<DOC>
[109th Congress House Hearings]
[From the U.S. Government Printing Office via GPO Access]
[DOCID: f:23141.wais]
THE COUNTDOWN TO COMPLETION: IMPLEMENTING THE NEW DEPARTMENT OF
HOMELAND SECURITY PERSONNEL SYSTEM
=======================================================================
HEARING
before the
SUBCOMMITTEE ON THE FEDERAL WORKFORCE
AND AGENCY ORGANIZATION
of the
COMMITTEE ON
GOVERNMENT REFORM
HOUSE OF REPRESENTATIVES
ONE HUNDRED NINTH CONGRESS
FIRST SESSION
__________
MARCH 2, 2005
__________
Serial No. 109-58
__________
Printed for the use of the Committee on Government Reform
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COMMITTEE ON GOVERNMENT REFORM
TOM DAVIS, Virginia, Chairman
CHRISTOPHER SHAYS, Connecticut HENRY A. WAXMAN, California
DAN BURTON, Indiana TOM LANTOS, California
ILEANA ROS-LEHTINEN, Florida MAJOR R. OWENS, New York
JOHN M. McHUGH, New York EDOLPHUS TOWNS, New York
JOHN L. MICA, Florida PAUL E. KANJORSKI, Pennsylvania
GIL GUTKNECHT, Minnesota CAROLYN B. MALONEY, New York
MARK E. SOUDER, Indiana ELIJAH E. CUMMINGS, Maryland
STEVEN C. LaTOURETTE, Ohio DENNIS J. KUCINICH, Ohio
TODD RUSSELL PLATTS, Pennsylvania DANNY K. DAVIS, Illinois
CHRIS CANNON, Utah WM. LACY CLAY, Missouri
JOHN J. DUNCAN, Jr., Tennessee DIANE E. WATSON, California
CANDICE S. MILLER, Michigan STEPHEN F. LYNCH, Massachusetts
MICHAEL R. TURNER, Ohio CHRIS VAN HOLLEN, Maryland
DARRELL E. ISSA, California LINDA T. SANCHEZ, California
GINNY BROWN-WAITE, Florida C.A. DUTCH RUPPERSBERGER, Maryland
JON C. PORTER, Nevada BRIAN HIGGINS, New York
KENNY MARCHANT, Texas ELEANOR HOLMES NORTON, District of
LYNN A. WESTMORELAND, Georgia Columbia
PATRICK T. McHENRY, North Carolina ------
CHARLES W. DENT, Pennsylvania BERNARD SANDERS, Vermont
VIRGINIA FOXX, North Carolina (Independent)
------ ------
Melissa Wojciak, Staff Director
David Marin, Deputy Staff Director/Communications Director
Rob Borden, Parliamentarian
Teresa Austin, Chief Clerk
Phil Barnett, Minority Chief of Staff/Chief Counsel
Subcommittee on the Federal Workforce and Agency Organization
JON C. PORTER, Nevada, Chairman
JOHN L. MICA, Florida DANNY K. DAVIS, Illinois
TOM DAVIS, Virginia MAJOR R. OWENS, New York
DARRELL E. ISSA, California ELEANOR HOLMES NORTON, District of
KENNY MARCHANT, Texas Columbia
PATRICK T. McHENRY, North Carolina ELIJAH E. CUMMINGS, Maryland
------ ------ CHRIS VAN HOLLEN, Maryland
Ex Officio
HENRY A. WAXMAN, California
Ron Martinson, Staff Director
Chris Barkley, Professional Staff Member
Reid Voss, Clerk
Mark Stephenson, Minority Professional Staff Member
C O N T E N T S
----------
Page
Hearing held on March 2, 2005.................................... 1
Statement of:
Kelley, Colleen M., national president, National Treasury
Employees Union; T.J. Bonner, president, Border Patrol
Council, American Federation of Government Employees; and
Darryl Perkinson, national vice president, Federal Managers
Association................................................ 116
Bonner, T.J.............................................. 133
Kelley, Colleen M........................................ 116
Perkinson, Darryl........................................ 156
McPhie, Neil A.G., chairman, Merit Systems Protection Board;
Ronald Sanders, Associate Director for Strategic Human
Resources Policy, U.S. Office of Personnel Management; and
Ronald James, Chief Human Capital Officer, Department of
Homeland Security.......................................... 63
James, Ronald............................................ 91
McPhie, Neil A.G......................................... 63
Sanders, Ronald.......................................... 74
Walker, David M., Comptroller General, U.S. Government
Accountability Office...................................... 20
Letters, statements, etc., submitted for the record by:
Bonner, T.J., president, Border Patrol Council, American
Federation of Government Employees, prepared statement of.. 135
Cummings, Hon. Elijah E., a Representative in Congress from
the State of Maryland, prepared statement of............... 9
Davis, Hon. Danny K., a Representative in Congress from the
State of Illinois:
Washington Post articles................................. 104
Prepared statement of.................................... 15
James, Ronald, Chief Human Capital Officer, Department of
Homeland Security, prepared statement of................... 94
Kelley, Colleen M., national president, National Treasury
Employees Union, prepared statement of..................... 119
McPhie, Neil A.G., chairman, Merit Systems Protection Board,
prepared statement of...................................... 67
Perkinson, Darryl, national vice president, Federal Managers
Association, prepared statement of......................... 158
Porter, Hon. Jon C., a Representative in Congress from the
State of Nevada, prepared statement of..................... 4
Sanders, Ronald, Associate Director for Strategic Human
Resources Policy, U.S. Office of Personnel Management,
prepared statement of...................................... 77
Walker, David M., Comptroller General, U.S. Government
Accountability Office, prepared statement of............... 22
THE COUNTDOWN TO COMPLETION: IMPLEMENTING THE NEW DEPARTMENT OF
HOMELAND SECURITY PERSONNEL SYSTEM
----------
WEDNESDAY, MARCH 2, 2005
House of Representatives,
Subcommittee on Federal Workforce and Agency
Organization,
Committee on Government Reform,
Washington, DC.
