Federal Hiring: Reconciling Managerial Flexibility with Veterans'
Preference (Chapter Report, 06/16/95, GAO/GGD-95-102).

Pursuant to a congressional request, GAO reviewed federal hiring
procedures, focusing on whether: (1) those procedures are working; and
(2) current hiring reform efforts address the needs of agencies and
applicants.

GAO found that: (1) the Department of Agriculture initiated a
demonstration project to test the feasibility of providing managers more
selection flexibility, the Office of Personnel Management (OPM)
automation, various hiring procedures, and the National Performance
Review (NPR) recommended reforms to streamline the federal hiring
process; (2) recent hires surveyed said they had no problem with the
application process, but many felt that they waited an unreasonably long
time to receive a job offer; (3) many veterans were not satisfied with
the preference procedures and often did not receive enhanced employment
consideration; (4) federal referral procedures allowed agencies to fill
vacancies with qualified people in a timely manner, while selection
procedures often did not; (5) veterans' preference procedures and the
Rule of Three adversely affected timely hiring and candidate quality;
(6) shortcomings with the federal hiring process increased the time
needed to hire candidates and impeded agency operations; and (7)
although current reform initiatives could make the hiring process more
efficient, they do not balance managers' flexibility in selecting the
best candidates and the legal requirement to give hiring preference to
veterans.

--------------------------- Indexing Terms -----------------------------

 REPORTNUM:  GGD-95-102
     TITLE:  Federal Hiring: Reconciling Managerial Flexibility with 
             Veterans' Preference
      DATE:  06/16/95
   SUBJECT:  Veterans employment programs
             Hiring policies
             Federal employees
             Personnel recruiting
             Personnel management
             Fair employment programs
             Federal agencies
             Employment discrimination
IDENTIFIER:  OPM Administrative Careers with America Program
             OPM Central Personnel Data File
             Outstanding Scholar Program
             Veterans Employment Program
             
**************************************************************************
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Cover
================================================================ COVER


Report to the Chairman, Subcommittee on Civil Service, Committee on
Government Reform and Oversight, House of Representatives

June 1995

FEDERAL HIRING - RECONCILING
MANAGERIAL FLEXIBILITY WITH
VETERANS' PREFERENCE

GAO/GGD-95-102

Federal Hiring Procedures


Abbreviations
=============================================================== ABBREV

  ACWA - Administrative Careers With America
  ARS - Agricultural Research Service
  CPDF - Central Personnel Data File
  EEO - Equal Employment Opportunity
  FS - Forest Service
  NPR - National Performance Review
  OPM - Office of Personnel Management
  USDA - U.S.  Department of Agriculture
  VA - Department of Veterans Affairs
  VSO - Veterans' Service Organization

Letter
=============================================================== LETTER


B-249782

June 16, 1995

The Honorable John L.  Mica
Chairman, Subcommittee on Civil Service
Committee on Government Reform and
 Oversight
House of Representatives

Dear Mr.  Chairman: 

This report, prepared at the request of the former Chairman,
Subcommittee on Civil Service, Committee on Post Office and Civil
Service, reviews federal hiring procedures to identify those which
are working, those which are not, and whether current efforts to
reform the hiring process address the needs of agencies and
applicants. 

We are sending copies of this report to the Director, Office of
Personnel Management, and interested congressional committees. 
Copies will also be made available to others upon request. 

The major contributors to this report are listed in appendix VIII. 
Please contact me on (202) 512-5074 if you have any questions. 

Sincerely yours,

Nancy R.  Kingsbury
Director
Federal Human Resource Management
 Issues


EXECUTIVE SUMMARY
============================================================ Chapter 0


   PURPOSE
---------------------------------------------------------- Chapter 0:1

The government's ability to serve the public is directly affected by
the quality of people it employs.  Past studies have shown, however,
that federal hiring procedures have often (1) impeded managers'
attempts to hire quality people when they were needed and (2)
frustrated applicants for federal employment. 

Concerned about the adequacy of the federal hiring process, the
former Chairman of the Subcommittee on the Civil Service, House
Committee on Post Office and Civil Service, asked GAO to determine
which procedures are working, those which are not, and whether
current efforts to reform the hiring process address the needs of
agencies and applicants. 


   BACKGROUND
---------------------------------------------------------- Chapter 0:2

The federal hiring process consists of over a dozen different legal
authorities or mechanisms that managers can use to fill vacancies,
depending on the qualifications of the candidate and the type of
position being filled.  These mechanisms generally have four phases
in common:  (1) a recruitment phase, where job openings are
publicized and candidates can be identified; (2) an application
phase, where candidates apply for federal positions; (3) a referral
phase, where applicants are examined and the names of qualified
candidates are referred to agency selecting officials (managers who
make hiring decisions); and (4) a selection phase, where the
selecting official chooses the desired candidates from among the best
qualified. 

Hiring practices must comply with applicable legal requirements, such
as merit principles, veterans' preference, the Rule of Three, and
equal employment opportunity.  Merit principles require agencies to,
among other things, select candidates solely on the basis of relative
ability, knowledge, and skills, as determined through fair and open
competition.  To help compensate eligible veterans for their military
service, Congress authorized giving veterans either 5 or 10
additional points on their examination scores for most external
hiring actions.  The Rule of Three, a component of veterans'
preference legislation, requires selecting officials, when
considering individuals from a list of rated and ranked candidates,
to choose from among the top three candidates.  Unless a request is
approved to pass over a veteran for reasons of qualifications or
suitability, a manager may not select a nonveteran over a higher
ranking veteran.  Equal employment opportunity prohibits
discrimination on the basis of race, sex, color, religion, national
origin, and disability. 

Prior GAO work has examined the effectiveness of the government's
recruitment activities (see Related GAO Products on p.  96).  To
complete the picture of the federal hiring process and determine what
is needed to make federal hiring procedures more responsive to agency
hiring officials and applicants, GAO reviewed several ongoing reform
initiatives.  For example, under its personnel demonstration project
authority, the Office of Personnel Management (OPM) is testing the
feasibility of giving managers more flexibility in recruiting and
hiring decisions at selected sites of the U.S.  Department of
Agriculture (USDA).  Further, in 1994, OPM introduced full-scale
automation of the examining process in all of its service centers. 

Additional reforms have been proposed by the National Performance
Review (NPR), the administration's taskforce on reinventing
government.  The September 1993 NPR report recommended decentralizing
the hiring process by authorizing agencies to establish their own
recruitment and examining programs and by abolishing centralized
registers and standard application forms.  To date, OPM has
implemented NPR's call to abolish centralized registers and standard
application forms. 

GAO also mailed questionnaires to approximately 2,200 internal and
external customers of the federal hiring process.  GAO defined
internal customers as agency personnelists and selecting officials. 
GAO defined external customers as applicants who had been recently
hired by the federal government when GAO began its study.  In
addition, GAO surveyed managers of OPM service centers who refer
lists of job candidates to agencies for certain occupations. 


   RESULTS IN BRIEF
---------------------------------------------------------- Chapter 0:3

Reform initiatives designed to make parts of the hiring process more
timely and responsive include a personnel demonstration project at
USDA to test the feasibility of providing managers more selection
flexibility; OPM's automation of various hiring procedures; and NPR's
recommended reforms to simplify and streamline the hiring process. 

Federal hiring procedures should allow people to apply for federal
employment without unnecessary frustration.  While most recent hires
GAO surveyed said they had little trouble with the application
process, they often reported that the wait to receive a job offer
exceeded what they considered reasonable.  Moreover, follow-up
interviews with representatives of four major veterans groups
suggested veterans may not be satisfied with preference procedures. 
The representatives GAO spoke with said that veterans' preference
procedures fell short of veterans' expectations because veterans
often did not receive enhanced employment consideration. 

Federal hiring procedures should also allow agencies to fill
vacancies with qualified people in a timely manner without the burden
imposed by bureaucratic processes.  Most internal respondents GAO
surveyed said that while federal referral procedures met this
standard, selection procedures frequently did not. 

Processes used to apply veterans' preference and the Rule of Three
during the selection phase caused the most dissatisfaction for many
OPM and internal respondents.  While other legal requirements were
said by respondents to affect either timeliness or candidate quality,
only veterans' preference and the Rule of Three were often said to
adversely affect both. 

When asked if federal hiring procedures have impeded agency
operations, agency personnelists responding to the GAO survey noted
that shortcomings with the federal hiring process can increase the
time needed to hire candidates and add to paperwork. 

The current OPM and NPR reform initiatives may make parts of the
hiring process more timely and responsive.  However, they do not
address the need for balance between managers' desire for flexibility
in selecting candidates they feel are best qualified for specific
vacancies and the legal requirement to give veterans preference in
hiring. 


   PRINCIPAL FINDINGS
---------------------------------------------------------- Chapter 0:4


      CURRENT EFFORTS ARE UNDERWAY
      TO REFORM THE FEDERAL HIRING
      PROCESS
-------------------------------------------------------- Chapter 0:4.1

OPM has various initiatives underway to test increased managerial
flexibility in the hiring process and to improve its overall
timeliness.  These initiatives include a personnel demonstration
project at the USDA that is testing alternative recruitment and
staffing methods using delegated direct hire authority at selected
sites of the Forest Service and Agriculture Research Service. 

