Congress on Capitol Hill or working for
the Federal Government, I hope that we will consider this
Reserve pay security as a way to approach this, and I thank you
for being here today to tell us about your support for that.
General McIntosh. Thank you, Senator.
I would like to make a comment. I have been in and out of
the Reserve, going from reserve to active, and back and forth,
for a 37-year career, and I have yet to hear one troop in the
field talk about the difference in pay, relative to a Reservist
serving side-by-side with an active component.
The other thing I would say, these two gentlemen to my
right, I was just handed a note, their companies pay
differential. So, as a retired Reservist and someone who cares
about our Guard and Reserve and the defense of the country, I
would just like to personally thank you on the record.
Senator Durbin. Thank you. Let me ask you, I have raised
this question about student loans as long as I have been around
this Subcommittee. I have not been as passionate an advocate as
my colleague, Senator Voinovich, has been on the general human
capital question. He has become our Senate expert, as he has
devoted a major part of his public career to this issue. And we
have managed to put some money into congressional
appropriations to deal with the staff on the Senate side--I do
not know, Congresswoman Norton, whether it is the same case on
the House side yet--for student loan forgiveness.
Let me just ask if any of you would like to comment on one
of the quandaries and one of the difficulties. If you were
putting student loan forgiveness into the package as part of an
incentive for recruitment and retention, where do you draw the
line? That has been the tough thing.
We have had people on Capitol Hill in different offices who
have said, ``Wait a minute. This employee has been with us for
2 years, has a significant student loan, has a significant
monthly payment. There is no talk about this employee
leaving,'' but what would it take then for retention for me to
provide student loan forgiveness? Do I give it to everyone who
has a student loan who works in my office, only if they say
they might leave, only if it is an incentive to bring them?
Where would I draw this line? Because it is becoming
ubiquitous. Student loans, as I know from my own family
experience, turn out to be an issue that younger people face as
a reality.
Do you have any thoughts on that, Dr. Kelman?
Mr. Kelman. I guess I would say this is not something that
should be addressed in legislation. That is the thing I feel
most strongly. This is a very workplace level, I mean, this is
what we pay managers for, to make decisions like this. I guess
I would say that we should maximize the flexibility that an
organization has to use whatever limited pot of student loan
forgiveness money to be used most effectively.
My quick inclination is that the only thing that
legislation should say is that it is up to the organization to
determine how whatever limited pot is available is used.
Senator Durbin. Mr. Stier, do you have any thoughts on
that?
Mr. Stier. I think that Steve is exactly right. It really
is a management issue, and really it should be viewed, again,
as a tool, and I think your emphasis that it is not only a
recruitment tool, but a retention tool, is quite important.
Because, indeed, they are really two sides of the same coin,
and I think it is important for a manager to see the panoply of
different benefits that they can give to get and keep the
talent they need as good managers.
Now, that said, one would hope that, particularly in the
government context, that the managers would be held
accountable, and one would hope that, as part of their own
evaluation, you would look to how they are doing in terms of
recruiting and retaining talent in their organizations. There
are Federal entities that do that--the Bonneville Power
Administration is one of them--to great success.
And I think that is one of the really key elements, Mr.
Chairman, that you had asked about earlier. If you have to
start someplace, one of the key places is really starting on
making sure we have a management and leadership corps here that
can get the job done. There are a lot of things we could do
with that.
There is a Commission recommendation about creating a
technical line, in addition to a managerial line, in the SES.
That is something I think would be very valuable to explore, to
make sure that you are actually selecting managers for their
management competencies and not simply because you want to give
them a raise, and in fact they deserve a raise. So make it an
option so that people can get the money they deserve and still
maintain the competencies that you need.
Senator Durbin. I would just close with this. I think the
student loan forgiveness issue is a generational issue that we
have to deal with because I think many of us in Congress making
the decisions on student loan forgiveness never lived through
what kids are living through today.
Mr. Stier. Right.
Senator Durbin. Maybe we can identify with our children who
are living through it. My daughter is, in just a few weeks,
completing her 28-year educational training. [Laughter.]
And it turns out that, and God bless her, she has done
wonderful things, but it turns out the meter has been running,
and when she finishes, as we discussed over the weekend, she
has to think about a job she can take where she can pay back
that student loan.
Mr. Stier. Right.
Senator Durbin. It is just a fact of life, and if you do
not deal with it, then, frankly, you are going to deal the
Federal Government out of the picture.
Mr. Stier. Right.
Senator Durbin. Thank you all for your testimony.
Senator Voinovich. Thank you. Congresswoman Norton.
Ms. Norton. Thank you, Mr. Chairman.