The subcommittee met, pursuant to notice, at 10 a.m., in
room 2247, Rayburn House Office Building, Hon. Jon C. Porter
(chairman of the subcommittee) presiding.
Present: Representatives Porter, Davis, Issa, McHenry,
Mica, Cummings, Norton, and Van Hollen.
Staff present: Ron Martinson, staff director; B. Chad
Bungard, deputy staff director and chief counsel; Chris Barkley
and Shannon Meade, professional staff members; Patrick
Jennings, senior counsel and OPM detailee; Reid Voss,
legislative assistant/clerk; Mark Stephenson and Tania Shand,
minority professional staff members; and Teresa Coufal,
minority assistant clerk.
Mr. Porter. A quorum being present, the Subcommittee on the
Federal Workforce and Agency Organization will come to order.
This is the first hearing of the Government Reform
Subcommittee on the Federal Workforce and Agency Organization
in the 109th Congress, and my first hearing as chairman of this
subcommittee. I am very excited about my new position and the
opportunity to examine ways the Federal Government can improve
the way it hires, pays, recruits, trains, and rewards its
employees, while at the same time improving individual agency
performance. Representing over 14,000 Federal workers and
retirees myself in Nevada, I know all too well the sacrifices
made by the Federal family, who work diligently--sometimes
putting their lives in danger--in the name of public service.
Admittedly, I have a lot to learn about this subject matter,
and I look forward to hearing from the various stakeholders,
agencies, and experts to figure out ways to make the Federal
Government better.
Today's hearing is of the utmost importance. February 1,
2005 marked a new day for our Federal employees--the Department
of Homeland Security and the Office of Personnel Management
issued final regulations for the new personnel management
system at the Department of Homeland Security. It was the first
major change to our Civil Service process in 50 years. This is
something I don't take lightly. It took over 2 years to design
this new system, but there are still a lot of details to be
worked out, and I can assure everyone here that this
subcommittee will closely monitor the progress and
implementation of this new system over the next several years.
The Department must have top talent in order to meet its
critical mission, and it cannot rely on the old system of
rewarding longevity rather than motivating and rewarding
performance. Change can be difficult, however, and I know that
this is a nerve-wracking experience for the Department's work
force. My predecessor, Congresswoman Jo Ann Davis, and Chairman
Tom Davis have worked on ensuring a smooth transition--Chairman
Davis couldn't join us today--and they have worked hard to make
sure this new system is one that is fair and credible. I am
quite encouraged to see the final regulations now require that
the development of any internal directives implementing the
personnel systems authorities provided by these regulations
involve employees and employee representatives. I am also
encouraged to see that the final regulations require that the
Department issue implementing directives requiring new
supervisors to meet certain assessment or certification points
as a part of a formal training program. This will go a long way
in ensuring the equitable application of this new pay-for-
performance system and conducting performance reviews. These
are much welcomed changes from the proposed regulations, and,
as I have read the background testimony that has been prepared
for today, I think that you would all agree.
Since the passage of the Homeland Security Act of 2002,
which authorized the creation of a new flexible personnel
system for Homeland Security Department employees, there has
been a continued trend to modernize personnel systems
governmentwide; not only in Government, but also in the private
sector, as we prepare for this global economy that is based
upon terrorism and impacts on our communities. In January 2003,
the Bipartisan National Commission on the Public Service,
chaired by Paul Volcker, called for the abolishment of the
General Schedule and recommended it be replaced with a more
flexible personnel management system. That same year, Congress
granted the Department of Defense flexibility to create a new
personnel system and also authorize senior executive service to
meet to a pay-for-performance personnel system governmentwide.
Now, more than 50 percent of the Federal work force will soon
be under this new, modern, flexible personnel system, outside
of the General Schedule.
In a forum hosted by the Government Accountability Office
and the National Commission on Public Service last April, there
was broad agreement among participants that a governmentwide
framework should be established to guide human capital reform,
balancing the need for consistency across the Federal work
force, and the need for a flexible system tailored to
particular needs of the agencies.