The most recent evaluation of the USDA demonstration project
concluded that, overall, managers, personnelists, and recently hired
employees participating in the program were generally pleased with
the way it was working.  Further, most demonstration site managers
wanted to continue the demonstration hiring procedures.  However, one
potentially problematic area was the way in which veterans'
preference is applied.  According to the evaluation, many selecting
officials expressed dissatisfaction with the demonstration project's
system of veterans' preference because it could restrict their
ability to choose nonveterans they thought were better qualified. 
The selecting officials' dissatisfaction appeared to be entwined with
their dissatisfaction over the criteria used to assign candidates to
the top group for selection. 

In addition, OPM has automated the application, rating, ranking,
referral, and employment information processes.  OPM believes this
has improved the timeliness of the hiring process.  Moreover, the NPR
recommended reforms to simplify and streamline the hiring process. 
In response, OPM has taken steps to make the hiring process more
customer oriented and to delegate staffing authority to agencies. 
(See pp.  18-20.)


      MOST EXTERNAL CUSTOMERS WERE
      SATISFIED WITH FEDERAL
      APPLICATION PROCEDURES BUT
      WERE LESS SATISFIED WITH
      TIMELINESS
-------------------------------------------------------- Chapter 0:4.2

Most external customers said the application phase posed few
difficulties.  Indeed, the majority of respondents reported no or
only some difficulty with such activities as obtaining application
materials and employment information, or knowing where to submit
their applications.  Nevertheless, of the recent hires who also
applied for a similar job in the private sector, about 59 percent
reported that the private sector application process was easier. 

The timeliness of the federal hiring process may not be satisfying
many external customers.  Depending on whether they applied for
federal employment based on their education and experience or by
taking an examination, recent hires reported a median waiting time of
8 or 14 weeks between the time they applied for employment and the
time they received a job offer.  About a third of the recent hires
responding felt that the wait to receive a job offer became
unreasonable after 6 weeks.  (See pp.  20-23.)


      PROCEDURES USED TO HIRE
      VETERANS MAY NOT MEET THEIR
      NEEDS
-------------------------------------------------------- Chapter 0:4.3

The survey did not ask recent hires about their perceptions of
veterans' preference and the Rule of Three.  However, follow-up
interviews with officials representing four major veterans' groups
suggested that implementation of these legal requirements may fall
short of the expectations of applicants who are military veterans. 
On the basis of prior work, GAO concludes that one reason for this
shortfall is that agencies prefer using noncompetitive hiring
mechanisms where they do not have to apply veterans' preference
points and the Rule of Three.  Moreover, agencies were less likely to
hire from a certificate of eligible candidates when a veteran was top
rated than when a nonveteran headed the certificate.  Because of this
practice, procedures used to give veterans preference in hiring may
not be meeting veterans' expectations.  (See pp.  23-32.)


      OPM AND AGENCY OFFICIALS
      SAID THE REFERRAL PHASE WAS
      GENERALLY WORKING WELL
-------------------------------------------------------- Chapter 0:4.4

OPM service center managers, agency personnelists, and selecting
officials were generally satisfied with the quality of candidates
referred by most federal hiring mechanisms and with the timeliness of
the examination and referral process.  For example, 73 percent or
more of the personnelists responding said they were satisfied with
the ability of 13 of the 14 hiring mechanisms GAO asked them about to
refer a pool of quality candidates.  Personnelists were generally
more satisfied with hiring mechanisms controlled by agencies under
delegated authorities as opposed to those controlled by OPM.  (See
pp.  25-30.)


      THE APPLICATION OF VETERANS'
      PREFERENCE AND THE RULE OF
      THREE LOWERED SOME
      RESPONDENTS' SATISFACTION
      DURING THE SELECTION PHASE
-------------------------------------------------------- Chapter 0:4.5

OPM and agency officials were less satisfied with the selection phase
than with the referral phase, frequently citing veterans' preference
and the Rule of Three as the reasons for their discontent.  Over 75
percent of the OPM service center managers and 50 percent of the
agency personnelists reported that highly qualified candidates were
not within reach as a result of adding points to the veterans'
scores.  OPM service center managers we contacted often expressed
their support for the principle of veterans' preference but believed
it could be implemented in other, more effective ways.  About 40
percent of these managers and personnelists reported that the Rule of
Three, which limits selections to the top three candidates, had the
same effect.  Veterans' preference and the Rule of Three were less
problematic for selecting officials.  A fifth of the selecting
officials reported that veterans' preference procedures adversely
affected their ability to obtain high quality candidates, while 10
percent indicated the Rule of Three did the same. 

Some respondents also reported that these two legal requirements
adversely affected timeliness.  Of those responding, 45 percent of
the OPM service center managers, 41 percent of the agency
personnelists, and 19 percent of the selecting officials reported
that the implementation of veterans' preference increased the amount
of time needed to fill vacancies. 

Similar percentages of respondents said the Rule of Three delayed the
hiring process.  One reason may be that selecting officials,
believing that the best qualified candidates are not within reach,
return a certificate to OPM without making a selection from it in
order to fill the vacancy through some other means.  Thus, the total
time needed to fill a vacancy may be extended.  (See pp.  30-33.)


      AGENCY PERSONNELISTS SAID
      THAT SHORTCOMINGS IN FEDERAL
      HIRING PROCEDURES ADVERSELY
      AFFECT THEIR OFFICES
-------------------------------------------------------- Chapter 0:4.6

When asked whether difficulties with federal hiring procedures were
adversely affecting them, agency personnelists cited various impacts. 
These impacts included (1) more time needed to hire candidates and
(2) increased workloads and paperwork.  (See pp.  33-35.)


      CURRENT REFORM INITIATIVES
      MAY NOT FULLY MEET
      RESPONDENTS' NEEDS
-------------------------------------------------------- Chapter 0:4.7

While OPM automation initiatives and NPR's recommendations may
improve timeliness and make the hiring process more responsive, they
do not address the primary reasons causing dissatisfaction among
respondents GAO surveyed--that is, veterans' preference and the Rule
of Three.  (See p.  35.)


   RECOMMENDATION
---------------------------------------------------------- Chapter 0:5

To reconcile the needs of internal and external customers (including
veterans), GAO recommends that the Director of OPM, under the OPM
personnel demonstration authority, actively recruit agencies and
assist them in establishing demonstration projects that would test
improved methods of implementing veterans' preference in hiring. 
Such alternatives should attempt to better reconcile managers' desire
for greater discretion in the selection process with the legal
requirement to provide veterans with preference in hiring, and should
be developed in consultation with representatives of veterans'
organizations, labor unions, and other affected parties.  To ensure
that increased flexibility does not come at the expense of
accountability, any alternative tested should hold managers
responsible for enhancing veteran employment opportunities as
required by law.  On the basis of evaluations of these agency
demonstration projects, OPM, in consultation with affected parties,
may then be in a position to propose statutory changes to the hiring
process that would implement successful innovations governmentwide. 
(See pp.  36-37.)


   AGENCY COMMENTS
---------------------------------------------------------- Chapter 0:6

In commenting on a draft of this report, OPM generally agreed with
GAO's findings and said that it is prepared to implement GAO's
recommendation.  OPM suggested technical changes, which GAO
incorporated where appropriate, to ensure that the report adequately
reflected the current status of its various initiatives to improve
the hiring process.  (See p.  37.)


INTRODUCTION
============================================================ Chapter 1

The efficiency and effectiveness of government programs are directly
affected by the quality of the people who run them.  However, our
prior work and studies by other organizations have shown that
shortcomings with the federal hiring process have impeded the ability
of agencies to get the people they need, when they were needed (see
Related GAO Products, p.  96).  Currently, with major efforts
underway aimed at reforming the federal hiring process, what will it
take to make federal hiring procedures more responsive to the
legitimate needs of agencies and applicants?  To help answer this
question, we asked the key people involved in the hiring process
about their requirements in order to obtain their views on procedures
that are working, those that are not, and whether current efforts to
reform the hiring process address the needs of agencies and
applicants. 


   ORIGINS OF THE CURRENT FEDERAL
   HIRING PROCESS
---------------------------------------------------------- Chapter 1:1

Current federal hiring procedures originated in legislation passed in
1883, when Congress approved the Civil Service Act.  Commonly called
the Pendleton Act, this law replaced the patronage system--where jobs
were filled through personal and political favoritism--with a merit
system, where jobs were filled according to applicants' character,
ability, and competitive examination scores. 

Over time, laws and regulations were added to increase
accountability, correct perceived mismanagement, achieve social
goals, and reward certain military veterans.  As a result, the
current federal hiring process is a patchwork of procedures designed
not only to fill vacancies but also to ensure merit and increase the
employment of women, minorities, and veterans. 

In our earlier work in this area, we found that these procedures
often do not meet their objectives, sometimes conflict, and can
overwhelm both managers and applicants with their complexity.  These
problems are illustrated in appendix I, which flowcharts the various
twists, turns, and "ping-ponging" that can take place when a federal
agency attempts to fill a position using an OPM certificate. 


   HOW NEW FEDERAL EMPLOYEES ARE
   HIRED
---------------------------------------------------------- Chapter 1:2

Despite governmentwide downsizing efforts, OPM reported that federal
executive branch agencies hired about 219,000 new employees in fiscal
year 1994.  Of these, about 38,000 were hired into permanent full
time positions (exclusive of on call, seasonal, and student trainee
employees).  Depending on the qualifications of the candidate and the
type of position being filled, applicants can be hired by using one
of over a dozen different legal authorities.  These authorities cover
positions in both the competitive and excepted services.  Competitive
service hiring is administered by OPM or by agencies under delegated
hiring authorities from OPM.  Entry into these positions generally
requires that candidates be competitively assessed on the basis of
their knowledge, skills, and abilities. 

