[Federal Register Volume 61, Number 172 (Wednesday, September 4, 1996)]
[Rules and Regulations]
[Pages 46531-46534]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-22366]



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  Federal Register / Vol. 61, No. 172 / Wednesday, September 4, 1996 / 
Rules and Regulations  

[[Page 46531]]



OFFICE OF PERSONNEL MANAGEMENT

5 CFR Parts 317 and 412

RIN 3602-AF96


Executive, Management, and Supervisory Development

AGENCY: Office of Personnel Management.

ACTION: Final rule.

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SUMMARY: The Office of Personnel Management (OPM) is issuing final 
regulations to eliminate the 3-year limitation on the validity of 
Qualifications Review Board (QRB) certification for appointment to the 
Senior Executive Service (SES). The Office is also revising its 
regulations governing executive and management development. The 
coverage has been expanded to include supervisory development. The 
revised regulations present broad program criteria on the systematic 
development of executives, managers, supervisors, and candidates for 
these positions. They also establish minimum requirements for formal 
SES candidate development programs. The revisions are intended to 
promote training and development activities which foster a corporate 
perspective of Government within the Federal executive cadre.

EFFECTIVE DATE: October 4, 1996.

FOR FURTHER INFORMATION CONTACT:
Constance Maravell at 202-606-1832.

SUPPLEMENTARY INFORMATION: OPM published proposed regulations to make 
changes in parts 317 and 412 on December 11, 1995 (60 FR 63454). We 
received comments from 7 agencies, 1 individual, and the Senior 
Executives Association (SEA). Most comments were supportive of the 
changes. There were some reservations about requirements for SES 
candidate development programs.

Part 317--Employment in the Senior Executive Service

    The proposed regulations included a change in 5 CFR 317.501(c)(5) 
which would have allowed Executive Resources Boards to refer to the 
selecting official all candidates as best qualified when there were 
less than 10 applicants for a position. This was proposed in response 
to a recommendation from the Executive Resources Management Group's 
(ERMG) Staffing Work Group, with the goal of simplifying and 
streamlining the merit staffing process. However, we recognize that 
such a provision presents difficulties in the context of other 
requirements of 5 CFR 317.501(c), calling for the ``relative ranking of 
the candidates'' and requiring selection ``from among the candidates 
identified as best qualified.'' Two agencies as well as the Senior 
Executives Association raised concerns relating to the interpretation 
and application of the proposed revision. In evaluating the proposal 
and the subsequent comments, we placed primary emphasis on the language 
of the merit principle requiring selection and advancement ``solely on 
the basis of relative ability, knowledge, and skills * * * '' (5 U.S.C. 
2301(b)(1)). In light of these considerations, the proposals has been 
deleted from the final regulation.
    Another recommendation put forward by the ERMG's Staffing Work 
Group involves a larger role for agencies in the management of the QRB 
process. Two agencies commenting on these proposed regulations 
recommended that the QRB process be delegated to agencies or, 
alternatively, eliminated entirely. Our research of the legislative 
history of the Civil Service Reform Act indicates that Congressional 
intent in legislating Qualifications Review Boards was to assure an 
independent review of executive qualifications outside the selecting 
agency. This is incompatible with full delegation of the QRB process to 
agencies. We currently have an interagency advisory group reviewing the 
function and operations of the QRBs as they are presently conducted. If 
we conclude that the QRB process does not ``add value'' to the 
selection of Federal executives, we will recommend appropriate changes, 
including revisions to the statute if necessary.