Moving the rest of the Federal workfoce outside the General
Schedule into a new performance-based compensation framework is
an issue for another day, which we will be discussing. With
that said, however, this subcommittee is well aware that all
eyes are on the success or failure of the new DHS personnel
management system. It is very important that we get it right
the first time, and we will spend the requisite amount of time
overseeing the system's implementation to ensure its successes.
I would like to, of course, express my many thanks to our
witnesses who have agreed to join us today. We brought together
what I believe is a broad and knowledgeable array of voices as
we begin our exploration of this new system, and look forward
to hearing all of your perspectives. I want you to know that as
I begin this hearing, I begin it with an open mind. I am a new
member of this committee and a new member as the chairman of
this committee, and look forward to your insights and your
perspective. As I mentioned, I have been in a public office, as
has many of my colleagues on this committee, for over 20 years,
and I plan on using that experience as I listen and make my own
independent decisions based upon the input that is going to be
provided. Of course, this session the subcommittee is going to
look at a number of other issues, but realize that this will
remain and continue to be a priority as we move forward.
[The prepared statement of Hon. Jon C. Porter follows:]
<GRAPHICS NOT AVAILABLE IN TIFF FORMAT>
Mr. Porter. I now would like to make sure that our majority
ranking member, Mr. Davis, is recognized. I know he is not here
today, but possibly Mr. Cummings would like to add something in
opening statement.
Mr. Cummings. Thank you very much, Mr. Chairman, and thank
you for calling this important hearing on the newly issued
personnel regulations for the Department of Homeland Security.
Following the tragic events of September 11th, the
Department of Homeland Security was created, which brought
together 22 agencies for the purpose of protecting our country.
The Homeland Security Act gave the Secretary of DHS and the
Director of the Office of Personnel Management the authority to
construct a new personnel system for the DHS. In 2002, Congress
agreed it was a top priority to make modern human resources
management system at the DHS capable of supporting its mission.
However, many of my colleagues and I had some serious
reservations that the authority granted to the DHS would
needlessly undermine our Nation's longstanding commitments to
employee protections, management accountability, and collective
bargaining rights. Unfortunately, these newly issued
regulations validate that my fears were well founded.
To begin, the administration has consistently justified its
proposed sweeping changes in the DHS human resources management
system as necessary to ensure national security. While national
security must remain our top priority, I can think of no
instances in which collective bargaining rights or employee
protections in the Civil Service were a specific obstacle to
protecting our Nation. These regulations substantially restrict
what issues are covered by collective bargaining. As described
in the new regulations, the DHS is no longer mandated to
bargain over the number, types, grades, or occupational
clusters and bands of employees or positions assigned to any
organizational subdivision work project or tour of duty.
I believe that it is important that we maintain the
integrity of our top priority by ensuring that the efforts we
take in the name of national security genuinely impact the
security of our Nation. As such, I look forward to the
testimony of T.J. Bonner, of the American Federation of
Government Employees, that describes numerous instances where
collective bargaining has protected employees in the Civil
Service and strengthened our homeland security.
It is troubling that the DHS and OPM rejected the proposal
by unions for a post-implementation bargaining policy in the
new DHS personnel system, which could have provided a balanced
approach that respected the needs of all interested parties and
provided the DHS with needed flexibilities to respond to
national security emergencies.
More troubling is the replacement of the General Schedule
with a performance-based pay system. Such a system could
provide a means for politicization and/or cronyism within DHS
without the necessary safeguards and clear standards to measure
employee performance. These regulations also fail to establish
an independent entity to resolve labor-management disputes.
Under the new regulations, DHS employees must take their
grievances to an internal board appointed by the DHS Secretary
called the Homeland Security Labor Relations Board, replacing
the independent Federal Labor Relations Authority as arbiter of
disputes, with the Homeland Security Labor Relations Board
being completely comprised of appointments by the top authority
representing management at the DHS. This poses a major obstacle
to ensuring impartiality in the resolution of labor-management
disputes. This is analogous to having the empires of the World
Series being chosen by an owner of a team involved in the game.
Even if one would make the argument that such a selection
process is reasonable, it certainly does not give the
perception of fairness to the American people and to those
playing the game.
Mr. Chairman, the Human Resources Management System at DHS
is no game. The regulations and laws which govern that system
directly impact the quality of life of some of our Government's
most important civil servants and, as a result, impact the
DHS's ability to fulfill its vital mission. I do not believe
that these regulations support an efficient and inclusive
relationship between employers and employees at the DHS,
specifically the type of relationship needed to keep morale
high, support retention, and attract skilled and capable
prospective employees to serve at the DHS. We best honor our
public servants by having a human capital system that embraces
time-honored and time-tested traditions of collective
bargaining, due process, and employee protections instead of
undermining them.
With that, Mr. Chairman, I yield back and look forward to
hearing from our witnesses.
[The prepared statement of Hon. Elijah E. Cummings
follows:]
<GRAPHICS NOT AVAILABLE IN TIFF FORMAT>
Mr. Porter. Thank you.