There are three categories of competitive service mechanisms: 

1.  OPM examining, where OPM administers a written test or reviews
applicants' education and prior experience to determine if applicants
are qualified.  Qualified applicants are rated and placed in rank
order on a register from which hiring officials can request a
certificate or list of eligible candidates representing the most
qualified applicants, from which they can make selections. 

2.  Delegated examining, where agencies receive applications, review
qualifications, and rate and rank applicants under authority granted
by OPM. 

3.  Direct hire, where OPM gives an agency authority to directly
recruit and hire candidates when the agency or installation is
experiencing a shortage of qualified applicants. 

The excepted service covers positions specifically excepted from the
competitive service by statute, the President, or OPM, and which are
not in the Senior Executive Service.  The excepted service includes
entire agencies, such as the Nuclear Regulatory Commission, as well
as specific positions where it is impractical to hold examinations or
open competition.  Such positions include attorneys, chaplains,
Presidential Management Internships, and student cooperative
education programs. 


      FEDERAL HIRING PROCEDURES
      TYPICALLY HAVE FOUR PHASES
-------------------------------------------------------- Chapter 1:2.1

Four phases are usually involved in any hiring process:  (1) a
recruitment phase, where job openings are publicized and candidates
are identified and invited to apply; (2) an application phase, where
candidates apply for specific positions; (3) a referral phase, where
candidates are examined and the names of qualified candidates are
referred to agency selecting officials (managers who make hiring
decisions); and (4) a selection phase, where the selecting official
chooses the desired candidates from among the best qualified. 


   FEDERAL HIRING PROCEDURES MUST
   COMPLY WITH LEGAL REQUIREMENTS
---------------------------------------------------------- Chapter 1:3


      MOST FEDERAL HIRING ACTIONS
      MUST COMPLY WITH MERIT
      PRINCIPLES
-------------------------------------------------------- Chapter 1:3.1

Competitive and excepted service selections for federal service must
generally comply with merit principles.  Merit principles require,
among other things, that "[r]ecruitment should be from qualified
individuals from appropriate sources in an endeavor to achieve a
workforce from all segments of society, and selection and advancement
should be determined solely on the basis of relative ability,
knowledge, and skills, after fair and open competition which assures
that all receive equal opportunity" (5 U.S.C.  2301 (b) (1) (1988)). 


      ELIGIBLE VETERANS CAN
      RECEIVE PREFERENCE IN HIRING
-------------------------------------------------------- Chapter 1:3.2

To help compensate veterans for their military service, the Veterans'
Preference Act of 1944, as amended, requires that eligible veterans
be given enhanced consideration for federal jobs.  Though modified
several times, the current veterans' preference system covers
veterans who meet certain service requirements.  In some instances,
the spouses, unmarried widows and widowers, and mothers of disabled
or deceased veterans can also receive preference.  With veterans'
preference, either 5 or 10 points are added to the passing
examination scores of eligible veterans.  In addition, eligible
veterans with service-connected disabilities are placed ahead of all
other candidates on certificates. 


      SELECTIONS MUST BE MADE FROM
      AMONG THE TOP THREE ELIGIBLE
      CANDIDATES
-------------------------------------------------------- Chapter 1:3.3

While a certificate of rated and ranked applicants may contain many
names, by law, managers are required to select from among the top
three candidates as determined by the results of a written test or a
review of candidates' education and experience.  This is known as the
Rule of Three, a component of veterans' preference legislation.  If
qualified candidates are available among the top three on a
certificate, the manager cannot select a candidate ranked lower on
the certificate without filing a formal objection.  Moreover, unless
a request is approved to pass over a veteran for reasons involving
qualifications or suitability, a manager may not select a nonveteran
over a higher ranking veteran.  In these cases, the Rule of Three
becomes, in effect, a Rule of One. 


      FEDERAL HIRING ACTIONS MUST
      COMPLY WITH EQUAL EMPLOYMENT
      OPPORTUNITY LAWS
-------------------------------------------------------- Chapter 1:3.4

The doctrine of equal employment opportunity (EEO) is embodied in
several federal laws.  EEO generally requires that all citizens,
regardless of race, color, religion, sex, national origin, age, or
disability, shall have equal access to positions in the public
service and to all conditions of employment attendant
thereto--limited only by their ability or potential to do the job. 


   OBJECTIVES, SCOPE, AND
   METHODOLOGY
---------------------------------------------------------- Chapter 1:4

Concerned about the government's ability to hire quality candidates
in a timely, efficient manner, the former Chairman of the
Subcommittee on Civil Service, House Committee on Post Office and
Civil Service, asked us to review federal hiring procedures and
determine those which are working, those which are not, and whether
current efforts to reform the hiring process address the needs of
agencies and applicants. 

To accomplish these three objectives, we examined OPM's reform
efforts and the National Performance Review (NPR) findings and
recommendations as they relate to federal hiring.  We also mailed
questionnaires to approximately 2,200 randomly selected internal and
external customers of the federal hiring process.  The internal
customers consisted of agency personnelists and selecting officials. 
External customers included applicants who had been recently hired by
the federal government when we began our study.  We were unable to
survey all applicants because the names and addresses were
unavailable for most applicants who had declined federal job offers
or who had failed to qualify.  Because recent hires have been
successful in obtaining federal employment, their views may not be
representative of applicants as a whole. 

In addition, we surveyed the managers of the 31 OPM service centers
that were operating when we did our review.  OPM service centers
examine candidates for certain occupations and refer lists of
qualified people to agencies. 

Specific questionnaires were developed for each respondent group. 
Where appropriate, each group was asked identical questions. 
However, internal customers were generally asked about referral and
selection procedures, while external customers were generally asked
about application procedures.  Selecting officials were mailed an
additional questionnaire eliciting information on whether they were
satisfied with the processes used to select specific candidates whom
we had identified.  Copies of the questionnaires and the aggregate
results from respondents are contained in appendixes II through VI. 

Response rates for each respondent category as a percentage of
deliverable questionnaires were as follows: 

  OPM service center managers, 100 percent;

  agency personnelists, 87 percent;

  selecting officials' perceptions of specific hiring actions, 64
     percent;

  selecting officials' perceptions of the overall hiring process, 73
     percent; and

  recent hires, 77 percent. 

The details of our survey methodology and response rates are provided
in appendix VII. 

After analyzing questionnaire responses from OPM and agency
personnel, it became apparent that they were primarily dissatisfied
with the way in which veterans' preference and the Rule of Three
adversely affected their ability to hire quality candidates in a
timely manner.  As a result, to obtain the views of those external
customers who might be affected by any changes to these two legal
requirements, we contacted representatives of four major veterans'
service organizations (VSO) that together represent about 6.5 million
members:  (1) the American Legion, (2) Veterans of Foreign Wars, (3)
Disabled American Veterans, and (4) Vietnam Veterans of America.  We
also compared the respondents' views with the results of earlier
studies done by us and other organizations.  In so doing, we verified
our questionnaire results, reconciled competing customer
requirements, and refined respondents' suggestions into
recommendations that we believe are reasonable, achievable, and
consistent with congressional intent.  Further verification and
refinement of respondents' suggestions for improving the hiring
process were obtained by discussing our results with officials from
OPM and the Department of Veterans Affairs. 

We also examined OPM's reform efforts and the NPR findings and
recommendations to determine whether they address respondents'
requirements as identified by the results of our work. 

The scope of our work covered all federal hiring procedures,
mechanisms, and legal requirements used to hire civilian white and
blue collar employees into the federal government during fiscal year
1992.  Excluded from our review were those selections made through
internal merit promotion, positions filled overseas, political
appointments, and positions in the Senior Executive Service.  Also
excluded were those agencies (such as the U.S.  Postal Service) not
part of OPM's Central Personnel Data File, the database used as the
sampling frame for our surveys. 

We did our audit work in Washington, D.C., from June 1992 through
December 1994 in accordance with generally accepted government
auditing standards.  OPM provided oral comments on a draft of this
report.  They are presented at the end of chapter 2. 


PERCEPTIONS OF FEDERAL HIRING
PROCEDURES
============================================================ Chapter 2

OPM and NPR have initiated improvements to the hiring process in
order to make it more customer oriented.  Federal hiring procedures
should allow people to apply for federal employment without
unnecessary frustration.  Likewise, they should permit agencies to
fill vacancies with qualified people in a timely manner without the
burden of complex and bureaucratic processes.  Survey respondents
generally said that while many aspects of the hiring process met
these standards, veterans' preference, the Rule of Three, and the
timeliness of the hiring process overall, often fell short of their
needs.  The reforms underway by OPM and NPR may improve timeliness
and reduce complexity, but they do not address the balance needed
between managers' desire for flexibility in selecting candidates they
feel are best qualified and the legal requirement to give veterans
preference in hiring. 


   OPM AND NPR HAVE TAKEN STEPS TO
   REFORM FEDERAL HIRING
---------------------------------------------------------- Chapter 2:1

OPM has various initiatives underway to test increased managerial
flexibility in the hiring process and to improve its overall
timeliness.  They include a personnel demonstration project at USDA
and OPM's automation of various hiring procedures.  Similarly, NPR
has recommended reforms to simplify and streamline the hiring
process.  In response to NPR's recommendations, OPM has taken steps
to make the hiring process more customer oriented and to delegate
staffing authority to agencies. 


