[Senate Hearing 109-709]
[From the U.S. Government Publishing Office]
S. Hrg. 109-709
ENHANCING EMPLOYEE PERFORMANCE:
A HEARING ON PENDING LEGISLATION
=======================================================================
HEARING
before the
OVERSIGHT OF GOVERNMENT MANAGEMENT,
THE FEDERAL WORKFORCE AND THE DISTRICT
OF COLUMBIA SUBCOMMITTEE
of the
COMMITTEE ON
HOMELAND SECURITY AND
GOVERNMENTAL AFFAIRS
UNITED STATES SENATE
ONE HUNDRED NINTH CONGRESS
SECOND SESSION
__________
JUNE 29, 2006
__________
Printed for the use of the Committee on Homeland Security
and Governmental Affairs
U.S. GOVERNMENT PRINTING OFFICE
29-509 PDF WASHINGTON : 2006
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COMMITTEE ON HOMELAND SECURITY AND 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
TOM COBURN, Oklahoma THOMAS R. CARPER, Delaware
LINCOLN D. CHAFEE, Rhode Island MARK DAYTON, Minnesota
ROBERT F. BENNETT, Utah FRANK LAUTENBERG, New Jersey
PETE V. DOMENICI, New Mexico MARK PRYOR, Arkansas
JOHN W. WARNER, Virginia
Michael D. Bopp, Staff Director and Chief Counsel
Michael L. Alexander, Minority Staff Director
Trina Driessnack Tyrer, Chief Clerk
OVERSIGHT OF GOVERNMENT MANAGEMENT, THE FEDERAL WORKFORCE AND THE
DISTRICT OF COLUMBIA SUBCOMMITTEE
GEORGE V. VOINOVICH, Ohio, Chairman
TED STEVENS, Alaska DANIEL K. AKAKA, Hawaii
NORM COLEMAN, Minnesota CARL LEVIN, Michigan
TOM COBURN, Oklahoma THOMAS R. CARPER, Delaware
LINCOLN D. CHAFEE, Rhode Island MARK DAYTON, Minnesota
ROBERT F. BENNETT, Utah FRANK LAUTENBERG, New Jersey
PETE V. DOMENICI, New Mexico MARK PRYOR, Arkansas
JOHN W. WARNER, Virginia
Andrew Richardson, Staff Director
Richard J. Kessler, Minority Staff Director
Nanci E. Langley, Minority Deputy Staff Director
Emily Marthaler, Chief Clerk
C O N T E N T S
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Opening statements:
Page
Senator Voinovich............................................ 1
Senator Akaka................................................ 3
Senator Lautenberg........................................... 4
WITNESSES
Thursday, June 29, 2006
Hon. Dan G. Blair, Deputy Director, Office of Personnel
Management..................................................... 6
Darryl Perkinson, National President, Federal Managers
Association, on behalf of the Government Managers Coalition.... 13
Colleen M. Kelley, National President, National Treasury
Employees Union................................................ 15
Jacqueline Simon, Public Policy Director, American Federation of
Government Employees........................................... 17
Patricia McGinnis, President and Chief Executive Officer, Council
for Excellence in Government................................... 18
Alphabetical List of Witnesses
Blair, Hon. Dan G.:
Testimony.................................................... 6
Prepared statement........................................... 29
Kelley, Colleen M.:
Testimony.................................................... 15
Prepared statement........................................... 38
McGinnis, Patricia:
Testimony.................................................... 18
Prepared statement........................................... 62
Perkinson, Darryl:
Testimony.................................................... 13
Prepared statement........................................... 34
Simon, Jacqueline:
Testimony.................................................... 17
Prepared statement........................................... 44
APPENDIX
Questions and answers submitted for the Record from:
Mr. Blair.................................................... 68
Mr. Perkinson................................................ 76
Ms. Kelley................................................... 79
Ms. Simon.................................................... 80
Ms. McGinnis................................................. 82
ENHANCING EMPLOYEE PERFORMANCE: A HEARING ON PENDING LEGISLATION
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THURSDAY, JUNE 29, 2006
U.S. Senate,
Oversight of Government Management,
the Federal Workforce and the
District of Columbia Subcommittee,
of the Committee on Homeland Security
and Governmental Affairs,
Washington, DC.
The Subcommittee met, pursuant to notice, at 9:36 a.m., in
room SD-342, Dirksen Senate Office Building, Hon. George V.
Voinovich, Chairman of the Subcommittee, presiding.
Present: Senators Voinovich, Akaka, and Lautenberg.
OPENING STATEMENT OF CHAIRMAN VOINOVICH
Senator Voinovich. Good morning. Today's hearing,
``Enhancing Employee Performance,'' will come to order.
The purpose of today's hearing is to examine two bills
within the Subcommittee's jurisdiction, the Federal Workforce
Performance Appraisal and Management Improvement Act, which I
introduced on June 13, and the Federal Supervisor Training Act,
introduced by Senator Akaka on Tuesday. Today's hearing
initiates the public discussion on these two bills.
I welcome the legislation that you introduced, Senator
Akaka.
Senator Akaka. Thank you.
Senator Voinovich. Hopefully, the two of us will be able to
work on it and get something done together.
Senator Akaka. I enjoy working with you and look forward to
addressing these issues together.
Senator Voinovich. Thanks. I am pleased that today's
witnesses include individuals who have testified before this
Subcommittee on many occasions. Dan Blair said this is OPM week
here in this Committee. I welcome you back. During my time in
the Senate, I have worked closely with all of you to enact
numerous reforms, including the Federal Workforce Flexibility
Act of 2004, and I am confident we can continue that tradition.
As I said, today's hearing is the beginning of the process
to consider these two bills. I look forward to listening to the
views of all interested parties--the Administration, employee
organizations, unions, the agencies that have had to implement
these proposals, and those in the non-profit, good government
sector.
I understand there will be comments, recommendations, and
concerns about the content of these bills. I welcome those
comments. I believe engaging in this constructive dialogue will
enable us to find a way to make continued improvements to the
environment in which our dedicated Federal employees work.
As the Comptroller General stated during this
Subcommittee's hearing on Tuesday, overall throughout the
government, performance management systems are, and this is his
words, ``abysmal.'' Abysmal. I do not believe it is fair to the
hard-working Federal employees of this country to subject them
to such poor systems.
The purpose of my legislation is to improve the performance
appraisal process. The legislation Senator Akaka and I have
introduced would help accomplish this goal by requiring that
Federal employees annually receive a written performance
appraisal. Current law only requires periodic appraisals of job
performance.
This legislation would require that an individual
performance appraisal be aligned with the agency's strategic
goals and be developed with the employee. The performance
appraisal systems would make meaningful distinctions among
employee performance, which means no more pass-fail systems.
None of these requirements currently exist in the statute. The
legislation, then, would require agencies to use this
information in making personnel decisions.
I believe the sections of the bill that may generate
concern among some unions are those that would prevent an
employee from receiving an annual pay adjustment or within-
grade increase if that employee has not earned a successful
performance appraisal. I support pay-for-performance. I know
this section of the bill would go a long way towards addressing
a concern identified in the 2004 Federal Human Capital Survey
that employees do not believe differences in performance are
recognized in a meaningful way. In that survey, only 29 percent
of the employees believed differences were recognized.
However, before an agency would even reach the point where
an under-performing employee would be denied a pay increase,
the agency would have to work with the Office of Personnel
Management to develop and refine its performance appraisal
system. Employees would then have one year under the
performance appraisal system to understand how it would be used
to make pay decisions.
The bottom line is, we are not going to let any agency
implement pay-for-performance unless we know they are prepared
to do it. Pay decisions would not be arbitrary or capricious.
Managers would be required to receive appropriate training to
judge the performance of their subordinates, make expectations
clear to employees, and give constructive feedback. This would
not happen overnight, but this training is essential to improve
overall government performance.
Furthermore, I would like to note that many people were
concerned, including some here today, that when Congress
authorized new personnel systems for the Departments of
Homeland Security and Defense, that these new systems would
quickly be implemented with minimal planning. I was committed
to making sure that these systems were implemented well, and
not simply fast. In fact, I went over to the Pentagon in March
2004 and met with Paul Wolfowitz and Secretary of the Navy
Gordon England and urged them to slow down the implementation
of the National Security Personnel System. They did so.
Senator Akaka and I held a hearing this past April on NSPS.
DOD had just begun implementation for the first 11,000
employees. Again, I went to the Pentagon in March 2004, and
they are starting to implement it this year; 2 years later. I
believe, at least I think Senator Akaka and I were impressed,
that they were doing it in a thoughtful, careful manner. The
point is, it can be done well within the Federal Government.
The robust performance appraisal system, as required in my
bill, would not be arbitrary and capricious. I believe most
employees want to know that their supervisor is paying
attention. They want to know where they stand and how they are
doing on their jobs. Employees need to discuss, with their
managers, their strengths and weaknesses and receive feedback
so they can improve their skills and grow professionally.
Finally, the bill would authorize pay-for-performance for
individuals hired as senior level or senior technical experts,
consistent with the statute for the Senior Executive Service.