I would like to now recognize our ranking minority member,
Mr. Davis.
Mr. Davis. Thank you very much, Mr. Chairman. Let me
apologize for being a trifle late, but I had all of the
television owners in my hometown in my office, as well as the
radio.
Mr. Porter. I think we understand.
Mr. Davis. It is pretty difficult to put them out. We need
them.
Well, let me thank you very much, Mr. Chairman, for calling
this hearing, and I would like to welcome you and all the new
Members who have come to the very first hearing of the Federal
Workforce and Agency Organization Subcommittee.
Last February this subcommittee held a joint hearing with
our Senate counterparts on, at the time, the proposed
Department of Homeland Security's DHS personnel regulations. At
that hearing I stated that we had embarked on a sad and
troubling era in the history of the Civil Service and asked if
agencies were being granted exemptions from Title V to fix
inefficient regulations or to simply change what is
inconvenient for management. The answer is now painfully clear.
It is as if DHS put management in a room and said, come up with
your dream personnel system; you don't have to worry about
fairness or credibility, just tell us what you would want to
make your life easier and more convenient. They did and DHS put
their recommendations in these regulations, right down to
Section 9701-406, that states that employee performance
expectations do not have to be put in writing. These are the
same expectations that will determine whether or not an
employee gets a pay raise, and not one word of these
expectations have to be put in writing.
The one thing that DHS allowed employees is that the
expectations have to be communicated to them before they can be
held accountable to them. Employees should be grateful for that
concession. If putting employee expectations in writing is too
onerous for DHS managers, then asking them to negotiate with
unions is practically out of the question. DHS is prohibited
from bargaining over the number types and grades of employees
and the technology methods and means of performing work. Even
individual components of DHS are prohibited from bargaining
over these subjects, even at their own discretion. DHS even
rejected a proposal by the unions to bargain over personnel
changes after they have been implemented and shown to have had
an adverse impact on affected employees.
Now, I am sure that we are going to hear today that all of
this is being done in the name of national security. But let me
caution witnesses from the outset that their answers to
questions on these matters need to be more substantive than
that. It is simply not enough to say that national security
prevents you from putting employee performance expectations in
writing, or that it is in the national interest or the best
interest of national security for the Secretary of DHS to have
sole authority to appoint members to DHS's Internal Mandatory
Removal Panel or Homeland Security Labor Relations Board. These
regulations are not fair, they are not credible, and they are
not transparent. As a matter of fact, most of the regulations
have been defined as implementing directives, and are not even
outlined in the regulations.
Members on both sides of the aisle should be outraged.
These regulations go beyond the need for DHS to have personnel
flexibility. These regulations reflect DHS's and this
administration's desire to have unfettered and unchecked
authority over the Civil Service period. As one article I read
on DHS and DOD personnel regulations noted, we are going back
to the past; back 120 years, when Andrew Jackson was President
and there were only about 20,000 Federal employees and the work
required few skills; back to when the entire work force faced
possible replacement after each election and the newly
installed politicians doled out jobs to reward campaign
workers, donors, and party operatives. Wasn't it earlier this
year that it came to light that DOD gave political non-career
employees higher pay raises than career employees? These were
across-the-board pay raises for political appointees that were
not based on merit or individual performance. What is ironic
about DOD's actions is that these political appointees did not
have any more skill, any more knowledge, or any more
performance than that performed by career employees.
And so, Mr. Chairman, I look forward to these hearings and
thank all of the witnesses for appearing and, again, thank you
for calling it. I yield back.
[The prepared statement of Hon. Danny K. Davis follows:]
<GRAPHICS NOT AVAILABLE IN TIFF FORMAT>
Mr. Porter. Thank you, Mr. Davis.
I ask at this time for unanimous consent that all Members
have 5 legislative days----
Ms. Norton. Mr. Chairman.
Mr. Porter. Yes.
Ms. Norton. I ask to make an opening statement.
Mr. Porter. Absolutely. I would like to go through a few
procedural matters, then certainly we will have the balance of
the committee with their openings. Thank you.
At this time, again, I would like to ask unanimous consent
that the Members have 5 legislative days to submit written
statements and questions for the hearing record; that any
answers to written questions provided by the witnesses also be
included in the record.
Without objection, so ordered.
I also ask unanimous consent that all exhibits, documents,
and other materials referred to by the Members and the
witnesses may be included in the hearing record, and that all
Members be permitted to revise and extend their remarks.
Without objection, so ordered.
I also ask unanimous consent that all future meetings be
held in Las Vegas. Hearing none----
Mr. Issa. Half in California.
Mr. Porter. Half in California.
Know that, again, we have these formal procedural matters,
but as a community we would welcome the committee at any time
in Las Vegas.
Also, it is the practice of this committee to administer
the oath to all witnesses, which we will do shortly, but I
would like to continue with opening statements.
I believe Member Issa, do you have anything you would like
to add?
Mr. Issa. In the interest of hearing our speakers, I will
submit for the record.
Mr. Porter. Thank you.
Congresswoman Holmes Norton.