      OPM IS TESTING INCREASED
      MANAGERIAL FLEXIBILITY IN
      THE HIRING PROCESS
-------------------------------------------------------- Chapter 2:1.1

Under 5 U.S.C.  4703, OPM has the authority to conduct and evaluate
demonstration projects to determine whether a specified change in
personnel management policies or procedures would result in improved
federal personnel management.  To be considered a "demonstration
project," a project must require the waiver of an eligible provision
of law, rule, or regulation.  According to OPM, all laws and
regulations under title 5 may be waived except those dealing with
leave, benefits, political activity, merit principles, and equal
employment opportunity.  Each demonstration project is generally
limited to a 5-year test period.  Not more than 10 active
demonstration projects may be in effect at any time, and each
demonstration project is generally limited to 5,000 participants. 
According to OPM, since demonstration projects were first authorized
in 1978, six have been implemented, and three are still in effect. 

One demonstration project designed to test alternative recruitment
and staffing methods is currently underway at USDA.  Among the tests
being done at selected sites of the Forest Service (FS) and
Agricultural Research Service (ARS) are delegated direct hiring and a
new system for selecting candidates for all competitive appointments. 

In the USDA demonstration project, qualified candidates are evaluated
and placed in either an "eligible" group or a "quality" group. 
Generally, job candidates meeting minimum qualification standards for
the position are placed in the eligible group.  Those candidates
exceeding minimum qualifications by virtue of above average
educational achievement, job-related experience, and/or high ability
are placed in the quality group.  Managers may select anyone in the
quality group.  However, if the quality group includes veterans, a
veteran must be selected unless he or she is "passed over" for cause. 
This approach, known as "absolute preference," differs from the
traditional method of veterans' preference, where veterans are given
either 5 or 10 additional points.  If the quality group is not
sufficiently large (e.g., if it consists of only three candidates),
the selecting official can select from the eligible group. 

A recent evaluation of the USDA demonstration project by Pennsylvania
State University concluded that "there is a positive reaction overall
to the demonstration project by ARS and FS managers as well as
personnelists and recently hired employees." Moreover, 64 percent of
demonstration site managers agreed or strongly agreed that they would
"much rather continue" the demonstration hiring procedures, compared
with 9 percent who disagreed or strongly disagreed that they would
much rather continue the demonstration hiring authority. 

Nevertheless, the evaluation noted that many selecting officials were
dissatisfied with the demonstration project's system of absolute
veterans' preference.  According to the evaluation, the
dissatisfaction appeared to be entwined with selecting officials'
dissatisfaction with the criteria used to assign candidates to the
quality grouping.  These officials reported that they believed using
too low or vague criteria allowed some unqualified candidates to get
assigned to the quality group.  If a veteran was one of those
candidates, the officials said that person could block the selection
of nonveterans who managers felt were qualified.  Nevertheless, the
evaluation noted that when the criteria for inclusion in the quality
group were not perceived to be problematic, managers described
instances in which veterans were selected who were high-quality
employees. 


      OPM HAS AUTOMATED THE
      FEDERAL HIRING PROCESS
-------------------------------------------------------- Chapter 2:1.2

OPM has automated the application, rating, ranking, referral, and
employment information processes.  For example, OPM has developed a
system that allows people to apply for certain federal positions
using a touch-tone telephone.  Other automated systems allow
applicants to obtain governmentwide employment information using
touch-screen computers, the telephone, and computer bulletin board. 
OPM believes that these automated systems have improved the
timeliness of the hiring process. 


      NPR CALLED FOR DECENTRALIZED
      HIRING PROCEDURES
-------------------------------------------------------- Chapter 2:1.3

OPM is also reforming the hiring process in response to the NPR
recommendations.  In its September 1993 report, NPR described the
federal hiring process as complex, centralized, and rule bound.  It
recommended decentralizing the hiring process by authorizing agencies
to establish their own recruitment and examining programs and by
abolishing centralized registers and standard application forms.  To
date, OPM has made progress toward achieving the NPR recommendations. 
In January 1994, for example, OPM abolished much of the Federal
Personnel Manual to give agencies more flexibility over personnel
matters, including hiring.  The government's standard application
form, the SF-171, was no longer required after December 31, 1994, and
OPM will delegate staffing authority to agencies to the extent
allowed by law. 


   EXTERNAL CUSTOMERS' PERCEPTIONS
   OF FEDERAL APPLICATION
   PROCEDURES
---------------------------------------------------------- Chapter 2:2

While most recent hires we surveyed said they had little trouble with
the application process, they often reported that the wait to receive
a job offer exceeded what they considered reasonable.  Moreover,
follow-up interviews with representatives of VSOs suggested that
applicants who are military veterans may not be satisfied with
veterans' preference procedures.  According to the officials we
contacted, veterans who received additional points were not being
hired as often as they should be. 


      MOST EXTERNAL CUSTOMERS SAID
      APPLICATION PROCEDURES WERE
      GENERALLY WORKING WELL BUT
      WERE LESS SATISFIED WITH
      OVERALL TIMELINESS
-------------------------------------------------------- Chapter 2:2.1

Most external customers we surveyed said the application phase posed
few difficulties.  As shown in figure 2.1, the majority of
respondents reported no or only some difficulty with such activities
as obtaining application material and employment information or
knowing where to submit their applications. 

   Figure 2.1:  Recent Hires'
   Perceptions of Federal
   Application Procedures

   (See figure in printed
   edition.)

Note:  Percentages were based on those respondents who indicated
their perceptions of federal application procedures. 

Source:  GAO survey (see app.  VI, question 14). 

This is not to suggest that all is well from the external customers'
perspective, however.  For example, we asked recent hires how
reasonable or unreasonable the wait was between the time they applied
for federal employment and the time they received a job offer.  While
many respondents said the wait was somewhat to very reasonable,
depending on how they applied, 24 percent or more of the respondents
said the wait was somewhat to very unreasonable. 

As shown in figure 2.2, of those applicants who qualified for a
federal job on the basis of their education and experience, 66
percent reported that the wait was somewhat to very reasonable, while
24 percent reported that it was somewhat to very unreasonable. 
Respondents who took a written examination were less happy with the
amount of time it took to receive a job offer.  Forty percent said
the wait was somewhat to very reasonable, while 43 percent said it
was somewhat to very unreasonable. 

   Figure 2.2:  Recent Hires'
   Perceptions of the
   Reasonableness of the Amount of
   Time Between Applying for a
   Federal Job and Receiving a Job
   Offer

   (See figure in printed
   edition.)

Note:  Percentages are based on those respondents who indicated the
reasonableness of the amount of time between applying for a federal
job and receiving a job offer. 

Source:  GAO survey (see app.  VI, questions 7-8; 10-11). 

Many agencies may not be able to meet applicants' expectations for
timeliness.  Although almost a third of the recent hires responding
said the wait to receive a job offer becomes somewhat to very
unreasonable after 6 weeks, those who qualified for federal
employment through their education and experience reported a median
waiting time of 8 weeks.  Those who took an exam reported a median
waiting time of 14 weeks.  Both periods exceeded what they considered
a reasonable period to wait. 

The following selection of comments written by the recent hires
reflects their frustration over delays in the hiring system: 

  "Sometimes things take forever, or you never hear one way or
     another about potential positions."

  "Fourteen weeks from application to hire is a little extreme."

Aside from timeliness, external customer responses suggested federal
application procedures might be needlessly complex.  Of the 36
percent of recent hires who said they had applied for comparable jobs
in the private sector, 59 percent reported that applying for the
private sector position was easier.  Applying for a federal job may
also be difficult without assistance.  About 38 percent of the recent
hires said they needed help from a family member, friend, or agency
official in applying for their current position. 

The federal hiring process may also be perceived as so complex that
some prospective candidates may not be applying in the first place. 
Our recent survey of nearly 1,000 new graduates from 4 universities
found that their most frequent reasons for not considering federal
employment were a lack of information on federal jobs, the inability
to identify specific job openings, and the federal job application
process.\1


--------------------
\1 Federal Employment:  How Government Jobs Are Viewed on Some
College Campuses (GAO/GGD-94-181, Sep.  9, 1994), p.  12. 


   VETERANS MAY NOT BE SATISFIED
   WITH VETERANS' PREFERENCE
   PROCEDURES
---------------------------------------------------------- Chapter 2:3

Although we did not ask external hires about their perceptions of
veterans' preference and the Rule of Three, follow-up interviews with
representatives of four VSOs suggested that applicants who are
military veterans may not be satisfied with veterans' preference
procedures.  The representatives believed that veterans' preference
currently does not have the same strength as it did when first
enacted in 1944 and that veterans are not being hired as often as
they should be. 