I now yield to my good friend Senator Akaka for his opening
statement. Senator Akaka.
OPENING STATEMENT OF SENATOR AKAKA
Senator Akaka. Thank you very much, Mr. Chairman, for
holding this very important hearing today on our respective
bills. You and I know that strong employee performance
translates into improved agency performance, which is why the
measures we have introduced deserve attention. We both want to
make the Federal Government an employer of choice, and I
commend you, Mr. Chairman, for your continuance and strong
leadership, of this effort.
Nothing is more important to the success of Federal
programs than how the Federal Government hires, fires,
compensates, and evaluates its employees. To be effective,
government programs and services depend on well-trained
employees and skilled managers. And yet, because supervisor
training is left to the discretion of the individual agencies,
this training is often inconsistent and its availability is
many times plagued by inadequate agency resources. Meaningful
training matters and it should not be a discretionary option
for agencies.
Federal workers deal with a broad and complex range of
issues affecting our Nation and the world. They understand that
well-trained managers empower them, which in turn improves
programs and saves taxpayers money. Training also strengthens
communications skills, ensures that employees have a clear
understanding of their roles and responsibilities, and promotes
stronger manager-employee relationships.
That is why I introduced the Federal Supervisor Training
Act. My bill will bridge this training gap that exists now and
help ensure that Federal managers have the necessary skills to
manage and meet agency missions.
The legislation has three major training components. First,
the bill will require that new supervisors receive training in
their initial 12 months on the job, with mandatory retraining
every 3 years on how to work with employees to develop
performance expectations and evaluate employees. Current
managers will have 3 years to obtain their initial training.
Second, the bill requires mentoring for new supervisors and
training on how to mentor employees.
Third, the measure requires training on the laws governing,
and the procedures for enforcing, whistleblower and anti-
discrimination rights.
Agencies will also be required to set standards that
supervisors should meet in order to: Manage employees
effectively, assess a manager's ability to meet these
standards, and provide training to improve areas identified in
personnel assessments.
I also believe this training will address the perceived
shortfalls in the General Schedule, or GS. I know there are
those who believe that the government should throw out the GS
because, in their view, agency employee performance has not
improved. I, on the other hand, believe that the lack of
manager training is a primary reason the GS has not lived up to
expectations. The GS was designed to be a performance-based
compensation system that is both transparent and credible.
Mr. Chairman, I am grateful for the support my bill has
received from the Government Managers Coalition; AFGE; NTEU;
IFPTE; the AFL-CIO; Metal Trades Department, as well as the
Partnership for Public Service. And, I want to thank you again,
Mr. Chairman, for holding today's hearing and your efforts in
these areas. I also want to thank our witnesses for being here
today. Thank you.
Senator Voinovich. Thank you, Senator Akaka. Senator
Lautenberg.
OPENING STATEMENT OF SENATOR LAUTENBERG
Senator Lautenberg. Thank you, Mr. Chairman. I admire your
interest in trying to make government more efficient and I know
that you come from an environment where employees were a
critical part of your functioning in your previous positions in
government.
I have been honored to serve in the Senate for 21 years.
Before that, I worked in the private sector. I helped start a
company that was listed as one of the six best companies in
America, included with companies like General Electric and
Chevron. I and two brothers founded that company. So I speak
from some experience.
When I look and see what happens here, I, too, would like
to see efficiency and productivity, and I believe that
government employees are among the most dedicated staff that I
have seen, and that includes all of my business experience.
When I came to the Senate and left ADP, we had 16,000
employees. It is dwarfed now because they have 44,000, but our
work was primarily in the personnel area. So in many ways, this
zealous commitment creates a loyalty rarely found.
Seeing each group from a personal experience tells me that
as a result, exceptional performances are often given by
government employees who have little more than the security of
their job that attracts them to it, because if it is
competition for higher wages, they can do a heck of a lot
better outside the government. While there may, and there
always are, malingerers and people who are lazy, the question
of letting political influence creep into the decisionmaking, I
think, is a high risk.
Now, when we talk about the unions and collective
bargaining, things have happened. In the wake of the terrorist
attack on September 11, 2001, Congress told the Department of
Homeland Security and Department of Defense to overhaul their
pay and workplace rules, to get rid of the General Schedule
band system that has been in place since 1949.
Mr. Chairman, I believe that there is a role for collective
bargaining. I am a strong believer in organized labor. I
learned of my father's experience when he was growing up and
how employment was in the days before unions. The people who
rushed to their death in the World Trade Center, trying to save
lives of people that they never met, were members of a union.
But in the aftermath of September 11, 2001, the Bush
Administration saw an opportunity to close down organized
labor, got new workplace rules it wanted for DHS and the
Department of Defense, and so far, those rules haven't worked
out as planned. Courts have ruled that they go too far in
stripping the rights of workers. In fact, the latest such
ruling was handed down Tuesday of this week by the Federal
Court of Appeals in the District of Columbia, and it is clear
that this approach was not the right way to go.
If the Administration really wants to make government more
efficient, more accountable, I urge them to sit down with
public workers and find ways to accomplish that goal. Given the
importance of the mission of DHS, we need to attract the best
and the brightest. Taking away employees' rights and
protections isn't going to attract the kind of workers that we
need to keep America safe.
Mr. Chairman, as we look around this room and our offices,
I have never seen a more dedicated, committed group of people
working. I think the same is true of departments throughout
government. So while I salute the effort to make the system
work better, I do also recommend that we keep in mind that the
security factor is a huge factor in people working in
government, knowing that it is a reliable place to work and
that if they do their job, they will move along, that there are
some extra conveniences.
Thanks very much, Mr. Chairman. I appreciate it.
Senator Voinovich. Thank you, Senator Lautenberg.
Congratulations, by the way, on your company. That is
wonderful. That should make you feel good. It is like your
child is growing up and it is doing great.
Senator Lautenberg. Yes, just the poor boys, the three of
us. My father died from an occupational exposure when he was 43
years of age and he was a health faddist, and his brother died
similarly at a very young age. So I have strong worker
orientation. When I see that our company is listed with GE and
the others, it is a mind-blowing experience. I have been lucky.
Senator Voinovich. That is great.
Our first witness today is Dan Blair. Linda Springer is out
in the field. I spent a lot of time with her this week, and she
is visiting all OPM offices. When OPM did their annual employee
survey, employees said they felt that the management was
disconnected from the employees. So Linda is out there spending
time with folks and letting them know that she cares about them
and wants to hear what they think needs to be done to help them
do a better job.
So, Mr. Blair, we are very glad to have you here, and if
you will stand, I will administer the oath. Do you swear the
testimony you are about to give this Subcommittee is the truth,
the whole truth, and nothing but the truth, so help you, God?
Mr. Blair. Yes, I do.
Senator Voinovich. Mr. Blair, you may begin.
TESTIMONY OF THE HON. DAN G. BLAIR,\1\ DEPUTY DIRECTOR, OFFICE
OF PERSONNEL MANAGEMENT
Mr. Blair. Mr. Chairman, Senator Akaka, and Senator
Lautenberg, thank you for inviting the Office of Personnel
Management (OPM) to testify about the proposed Federal
Workforce Performance Appraisal and Management Improvement Act,
S. 3492, and the proposed Federal Supervisor Training Act, S.
3594. I am pleased to testify here on behalf of OPM and
Director Linda Springer. I know that we are all pressed for
time, so I will ask that my full statement be included for the
record, and I am happy to summarize.
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\1\ The prepared statement of Mr. Blair appears in the Appendix on
page 29.
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Senator Voinovich. Thank you.
Mr. Blair. OPM is pleased to endorse and support your
legislation, S. 3492, Mr. Chairman. We view enactment of this
legislation as an important step to ensure that we are able to
have a 21st Century compensation system for Federal employees.
I would be remiss if I failed to acknowledge your steadfast
commitment and Senator Akaka's commitment to improving Federal
management policies and practices. The support of you both has
been essential to the significant changes we have already
achieved.
As we look to the future, we view S. 3492 as laying
essential building blocks entirely consistent with the
direction future personnel reforms must take. As you know,
years of experience with effective pay-for-performance systems
with nearly 100,000 Federal employees has made clear that
further experimentation is not needed. We firmly believe having
Congress spell out these requirements in statute sends a
powerful message to employees, managers, and the American
public.
Senator Akaka, I want to recognize you, as well, for your
efforts in crafting the Federal Supervisor Training Act, S.
3584. I understand it was introduced Tuesday evening and OPM
staff is studying the specifics at this time. However, let me
say that I believe we share general agreement about the
necessity for and the benefits of good quality training of
managers and supervisors, and we look forward to working with
you on this legislation as well.
Both of your bills emphasize training, and let me give you
a snapshot of our efforts to date. OPM, under both of these
bills, would be prepared to set standards and offer effective
training, as we have with the Human Capital Initiative under
the President's Management Agenda. Through that agenda, OPM has
provided extensive guidance to agencies redesigning their
performance management systems to better improve employee
performance plans by ensuring their alignment with
organizational goals and focusing employees on achieving
results.