Ms. Norton. Thank you very much, Mr. Chairman. I want to
thank you for making this your first hearing. I have been on
this committee for all of my 14 years in Congress, and you have
chosen a subject of special importance because what we do here
is essentially going to be what we do or what the committee
will hope to do for the entire merit system, and, therefore, it
is a very important subject, given what that system has meant
for more than a century to Federal employees and to the
efficiency and integrity of the Federal system.
Mr. Chairman, I think the older system is more in need of
reform, and I say that from my own experience as chair of the
Equal Employment Opportunity Commission. It was a dysfunctional
agency when I came, buried in backlog. I am credited with
modernizing the system, getting rid of the backlog in part by
using such efficiencies as reducing litigation, depending on
settlements before they were widely used in the Federal
Government at all. So I approach every system as old as this as
if it needed reform, rather than not needing reform. And I
certainly think that after September 11th, with the rise of
terrorism and with the special mission of the Homeland Security
Commission, a very close look at Civil Service reform was
closely called for.
We began by believing, I think, exercising a presumption in
favor of a merit system, rather than seeing the beginning of
the end of the merit system and the stripping of collective
bargaining protections. Improvements have been made, and I
congratulate the unions involved and the agency for as much
collaboration as they did. Now we face lawsuits and delays,
some demoralization in the agency. Remember how many agencies
we are putting together for the first time. And if I may say
so, about the last agency we need to see any demoralization in
is the agency that protects the homeland, an agency that
involves 180,000 employees.
We have here involved most of the Federal work force, when
you get the DOD, where we have also begun this process, and
Homeland Security. Very careful attention is therefore merited.
We are eliminating important protections at the same time
that we are establishing a new pay system, the pay banding
system, at the total discretion of management. With pay
involved, the time could not be worse for eliminating
protections. Pay is perhaps what makes a merit system with
impartiality most essential.
The point of any regulation we do, it seems to me, should
be efficiency. Yet I look at the MSPB changes in particular,
where it takes 3 months to resolve a complaint. The MSPB is the
outside agency that looks at what the agency has done. The
hallmark of due process is that you do not investigate
yourself, but somebody with fresh eyes, not imbedded in
protection of one or the other of the parties gets to look at
the matter. Very, very serious when you eliminate some of that.
And for what? Is 3 months too long? Find me a system that
resolves these matters in less time.
Indeed, the indications are that there isn't a problem at
all here, since 80 percent of the time the agency prevails.
What is it that we are after? I need to know what is it that we
were after that we were not achieving by outside review,
particularly given the predominance of evidence standard and
even a lower standard in performance cases, substantial
evidence.
Mr. Chairman, the more I learn about how other countries
run their governments, the more I appreciate what the merit
system has meant in eliminating those kinds of matters--bribes,
favoritism--in our own system. Our system stands up among the
systems of the world in this regard. Impartiality has been its
hallmark. The Homeland Security regulations do not yet meet
that burden. This matter needs more work; it needs greater
consultation with those who will be bound by the system. I
think it needs more work at the drawing board.
Thank you very much, Mr. Chairman.
Mr. Porter. And thank you for your testimony.
I believe that is the end of our opening statements.
At this time, what I would like to do is ask if everyone
would stand on all the panels so I can administer the oath,
please.
[Witnesses sworn.]
Mr. Porter. Let the record reflect the witnesses have
answered in an affirmative manner, and we will now start with
our first panel.
On our first panel today we will hear from David Walker,
the U.S. Comptroller General from the Government Accountability
Office.
Mr. Walker, as always, it is a pleasure to have you here,
and you are recognized for 5 minutes.
STATEMENT OF DAVID M. WALKER, COMPTROLLER GENERAL, U.S.
GOVERNMENT ACCOUNTABILITY OFFICE
Mr. Walker. Thank you, Mr. Chairman. Congratulations on
your appointment, and thank you for the opportunity to appear
before this inaugural meeting under your chairmanship.
Mr. Davis, always good to see you, and other members of the
subcommittee.
Mr. Chairman, I respectfully request that my entire
statement be included into the record so that I can move to
summarize it now.
Mr. Porter. Absolutely.
Mr. Walker. Thank you, Mr. Chairman.
Two comments at the outset. First, as you know, GAO put the
lack of an effective human capital strategy by the Federal
Government on our high risk list on January 2001. Much progress
has been made since then, but quite a bit remains to be done. I
do agree that this is a very important subject matter, because
whatever happens at DHS obviously has broader implications for
reform elsewhere in the Federal Government.
Second, I would note that GAO has been leading by example
in this area. We have had broad banding since 1989; we have had
pay-for-performance since 1989. And with the assistance of this
subcommittee, this committee and the Congress at large, we now
have additional flexibilities, as a result of legislation that
was enacted last year, to move to a more market-based and
performance-oriented classification and compensation system
that will enable us to reward people based upon skills,
knowledge, and performance, while maintaining important
principles and incorporating adequate safeguards to maximize
consistency and avoid abuse of employees, which is very
important, because, after all, our people are our most valuable
asset, no matter what agency you are dealing with.