On the basis of our earlier work, it appears one reason why veterans
believe they are not being hired as frequently as they should is that
agencies prefer using hiring processes that do not require the
application of veterans' preference points and the Rule of Three.  In
our 1994 review of the Administrative Careers With America (ACWA)
program, for example, we found that one reason for ACWA's low usage
was that agencies favored other mechanisms, such as the Outstanding
Scholar Program, that do not require rating and ranking and thus do
not involve the application of veterans' preference points and the
Rule of Three.\2

Even when preference points are added, selecting officials are less
likely to hire from a certificate with a veteran in the top position. 
Our March 1992 report on veterans' preference showed that selecting
officials returned certificates unused more frequently when a veteran
was at the top of the certificate than when a nonveteran headed the
certificate.  Of the certificates headed by veterans, 71 percent were
returned unused, compared with 51 percent of the certificates headed
by nonveterans.\3

During our review, we learned of the Department of Veterans' Affairs
(VA) efforts to enhance its employment of veterans in addition to
using preference points.  VA officials told us about their Veteran
Employment Program, established to encourage all VA organizations to
increase their efforts to recruit and hire veterans.  As part of this
effort, VA monitors its veteran employment through quarterly listings
of overall veteran employment, categorized by each VA facility. 
Facilities are ranked based on their overall and disabled veteran
employment figures.  Individual facilities can then be compared with
the national federal veteran employment averages.  An extensive
outreach and recruitment effort has also been incorporated as part of
this employment program.  According to OPM data, as of September
1993, 72,348 veterans (12 percent of all veterans in the federal
executive nonpostal workforce) were working for VA.  The Army, Navy,
and Air Force were the only agencies that employed more veterans. 


--------------------
\2 Federal Hiring:  Testing for Entry-Level Administrative Positions
Falls Short of Expectations (GAO/GGD-94-103, Mar.  30, 1994), p.  10. 

\3 Federal Hiring:  Does Veterans' Preference Need Updating? 
(GAO/GGD-92-52, Mar.  20, 1992), p.  27. 


   OPM AND AGENCY OFFICIALS SAID
   THEY WERE GENERALLY SATISFIED
   WITH THE REFERRAL PROCESS
---------------------------------------------------------- Chapter 2:4

OPM and agency officials were generally satisfied with the quality of
candidates referred and the timeliness of the referral phase. 
However, those mechanisms administered by OPM were less satisfactory
to agency personnelists. 


      MOST OPM AND AGENCY
      OFFICIALS SAID THEY WERE
      SATISFIED WITH THE QUALITY
      OF CANDIDATES REFERRED
-------------------------------------------------------- Chapter 2:4.1

When we asked OPM service center managers about the three hiring
mechanisms administered by OPM (ACWA, OPM certification process with
an existing inventory of applicants, and OPM certification process
without an existing inventory of applicants), most said they were
satisfied with the ability of two of the three mechanisms to refer a
quality pool of job candidates to selecting officials.  Of the 30
managers who said they used them, 27 said they were satisfied or very
satisfied with OPM's certification process with an existing inventory
of applicants and 28 felt the same about the OPM certification
process without an existing inventory of applicants.\4

OPM service center managers were less satisfied with the ACWA
examination.  Of the 11 service center managers who expressed an
opinion on ACWA, 6 said they were satisfied or very satisfied with
ACWA's ability to produce a quality pool of job candidates, 3 said
they were dissatisfied or very dissatisfied, and 2 indicated they
were neither satisfied nor dissatisfied.  Since November 1994, OPM no
longer requires applicants to take the ACWA exam.  Currently, job
seekers can apply for specific vacancies by completing a
questionnaire and submitting a resume.  Agencies then have the option
of requiring an applicant to take a written test. 

As shown in table 2.1, when we asked agency personnelists how
satisfied they were with the ability of 14 hiring mechanisms to
produce quality candidates, 73 percent or more of the respondents
said they were generally to very satisfied with 13 of the mechanisms. 
However, like the OPM service center managers, they were less
satisfied with ACWA. 



                                    Table 2.1
                     
                        Percentage of Agency Personnelists
                        Satisfied or Dissatisfied With the
                     Ability of Federal Hiring Mechanisms to
                          Produce Quality Job Candidates

                                           Neither satisfied
                       Generally to very                 nor   Generally to very
Hiring mechanism               satisfied        dissatisfied        dissatisfied
--------------------  ------------------  ------------------  ------------------
ACWA (N = 304)                       51%                 21%                 28%
OPM certification                     73                  13                  15
 process (excluding
 ACWA) with an
 existing inventory
 of applicants (N =
 916)
OPM certification                     77                  12                  12
 process (excluding
 ACWA) without an
 existing inventory
 of applicants (N =
 951)
Delegated examining                   87                   9                   4
 process with an
 existing inventory
 of applicants
 (N = 578)
Delegated examining                   92                   4                   4
 process without an
 existing inventory
 of applicants
 (N = 737)
Delegated direct                      89                   9                   2
 hire (nonclerical)
 (N = 697)
Delegated direct                      88                   6                   5
 hire (clerical) (N
 = 713)
Outstanding scholar                   93                   5                   2
 (N = 556)
Cooperative                           96                   4                   0
 education (N = 757)
Veterans                              89                  11                   0
 Readjustment
 (N = 928)
Presidential                          91                   9                   0
 Management Intern
 (N = 161)
Student program (N =                  95                   4                   1
 681)
Internal merit                        93                   5                   2
 promotion (N =
 1,186)
Handicapped/                          90                  10                   0
 disabled (N = 829)
--------------------------------------------------------------------------------
Legend: N equals the projected number of personnelists the responses
represent. 

Note 1: Row totals may add to more than 100 percent because of
rounding. 

Note 2: Percentages are based on the number of respondents who
indicated they used a particular process or authority in fiscal year
1992. 

Source: GAO survey (see app.  III, question 8). 

Generally, respondents reported being less satisfied with the three
mechanisms over which agencies have little direct control, such as
the OPM certification processes, including ACWA. 

When we asked selecting officials how satisfied or dissatisfied they
were with the quality of candidates referred to them for specific
positions that we randomly identified, 74 percent of those responding
said they were generally to very satisfied, 11 percent said they were
neither satisfied nor dissatisfied, while the remainder were
generally to very dissatisfied, unsure, or unable to judge. 


--------------------
\4 For some occupations, OPM maintains an existing inventory of
applications.  These inventories are usually standing registers of
applications for high turnover occupations where a continuing hiring
need exists, as opposed to a one-time need where applications are
requested for a limited period of time. 


      MOST OPM AND AGENCY
      OFFICIALS SAID THEY WERE
      SATISFIED WITH THE
      TIMELINESS OF THE REFERRAL
      PHASE
-------------------------------------------------------- Chapter 2:4.2

Our data indicated that referral procedures generally met OPM and
agency officials' expectations for timeliness.  For example, of the
30 OPM service center managers who said they had used the OPM
certification process with an existing inventory of applicants, all
reported they were satisfied or very satisfied with its ability to
produce a list of candidates for agency personnel offices in a timely
manner.  Of the 13 respondents who expressed an opinion on ACWA, 12
said they were satisfied or very satisfied, and 1 was neither
satisfied nor dissatisfied.  OPM service center managers were the
most dissatisfied with the timeliness of an OPM certificate without
an inventory of candidates.  Of the 30 respondents who said they used
this mechanism, 22 were satisfied or very satisfied, 7 were
dissatisfied or very dissatisfied, and 1 was neither satisfied nor
dissatisfied.  (When there is no inventory of candidates, additional
time is needed to advertise positions and develop registers of
candidates.)

As shown in table 2.2, 83 percent or more of the agency personnelists
responding indicated they were generally to very satisfied with the
ability of 10 of the 14 hiring mechanisms to deliver a list of
qualified applicants to a selecting official in a timely manner.  In
fact, the maximum level of dissatisfaction did not exceed 20 percent
for any of the 14 hiring mechanisms we asked agency personnelists
about. 

As was the case with the quality of candidates, agency personnelists
expressed greater satisfaction with those mechanisms that give their
agencies more control and flexibility over hiring, such as delegated
examining and direct hire.  Conversely, they were less satisfied with
those processes using OPM certificates, particularly ACWA. 



                                    Table 2.2
                     
                     Agency Personnelists' Satisfaction With
                     the Ability of Federal Hiring Mechanisms
                          to Deliver a List of Qualified
                     Applicants to a Selecting Official in a
                                  Timely Manner

                                           Neither satisfied
                       Generally to very                 nor   Generally to very
Hiring mechanism               satisfied        dissatisfied        dissatisfied
--------------------  ------------------  ------------------  ------------------
ACWA (N = 271)                       69%                 14%                 17%
OPM certification                     75                  13                  12
 process (excluding
 ACWA) with an
 existing inventory
 of applicants (N =
 1,001)
OPM certification                     67                  13                  20
 process (excluding
 ACWA) without an
 existing inventory
 of applicants (N =
 970)
Delegated examining                   84                  12                   5
 process with an
 existing inventory
 of applicants
 (N = 650)
Delegated examining                   87                   6                   8
 process without an
 existing inventory
 of applicants
 (N = 796)
Delegated direct                      83                   9                   8
 hire (nonclerical)
 (N = 767)
Delegated direct                      86                   7                   7
 hire (clerical)
 (N = 827)
Outstanding scholar                   95                   3                   2
 (N = 612)
Cooperative                           94                   5                   2
 education (N = 856)
Veterans                              94                   4                   2
 Readjustment (N =
 1,017)
Presidential                          72                  28                   0
 Management Intern
 (N = 179)
Student program (N =                  91                   7                   1
 778)
Internal merit                        93                   3                   4
 promotion (N =
 1,345)
Handicapped/                          93                   6                   1
 disabled (N = 989)
--------------------------------------------------------------------------------
Legend: N equals the projected number of personnelists the responses
represent. 

Note 1: Totals may not add to 100 percent because of rounding. 

Note 2: Percentages are based on the number of respondents who
indicated they used a particular process or authority in fiscal year
1992. 

Source: GAO survey, (app.  III, question 1). 