This year, agencies have identified what we call beta, or
test, sites to implement and assess the revised systems, and
those agencies will complete the performance appraisal cycle at
their beta site by September 30 of this year.
Mr. Chairman, we are pleased your bill sets a direction to
move further towards pay-for-performance. With respect to the
specific pay-for-performance proposals contained in your
legislation, we agree strongly that creating a basic
performance contingency for getting any pay increase is a very
reasonable first step. We owe it to the vast majority of good
performers to acknowledge their positive contributions and not
treat their underperforming counterparts in an identical
fashion.
Mr. Chairman, I want to note clearly that your bill
includes appropriate and significant safeguards and due process
requirements to reassure employees they will be treated fairly.
We agree this is an essential element for any pay-for-
performance feature.
That concludes my oral statement. I appreciate the
opportunity to speak to your proposals and am available to
answer any questions you might have.
Senator Voinovich. Thank you.
We will have, I think, one round of questions for 5
minutes. I understand OPM in May issued a new regulation
requiring agencies to submit data to OPM on employee training.
This will be very helpful to us in understanding agency needs
and correct the longstanding frustration I have with agencies'
inability to tell me how their training dollars are being
spent. I am still frustrated. I think in their budget
submissions there ought to be a separate line for training so
that we know agencies are using money for training their
people.
Both Senator Akaka's and my bills mandate training for
supervisors and managers. Are there additional steps we, in
Congress, should consider to ensure agencies have the necessary
resources to deliver this training without compromising
training for other employees' skills?
Mr. Blair. Let me first say that we issued those
regulations back in May and they ask agencies to report on
their training plans, expenditures, and activities, creating a
basic inventory of what training is taking place out there. It
will do so in an electronic format, which will be made
available to us, and presumably the Congress, if or when asked.
It will give a better snapshot of what training is taking
place.
The President's budget this year had roughly $20 million in
training needs in the area of performance management across
agencies. It wasn't one line item in the budget. Rather, it was
embedded in each agency and department's request. For instance,
OPM had a portion of that which was roughly around $2.1
million. We are still working with the appropriators to ensure
that request is maintained.
But, gathering this data by way of this regulation is going
to be a significant first step in addressing what, I think,
Senator Akaka has said earlier is a patchwork of training that
occurs across government. We agree this is a problem. We think
that we can do a better job of inventorying it, looking at
exactly what is out there in order to get a better idea of
where we need to move forward.
But I think that both of your bills speak very highly of
training, and that is something, I think, that there is broad
agreement on.
Senator Voinovich. One of the things that disturbs me is
that our appropriators sometimes ignore how important money is
for training and for human resources. I would hope that OPM is
weighing in on the budget for max HR at the Department of
Homeland Security because the House just cut its funding. We
need to get some help to get that money restored, although it
will not be as much money as they had originally asked for
because of the recent court ruling. Are you and Director
Springer working on that?
Mr. Blair. We are going to be working on that, and I would
also say that we would also be looking to leaders like yourself
to help us in that endeavor, because it is important that these
systems be properly funded in order to move forward.
Senator Voinovich. I think it is incumbent on all of the
Members of the Senate to share with the appropriators how
important dollars are for human resources.
The other thing, Mr. Blair, is that we will have
representatives testifying today from two of our major unions.
They are really concerned about adequate protections in Title V
to protect employees and their pay against retaliation by
managers, and would they be preserved under my legislation?
Mr. Blair. I would say that today----
Senator Voinovich. We are always worried about
arbitrariness and capriciousness. How do we safeguard to make
sure that performance appraisals and pay decisions are not
arbitrary and capricious?
Mr. Blair. I certainly don't think that any of us want to
give short shrift to those kinds of considerations. Today,
those protections are in place, and those protections would
remain and be made consistent with today's law under your bill.
So I think that it addresses those concerns very well.
Senator Voinovich. What I would like to do is to have you
provide me with a survey of where situations have arisen where
people feel they have been treated unfairly and share that with
me.
Mr. Blair. OK.
Senator Voinovich. Later this Congress, this Subcommittee
will be having a hearing on the implementation of pay-for-
performance in the Senior Executive Service. I would be
interested in hearing from OPM if there are folks that have
gone through the process and where someone feels that they
haven't been treated properly, what the procedure is, and I
would like to hear about that, too.
Mr. Blair. Certainly, Mr. Chairman.
Senator Voinovich. Senator Akaka.
Senator Akaka. Thank you very much, Mr. Chairman. Mr.
Blair, I want to thank you for your testimony and I also want
to thank you for your continued commitment to public service.
Mr. Blair. Thank you.
Senator Akaka. I am pleased to note OPM's initiative to
track training. OPM has fought for improved performance
management training.
Mr. Blair, you have heard from Senator Lautenberg and also
from the Chairman concerning relationships between employees
and the managers. Senator Lautenberg believes, as I do, that
the Administration should sit down with employees. Ms.
McGinnis, who is on our second panel, makes an interesting
point in her written testimony that the level of trust between
political employees and civil servants impacts Civil Service
reform.
Mr. Blair, what suggestions do you have for improving the
trust between employees, managers, and political appointees?
Mr. Blair. I think the basic underlying foundation for
building trust is fair, open, and transparent communication,
and that is one of the reasons, I think, that Senator
Voinovich's bill is so important, because it starts to build
that line of communication. One way to develop that is to make
sure that a supervisor and a manager have clear expectations
for what they think an employee should be doing, and those
communications should be transmitted, should be in writing, and
they should be consistant. There should be feedback made
available. The employee's input should be considered, as well,
in establishing those expectations.
So I think the first building block in building that kind
of trust is making sure that expectations are communicated and
communicated well. From then, I think you can build on that.
You can move forward on that in ensuring that supervisors and
managers understand their role and that employees understand
that managers and supervisors are going to be held to the same
levels of accountability that employees are. I think that is
very important, that you don't have inconsistent treatment of
employees across the workforce.
I think both of those things are very well enshrined in
Senator Voinovich's bill, and I think that would put us on a
very positive step forward to address the concerns you just
raised.
Senator Akaka. Mr. Blair, has there been any discussion
within OPM to bring back the Labor-Management Council of the
last Administration?
Mr. Blair. Well, I am not sure what you mean. Are you
talking about partnerships? We have a Labor-Management Council
at OPM that deals specifically with OPM issues. But if you are
referring to the partnership agreements that were a part of a
previous Administration, I am not aware of any.
Senator Akaka. Thank you. Mr. Blair, you note that the 1978
Civil Service Reform Act (CSRA) includes requirements for
employee performance appraisals that were drafted prior to the
Government Performance and Results Act of 1993 (GPRA). You
conclude that the CSRA paid little attention to strategic
contributions and expected results. However, there is nothing
in the CSRA that prohibits the linkage between performance
appraisal systems with strategic goals and annual performance
plans and GPRA. My question is, why do you believe agencies
have not made this linkage that you say is missing under the
General Schedule?
Mr. Blair. Well, I think that agencies weren't held
accountable for making such linkages. I think that for a long
time, the focus wasn't on results or outcomes or
accountability. I think that the President's Management Agenda
has helped turn us in that direction. I think that more
statutory reform will be needed. I would note that Senator
Voinovich's bill would bring about those kinds of alignments,
and I think it is very important that agencies move forward,
and I think progress is being made. We are not where we need to
be on performance management, but I don't want to say the glass
is half-empty when, in fact, tremendous progress has been made
in the past 5 years.
I referenced in my oral testimony and my written testimony,
for instance, the test sites that we have at the agencies that
will be the incubator, the laboratory for better performance
management, which then could spread throughout the agencies or
departments where they are located. We will be getting more
results from those at the end of the fiscal year. I think that
it is very important to have strong, robust performance
management systems aligned where you have strong, robust
performance evaluation systems in place.
I think it can do nothing but help improve morale. I think
when a supervisor or manager sits down and communicates clearly
with an employee to set expectations, when that employee
provides that kind of feedback in that situation, those are the
types of situations where employee input is valued. Outcomes
are expected, but it is transparent, it is credible, and it
will move us forward, I think, in building a higher-performing
workforce.
Senator Akaka. I have a follow-up question, but because my
time has expired, I will submit my remaining questions for the
record.
Senator Voinovich. OK, thanks.
Senator Akaka. Thank you.
Senator Voinovich. Senator Lautenberg.
Senator Lautenberg. Mr. Blair, you obviously must be
familiar with the opinion of the circuit court and with the
story that was in the Washington Post where they say the
Department's regulations--Homeland Security, we are talking
about--renders collective bargaining meaningless, it is utterly
unreasonable, impermissible because it makes no sense on its
own terms, the three-judge panel found. Another point in the
50-page opinion, the government's position not only defies the
well-understood meaning of collective bargaining, it defies
common sense. I urge you to read the article, if you haven't
seen it, by Stephen Barr yesterday.