In GAO's longstanding professional approach to try to take
a fair and balanced view, I would like to say, Mr. Chairman,
three positive things, three areas of concerns, and three
points about the way forward with regard to the matter before
this committee.
On the positive side, the Department of Homeland Security
is proposing to move to a more flexible, contemporary
performance-oriented and market-based compensation system that
will include consideration of occupational clusters and pay
bands that will endeavor to try to better reflect labor market
conditions in various labor markets, and that will end up
having a variety of features that are more reflective of the
knowledge-based work force that now is represented by the
Federal Government. Second, it is pledging to continue to
involve employees and union officials throughout the
implementation process. They have had more collaboration than
some others in the past in this regard, although it is
important that it be meaningful collaboration, not just pro
forma collaboration; and obviously that is a facts and
circumstances determination. Third, they are pledging to
evaluate the implementation of the new system, and it is my
understanding they are also proposing to engage in a phased
implementation process. I think that is critically important
given the significance and size and the scope of the Department
of Homeland Security.
As far as three areas of concern, there are a lot of
details that are yet to be defined, and details matter. And
depending upon how these details are defined could have a
direct effect on the likelihood that it will be successful and
with regard to areas such as fairness and consistency. Second,
DHS is proposing to consider adopting core competencies, but
has not committed to do so, and as has been mentioned, is not
necessarily committing to put all expectations in writing. My
personal view is that one should strongly consider core
competencies as a way to move forward in this area. Those
should be in writing, and I think that they can very much prove
to help set expectations at the same point in time. Third,
there is no guarantee that the proposed approaches that DHS is
going to follow will result in meaningful differentiation in
performance. While in general they do not propose to have a
pass-fail approach other than for possible certain entry-level
positions, they are talking about possibly a three summary
rating level categorization beyond the pass-fail, and I have
serious concerns as to whether or not you can achieve
meaningful differentiation in performance based upon just a
three level of rating system.
As far as the three issues for going forward, first, I
think that DHS could benefit for consideration of having a
chief operating officer or chief management officer to elevate,
integrate, and institutionalize responsibility not just for the
success of this effort, but also for the overall business
transformation effort and integrating the 22 different
departments and agencies that have come together to make DHS,
because achieving that is something that is going to take many
years, is going to take the sustained attention of a top
executive with a proven track record of success. Second, it is
absolutely critically important that there be effective on-
going, two-way consultation and communication in order to make
this reform a reality. And last, but certainly not least, it is
absolutely critical that there be an adequate infrastructure in
place to make effective use of these authorities before they
are implemented. There needs to be, among other things, an
effective human capital planning process--modern, effective,
credible, and hopefully validated performance appraisal
systems--with adequate safeguards in order to maximize
consistency and to prevent abuse before the new authorities are
implemented. Failure to do that is a high risk strategy.
So in summary, Mr. Chairman, there are some positive areas,
there are some areas of concern, and there a few comments about
the way forward. But as I would reinforce where I started, we
have been on this business longer than just about anybody in
the Federal Government, so I can speak from real live
experience, rather than theory, with regard to a lot of these
issues.
Thank you, Mr. Chairman.
[The prepared statement of Mr. Walker follows:]
<GRAPHICS NOT AVAILABLE IN TIFF FORMAT>
Mr. Porter. Thank you very much, Mr. Walker.
We now move into the question and answer period, and I have
a few questions I would like to begin with, and some comments.
First of all, I very much appreciate your testimony. I
appreciate that in the Federal Government we like to kill
trees, because I see there is a lot of backup paper here, and
that is OK; I know that is how it works. But some of your
comments I think can certainly scare some employees. And I
appreciate the fact that as a new Member I am looking at all
sides equally. Flexibility scares employees, because right,
wrong, or indifferent, they are accustomed to a process that
they have followed for, in some cases, 50 years, in some cases
less. There is concern about the collaboration, having read
some of the backup testimony, that there was, other than
hearings, true collaboration. Add to that the fact that
flexibility is a real concern. I share that not only do you
pledge, we do also, to evaluate these different phases as they
unfold.
But noW on to some specific questions.
As the chief operating officer, you mentioned you are
calling for DHS to establish a COO. Can you explain that a
little bit, how you think we should do that and go about
implementing that position?
Mr. Walker. I think there are selected departments and
agencies that could benefit for having a level two official.
You can call it deputy secretary for management, you can call
it a principal undersecretary for management or operations who
in effect would be responsible for the planning and the
integration of the overall business transformation process.
That includes things like financial management, human capital
strategy, information technology, knowledge management, change
management.
As Ms. Holmes Norton has mentioned, the fact of the matter
is this is a merger of 22 different departments and agencies
with different systems, with different personnel practices,
with different policies, and it is a massive effort to be able
to effectuate this integration with minimal disruption and
while protecting our homeland security. The fact of the matter
is that it is going to require sustained attention over several
years in order to achieve this, and I think consideration
should be given to establishing such a position that would be a
person with a proven track record of success, with a
performance contract, with a term appointment hopefully of
around 7 years, who would be able to help make sure that there
is consistent attention over a sustained period of time in
order to try to help maximizing success and to ultimately
institutionalize these issues, which otherwise may not occur.