When asked how long various hiring mechanisms were taking compared
with how long they should take, agency personnelists indicated that,
on average, most mechanisms met their expectations (see fig.  2.3). 
The largest gap existed for OPM certificates where positions had to
be advertised and registers of qualified candidates developed. 
Agency personnelists said this process should take an average of 4
weeks but believed it was taking 6 weeks or 50 percent longer. 

   Figure 2.3:  Agency
   Personnelists' Perceptions of
   How Long Hiring Mechanisms
   Actually Take Compared to How
   Long They Feel They Should Take

   (See figure in printed
   edition.)

Note:  Percentages are based on those respondents who indicated they
had used a particular hiring mechanism. 

Source:  GAO survey (app.  III, question 7). 

Selecting officials were generally satisfied with the timeliness of
the referral process, although somewhat less so than the agency
personnelists.  When asked about the timeliness of the referral
process for specific hiring actions that we randomly identified, 68
percent said they were generally to very satisfied, 9 percent said
they were generally to very dissatisfied, while the remaining 23
percent were neither satisfied nor dissatisfied, unsure, or unable to
judge. 


   OPM AND AGENCY OFFICIALS
   EXPRESSED LESS SATISFACTION
   WITH LEGAL REQUIREMENTS APPLIED
   DURING THE SELECTION PHASE
---------------------------------------------------------- Chapter 2:5

The surveys we mailed to OPM service center managers, agency
personnelists, and agency selecting officials contained a series of
questions that asked what effect, if any, various legal requirements
had on their ability to obtain a quality pool of job candidates and
the amount of time needed to fill vacancies.  The legal requirements
included veterans' preference, processes used to ensure merit
principles, the Rule of Three, processes used to ensure
EEO/Affirmative Action, and union contracts or agreements.  While all
the legal requirements were said by at least some of the respondents
to affect either candidate quality or timeliness, only veterans'
preference and the Rule of Three were often said to adversely affect
both. 


      SOME OPM AND AGENCY
      OFFICIALS BELIEVED VETERANS'
      PREFERENCE AND THE RULE OF
      THREE CAN LOWER CANDIDATE
      QUALITY AND ADD DELAYS
-------------------------------------------------------- Chapter 2:5.1

As shown in table 2.3, veterans' preference was the legal requirement
cited most frequently by OPM and agency officials as decreasing their
ability to obtain a quality pool of job candidates.  About
three-quarters of the OPM service center managers, about half of the
agency personnelists, and a fifth of the selecting officials
responding indicated that veterans' preference decreased their
ability to obtain a quality pool of job candidates.  OPM Service
Center Managers we contacted often expressed their support for the
principle of Veterans' Preference but believed it could be
implemented in other, more effective ways.  About 40 percent of the
OPM service center managers and agency personnelists also said the
Rule of Three decreased the ability of agencies to obtain a quality
pool of job candidates. 



                                    Table 2.3
                     
                      Percentage of Respondents Who Believed
                       Various Legal Requirements Affected
                      Their Ability to Obtain a Quality Pool
                            of External Job Candidates

                           Not sure/no
Legal         Respondent      basis to     Decreased  No effect on     Increased
requirement   group              judge       quality       quality       quality
------------  ----------  ------------  ------------  ------------  ------------
Veterans'     OPM                   7%           77%           16%            0%
 preference    service
               center
               managers
               (N = 31)
              Agency                16            52            30             3
               personnel
               ists
               (N =
               1,431)
              Selecting             21            20            56             3
               officials
               (N =
               11,534)
The Rule of   OPM                    7            42            48             3
 Three         service
               center
               managers
               (N = 31)
              Agency                16            40            41             3
               personnel
               ists
               (N =
               1,431)
              Selecting             31            10            54             5
               officials
               (N =
               11,353)
Processes     OPM                    7             7            58            29
 used to       service
 ensure        center
 merit         managers
 principles    (N = 31)
              Agency                12             5            75             9
               personnel
               ists
               (N =
               1,429)
              Selecting             23             6            58            13
               officials
               (N =
               11,490)
Processes     OPM                   26             7            45            23
 used to       service
 ensure EEO/   center
 Affirmative   managers
 Action        (N = 31)
              Agency                15            13            70             3
               personnel
               ists
               (N =
               1,425)
              Selecting             21            11            66             3
               officials
               (N =
               11,502)
Union         OPM                   60             7            33             0
 contracts     service
 or            center
 agreements    managers
               (N = 30)
              Agency                25             8            66             1
               personnel
               ists
               (N =
               1,420)
              Selecting             32             2            67             0
               officials
               (N =
               11,309)
--------------------------------------------------------------------------------
Legend:  N equals the projected number of respondents the responses
represent with the exception of the OPM service center mangers, where
N represents the universe. 

Note:  Totals may not add to 100 percent bacause of rounding. 

Source:  GAO survey (see apps.  II, question 15; III, question 12; V,
question 3). 

Although 54 percent of the selecting officials did not believe the
Rule of Three affected candidate quality, it sometimes played a role
in their decision to return a list of candidates without a selection. 
Of the 25 percent of the selecting officials who said they had
returned at least one list of eligible candidates to their agency
personnel office without making a selection from that list in fiscal
year 1992, one quarter said they did so because the desired candidate
was not within reach due to a higher scoring preference-eligible
veteran. 

Respondents made a number of comments on veterans' preference, the
Rule of Three, and their effect on candidate quality.  The following
are some of them: 

  "As long as Veterans' Preference and Rule of Three have priority
     over the judgment of agency management, quality will take a
     backseat." (OPM service center manager)

  "Veterans' preference and the Rule of Three adversely impact on our
     ability to get to highly qualified candidates." (Personnelist)

  "Veterans Preference and Rule of Three in many cases forces us to
     take less qualified applicants for positions." (Selecting
     official)

As shown in table 2.4, some respondents reported that veterans'
preference sometimes increased the amount of time needed to fill
vacancies.  Forty-five percent of OPM service center managers and 41
percent of the agency personnelists believed that veterans'
preference increased the amount of time needed to fill vacancies. 
Selecting officials were less likely to feel this way, with 19
percent reporting that veterans' preference increased the time needed
to fill vacancies. 



                                    Table 2.4
                     
                      Percentage of Respondents Who Believed
                     Various Legal Requirements Affected the
                        Time Needed to Fill Vacancies With
                               External Candidates

                           Not sure/no
Legal         Respondent      basis to     Decreased  No effect on     Increased
requirement   group              judge   time needed   time needed   time needed
------------  ----------  ------------  ------------  ------------  ------------
Veterans'     OPM                   0%            0%           55%           45%
 preference    service
               center
               managers
               (N = 31)
              Agency                14             6            39            41
               personnel
               ists (N =
               1,431)
              Selecting             25             4            52            19
               officials
               (N =
               11,497)
The Rule of   OPM                    0             0            48            52
 Three         service
               center
               managers
               (N = 31)
              Agency                13             1            49            37
               personnel
               ists (N =
               1,431)
              Selecting             37             1            46            16
               officials
               (N =
               11,337)
Processes     OPM                    0             0            29            71
 used to       service
 ensure        center
 merit         managers
 principles    (N = 31)
              Agency                 9             0            53            38
               personnel
               ists (N =
               1,429)
              Selecting             26             0            46            28
               officials
               (N =
               11,440)
Processes     OPM                   23             0            39            39
 used to       service
 ensure EEO/   center
 Affirmative   managers
 Action        (N = 31)
              Agency                11             0            54            34
               personnel
               ists (N =
               1,414)
              Selecting             23             1            58            18
               officials
               (N =
               11,495)
Union         OPM                   45             0            39            16
 contracts     service
 or            center
 agreements    managers
               (N = 31)
              Agency                23             2            45            30
               personnel
               ists (N =
               1,420)
              Selecting             33             0            62             5
               officials
               (N =
               11,432)
--------------------------------------------------------------------------------
Legend:  N is the projected number of respondents the responses
represent, with the exception of the OPM service center managers,
where N represents the universe. 

Note:  Totals may add to more than 100 percent because of rounding. 

Source:  GAO survey (see apps.  II, question 14; III, question 11;
IV, question 2). 

Selecting officials were less likely to hold this view, with 19
percent believing that veterans' preference increased the amount of
time needed to fill a vacancy. 

Regarding the Rule of Three, 52 percent of the OPM service center
managers, 37 percent of the agency personnelists, and 16 percent of
the selecting officials believed that it increased the amount of time
needed to fill vacancies.  One reason for this belief may be that
selecting officials, believing that the best qualified candidates are
not within reach, return a certificate to OPM without making a
selection from it in order to fill the vacancy through some other
means.  As a result, the total time needed to fill a vacancy may be
extended. 

Table 2.4 also shows that many respondents also believed that
processes used to ensure merit principles increased the time needed
to fill vacancies.  This increased time may be caused by the need to
recruit candidates and announce positions using various methods so
that the merit principle of fair and open competition may be met. 
Likewise, the need for additional recruiting efforts may be the
reason respondents believe that processes used to ensure equal
employment opportunity increased the time needed to fill vacancies. 


   PERSONNELISTS SAID PROBLEMS
   WITH THE HIRING PROCESS
   ADVERSELY AFFECT THEIR OFFICES
---------------------------------------------------------- Chapter 2:6

By reviewing written comments that agency personnelists added to
their surveys, we sought to determine what happens when federal
hiring procedures fall short of expectations and whether agency
operations, agency employees, job applicants, and taxpayers are
affected in any way. 