Just to you, General McIntosh, quite apart from issues of
fairness, I am almost frightened by the extent to which the
defense of the United States today is dependent upon the Guard
and Reserves. So if, for no other reason, if we want to
continue to recruit people to defend our country, we have got
to begin to deal, in some way, with the questions you raise.
One thing we have not faced is the extent to which the
Reserves and the Guards are race- and class-based; people who
have gone to get expertise, to get training opportunity that
they did not have in this society. My son would not have gone
into the Reserves or the Guard because he is a middle-class boy
that went to college. There are such people who go into the
Guard and Reserve.
But one of these days we are going to look and see who goes
and who does not go, and I think we will come particularly to
understand that we owe them much more than the waving of the
flag, and even in the bills that we put forward, and certainly
we have got to begin to deal with this differential problem in
some way.
I have a question for Ms. Sistare and Dr. Kelman. I believe
you were here and heard testimony of the previous panel that we
are not using the flexibility we have. There may be a number of
reasons for that, but one reason that clearly came out was the
win-lose situation that the agency faces, that there is one pot
of money, and if you go to reward employees, even with the
existing flexibility, you are taking it out of that pot, and
more often than not, taking it from other employees. And rather
than do that, people simply do not move on the flexibility at
all.
I am asking you whether you think pay for performance and
other changes involving pay would be better implemented and
better received if, in fact, there were additional resources to
accomplish this departure from what has been the norm in the
merit system.
Ms. Sistare. I think, definitely, the Commission definitely
feels that adequate funding of any of these kinds of programs,
including training, which has not been adequately or
consistently funded over the years, is absolutely necessary to
its being effective.
Mr. Kelman. I very much appreciated what you said before
about trying, as a general matter, during the earlier
colloquies, to look for win-win solutions. It has been really
tough in this area, and it has been very frustrating looked at
from Boston to see all of the partisanship and so forth that
has taken place here.
I think, inevitably, money is not going to be unlimited.
There, inevitably, are going to be some choices and sometimes
tough choices. Obviously, more money greases things. I guess I
am personally inclined partly to agree with Ms. Sistare that,
for me, actually a priority for additional funds, in addition
possibly to some versions of pay for performance--I do not want
to go into great lengths of my own views on this, I have sort
of mixed views, but be that as it may--I think more money for
training, which our friends on the Appropriations Committees,
both in the House and Senate, usually is the very first thing
that gets taken out of any agency's budget I think is
extraordinarily ``penny wise and pound foolish.''
I guess we are in a tight budget environment, and, yes, it
would be wonderful to have all of this money to give out and,
yes, that would make things easier, but I also think we have to
choose priorities, for whatever pot of money we have, what is
going to do the most to create a public service that attracts
and retains good people. I think, at the end of the day, there
are going to be some tough choices. We are not simply going to
be able to say let us give more to everybody.
So I like the idea of trying to look for win-wins. I think
we should do it to the maximum extent we can, but also funds
are limited.
Mr. Stier. Congresswoman, I think, bottom line, that the
Federal Government has insufficiently prioritized the Federal
workforce, and that includes not only resources, but clearly
focusing on good management. I think we have dug ourselves very
much into a hole that we need to fill in and to do better with,
and that in the long term, those kinds of investments, as we
have seen from a lot of private-sector data and public-sector
exploration, pay off.
And so I do believe that we do need to see more resources,
and I think, ultimately, for pay for performance to work. A lot
of the skepticism that was raised is the right skepticism, but
it is the right goal for us to be trying to achieve, and we
should be figuring out how to get there through a win-win
strategy such as the one that you were suggesting we need to
pursue.
Ms. Norton. And, Dr. Kelman, when I said win-win, that does
not mean that dollar-for-dollar you get as much here as you get
there. Win-win also means lose-lose; that everybody loses
something usually, as well. And I will tell you what win-lose
is. If you are trying to do something in the workforce that has
not been done in 100 years, and you begin by giving $25,000 to
political appointees, that is win-big lose. Or you begin by
saying pay for performance and no additional money, but it
comes out of your pot, that is win-lose.
Now, I am just looking for not--give me an equal amount of
money here. If the world were so simple, that would not be win-
win, it would be an inexhaustible supply of resources, and we
would have no problems.
This takes deeper thinking than I am seeing come forward.
And simply saying, ``well, you are not always going to get more
money, gets us back to where they are.''
Let me ask you a question, Dr. Kelman, further. I think you
or somebody cited a very good example that brings to mind
something that some of us are working on. Was it you, Dr.
Kelman, that cited the example of a brochure that says ``only
former and current employees''?
Mr. Kelman. Yes, it is actually a job announcement.
Ms. Norton. Let me try that one on win-win. Because I would
agree, you see, I am looking for some way to streamline and
modernize the gargantuan civil service system, while being fair
enough to employees so that they are stakeholders also in that
system, and I have never seen any system, particularly systems
I know in the private sector, that worked any other way.