Mr. Porter. Additional question. In hearing your testimony
again, talking how this would improve or help prevent future
terrorist attacks. And I know from my colleagues, they
mentioned the concern that this is going to make a difference.
Would you be very specific how you think this is going to make
this country a safer place to live?
Mr. Walker. Well, this is not a panacea, but I can tell you
that do not underestimate the degree of difficulty in achieving
all the different business transformation elements of the
Department of Homeland Security; it is the largest merger since
the establishment of the Department of Defense in 1947 and,
quite frankly, they have huge challenges on their own. I think
the fact of the matter is, as you know, Mr. Chairman, we just
added to our high risk list, information sharing, and the
merger and integration of the Department of Homeland Security
remains on our high risk list. So the fact of the matter is if
you have somebody focused on this full-time, over a sustained
period of time, you are going to make a lot more progress in
trying to help facilitate effective information sharing; you
are going to make a lot more progress in helping to assure that
you are implementing these new flexibilities in a fair and
responsible manner, and within a reasonable timeframe. That is
obviously going to help homeland security because, as was
mentioned, if this isn't done right, it can have a significant
adverse effect on morale, it can have a significant adverse
effect on a variety of other operational matters.
Mr. Porter. Thank you, Mr. Walker. I have additional
questions, but I will wait until later.
Any questions, Mr. Davis?
Mr. Davis. Thank you very much, Mr. Chairman.
Mr. Walker, it is always good to see you, and I appreciate
your testimony. On the next panel, Ron Sanders of OPM will
testify that the DHS regulations provide for a balanced human
resources system that will hold managers accountable and
provide for due process. He also states in his testimony that
there is no danger whatsoever that the pay of individual DHS
employees will be politicized. Given what has been outlined in
the regulations, do you concur with Mr. Sanders' assessment of
the system?
Mr. Porter. I have little doubt that is what their intent
is, but I think there are a lot of details that need to be
outlined in order to provide reasonable assurance that in fact
that will be the case. We have, for example, in our agency, a
number of checks and balances that exist outside of the normal
line management structure to provide reasonable assurance that
the standards are applied consistently, fairly, and in a non-
discriminatory fashion. Furthermore, we have transparency over
the results, reasonable transparency over the results of the
effort; and obviously transparency can be a good thing in order
to try to provide some checks and balances. In addition to
that, we have both internal grievance processes and external
appeal processes to an independent party. I think having
elements like that are important in order to maximize the
chance that in fact that intent will be a reality.
So I am confident as to their intent, but without knowing
all the details it is tough to say that you can say that with
certainty.
Mr. Davis. I have some concerns about the composition of
the Mandatory Removal Panel and the labor relations board. I
grew up on the farm, and it seems to me like the Constitution
suggests that the fox will determine when to let the chickens
out. Do you think that with the appointment simply being that
of the secretary, that this board is likely to have a balanced
approach to making decisions about employees who would come
before it?
Mr. Walker. I think if it is made by the secretary, one has
to think about what is the process that is followed in coming
up with candidates from whom the secretary would select. And
let me give you an example, first-hand experience. We at GAO
have something called a Personnel Appeals Board. It is a group
of individuals who are appointed by me to be able to hear
appeals of our employees and to make an independent judgment as
to whether or not we have acted fairly and consistently with
our policies and procedures and applicable laws. But when I
make appointments to that body, the Personnel Appeals Board, I
seek advice and counsel from our Employee Advisory Council, I
seek advice and counsel from a variety of parties; they present
candidates that are acceptable to the broad range of interests
and I will select from that list of candidates.
So part of the issue is if the secretary is going to make
the appointments, you need to be concerned with what is the
process that takes place to submit candidates to the secretary
from whom he will select to try to provide reasonable assurance
that they are not only qualified, but they are credible with
regard to all the different stakeholders.
Mr. Davis. The individuals that you select, where do they
come from? Are you given any kind of list or can you just go
out in the open environment?
Mr. Walker. We have a notice that we go out with. We seek
nominations; people can nominate themselves. We have a review
panel within the agency that will end up reviewing potential
candidates. We seek input from our employees; we seek input
from others within the agency. We also actively seek to achieve
balance. People that have past experience representing
employees, as well as people that have past experience
representing agencies. The whole thing has to be balanced and
it has to be credible, because if it is not balanced and
credible, it is not going to be used and it is not going to be
effective. I am pleased to say that the system that we now had
in place for 20 plus years has worked very well, and I am also
pleased to say they don't have a lot of work to do, and I want
to keep it that way, if I can.
Mr. Davis. Thank you very much, Mr. Chairman. I have
another question, but I will wait and come back.
Mr. Porter. Thank you, Mr. Davis.
Mr. Issa.
Mr. Issa. Thank you, Mr. Chairman.