How do we comport ourselves with that kind of a judgment by
an appeals court? And when in your comments I see that you say,
years of experience with effective pay-for-performance, nearly
100,000 employees, have made it clear that further
experimentation is not needed, so how do you measure your
success? I ask in the interest of a very perceptive Chairman,
who makes us obey the rules, so the 5 minutes applies to you as
well as it does to me. So Mr. Blair?
Mr. Blair. Last year, we had the opportunity to prepare for
Senator Voinovich and for Senator Collins, and we would be
happy to provide that for you, a report on the experience that
we have seen with alternative personnel systems across
government. Current law provides for demonstration project
authority in which you can experiment with a number of
different aspects of personnel management. A number of the
demonstration projects out there have incorporated pay-for-
performance.
Senator Lautenberg. Were these a selected group of
employees that were tested, or that were questioned?
Mr. Blair. You mean that were a part of the demonstration
project?
Senator Lautenberg. Particular departments----
Mr. Blair. Yes, sir, they were. Many were in the Department
of Defense, but you have employees at the Department of
Commerce, and I can provide you with the inventory. It was
across government.
Senator Lautenberg. I would ask you to do that, because the
one thing I can't disagree with the Chairman on, and that is
that there is absolute need for training. Any organization this
size, this complicated and cross-referenced in so many ways
needs constant, particularly management training. It is
distressing to find out that funds are either not available or
are not used in that manner.
Mr. Blair. If I can just continue a little bit further,
because I think that this will help further our discussion, it
is interesting, especially with those alternative personnel
systems and the experience we have seen, when you go into these
systems, there is great employee angst, anxiety, and
uncertainty about these new systems when they enter it, and
that is only fair----
Senator Lautenberg. These are subjective views of yours,
sir.
Mr. Blair. Well, no, these were----
Senator Lautenberg. Well, I am going to ask you to furnish
in writing----
Mr. Blair. I will be happy to. I mean, based on the surveys
that we have done----
Senator Lautenberg. In the interest of time, I am going to
continue and we will live by those rules. Is morale a factor
when evaluating the success of these programs?
Mr. Blair. Absolutely. That is what I was going to address.
We look at employee satisfaction, and over time, employee
satisfaction starts at a low level and increases, and increases
to the point that the majority of employees would not want to
go back to the old General Schedule system after having
experienced these systems. So clearly, there is room for
improvement from the General Schedule. These systems employ
performance management and evaluation plans which recognize
distinctions in employee performance, reward better
performance, and make----
Senator Lautenberg. Yes, I know the opinions that you
expressed and I respect them. Honestly, I do. But there are a
couple things that I really want to get to. One of them is the
collective bargaining situation that was revealed in the
commentary by the circuit court. What do you think about that?
Is the court making sense or not?
Mr. Blair. I haven't had a chance to study the 50-page
opinion yet, but I will say the Administration certainly had
one side. The unions had another. The court ruled for the
unions, and at this point, the Administration is deciding what
course of action to proceed. We certainly respect the court's
opinions in terms of----
Senator Lautenberg. I hope so.
Mr. Blair [continuing]. Not moving forward, but I think
what is also interesting in here is that there are other
opportunities to move forward in areas outside the labor-
management relations area and that seemed to be the focus of
the court's attention. I think it is important to note that
Senator Voinovich's bill has no labor-management changes in
that, and so I wouldn't want one to confuse the DHS and NSPS
proposals with the proposal that Senator Voinovich has.
Senator Lautenberg. Mr. Blair, have you been in government
a long time? I don't know you.
Mr. Blair. Actually, I used to serve on the staff of the
full Committee for 4 years.
Senator Lautenberg. You did? Any experience with outside
employment practices, outside of government?
Mr. Blair. No, sir.
Senator Lautenberg. Thanks, Mr. Chairman.
Senator Voinovich. Thank you, Senator Lautenberg. It will
be interesting, Senator Lautenberg, the first spiral of the new
National Security Personnel System is underway, so we will have
a good chance to see how that is working. We will have some
oversight hearings to monitor implementation. This is what
Senator Akaka and I had a hearing on in April.
Second, it is interesting that entities, such as the
Department of Defense laboratories, operate successful
alternative personnel systems and have asked to be kept
separate from the new National Security Personnel System until
it has been in place. They want to be able to compare data
before making additional changes.
We need good information from people about how this system
is actually working.
Senator Lautenberg. Excellent.
Senator Voinovich. Mr. Blair, thank you very much.
Mr. Blair. Thank you.
Senator Voinovich. I want to also echo Senator Akaka in
thanking you for your service.
Mr. Blair. And thank you for yours, as well.
Senator Voinovich. I just want to say that I was really
impressed this week, and I think Senator Akaka was, as well,
when Director Springer came in with her team. It seems like
there is a new day in OPM. Let us just keep working on it, OK?
Mr. Blair. Thank you, sir. Thank you.
Senator Voinovich. Thank you.
I would now like our next panel of witnesses to come
forward. Darryl Perkinson is here on behalf of the Government
Managers Coalition. Welcome to my good friend Colleen Kelley,
President of the National Treasury Employees Union. Colleen,
good to have you back again. Jacqueline Simon, I am so pleased
that you are here for the American Federation of Government
Employees. And Patricia McGinnis, who has been working with me
since 1999 on Federal human capital policy, is here for the
Council for Excellence in Government. I think we have a really
good, well-balanced panel. You have the management side, the
union side, and we have, I guess, the good government side. You
are all good government.
Now that you sat down, will you stand up and I will
administer the oath. Do you swear that the testimony you are
about to give is the truth, the whole truth, and nothing but
the truth, so help you, God?
Mr. Perkinson. I do.
Ms. Kelley. I do.
Ms. Simon. I do.
Ms. McGinnis. I do.
Senator Voinovich. Thank you. Mr. Perkinson, it is nice to
have you back again. We are anxious to hear your testimony. I
ask you all to observe the 5-minute rule. Your written
testimony will be included in the record. Mr. Perkinson, please
proceed.
TESTIMONY OF DARRYL PERKINSON,\1\ NATIONAL PRESIDENT, FEDERAL
MANAGERS ASSOCIATION, ON BEHALF OF THE GOVERNMENT MANAGERS
COALITION
Mr. Perkinson. Thank you, Chairman Voinovich, Ranking
Member Akaka, and Members of the Subcommittee, for allowing me
to be here representing both the Government Managers Coalition
and the Federal Managers Association to present our views on
enhancing employee performance.
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\1\ The prepared statement of Mr. Perkinson appears in the Appendix
on page 34.
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My name is Darryl Perkinson and I am the President of the
Federal Managers Association. I testify before you today not
only on behalf of the organization I head, but also as a member
of the Government Managers Coalition. The GMC was founded
earlier this year to unify five major executive and management
associations, the Federal Aviation Administrator Managers
Association, the Federal Managers Association, the National
Council of Social Security and Management Associations, the
Professional Managers Association, and the Senior Executives
Association, in advocacy for common-sense solutions to bolster
good government through the Federal workforce.
Our coalition is a deliberative body and we only put forth
positions that have received the unanimous support of the
members of the coalition. When we reach unanimity on a
position, the GMC speaks for nearly 200,000 Federal
supervisors, managers, and executives, ranging from career
senior executives to mid-range GS supervisors.
To date, we have endorsed four broad legislative
initiatives to improve employee performance: Rewarding Federal
employees for not abusing sick leave; an extension of the
probationary period for most new employees to 2 years; clarity
on the status and treatment of managers when subordinates file
EEO complaints; and mandatory supervisor training and
retraining for those who manage other Federal employees. The
GMC endorses these initiatives, which we believe will improve
the overall effectiveness of managers to enhance employee
performance and produce more results for their agencies.
It is clear to us that this does not happen to the degree
that it should. Mandatory training is the only way to ensure we
are not only hiring the best and the brightest, but we are
giving them the tools to do their jobs to the best of their
abilities.
In order for mandatory training to achieve results, we
believe there are five critical elements that are essential.
Every supervisor and manager in Federal Government must receive
mandatory supervisory training within one year of their initial
appointment. Supervisors and managers should receive updated
training every 3 years after the initial training. Training of
managers must become a priority within each Federal agency and
department. A specific authorization of Federal funds must be
made to underwrite the costs of training that is in addition to
money currently allocated to each agency and department for
personnel costs. And managers must be afforded participation in
processes that arise from constructive feedback and evaluations
required of them from this legislation.
The GMC is pleased that this Subcommittee recognizes the
need for mandatory training programs to be implemented for all
supervisors and managers throughout government. Current law,
Public Law 108-411, requires agencies to establish a training
program for managers on how to manage employees whose
performance is unacceptable, how to mentor and improve employee
performance, and how to accomplish performance appraisals.
However, there is no accountability for managers to
participate, and when budgets are tight, these discretionary
programs are often the first to have their funding cut. This
problem is exacerbated by the fact that ongoing personnel
reforms require a well-trained, well-versed management team to
implement, and they challenge supervisors to learn new skill
sets. Experience from this ongoing reform effort has shown that
managers must be well trained in advance to meet the challenges
of a Federal pay system that is moving to pay-for-performance.