I am still a professor of law at Georgetown, but when I was
a free citizen, I was on the board of three Fortune 500
companies, and I never saw them do anything except on a win-win
basis. Some of those companies were unionized and some were
not, but they did understand how to get personnel on-line with
you, and if you did not, you did not have a system.
So I agree that if you are a bright, young person, and you
see you have to already have been a government employee, it
makes you pretty cynical.
Some of the employees that would be most valuable to us are
people at mid level who have considerable expertise. Both of
you, Mr. Taylor and Mr. Stier, in effect, are talking about
some of those employees.
One of the things some of us are considering is a bill that
would invite people at mid level to apply, but it would be open
to employees who are not Federal employees and to employees who
are Federal employees.
Mr. Kelman. You mean apply for like a Presidential
Management Internship----
Ms. Norton. Oh, no.
Mr. Kelman. No. What are you thinking?
Ms. Norton. Mid level. I am talking about attracting people
at mid level. You know that some of those people are in the
private sector. You know for sure some of them are in the
private sector. You know some of them are kind of fed up with
the private sector. They would like to do some public service
work. You want to bring them in. You even want to bring them in
at mid level.
But the reason--and I have no idea--you have this brochure
that says ``former and current employees only'' is because
there is perceived to be a competition between these two kinds
of employees. Why not eliminate the competition, and say those
of you at mid level, whether you are in the government or out
of the government, whether you are, I do not know, a GS-12 in
the government or you come from Metropolitan Life Insurance
Company, you can compete for this series of jobs; would that be
something----
Mr. Kelman. Oh, absolutely. No, I mean, it would make no
more sense to exclude current Federal employees from competing
for jobs than it is to limit it. So, no, obviously both groups
should be there, and I guess the worry has been that with more
and more people, younger people, are not looking any more in
the same way as our generation did for one career your whole
life, whatever, just stay in an organization, they are moving
around a lot, that the government is cutting itself off from a
potential source of talent.
And some people who want to have, as you indicated, a
period of doing public service, but maybe, for whatever reason,
feel they cannot do it their whole career, give them a chance,
but certainly not at the expense of saying we are going to
exclude the existing Federal employees.
Mr. Taylor. I would like to make the comment that on that
7- or 8-foot-long job description, right near the bottom it
says, ``Do not E-mail or fax or call on this position. Only
mail your resume.''
And so what happens at the mid level for talented
individuals is, by the time that system works for that person,
it could be 3 or 4 months, in some cases I have had Federal
applicants come up to me at these different conferences and say
9 or 10 months later they get a call back that says they are
interested in talking to you. Well, you are 7 months into a new
job when you get that request.
So it is a balance here is that it is, for Federal
employees, they understand the process and the expectation. So
they are the perfect candidate for the job, which is why there
is a lot of insular trading of employees back and forth between
the agencies.
To get somebody from the outside in the private sector, we
are going to have to clean up some of these systems, get the
momentum going, which is a lot of what Max has been working on
with the Partnership, and working with Monster, so that we can
get these candidates in, in a timely fashion, get them
responded to so we keep them warm and ready to go to work.
Mr. Kelman. I once actually asked Jeff what percentage of
the jobs advertised on Monster are entry level versus nonentry
level, and I think you told me it was like over 90 percent are
nonentry-level jobs.
Mr. Taylor. Entry-level jobs, like very senior executive
jobs, are not listed, for the most part. Entry-level jobs, most
companies, whether it is hubris or not, think that entry-level
workers will come to them in droves anyway. That is really
changing, as we speak, as more campus recruiting takes center
stage.
Ms. Norton. The Chairman has a vote.
I want to say to General McIntosh and to the Chairman, one
of the reasons why I am so attuned to what you had to say is
that I have people in Iraq, people who are second per capita in
Federal income taxes. They have nobody here in the Senate and
only me in the House, and I do not intend to see one more
denial to them.
And I want to say to you, Mr. Taylor, there are some
agencies where you can only apply on-line. So we have got to
have the balance, too, because not everybody in the world is
computer literate, and we are not only applying for those kinds
of jobs. We need equity for those who are technically
competent----
Mr. Taylor. Absolutely.
Ms. Norton [continuing]. And those who might be competent
to come to the Federal Government, but are not on-line.
Thank you very much, Madam Chairman.
Mrs. Davis. Thank you, Ms. Norton.
I thank you all. It has been a very long hearing, and thank
you for your patience. If there are no further questions, there
may be additional questions for the record, which we will
submit to you in writing. And for the information of my
colleagues, the hearing record will remain open until the close
of business Thursday afternoon.
With that, this hearing is adjourned.
[Whereupon, at 1:09 p.m., the Subcommittees were
adjourned.]
A P P E N D I X
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