Part 412--Executive, Management, and Supervisory Development

    One agency raised a question about sabbaticals, which are spelled 
out in statute (5 U.S.C. 3396(c)) and which are not covered in this 
final rule. The question concerned whether agencies would have complete 
authority for deciding the merits of requests for sabbaticals. Agencies 
have always had complete decision-making authority regarding the use of 
sabbaticals. Agencies should continue to report the use of sabbaticals 
to OPM, including submission of appropriate documentation (currently 
OPM Form 1390, Executive Personnel Transaction).
    One agency suggested including the role of ``team leader'' in the 
supervisory, managerial, and executive continuum. At this time the role 
of the team leader is still evolving and may vary widely, depending on 
the type of team or the specific agency. There is no prohibition 
barring an agency from setting whatever training policies it deems 
appropriate for the training of teams and team leaders. However, we are 
not broadening the scope of part 412 to incorporate such a requirement 
for all agencies.
    Another agency asked for verification of its assumption that a 
person who leaves the Government and has been certified as qualified 
for the SES by a QRB retains that certification. Since the 
certification has no time limit, this is a correct assumption. The 
individual could use that certification to return to the Government and 
receive a noncompetitive appointment to the SES, provided that he or 
she had competed Governmentwide to enter the Candidate Development 
Program (CDP).
    One agency commented that agencies should be encouraged to train 
their managerial corps as needed to meet their program needs rather 
than being required to provide managerial training generally. The 
regulations require that training and development programs be 
consistent with an agency's strategic plan. We would like to emphasize 
the importance of training for enhancing organizational achievement. 
Training and development play a critical role in assuring high quality 
customer service, information management, and improved management 
skills. This is widely recognized in the private sector as well as in 
Government. Furthermore, the requirements for managerial

[[Page 46532]]

development are flexible enough to allow agencies to comply within the 
limits of their financial resources.

Section 412.104  Formal Candidate Development Programs for SES 
Positions

    OPM believes that formal SES Candidate Development Programs (CDPs) 
provide an excellent vehicle for creating and reinforcing a corporate 
perspective within the SES. The idea of a ``corporate SES'' originated 
with the Civil Service Reform Act of 1978 and was reinforced by the 
National Performance Review (NPR) in 1994. One agency asked us to 
clarify the concept of corporate SES perspective; another questioned 
whether it was a valid objective. We believe that a corporate SES ( a 
Governmentwide executive service with shared values, a common identity, 
and a certain fundamental uniformity in personnel systems) contributes 
to stronger Government, and we will continue our efforts to promote a 
corporate SES culture in our policies and programs.
    The essence of a corporate SES is shared values. These values must 
transcend a commitment to agency mission; they must extend beyond an 
executive's individual profession and aspirations. The SES values must 
respect and embrace the dynamics of American democracy, an approach to 
governance that provides a continuing vehicle for change. The NPR 
report on the SES captures the original vision of the SES:

to serve the twin objectives of change and continuity: On one hand 
helping the top officials of a new administration to steer their 
agencies in the direction set by the newly elected President; on the 
other hand carrying forward the institutional memory of government 
and maintaining high standards of public service.