The legislation introduced by Chairman Voinovich, the
Federal Workforce Performance Appraisal and Management
Improvement Act, includes much of the GMC's desired program,
providing for training within a year and every 5 years
thereafter. We would like to thank Chairman Voinovich and his
staff for accepting the suggestion by the GMC that the program
allow supervisors to receive credits for training so they do
not have to retrain upon transferring to a different job within
government.
We also commend Ranking Member Akaka for his continued
interest and action on this important issue and for including
in his legislation, the Federal Supervisor Training Act, an
accelerated time table and noted authorization of funds. In
these times of strained budgets, training is viewed often as a
secondary expense and is, therefore, the first program to meet
the chopping block when Congress, the Administration, or an
agency must allocate funds. With mandatory training taking the
force of law in these bills, Congress and the Administration
will be obligated to recognize the fundamental requirement to
train Federal supervisors and the management force. Our biggest
concern is that your efforts in drafting this legislation and
bringing to it the final passage will not achieve the results
unless you seek a specific authorization of funds to underwrite
the costs of that training.
I thank you for the opportunity to present our views and I
will be pleased to answer any questions you may have. Thank
you.
Senator Voinovich. Thank you, Mr. Perkinson. I think it is
wonderful that you have all joined in a coalition because that
gives us a nice perspective from all of you on the management
side of government.
Mr. Perkinson. Yes, sir.
Senator Voinovich. Ms. Kelley.
TESTIMONY OF COLLEEN M. KELLEY,\1\ NATIONAL PRESIDENT, NATIONAL
TREASURY EMPLOYEES UNION
Ms. Kelley. Thank you very much, Chairman Voinovich,
Ranking Member Akaka, and Senator Lautenberg. I really
appreciate the opportunity to be here today at this important
hearing.
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\1\ The prepared statement of Ms. Kelley appears in the Appendix on
page 38.
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Mr. Chairman, NTEU appreciates your recognition of the need
for supervisor training, accountability, and development. NTEU
also appreciates Senator Akaka's introduction of the Federal
Supervisor Training Act, S. 3584. We believe that S. 3584
expands and develops in a very positive way the basic mandate
for supervisor training in S. 3492.
S. 3584 adds several essential features to a supervisor
training initiative that NTEU views as critical. A more
detailed description of the type of training to be required,
specifying that training must be interactive and instructor-
based, more than simply a review of written materials. Training
must be delivered by training professionals in a situation,
either face-to-face or Internet-based, which allows dialogue,
questioning, and interaction between student and teacher.
S. 3584 also requires more than simply training in the
supervision of employees, but it requires working with
employees, communicating with them, and discussing their
progress. A good manager needs to do more than correctly
evaluate an employee. A good manager needs to know how to
develop an ability to help his or her subordinates to become
top performers. Absolutely essential, we believe, is the
requirement in the Akaka bill to include supervisor training on
prohibited personnel practices, particularly violations of
statutorily prohibited discrimination and whistleblower rights.
S. 3584 also adds another important feature which is
missing in S. 3492, the promulgation of management performance
standards. While S. 3492 refers to holding supervisors
accountable, it does not include any penalties, disincentives,
or rewards that are tied to managerial performance. It is
unclear to me what provisions in the bill would provide that
accountability.
NTEU is also concerned, as Mr. Perkinson identified, as to
whether this training initiative will be adequately funded.
NTEU would prefer that this legislation clarify exactly where
the resources will come from to finance this important
initiative.
With regard to S. 3492, much of the section dealing with
performance appraisal systems is already in place. For example,
linking the system with the strategic goals in the annual
performance plan of the agency is a basic tenet of GPRA. While
the bill calls for a written performance appraisal annually,
OPM regulations currently call for a written rating of each
employee on an annual basis. We have no objection to the
language in S. 3492, which makes clear that a written
performance appraisal is required annually.
The major change, however, in this section adds the term
``compensating'' to the list of uses for which the performance
appraisals can be used. Current law states that agencies can
use performance appraisals as a basis for training, rewarding,
reassigning, promoting, reducing in grade, retaining, and
removing employees. The purpose of including ``compensating''
in this list is made clear in Section 4 of the bill, which
states that an employee whose summary rating of performance for
the most recent completed appraisal period is below fully
successful, that employee may not receive the annual across-
the-board or locality pay increases.
Under current law, an employee who has received an
unacceptable performance evaluation may not receive a grade or
a step increase. These increases are tied to performance and it
is entirely appropriate that they be withheld if an employee's
performance is less than acceptable. The annual across-the-
board and locality increases, however, were created by the
Federal Employee Pay Comparability Act with the purpose of
achieving comparable pay between Federal employees and their
counterparts in the private sector. These increases are tied to
the position and location, not to the individual, and
therefore, withholding these increases based on the performance
of the individual completely drops the goal of comparability,
which has been the goal of the Federal sector for decades. If
Congress wants to drop the goal of comparability with the
private sector as the basis of Federal pay, I think that should
be noted and debated. That is clearly the result of what this
proposal will be and NTEU opposes that.
According to a GAO report last year, they identified that
three-tenths of one percent of employees rated in the year were
rated unacceptable. This is an extremely small number and
should not drive major changes in the basic tenets of our pay
system.
The 2005 GAO report also identified various impediments to
dealing with poor performance. They identified time and
complexity of the processes, lack of training in performance
management, and communication, including the dislike of
confrontation. None of the top impediments cited include lack
of sufficient disincentives for poor performance. Rather, the
impediments highlight managers' reluctance to engage in the
processes that will have an impact rather than on the processes
themselves.
I would close by identifying another feature in the bill
that I was very surprised at, and this was a portion that says
that the rank and file employees would be denied across-the-
board and locality increases unless a performance-based
standard is achieved. However, it appears that SES employees
would be provided with a pay increase totally unrelated to
individual performance. To increase pay for the highest-paid
employees regardless of their performance in the same piece of
legislation that would be cutting the pay for front-line
employees based on performance is only going to increase the
skepticism about a new pay-for-performance system being fair.
I would also identify time lines as a potential concern for
NTEU. S. 3492 says that agencies will have to have new
appraisal systems certified by OPM by July 2007. Based on the
problems both DHS and DOD have been having in designing new
systems, this seems a very short period of time, and also to
affect pay increases for the SES 180 days after enactment, long
before other sections of the bill would be in place, will give
the appearance that the goal of this legislation is about
providing the highest-paid employees with pay increases
unrelated to their performance, and I would hope that is not
the case.
So I appreciate the opportunity to testify and welcome any
questions you have.
Senator Voinovich. Thank you very much. Ms. Simon.
TESTIMONY OF JACQUELINE SIMON,\1\ PUBLIC POLICY DIRECTOR,
AMERICAN FEDERATION OF GOVERNMENT EMPLOYEES
Ms. Simon. Mr. Chairman, Ranking Member Akaka, and Senator
Lautenberg, on behalf of the more than 600,000 Federal and
District of Columbia employees AFGE represents, I want to thank
you very much for the opportunity to testify today.
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\1\ The prepared statement of Ms. Simon appears in the Appendix on
page 44.
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You have asked for AFGE's views on two legislative
proposals, the Federal Workforce Performance Appraisal and
Management Improvement Act and the Federal Supervisor Training
Act. AFGE appreciates the time and attention that have gone
into the development of these proposals as well as the evident
intention to improve the functioning of the Federal Government
and the ability of Federal managers to perform their jobs
competently.
The proposal in S. 3492 takes a new turn from previous
proposals. Heretofore, pay-for-performance proposals have been
promoted as opportunities to reward high performers and help
the government recruit and retain the best possible talent.
Although these schemes invariably include a punitive element,
that element is usually barely mentioned. The emphasis is
always on the positive, the promise of higher pay for employees
and higher performance for agencies.
Yet this bill provides virtually nothing in the way of
reward. The emphasis is all on the negative, the threat of
punishment for so-called poor performance. S. 3492, in other
words, takes an emphatic position on the proverbial, which
works better, the carrot or the stick? This is all stick and no
carrot.
The proposal to withhold the annual pay raise in S. 3492,
if it were the only thing that had happened to Federal
employees, and we knew that it were an end in itself, would be
one thing. But after 5 years of having the Bush Administration
take away collective bargaining and appeal rights from the two
largest agencies in the Federal Government, and knowing of
their desire to spread this bad system government-wide through
the Working for America Act, and even after three negative
court decisions, AFGE cannot support even a modified version of
S. 3492.
During the same period when Federal employees have had to
try to fend off the Administration's efforts to take away
collective bargaining and appeal rights and privatize their
jobs, we have also had to put up with skyrocketing health
insurance premiums and an OPM that either cannot or will not
engage in serious negotiations with insurance companies to keep
a lid on their greedy behavior and whose focus in regard to
health insurance has been to try to shift more costs onto
employees and retirees. Now, we believe that is a performance
problem that needs attention.