In the survey sent to agency personnelists, we asked them to describe
what adverse effects, if any, the various hiring processes or
authorities used in hiring external job candidates have had on their
offices.  We asked that they consider such things as excessive use of
staff time, paperwork, delayed personnel projects, etc.  Of the 192
questionnaires returned, 89 contained a total of 163 comments, which
were then coded into five categories for analysis.  Comments that did
not fit into a specific category were coded as "other." While
personnelists' comments help illuminate some of the effects of
current federal hiring practices, they can only be taken as
representative of the views of those who elected to make comments and
cannot be generalized as the views of respondents as a whole. 


      SOME AGENCY PERSONNELISTS
      SAID FEDERAL HIRING
      PROCEDURES CAUSE
      ADMINISTRATIVE BURDENS
-------------------------------------------------------- Chapter 2:6.1

As shown in table 2.5, the two impacts cited most frequently by
agency personnelists were (1) the increased time needed to hire a
candidate and (2) the added workload of the personnel office, such as
additional paperwork.  The following are examples of their comments: 

  "The federal hiring system needs to be streamlined.  Too many
     delays, too much staff time expended.  [We are] buried in
     paperwork and red tape."

  "Too much confusion and wasted time.  .  .  .This is a maximum
     security penitentiary and we have to keep it staffed.  There is
     not the luxury some agencies enjoy; it does not affect their
     mission all that much if it takes months to fill a position."

  "Too many resources devoted to managing the paper process.  We're
     doing work that is non-value added to the organization as a
     whole.  We should be spending those resources on the real work
     in the selection process:  targeted recruitment and assisting
     selection officials in their part of the process.  .  .We are
     spending resources maintaining an irrelevant paper process and
     trying to explain an arcane system with little success.  .  . 
     ."

  "Excessive paperwork to prove we are being fair to everyone, and
     excessive time needed to process objections on poor candidates."

  "Twenty-five years ago I started as a Staffing Specialist and
     essentially the process and/or authorities have not changed. 
     They were wasteful in terms of staff time and paperwork then and
     they continue to be.  .  .  ."



                          Table 2.5
           
               Summary of Agency Personnelists'
            Comments on How Using Various External
             Hiring Mechanisms Adversely Affects
                   Their Personnel Offices

                                              Percent of all
Adverse impact        Number of comments            comments
--------------------  ------------------  ------------------
Increased time                        62                 38%
 needed to hire
 candidates
Increased workload                    45                  28
 and paperwork
Diminished ability                    16                  10
 to get the best
 qualified
 candidates
Adverse effect on                     28                  17
 personnel office
Adverse effect on                      5                   3
 agency mission
Other impacts                          7                   4
============================================================
Total                                163                100%
------------------------------------------------------------
Source: GAO survey. 


   CONCLUSIONS
---------------------------------------------------------- Chapter 2:7

OPM's efforts to reform the hiring process, along with the NPR
recommendation for greater decentralization of recruitment and
examination procedures, may improve timeliness and reduce complexity. 
As a result, customer satisfaction with the hiring process may be
improved.  Nevertheless, these reform efforts do not address the
changes needed to the way veterans' preference and the Rule of Three
are implemented.  While other legal requirements were said by some
respondents to affect either their ability to obtain a pool of
quality candidates or the timeliness of the hiring process overall,
only veterans' preference and the Rule of Three were often said to
affect both. 

Some external customers, too, may be poorly served by these two legal
requirements, according to VSO representatives we interviewed and our
prior work.  Under present procedures, agencies often return
certificates headed by veterans without making selections, or use
alternative mechanisms that do not require the application of
veterans' preference points and the Rule of Three. 


   RECOMMENDATION
---------------------------------------------------------- Chapter 2:8

We recommend that the Director of OPM, under OPM's personnel
demonstration project authority (5 U.S.C.  4703), actively recruit
agencies and assist them in carrying out demonstration projects that
would test improved methods of implementing veterans' preference
procedures.  Such procedures should attempt to better reconcile
managers' desire for greater discretion in the selection process with
the legal requirement to provide veterans with preference in hiring. 

These procedures should be developed in consultation with
representatives of veterans' groups, labor unions, and other affected
parties, and could include, for example, such actions as developing
alternatives to the Rule of Three, adding a new noncompetitive hiring
authority for veterans (in lieu of the current point system), and
establishing an affirmative veteran employment program similar to
that maintained by VA.  To ensure that increased flexibility does not
come at the expense of accountability, any alternative tested should
hold managers responsible for enhancing veteran employment
opportunities, as required by law.  On the basis of evaluations of
these agency demonstration projects, OPM, in consultation with
affected parties, may then be in a position to propose statutory
changes to the hiring process that would implement successful
innovations governmentwide. 

Consistent with the NPR recommendation for greater decentralization
of the recruiting and hiring process, this recommendation could give
agencies a greater role in developing procedures that would better
balance the needs of managers and veterans. 


   AGENCY COMMENTS
---------------------------------------------------------- Chapter 2:9

We requested comments on a draft of this report from the Director of
OPM.  On March 20, 1995, we met with the Associate Director of the
Career Entry Group and other OPM officials to discuss their comments. 
OPM generally agreed with our findings and is prepared to implement
our recommendation.  OPM suggested technical changes to ensure that
our report adequately reflected the current status of its various
initiatives to improve the hiring process, which we have incorporated
where appropriate. 


FLOW CHART OF HIRING PROCESS USING
AN OPM CERTIFICATE
=========================================================== Appendix I



   (See figure in printed
   edition.)



   (See figure in printed
   edition.)



   (See figure in printed
   edition.)



   (See figure in printed
   edition.)

\a Considerations include:  what grade levels to recruit, and whether
internal sources (e.g., merit promotion), external sources (e.g., OPM
or agency delegated examining), or special hiring authorities (e.g.,
Veterans Readjustment Authority, Handicaped, Outstanding Scholar)
will be used.  Multiple sources can be used to increase the applicant
pool. 

\b In existing inventories, OPM would have already received
applications for the position, completed the legal review, determined
suitability, verified 10-point Veterans' Preference, and tentatively
vertified 5-point Veterans' Preference. 




(See figure in printed edition.)Appendix II
AGGREGATE RESULTS FOR
QUESTIONNAIRE SENT TO MANAGERS OF
OPM SERVICE CENTERS
=========================================================== Appendix I



(See figure in printed edition.)



(See figure in printed edition.)



(See figure in printed edition.)



(See figure in printed edition.)



(See figure in printed edition.)



(See figure in printed edition.)



(See figure in printed edition.)



(See figure in printed edition.)



(See figure in printed edition.)



(See figure in printed edition.)



(See figure in printed edition.)



(See figure in printed edition.)



(See figure in printed edition.)



(See figure in printed edition.)




(See figure in printed edition.)Appendix III
AGGREGATE RESULTS FOR
QUESTIONNAIRE SENT TO AGENCY
PERSONNEL OFFICIALS
=========================================================== Appendix I



(See figure in printed edition.)



(See figure in printed edition.)



(See figure in printed edition.)



(See figure in printed edition.)



(See figure in printed edition.)



(See figure in printed edition.)



(See figure in printed edition.)



(See figure in printed edition.)



(See figure in printed edition.)



(See figure in printed edition.)



(See figure in printed edition.)



(See figure in printed edition.)



(See figure in printed edition.)



(See figure in printed edition.)




(See figure in printed edition.)Appendix IV
AGGREGATE RESULTS FOR
QUESTIONNAIRE SENT TO SELECTING
OFFICIALS ON THEIR PERCEPTIONS OF
SPECIFIC HIRING ACTIONS
=========================================================== Appendix I



(See figure in printed edition.)




(See figure in printed edition.)Appendix V
AGGREGATE RESULTS FOR
QUESTIONNAIRE SENT TO SELECTING
OFFICIALS ON THEIR GENERAL
EXPERIENCES WITH THE FEDERAL
HIRING SYSTEM
=========================================================== Appendix I



(See figure in printed edition.)



(See figure in printed edition.)



(See figure in printed edition.)



(See figure in printed edition.)



(See figure in printed edition.)



(See figure in printed edition.)




(See figure in printed edition.)Appendix VI
AGGREGATE RESULTS FOR
QUESTIONNAIRE SENT TO RECENT HIRES
=========================================================== Appendix I



(See figure in printed edition.)



(See figure in printed edition.)



(See figure in printed edition.)



(See figure in printed edition.)



(See figure in printed edition.)



(See figure in printed edition.)


QUESTIONNAIRE SURVEY METHODOLOGY
========================================================= Appendix VII

The objective of our questionnaires was to obtain the perceptions of
key people who work with the federal hiring process on procedures
that are working, those that are not, and how the process can be
improved.  By measuring their satisfaction with various aspects of
the federal hiring process, we hoped to develop quantitative data
that Congress and agencies can use to make federal hiring procedures
more consistent with customers' needs. 


   SAMPLING AND SURVEY PROCEDURES
------------------------------------------------------- Appendix VII:1

We mailed questionnaires to three categories of individuals:  (1)
agency personnelists, (2) agency selecting officials, and (3)
employees recently hired from outside the government.  Individuals in
these categories of customers were represented by interrelated,
variable-probability samples.  In addition we surveyed managers of
OPM service centers to determine their level of satisfaction or
dissatisfaction with the hiring process.  There were 31 OPM service
centers at the time of our study, and the manager of each center was
sent a questionnaire. 