We believe that this vision is still valid, and we believe that 
balancing continuity and change is the fundamental responsibility of 
the Senior Executive. Inherent in this responsibility is respect for 
both merit and diversity, both the dignity and importance of the 
individual and the richness and wisdom that diversity of individuals 
brings to organizations and societies.
    Two agencies commented in favor of adding a provision to establish 
a cadre of ``precertified'' managers in order to expedite the filling 
of executive positions. The ERMG's Staffing Work Group has recommended 
that OPM examine ways to allow agencies to precertify the 
qualifications of executive candidates outside of the candidate 
development process. We are currently considering the feasibility of 
possible options for implementing such a recommendation. We recognize 
that even experienced managers, who would otherwise meet the 
requirements for SES appointment, can benefit from the training and 
development provided through a formal CDP. However, given the 
limitations of formal training budgets, the CDP is not a cost-effective 
vehicle for certifying executive qualifications obtained outside a 
formal program.
    One agency advocated substituting a general statement of purpose 
for formal candidate development programs, in place of the specific 
program requirements at Sec. 412.104(e), saying that such 
specifications are ``unnecessary and rigid.'' Another agency took 
exception to the requirement specifying the aggregate length of 
developmental assignment(s) outside the candidate's position of record. 
We do not find these requirements to be unnecessary, and it is not our 
intention to be rigid in their application or interpretation. In all 
cases except where competition for entry into the CDP is restricted to 
agency employees, QRB certification based on successful completion of 
an OPM-approved executive development program makes an individual 
eligible Governmentwide for noncompetitive appointment to the SES. 
Therefore, to support development of a corporate perspective in 
Government, there is a Governmentwide interest in assuring that a 
minimum level of training and development is shared by successful DCP 
participants. The regulations allow a great deal of flexibility in 
choosing the formal interagency training experience, and the 4 months 
of developmental assignments can be accomplished through a series of 
shorter assignments. Furthermore, OPM will work with agencies to 
develop program plans that are tailored to specific agency needs and 
circumstances, and we will permit individual participants to have 
development plans which deviate from their agencies' approved program 
plans, provided these deviations are approved by OPM in advance. We 
absolutely agree with the comment that developmental assignments should 
be ``tailored to the individual developmental needs of each 
candidate.''
    At the same time, some work experiences would not normally provide 
the depth and breadth of experience needed to enhance a candidate's 
executive qualifications. For example, one agency asked if a candidate 
could stay in his/her current position and have extra duties added to 
that position. This does not go far enough to achieve the principal 
goal of the developmental assignment, which is to have the person gain 
a broader perspective on his/her agency and the Federal Government. To 
achieve this requires experience in other lines of work and/or in 
different working relationships within the organization, or in 
different organizations. Adding duties to an existing position does not 
accomplish that purpose.
    One agency commented that not all candidates have equivalent 
backgrounds and, therefore, that development should be based on 
individual requirements needed to reach a set level of expected job 
performance. As we have previously indicated, we agree that development 
plans should be tailored to the individual needs of each candidate. The 
regulations require that each candidate have a development plan 
prepared from a competency-based needs assessment. The minimum 
standards are sufficiently broad so that individual development plans 
can be tailored to meet each candidate's needs.
    Another agency requested that OPM not restrict formal training to 
``interagency sources.'' In fact, the regulations do not restrict 
formal training to any particular source or sources. The regulations 
allow agencies to choose any source, including nongovernmental, for the 
required training experience, which must be Governmentwide or multi-
agency in its nature and scope. The purpose of this requirement is to 
expose potential executives to multiple points of view and foster a 
corporate perspective.
    One agency questioned the necessity of requiring OPM approval of 
agency programs prior to announcement for the first time under the new 
regulations. We believe these regulations are a significant departure 
from the superseded regulations, such that prior OPM review and 
approval will contribute to the development of agency programs that 
both meet minimum regulatory standards and are tailored to individual 
agency needs. We encourage agencies to meet with us early in the 
development of their programs so that the concerns of all parties can 
be surfaced and adequately addressed. By engaging in such discussion 
before agencies' programs are announced for the first time, we can 
minimize problems which might arise as individual candidates are 
submitted for QRB certification.
    The Senior Executives Association (SEA) commented on the 
requirement that agencies' recruitment efforts comply with statutory 
merit principles (1) and (2) and also take ``into consideration the 
goal of achieving a

[[Page 46533]]

diversified workforce'' (412.104(b)). SEA believes ``To provide 
additional emphasis will create an appearance that preferential 
treatment for some is the desired, but unclearly stated, goal.'' In 
Adarand Constructors, Inc. v. Pena, 115 S. Ct. 2097 (1995), the Supreme 
Court ruled that all Federal programs which use race-based decision-
making are subject to strict judicial scrutiny. However, the provision 
in question speaks to the recruiting process and not to the selection 
process. In a Department of Justice memorandum to General Counsels 
providing guidance on the Adarand decision (February 29, 1996), 
agencies were advised:

Adarand does not apply, however, to actions in which race is not 
used as a basis for making employment decisions about individuals. 
For example, action to increase minority applications for employment 
is not subject to Adarand. Outreach and recruitment efforts * * * 
which merely seek to expand the pool of qualified applicants 
generally would not be subject to strict scrutiny under Adarand.

Our purpose in highlighting the value of achieving a diversified 
workforce is not to influence selections or other employment decisions 
but to articulate the principle that members of all groups should have 
an opportunity for consideration.
    The SEA suggested that we list in the regulations the 22 generic 
competencies identified in the Leadership Effectiveness Framework to 
assist potential candidates in assessing their qualifications for SES 
positions. For purposes of assessing an individual's executive 
qualifications, these 22 competencies are grouped into five ``executive 
core qualification:'' strategic vision, human resources management, 
program development and evaluation, resource planning and management, 
and organizational representation and liaison. It is against these five 
core qualifications that individuals are evaluated by Qualifications 
Review Boards to determine ``demonstrated executive experience'' and/or 
``likelihood of executive success,'' as required by 5 U.S.C. 3393. OPM 
has already published guidance which describes the five core 
qualifications and provides additional information on how to present a 
candidate's executive qualifications for consideration by a QRB.

Operational Issues

    One agency raised a number of operational issues, such as the 
appropriate organizational level for seeking OPM approval of agency 
programs and the lowest organizational level appropriate for seeking 
exceptions to Governmentwise recruitment under section 412.104(a)(2). 
We plan to discuss these and other procedural questions with all stake 
holders and issue operational guidance at the time the regulations 
become final.