In the meantime, overall Federal pay continues to lag
behind the private sector and State and local governments by
about 14 percent, on average, nationwide. If we start making
the annual pay raise optional, it will only lay the foundation
for reducing raises even further in the future, thereby
punishing the more than 95 percent of Federal employees who by
all accounts are doing a very good job.
Contrary to what some pay-for-performance advocates have
suggested, Federal employees do not lie awake at night hoping
their supervisor will withhold the annual pay raise from their
less-than-stellar coworker. When they are not worrying about
their lengthy and increasingly expensive commutes, the rising
cost of health insurance, and whether their jobs are going to
be contracted out, chances are they are worrying about how to
keep up the pace at work, where they are continually expected
to do more with less and do so without gratitude or
recognition.
On the rare moments when they might think about poor
performers in their workplace, what they do want is for their
supervisor to take appropriate action to correct the behavior
of the poor performer. It is undoubtedly the case that
sometimes people are poor performers because they are lazy, or
have a negative attitude. For those employees, the supervisor
should take action under current law. Put the employee under a
performance improvement period and then take disciplinary
action if that doesn't succeed.
Often, however, people are poor performers because they
truly don't understand how to do their work, or they think they
do but need additional training and attention from their boss.
They may be in the wrong job. For those employees, withholding
an annual pay raise will only serve as an intimidation and a
disincentive to ask for additional help. It won't help get the
job done.
In contrast to S. 3492, the proposed Supervisor Training
Act is focused on positive strategies that make sure Federal
managers receive adequate, high-quality training designed to
teach them how to help all Federal employees improve their
performance. One thing that bears mention is that the bill
establishes a program whereby experienced supervisors mentor
new supervisors by helping them with such important managerial
skills as communication, critical thinking, responsibility,
flexibility, motivating employees, and teamwork. In the context
of political denunciations of the current system's emphasis on
longevity, it is refreshing to see a legislative proposal that
values the benefits of tenure and experience and the
transmission of knowledge and skill.
This concludes my statement. I would be very happy to
answer any questions you or Members of the Subcommittee may
have. Thank you.
Senator Voinovich. Thank you very much for your testimony.
Ms. McGinnis.
TESTIMONY OF PATRICIA McGINNIS,\1\ PRESIDENT AND CHIEF
EXECUTIVE OFFICER, COUNCIL FOR EXCELLENCE IN GOVERNMENT
Ms. McGinnis. Thank you, Mr. Chairman, for inviting me to
be part of this discussion. I want to compliment you and
Senator Akaka for the very constructive bipartisan effort that
you have shown over the years in trying to improve government
performance and also to develop the potential of Federal
workers to do their jobs well. The full Committee and this
Subcommittee really are a model in the Congress for
bipartisanship.
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\1\ The prepared statement of Ms. McGinnis appears in the Appendix
on page 62.
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As you know, the Council for Excellence in Government is a
nonprofit, nonpartisan organization that focuses on improving
performance of government, building public-private
partnerships, and engaging the American people to improve
government results and accountability. We are a group of
private sector leaders who have served in government and truly
care about these issues.
Attracting and developing talented people for public
service is one of our key objectives, and as you know, we have
worked hard to bring different perspectives on these issues
together in constructive discussions. A series that you
participated in, we held with the Washington Post to focus on
what the new public service can look like given the huge number
of retirements and the opportunity to reshape it. We brought
together for the first time in an historic session the union
leaders, AFGE President John Gage and Colleen Kelley from NTEU,
with OMB Deputy Director Clay Johnson and Comptroller General
David Walker. This was the first time they had ever appeared in
public on a panel together, talking with each other.
It was very interesting. We had two sessions, one on their
vision for public service 10 years out, because we wanted to
get beyond all of the litigation and legislation and issues on
the table now. It was very interesting how much of a consensus
there was. I think they were surprised themselves when they
heard each other.
John Gage talked about a rebirth of the service culture in
the Federal Government, more collaboration, more choice, less
of an adversarial relationship between employees and
management. Clay Johnson talked about a culture where getting
better is just what we do, getting better personally,
professionally, programs getting better. Colleen Kelley
described a workforce that is valued, respected, and recognized
as having expertise, and employees who would be given the
resources to do their jobs well. And, of course, David Walker
also talked about a rebirth of public service where the
government would be an employer of choice and we would be able
to attract the best and brightest.
The consensus on this vision falls apart when these leaders
get into details of how we should get there, and that is why I
brought up the lack of trust that Senator Akaka mentioned
earlier and also the lack of ownership of solutions. Those two
things, the lack of trust and the lack of participation and
ownership of the solutions, I think are the main roadblocks to
meaningful reform.
John Gage was deeply cynical about cronyism and patronage.
Colleen Kelley called for a two-way conversation between
management and employees. Clay Johnson talked about a bad tone,
the wrong tone. And David Walker said, and we certainly agree
with this, that the current GS system is not market-based, it
is not skills, knowledge, and performance oriented, and it does
not result in equal pay for work of equal value over time. I
think it is really too bad that the discussion now is either
let us stick with what we have or let us do something
dramatically different, and there seems to be nothing in
between that we can agree on.
That is why I think your legislation, and also Senator
Akaka's bill, represent important steps, progress that could be
built upon to create a much larger reform effort.
Linda Springer came to the forum and talked about--and I
think this is very important because it should be part of the
conversation about reform--the challenge to recruit, engage,
and manage a whole new wave of employees who want more flexible
work arrangements, greater mobility, and different kinds of
training. If you look out there at the job market and who we
are going to have to recruit, we need to understand both what
they are going to find attractive about the government and also
what are the state-of-the-art best practices, many in the
private sector, that we should be emulating.
You joined us in one of these sessions to announce that you
were going to introduce this bill. We really appreciate that.
Let me turn to what the employees say about these issues,
because I think that should guide the discussion, almost more
than what the leadership of either the unions, the
Administration, or other organizations have to say.
Senator Voinovich. Ms. McGinnis, if you can kind of wrap it
up, I would appreciate it.
Ms. McGinnis. I will. In the Federal Human Capital Survey,
the most negative aspects of government service, I think,
represent the to-do list. One, if you took this bottom part of
the list, you would base personnel decisions on merit,
recognize differences in performance in a meaningful way, deal
with poor performers--that actually is a very big concern among
employees, provide opportunities for employees to get better
jobs, and improve certain benefits.
And then if you look at the differences between public and
private sector, you would add working on increasing the level
of satisfaction with training, the level of satisfaction with
information received from management, and how good a job my
supervisor is doing.
That is a great agenda for change and the council supports
both bills before us today.
Senator Voinovich. Thank you very much. I would like to
comment. I have been working on personnel issues for 8 years.
When Congress debated NSPS and max HR, I advocated for binding
arbitration. I think the fact that we had ``meet and confer''
where at the end, management did what they wanted, did not end
well. It went to the courts and they have made their decision.
I don't know what the Administration intends to do next, but
from this Chairman's point of view, I would like to move
forward and see if we can't concentrate on figuring a way that
we can work together.
Ms. Kelley, you mentioned the fact that three-tenths of one
percent were not satisfactory. David Walker described the
performance appraisal systems as abysmal. I know that it is not
reflective of reality. GSA Administrator Steve Perry, who once
worked for me, said when he came to GSA, the performance
appraisal system was zero. I think if someone goes back and
looks at what he did there, they will find that it is much
improved. There were some super performers. They started to
take the time to write effective performance appraisals. It
wasn't just, get it over with and go on, file it and forget it.
The point I am making is that the performance appraisal
really is to let somebody know where they stand, let somebody
know that someone cares about them. But the worst thing, I
think, for anyone is to come to work for an agency, come in
every day, do their work, and not know whether or not they are
doing a good or bad job, how they can improve, or how the work
that they do is connected with the goals of the agency. This is
the goal of my bill.
It seems that there is one thing that has unanimity here:
Training. Ms. Kelley, you remember I sent that survey to 12
agencies when I first came to Congress. I asked them how much
they were spending on training. Eleven came back and said they
didn't know. One said, yes, we do, but we won't tell you.
How do we get training ingrained in the administrative
branch of government? How do we make sure that is getting done?
How do we also communicate with the Congress about the
importance of these dollars to employee satisfaction and
excellence and doing a better job for the American people?
Ms. Kelley. I think that is an appropriate question and a
complex one, because for me, what I have seen over the years is
that the tone and attitude come from the top. That is where the
recognition and support has to be, and it is not there as a
rule. And even when you get to the point of, as you suggested,
Chairman Voinovich, a line item in the budget, in my
experience, training is about a lot more than just a line item.
Although, a line item would be a good place to start, at least
to know that there were funds identified for it. One of the
things that often blocks training from being delivered, as it
should be, out in the workplace is the staff time away from the
job that it would take to be in training, and that is never
ever built into whatever the budget dollars are, even if they
would share those with you and put the appropriate dollars in.
The second issue I would identify is the substance of the
training. There are many agencies who will tell you that they
do training and they can tell you how many hours they did. But
if you ask employees if that is the training that they need to
do their job, they would tell you no, that the training being
provided is not the training that they need, or that they
should be provided by the agencies. I think many managers would
say the same thing.