Because we were interested in respondents' perceptions of specific
types of hiring mechanisms, we stratified the different hiring
mechanisms into five broad categories:  (1) Mechanisms that are
essentially noncompetitive, such as the outstanding scholar program;
(2) mechanisms where OPM rates and ranks applicants; (3) mechanisms
where agencies rate and rank applicants under delegated agreements
with OPM; (4) mechanisms used to hire temporary employees; (5) and
excepted service mechanisms. 

Personnel offices was the initial sampling unit for the
questionnaires sent to personnelists, selecting officials, and recent
hires.  From a universe of 1,621 personnel offices, we drew a random
sample of 221 personnel offices with probabilities proportionate to
the numbers of new hiring actions made in fiscal year 1992.  Overseas
offices and those that had no new hires in fiscal year 1992 were
excluded from our review.  We then selected a random sample of 2,140
employees hired during fiscal year 1992 through those 221 offices. 
Probabilities of selection were varied to provide approximately equal
numbers of sample selections for the five strata.  Our goal was to
obtain estimates of percentages for all three populations with
95-percent confidence intervals of +10 percent. 

The names of the 2,140 new hires and the identity of the personnel
offices that hired them were obtained through OPM's Central Personnel
Data File (CPDF).  The file includes employment information on
federal workers in most agencies, the major exclusions being members
and employees of Congress, the Judicial Branch, the United States
Postal Service, and intelligence agencies.  We did not independently
verify the information in the file. 

Because the CPDF lacked information on employees' work addresses and
the selecting officials who hired them, we depended on personnel
offices to provide us with that information on recent hires.  If the
personnel office did not respond or gave us incomplete or inaccurate
information, we were unable to survey the recent hires and selecting
officials. 

Specific questionnaires were developed for each respondent group. 
Selecting officials were mailed an additional questionnaire eliciting
information on whether they were satisfied with the processes used to
select specific candidates whom we had identified. 

We pretested the questionnaires with 38 individuals before mailing. 
These pretests included members of each respondent group, and took
place in Washington, D.C., Denver, Co., Dallas, Tx., and
Philadelphia, Pa.  Pretests helped to ensure that the questions could
be interpreted correctly by the different individuals in our survey. 

Questionnaires were mailed to the 31 OPM service center managers in
March 1993.  Telephone and in-person interviews were later held with
a random selection of 16 service center managers to elaborate on
their responses.  We mailed questionnaires and forms to obtain
identifying information on recent hires and selecting officials to
personnelists in late April 1993.  Questionnaires to recent hires and
selecting officials were mailed June through August, 1993. 

A follow-up mailing to non-respondents in each respondent group was
made several weeks after the first mailing.  We continued to accept
responses until October 1, 1993.  Table III.1 summarizes the
disposition of our questionnaires. 



                                   Table III.1
                     
                        Analysis of Questionnaire Returns


                                           Selecting       Selecting
                                           officials       officials
                                        (perceptions    (perceptions
         OPM service                     of specific      of overall
Catego        center          Agency          hiring          hiring      Recent
ry          managers   personnelists        actions)        process)       hires
------  ------------  --------------  --------------  --------------  ----------
Total            Not             221         1,992\a       Unknown\b       2,140
 sampl    applicable
 ed

Stage I: Identification of sample members
--------------------------------------------------------------------------------
Indivi             0               0             166               0         665
 dual
 no
 longe
 r
 prese
 nt
Person           Not  Not applicable             627               1         397
 nel      applicable
 offic
 e did
 not
 respo
 nd or
 provi
 ded
 inade
 quate
 ident
 ifyin
 g
 infor
 matio
 n
Indivi            31             221           1,199           907\c       1,078
 duals
 ident
 ified
 and
 eligi
 ble
 for
 quest
 ionna
 ire
 mailo
 ut

Stage II: Mailout of questionnaires
--------------------------------------------------------------------------------
Unable             0               0              21              98          64
 to
 locat
 e
 indiv
 idual
 \d
No                 0              29             427             158         235
 usable
 respo
 nse\e
Total             31             192             751             651         779
 usable
 respo
 nses

Response Rates
--------------------------------------------------------------------------------
Percen          100%             87%             38%         Unknown         36%
 tage
 of
 origi
 nal
 proba
 bilit
 y
 sampl
 e\f
Percen          100%             87%             63%             72%         72%
 tage
 of
 ident
 ified
 sampl
 e\g
Percen          100%             87%             64%             73%         77%
 tage
 of
 deliv
 erabl
 e
 quest
 ionna
 ires\
 h
--------------------------------------------------------------------------------
\a So that selecting officials could evaluate the hiring process for
specific recent hires, we drew a subsample of 1,992 from the original
sample of 2,140 recent hires.  This random subsample was drawn to
reduce the response burden on selecting officials who were
responsible for making more than 10 new appointments.  Thus, if a
selecting official was responsible for more than 10 hiring actions,
we randomly selected 10 on which to obtain his or perceptions. 

\b The total number of selecting officials who selected the 2,140
recent hires in our sample is unknown because they often selected
more than one individual.  Since the personnelists who provided us
with the names and addresses of selecting officials were not asked to
do so if the person was no longer present at their agency, the
population of selecting officials could not be determined. 

\c These 907 selecting officials selected 1,542 new hires or 72
percent of our sample of 2,140 new hires. 

\d This broad category includes, for example, questionnaires that
were returned by the Postal Service, as well as individuals who were
unable to receive a questionnaire because they were no longer
employed at that office. 

\e Includes those questionnaires that could not be part of our
database because individuals returned their questionnaires late,
refused to participate, were not responsible for a particular hiring
action, and miscellaneous other reasons. 

\f This is the number of usable responses as a percentage of the
total sampled. 

\g This is the number of usable responses as a percentage of the
individuals identified and eligible for questionnaire mailout. 

\h This is the number of usable responses as a percentage of the
identified sample less those where we were unable to locate sample
members. 


   ANALYSIS OF DATA
------------------------------------------------------- Appendix VII:2

We reviewed and edited the completed questionnaires and made
consistency checks on the data.  We did not test the validity of
respondents' answers or the comments they made. 

As noted earlier, with the exception of the questionnaire sent to OPM
service center managers, our study used random sampling.  As a
result, the data obtained are subject to some uncertainty or sampling
error.  The sampling error consists of two parts:  confidence levels
and ranges.  The confidence level indicates the degree of confidence
that can be placed in the estimates derived from the sample.  The
confidence interval is the upper and lower limits between which the
actual estimates may be found.  Our samples were designed to achieve
a sampling error no greater than +10 percent at the 95-percent
confidence level.  In this way, if all members of the various
respondent groups had been surveyed, the chances are 95 out of 100
that the results obtained would not differ from our sample estimates
by more than 10 percent. 

Despite the generally high response rates of those who received
questionnaires, we were unable to obtain information from more than
60 percent of the target samples of recent hires and from selecting
officials who provided perceptions of the hiring process for specific
individuals.  This low response rate is largely the result of agency
personnel offices providing incomplete or no identifying data on
members of our sample.  This made it impossible to contact recent
hires and selecting officials.  Because many of the recent hires not
contacted were hired as temporary employees, our findings may not be
representative of this type of hiring mechanism. 

Because of sampling variability, the percentages reported for certain
questionnaire items have a sampling error of greater than +10 percent
at the 95 percent confidence interval.  These include personnelists'
perceptions of specific hiring mechanisms when less than 50
personnelists reported using a particular mechanism; and new hires'
perception that applying for a private sector position was easier
than applying for a federal position (+11 percent). 


MAJOR CONTRIBUTORS TO THIS REPORT
======================================================== Appendix VIII


   GENERAL GOVERNMENT DIVISION,
   WASHINGTON, D.C. 
------------------------------------------------------ Appendix VIII:1

Steven J.  Wozny, Assistant Director,
 Federal Human Resource Management Issues
Robert Goldenkoff, Assignment Manager
James M.  Fields, Senior Social Science Analyst
Stuart Kaufman, Senior Social Science Analyst
Jerome T.  Sandau, Evaluator


   DENVER REGIONAL OFFICE
------------------------------------------------------ Appendix VIII:2

Thomas Kingham, Evaluator-in-Charge
Susan Iott, Evaluator

Related GAO Products

Federal Employment:  How Government Jobs Are Viewed on Some College
Campuses (GAO/GGD-94-181, Sep.  9, 1994). 

Federal Hiring:  Testing for Entry-Level Administrative Positions
Falls Short of Expectations (GAO/GGD-94-103, Mar.  30, 1994). 

The Public Service (GAO/OCG-93-7TR, Dec.  1992). 

Federal Employment:  Poor Service Found at Federal Job Information
Centers (GAO/GGD-92-116, July 28, 1992). 

Federal Recruiting:  Comparison of Applicants Who Accepted or
Declined Federal Job Offers (GAO/GGD-92-61BR, Mar.  20, 1992). 

Federal Hiring:  Does Veterans Preference Need Updating? 
(GAO/GGD-92-52, Mar.  20, 1992). 

Federal Recruiting:  College Placement Officials' Views of the
Government's Campus Outreach Efforts (GAO/GGD-92-48BR, Jan.  31,
1992). 

Recruitment and Retention:  Inadequate Federal Pay Cited as Primary
Problem by Agency Officials (GAO/GGD-90-117, Sep.  11, 1990). 

Federal Recruiting and Hiring:  Making Government Jobs Attractive to
Prospective Employees (GAO/GGD-90-105, Aug.  22, 1990). 

The Public Service (GAO/OCG-89-2TR, Nov.  1988). 

Improvements Needed in Examining and Selecting Applicants for Federal
Employment (B-179810, 1974). 