Regulatory Flexibility Act

    I certify that these regulations will not have significant economic 
impact on a substantial number of small entities because they affect 
only federal employees and agencies.

List of Subjects in 5 CFR Parts 317 and 412

    Government employees.
James B. King,
Director, Office of Personnel Management.

    Accordingly, the Office of Personnel Management is amending 5 CFR 
parts 317 and 412 as follows:

PART 317--EMPLOYMENT IN THE SENIOR EXECUTIVE SERVICE

    1. The authority citation for part 317 continues to read as 
follows:

    Authority: 5 U.S.C. 3392, 3393, 3393a, 3395, 3395, 3397, 3593, 
and 3595.

    2. In subpart E, Sec. 317.502, paragraph (c) is revised to read as 
follows:

Subpart E--Career Appointments


Sec. 317.502  Qualifications Review Board certification.

* * * * *
    (c) Qualifications Review Board certification of executive 
qualifications just be based on demonstrated executive experience; 
successful completion of an OPM-approved candidate development program; 
or possession of special or unique qualities that indicate a likelihood 
of executive success. Any existing time limit on a previously approved 
certification is removed.
* * * * *

PART 412--EXECUTIVE, MANAGEMENT, AND SUPERVISORY DEVELOPMENT

    3. Part 412 is revised to read as follows:

Subpart A--General Provisions

Sec.
412.101  Coverage.
412.102  Purpose.
412.103  Criteria for programs for the systematic training and 
development of executives, managers, supervisors, and candidates.
412.104  Formal candidate development programs for Senior Executive 
Service positions.
Subpart B--Senior Executive Service Status and Nonstatus Candidate 
Development Programs
412.201  Purpose.
412.202  ``Status'' programs.
412.203  ``Non-status'' programs.

    Authority: 5 U.S.C. 3397, 4101, et seq.

Subpart A--General Provisions


Sec. 412.101  Coverage.

    This subpart applies to all incumbents of or candidates for 
supervisory, managerial, and executive positions in the General 
Schedule, the Senior Executive Service (SES), or equivalent pay systems 
who are also covered by part 410 of this chapter.


Sec. 412.102  Purpose

    (a) This subpart implements for supervisors, managers, and 
executives the provisions of chapter 41 of title 5 of the United States 
Code related to training and section 3396 of title 5 related to the 
criteria for programs of systematic development of candidates for the 
SES and the continuing development of SES members.
    (b) The subpart identifies a continuum of preparation starting with 
supervisory positions and proceeding through management and executive 
positions Governmentwide. For this reason, the subpart establishes a 
comprehensive system that is intended to:
    (1) Provide the competencies needed by supervisors, managers, and 
executives to perform their current functions at the mastery level of 
proficiency; and
    (2) Provide learning through development and training in the 
context of succession planning and corporate perspective to prepare 
individuals for advancement, thus supplying the agency and the 
government with an adequate number of well prepared and qualified 
candidates to fill supervisory, managerial, and executive positions 
Governmentwide.


Sec. 412.103  Criteria for programs for the systematic training and 
development of executives, managers, supervisors, and candidates.

    Each agency must provide for the initial and continuing development 
of individuals in executive, managerial, and supervisory positions, and 
candidates for those positions. The agency must issue a written policy 
to assure that their development programs:
    (a) Are designed as part of the agency's strategic plan and foster 
a corporate perspective.
    (b) Make assignments to training and development consistent with 
the merit

[[Page 46534]]

system principles set forth in 5 U.S.C. 2301(b) (1) and (2).
    (c) Provide for:
    (1) Initial training as an individual makes critical career 
transitions to become a new supervisor, a new manager, or a new 
executive consistent with the results of needs assessments;
    (2) Continuing learning experiences, both short- and long-term, 
throughout an individual's career in order for the individual to 
achieve the mastery level of proficiency for his or her current 
management level and position; and
    (3) Systematic development of candidates for advancement to a 
higher management level. Formal candidate development programs leading 
to noncompetitive placement eligibility represent one, but not the 
only, type of systematic development.


Sec. 412.104  Formal candidate development programs for Senior 
Executive Service positions.