Senator Voinovich. One of the requirements in my
legislation is that before an agency could go forward with the
new system they would have to be certified by OPM and
managerial training has to be completed so that the employees
know what they are doing. It must be quality and not just going
through the motions.
Any other comments about how we can guarantee the money for
training?
Ms. Simon. Sir, I would like to comment on your original
question with regard to training. I think that, although you
are right, there is certainly unanimity on this panel, and
probably any other, that funded training would be a valuable
and important component of the success of any kind of
performance management system. The really difficult question
would be, what would be the content of the training.
Where the conflict arises is the question of how much
discretion managers will have to set those performance
standards, defining what those standards are, and what role
employees can play in the development of those standards. These
are very difficult issues, and when they are established
unilaterally and/or established in a way that they can be
interpreted entirely at the will of management, training is the
least of the problems. That is the difficult part.
Senator Voinovich. So, if OPM is going to be the overseer
on this, it would seem to me that the kind of things that you
are talking about would involve communication so there is
consensus. I would sure do that, sit down with the agency and
say, here is what we think, what do you think about this. So
that they start out from the beginning with some understanding
of what is this that we are talking about.
Ms. Simon. Well, there is no question about that. But, in
the context of, just, for example, DHS and DOD, the
conversations our union has been involved in with the
management of those agencies and the people in those agencies
charged with trying to design the type of performance criteria
would be involved in a performance appraisal, a lot of times
what is presented are these extremely vague competencies, they
are called, and they have to do with personal characteristics
that are extremely difficult to pinpoint----
Senator Voinovich. Pardon me for interrupting you, because
I am limited in my own time, also.
Ms. Simon. Sure.
Senator Voinovich. Have you looked at the Senior Executive
Service and the first spiral of NSPS?
Ms. Kelley. I read a paper about it, but I wouldn't know--
--
Senator Voinovich. I will tell you, I would really like you
to look at how the Spirals are being implemented. They are
working to address what both of you are concerned about. In
other words, I would really like you to look at how they are
going about training the trainer, implementation, including the
program, and the training they have done to conduct performance
evaluations. I really would like you to look at it and tell me
what you think of it.
Ms. Simon. One last very quick comment----
Senator Voinovich. Yes?
Ms. Simon [continuing]. And that is a lot of what we have
looked at in that context has involved what can only be
described as highly political standards and politicized
standards for evaluation, and that is really where the problem
lies.
Senator Voinovich. Well, I would ask you to do it
specifically. Tell me what you think. Tell me how it is
politicized.
Senator Lautenberg, and then we will have another round.
Senator Lautenberg. Thanks, Mr. Chairman.
For Ms. Kelley, you heard my question before that I asked
about morale. Do you try to gauge that in some way, whether
formally or informally, and how do you do it?
Ms. Kelley. Actually, I travel a lot and visit with Federal
employees in all of our agencies at their workplaces and I
don't have to do very much questioning or research, because
usually within the first 5 minutes, employees are starting a
conversation with me about how bad morale is. It is always
framed around the fact that they are all looking for--not all,
but many of them are looking for other jobs. They are counting
the days until they can retire.
There was a time when I would talk to our members when
everyone knew their eligible retirement date but very few were
planning on going on that date. That is very different today.
Many in the workforce, Homeland Security in particular, is
where I hear that employees are looking for other jobs. It is a
place that they do not feel supported. They do not feel that
their work is respected, that their opinions are valued, and
they are not looking at staying with DHS for a long time.
Senator Lautenberg. Do you have an idea what the turnover
in DHS is? I think, Mr. Chairman, DHS has a fairly high
turnover rate. Are you familiar with it?
Ms. Kelley. I know anecdotally it is a high turnover. When
I have asked for that number, they have told me they cannot--
they have told me it is standard with the rest of government,
which I do not believe, and that they cannot share the numbers
with me because it is a national security issue. So maybe if
this Subcommittee were to ask that question, they would provide
you with the turnover numbers, and I would be very interested
in those, too. But I know it is higher than----
Senator Lautenberg. We have no problem asking that
question.
Senator Voinovich. In fact, we ought to have an oversight
hearing on the reorganization. Let us face it, putting all
those agencies together and forming one department and one
culture. Senator Lautenberg, do you remember how we came up
with the idea? Senator Lieberman initiated it on the
recommendation of the Hart Rudman Commission. Remember that?
Senator Lautenberg. Yes.
Senator Voinovich. The Administration initially said no.
Well, the public pressure built up, so finally the light went
on at the White House. When the Department was created, it
combined 22 agenceis and 180,000 employees, the biggest
management undertaking that this government has had since
creating the Defense Department.
Senator Lautenberg. Sure. Twenty-two departments merged
into a department, 180,000 employees----
Senator Voinovich. It hasn't worked well. What
Administration should have done is evaluate what agencies might
go together, maybe start out with four or five. So here we are,
but the Department has some major problems, and----
Ms. Kelley. And so many of those decisions were made
without any input from employees or the unions who represent
them. There were unilateral decisions made. They were bad
decisions made from an operations standpoint and surely from an
employee morale perspective.
Senator Voinovich. Well, remember when they were developing
the regulations, we talked about that. That is why I said we
would have been much better off with binding arbitration so
that people would have worked it out early on, because they
would have known there was somebody objective or impartial that
would make the final decision if there was not consensus.
Senator Lautenberg. Also, Mr. Chairman, I think it is fair
to say that there was a lot of flailing about in panic, in
dismay about what had happened, that it was so terrible. In our
country's history, it is probably one of the most significant
events that changed our world. So as a consequence, there was a
rush, unfortunately, I think, hasty, and I have made some
outlandish recommendations about maybe--I am not sure about
divorce, but at least separation for now, an agreed upon mutual
separation agreement.
Right now, Ms. Simon, can't managers and supervisors
already award quality step increases to high performers and
withhold regular step increases for poor performers?
Ms. Simon. Yes, that is absolutely the case. What is unique
in the proposed legislation is to put the locality-based salary
adjustment and the National Employment Cost Index based-salary
adjustment at risk and contingent upon a performance appraisal.
Within-grade increases have always been based on performance
and Federal employees become eligible for them at certain
intervals over the course of their careers. But they are
performance-based.
Senator Lautenberg. But why is this system inadequate to
ensuring accountability for employee performance?
Ms. Simon. Oh, I don't think that it is inadequate. If
there is anything about it that is inadequate, it would be the
size of the within-grade increases. They are not enormous. But
I think surveying the academic literature on what motivates
employees, particularly public employees, to higher
performance, money is not the only thing. I don't mean to
downplay it by any standard. Federal employees are underpaid
relative to their counterparts who perform similar work in the
private sector, which is why the principle of comparability was
enshrined in the law many times over, but most recently, since
1990, in FEPCA.
But there are performance-based elements. Last year, or was
it 2 years ago now, the Workplace Flexibility Act gave enhanced
flexibility to Federal managers to reward employees they wanted
to retain or recruit, presumably based on their either manifest
high performance or potential for very high performance. There
are many flexibilities within the existing system that haven't
been adequately funded, which is why they are rarely used. But
there certainly are opportunities to reward high performers
and, of course, there is also more than adequate, I would say,
management authority for dealing with poor performers.
Senator Lautenberg. Mr. Chairman, the obvious picture that
is drawn in terms of what needs to be done is if you look at
the military today and see that in the Reserve, the Guard,
there are huge bonuses, relatively speaking, for people with
certain skills that challenge the existing structure. And I
think the same thing happens today in the Federal Government.
Mr. Perkinson, I want to ask you, what is the effect of
proper functioning Federal departments when political
appointees have no relevant experience to the job that they are
nominated for? Is that a matter of some consequence?
Mr. Perkinson. With leadership coming from the top, yes,
sir, there are times when it does affect management, but I
think in the management ranks and speaking for managers, we a
lot of times understand, adjust, and work with our employees to
the maximum.
I guess one of my big fears or one of my big problems with
all this discussion is when we talk about poor performers and
managers not adhering to or listening to the needs of the
employees, the public gets this perception it is a major
percentage of our employees. But I go to work every day and 90
to 95 percent of our employees do great jobs and dedicated to
this country and it is outside the scope of the leadership. We
put the management responsibility to those people at the agency
level and they are at the grassroots dealing with the
employees. And I say it has been my perspective in my travels
that the only things that get highlighted are those things that
hit the press. The poor performers stand out. Yet every day, 90
to 95 percent of our people do an outstanding job for this
country and support this country to the maximum.
Senator Lautenberg. I believe that.
Ms. Simon, I noted something in your comments that aroused
my curiosity. We are saying here that in the private sector
that pay-for-performance is a fad. I hadn't heard that and I
was just curious as to how you draw that conclusion.
Ms. Simon. I drew the conclusion based on a survey of the
literature on human resource management that I try to keep up
with. In particular, I have followed the work of Professor
Jeffrey Pfeffer of Stanford University's Business School. He is
often quoted in the context of these debates arguing that pay-
for-performance eats up enormous quantities of resources and
makes everyone unhappy and has yet been empirically shown in
large private sector firms not to justify its cost, its
administrative cost, when the actual impact in terms of
productivity improvement is measured in any objective way.