    Formal SES candidate development programs permit the certification 
of the executive qualifications of graduates by a Qualifications Review 
Board under the criterion of 5 U.S.C. 3393(c)(2)(B) and selection for 
the SES without further competition. The agency must have a written 
policy describing how the program will operate. The agency must obtain 
OPM approval of the program before it is conducted for the first time 
under these regulations and whenever there are substantive changes to 
the program. Agency programs must meet the following criteria.
    (a) Recruitment.
    (1) Recruitment for the program is from all groups of qualified 
individuals within the civil service, or all groups of qualified 
individuals whether or not within the civil service.
    (2) Agencies may request an exception to the provision in paragraph 
(a) of this section if they can show that during the 5-year period 
prior to the announcement of a program they have made at least 15% of 
their career SES appointments from sources outside the agency. 
Notwithstanding this exception recruitment must be competitive and be 
announced at least agencywide. Graduates of these programs who have 
been certified by a QRB must then compete Governmentwide for entry to 
the SES, but do not have to obtain a second QRB certification before 
appointment.
    (b) In recruiting, the agency, consistent with the merit system 
principles in 5 U.S.C. 2301(b) (1) and (2), takes into consideration 
the goal of achieving a diversified workforce.
    (c) All candidates are selected through SES merit staffing 
procedures. The number selected shall be consistent with the number of 
expected vacancies.
    (d) Each candidate has an SES development plan covering the period 
of the program. The plan is prepared from a competency-based needs 
determination. It is approved by the Executive Resources Board.
    (e) The minimum program requirements, unless an exception is 
obtained in advance of the beginning of the candidate's program, for an 
SES development plan are as follows:
    (1) There is a formal training experience that addresses the 
executive core qualifications and their application to SES positions 
Governmentwide. The training experience must include interaction with a 
wide mix of Federal employees outside the candidate's department or 
agency to foster a corporate perspective but may include managers from 
the private sector and state and local governments. The nature and 
scope of the training must have Governmentwide or multi-agency 
applicability. If formal interagency training is used to meet this 
requirement, it must total at least 80 hours. If an interagency work 
experience is used, it must be of significantly longer duration than 80 
hours.
    (2) There are developmental assignments that total at least 4 
months of full-time service outside the candidate's position of record. 
The purpose of the assignments is to broaden the candidate's experience 
and/or increase knowledge of the overall functioning of the agency so 
that the candidate is prepared for a range of agency positions.
    (3) There is a member of the Senior Executive Service as a mentor.
    (f) Each candidate's performance in the program is evaluated 
periodically, and there is a written policy for discontinuing a 
candidate's participation in the program. A candidate can be 
discontinued or may withdraw from the program without prejudice to his 
or her ability to apply directly for SES positions.
    (g) Each candidate has a documented starting and finishing date in 
the program.

Subpart B--Senior Executive Service Status and Nonstatus Candidate 
Development Programs


Sec. 412.201  Purpose.

    Section 3393 of title 5, United States Code, requires that career 
appointees to the SES be recruited either from all groups of qualified 
individuals within the civil service, or from all groups of qualified 
individuals whether or not within the civil service. This subpart sets 
forth regulations establishing two types of SES candidate development 
programs, ``status'' and ``non-status.''


Sec. 412.202  ``Status'' programs.

    Only employee serving under career appointments, or under career-
type appointments as defined in Sec. 317.304(a)(2) of this chapter, may 
participate in ``status'' candidate development programs.


Sec. 412.203  ``Non-status'' programs.

    (a) Eligibility. Candidates are from outside Government and/or from 
among employees serving on other than career or career-type 
appointments within the civil service.
    (b) Requirements.
    (1) Candidates must be appointed using the Schedule B authority 
authorized by Sec. 213.3202(j) of this chapter. The appointment may not 
exceed or be extended beyond 3 years.
    (2) Assignments must be to a full-time position created for 
developmental purposes connected with the SES candidate development 
program. Candidates serving under Schedule B appointment may not be 
used to fill an agency's regular positions on a continuing basis.
    (3) Schedule B appointments must be made in the same manner as 
merit staffing requirements prescribed for the SES, except that each 
agency shall follow the principle of veteran preference as far as 
administratively feasible. Positions filled through this authority are 
excluded under Sec. 302.101(c)(6) of this chapter from the appointment 
procedures of part 302.

[FR Doc. 96-22366 Filed 9-3-96; 8:45 am]
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