Consequently, there are many large corporations in the
private sector that have done away with elaborate differentials
for employees in the same positions in terms of their pay
increase----
Senator Voinovich. If you could move on.
Senator Lautenberg. Yes. I think, Mr. Chairman, you and I,
in our debate, used a little bit of the time, so I would like
to use some that I lost.
Senator Voinovich. All right. Go ahead.
Senator Lautenberg. Just for a moment more, thank you.
This stunned me, Mr. Chairman, because while I am largely
on your side of the issue, I don't know of any company that has
decided that what we will do is pay on the basis of longevity
and not performance. I want equity and fairness. I want the
right for employees to have collective bargaining. My father
described an incident, when he was a young man working in a
mill of standing with his hat in his hand because his manager
told him that if he took off of work for a very important
religious holiday, that he shouldn't come back to work. That
left a mark on my thinking almost for ever, because collective
bargaining then came into play and it was different.
So this is a new one for me. While I am very conscious of
our responsibility to our people who work for us and the
outstanding performance that we get, and in this body here, let
me tell you, working for Senators, that is really a trial.
[Laughter.]
So I thank you all for your appearance and your views, and
Ms. Simon, if you could give us anything that supports that----
Ms. Simon. I would be happy to.
Senator Lautenberg. OK. I appreciate it. Thanks, Mr.
Chairman.
Senator Voinovich. Thank you, Senator Lautenberg.
I am just going to finish up with the same question I
started with. How do we guarantee that the money for training
is going to be available? Senator Akaka, Senator Lautenberg,
and I agree it needs to be done. It doesn't seem like it is
happening. Ms. McGinnis, do you have any ideas on that?
Ms. McGinnis. I do think that honing in on the investment
needed for training, what is being invested now and what is
needed, would be very helpful. We know that in the private
sector, 2.5 percent to 3 percent of payroll is allocated for
training. It is hard to get those comparable numbers for
government. They really don't exist. But there are studies that
show that certain industries are spending as much as twice as
much on training as government. So we need to know what we
should be aspiring to and look at the state of the art training
and what aspects of training do correlate with performance.
Senator Voinovich. That is a good idea. I can't remember
now the percentage. When I was mayor, we had nothing. I think
we looked at General Electric and found they allocated 10
percent.
Ms. McGinnis. You really need to know----
Senator Voinovich. Maybe that number is high, but these
high-quality performing organizations put a lot of money in
training. Perhaps getting information like that across to the
agencies and to Members of Congress will demonstrate how
important it is to a good functioning organization. We must
recognize that this is money well-spent, a good investment in
good government.
Ms. McGinnis. I would recommend that.
Senator Voinovich. Mr. Perkinson.
Mr. Perkinson. Mr. Chairman, I would like to share with
you, I think the line item is a good start. I wouldn't say that
it would be adequate, but to give you an example, Senator
Akaka, a few years ago in the shipyard community, when they
were trying to restart their apprentice programs, the money was
getting lost in the Department of Defense overall
authorization. Senator Akaka took great steps in applying an
apprentice appropriation for the naval shipyards so that they
could get started, and they dedicated those funds to start up
that program and to get the apprentice funding done. We have
now gone to where the money is now within the Naval Sea Systems
Command budget, but that first step in dedicating it to that
effort caused focus at the agency level to where those funds
were spent for that specific type of training. So putting the
line item in, I think, is the right start in having some
management tool to ensure that those funds are being dedicated
to the level of training that we would like to have.
Senator Voinovich. Any other comment on that?
[No response.]
Senator Voinovich. I had a hearing earlier this week with
David Walker and with OPM Director Linda Springer. My
observation is that they are on the right track. I will say
that I am impressed with Linda Springer. I think she is
sincere, hard working, and wants to get the job done. We didn't
have any of you there, and it seems to me that if reforms are
going to be successful, at least from my perspective, you have
to have a really good Office of Personnel Management. I mean,
it has to be functioning, it has to have the resources to do
the job. They have to have the competencies in place to
evaluate whether or not people have been trained up to the
point where they can do objective performance appraisals.
I would like each of you in the next couple of minutes to
just give me a quick appraisal of how do you think OPM is
doing?
Mr. Perkinson. I will start off. I think OPM is making
strides in the right direction. I think we have a long way to
go in that regard because a lot of times, policies that are
implemented and discussed stay within the beltway. When you get
down to the agency level and to the office level, those
policies and procedures, that are great ideas, are not
implemented at the local level, for whatever reason. Be it
budget, be it agency decision, whatever, they are not
implemented.
So that being said, I think that we could give Linda
Springer and OPM, if we would give them some type of
authoritative push through for the policies and procedures that
they do----
Senator Voinovich. Are you familiar with the new plan that
she has, and the metrics that she is using?
Mr. Perkinson. Yes, sir, but I still contend, and it has
been my experience, that there is some disconnect when it goes
down to the local level. She is working hard on it and she is
making steps in the right direction, but at the local level, we
haven't seen it.
Ms. Kelley. I think that they have good intentions and are
focused on a lot of the right issues. I have a very open and
functional relationship with Linda Springer and look forward to
working with her on these issues. In my experience, two things
happen. Even when OPM puts forward good, solid advice and plans
for implementation, they really have no authority to make that
happen in the agencies. So it is selectively implemented or not
supported at the top of the agency and definitely down at the
local level, as Mr. Perkinson describes. That, too, has been my
experience.
And there are also other things that I think OPM could
reach in and correct across government that they haven't done
yet and I am hoping they are going to, and these are issues
that I am identifying for Director Springer and will continue
to work with her on.
Senator Voinovich. Has she asked you for your advice on the
things that you think need to be done?
Ms. Kelley. She has been very open to any issues that NTEU
wants to discuss and has brought us issues that she wants our
input into, so yes.
Senator Voinovich. I just want you to know, I want OPM to
be the best managed agency in the Federal Government. Without
that, nothing will happen.
Ms. Kelley. I know that you do----
Senator Voinovich. I would really appreciate as much input
as possible from you and from AFGE and from the Federal
Managers Association to try and really get that input.
Ms. Kelley. We will do that.
Senator Voinovich. Ms. Simon.
Ms. Simon. Yes, thank you, sir. We have a slightly
different relationship with OPM because AFGE represents the
employees of OPM, so I have been sitting here thinking about
how to answer your question in a politic way. Certainly the
employees in the headquarters office have had their lives
turned upside down because OPM has pursued A76 competitions
with a vengeance, one after another, one bigger than the next,
and so there is tremendous uncertainty about the future and
instability and worry and low morale of the rank and file
workers there.
Senator Voinovich. I wasn't aware that they were doing
that.
Ms. Simon. Yes, sir.
Senator Voinovich. Have they matured enough so that the MEO
is competitive with the private sector?
Ms. Simon. Well, one of the problems with A76 is even when
the MEO wins, it loses, because invariably, it wins on the
basis of a proposed alternative that is less expensive and less
expensive invariably means fewer employees and downgrades. And
so people are losing their jobs, not as many as would lose
their jobs if the MEO didn't win, and having their positions
downgraded. So that doesn't make anyone very happy.
We have had relatively little contact and communication at
the highest levels with OPM since Ms. Springer took over, which
is not to say that it has been hostile, it has just been very
little communication. But certainly among the rank and rile
employees of OPM, there is a lot of unhappiness over the
relentless pace of A76.
Senator Voinovich. Thank you. Ms. McGinnis.
Ms. McGinnis. I think Linda Springer is a real breath of
fresh air. I think she brings to OPM a very practical market
and performance-oriented approach and she knows the value of
people in government. So it is very balanced. Her progress on a
strategic plan and metrics, I think, is commendable. She is not
waiting for anything. She is moving ahead. The work that she
has begun on career patterns and preferences, thinking ahead to
how to recruit and retain and develop the best and brightest
workforce of the future, I think is quite commendable, as well.
The role of OPM as a constructive partner to the agencies,
I think, does have a way to go, but it is on that path and I
think her leadership is terrific. I can't speak to the morale
issues, but you can look at that same survey that we have
talked about and see where OPM stacks up in terms of morale. So
we ought to all take a look at that. I don't think it is at the
bottom.
Senator Voinovich. The problem that we have is that the GAO
report used 2004 employee survey data. Quite frankly, that
report showed it wasn't very good. I think that Ms. Springer is
trying to remedy that situation. We will be getting more GAO
analysis, but I think you would all agree, that OPM has more to
do with your lives than any other agency.
I want to thank you very much for being here. Senator Akaka
and I are well aware of the fact that nothing will get done
this year without unanimous consent in the Senate, as you have
observed. So we are going to see if we can't work something out
between the two of us on these two pieces of legislation. It we
can't, we will see you next year. [Laughter.]
Thank you very much. The hearing is adjourned.
[Whereupon, at 11:14 a.m., the Subcommittee was adjourned.]
A P P E N D I X
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