Mr. Walker, my concern goes a little bit more to sort of
the drift toward performance-related pay. Later on we are going
to hear from T.J. Bonner, and we have already had a number of
instances where although Mr. Bonner is not restricted from
speaking about what he feels to be policies inconsistent with
the best interest of national security, there has been an
effort to say that his local officials aren't allowed to make
those statements. My own office has been discouraged or people
have been discouraged from coming to my office unless it is a
formal hearing, from the Border Patrol.
If you add to it the ability to affect somebody's pay based
on whether they bucked policy, don't you create a potential
that you simply are going to have higher pay for those who go
along with this administration or the next administration's
trick-down feeling of what they would like to have said or done
versus those who may legitimately be defending the best
interest of the job that their agency is required to do? How do
you prevent policy trickling all the way down to pay when in
fact agencies very often, particularly within Homeland
Security, differ, and differ in the most strident ways, about
the best way to achieve homeland security, border integrity,
etc.?
Mr. Walker. Well, a number of ways. No. 1, we have
competencies that are clearly defined in writing that were
developed in conjunction with all of our employees for each
applicable occupation, and which have been validated by
employees through a formal process to maximize acceptance and
credibility, and to minimize litigation. So they are evaluated
based upon these written competencies, which they are actively
involved in developing. We also have safeguards in place so
that if somebody believes that they have been unfairly treated,
there are mechanisms within our agency that they can go to,
either informally or formally, and they also have the Personnel
Appeals Board, which is an independent outside body that they
can go to in lieu of the Federal courts, although on certain
circumstances they continue to have the right to go to the
Federal courts.
So, again, that is why I am saying having a competency-
based system that grounds these types of decisions, having
adequate safeguards, having appropriate transparency and, as
far as the safeguards, both internal as well as external appeal
rights I think can go a long way to minimize that possibility
of abuse.
Mr. Issa. One followup question, but on a different area.
When you talked about a chief operating officer and a 7-year
term as a hypothetical, I come from corporate America, where
our term is only however the last quarter went very often, and
rightfully so, although I notice that Carly Figurino will
probably be running the World Bank in return for having been
fired from her last job, so just getting fired is not always
the end of a career. But I guess my question is no matter how
good the past performance of a proposed chief operating
officer, by definition there is no equivalent to this job;
there is nothing where you say, boy, this person did this in
Connecticut, with its couple million papers and GDP about equal
to San Diego, but we are going to run them over and we are
going to provide them this opportunity to head this huge
agency. What safeguards would you have on, particularly the
first term of that person, if you give them a 7-year term and
they don't perform?
Mr. Walker. Well, for one thing, I think there should be
statutory criteria that would have to be met in order for
somebody to be appointed. Second, I also believe that this
level position should be a PAS, president appointee, Senate
confirmation. Third, I believe that it should have a
performance contract. I believe that somebody should have a
performance contract, and that could be grounds for removal if
they are not in compliance with their performance contract. It
also should have an effect on how much they get paid, as to
what type of results they are generating within certain
limitations.
One last thing, if I may, on your prior comment about
compensation. We clearly have to reform our compensation system
in the Federal Government. And let me give you two reasons why.
No. 1, the current methodology for determining market-based
competition by locality is fundamentally flawed. No. 2, at the
present point in time, for executive branch agencies that are
subject to the General Schedule, 85 percent plus of annual pay
adjustments have nothing to do with skills, knowledge, and
performance; 85 percent plus. And, in addition, under current
law, individuals, although they are not big in number,
individuals who are unacceptable performers are guaranteed
across-the-board pay adjustments, even if they are unacceptable
performers. That just doesn't make sense, I would respectfully
suggest.
Mr. Issa. Thank you, Chairman.
Mr. Porter. Thank you.
Mr. Cummings.
Mr. Cummings. Thank you very much.
Mr. Walker, I was listening to what you just said, and, you
know, pay is a big deal. In the Congress we have this book. I
haven't looked at it, but apparently it tells everybody's
salary by position, and if you see the alleged director in one
office making $85,000 and the one in your office is making
$80,000, you ought to have a conference to figure out why there
is a difference. So people are concerned about their pay; it
touches every aspect of their lives, and it goes to morale, as
you well know. And this whole thing of requiring performance
expectations be in writing, that is a concern of yours, is that
right?
Mr. Walker. Oh, it is, absolutely. There are different ways
you can do it, but I clearly think you have to have things in
writing, and I think competencies are a way to do that, to
accomplish a number of objectives.
Mr. Cummings. So elaborate on what you just said on the
competencies.
Mr. Walker. Take, for example, GAO. One of the things that
we do is we have different kinds of occupations. One of the
type of occupations we have are auditors, investigators,
analysts, evaluators. And one of the things that we did is we
worked with those individuals to come up with a set of
competencies, things like thinking critically, achieving
results, effective communications; and we defined them in very
specific terms. They then validated that, yes, these are the
type of competencies you have to have in order to be successful
in that particular occupation. We then came up with different
rating levels, in other words, when would you be rated meets
expectations, role model, exceeds expectations, below
expectations, based upon these different standards. So that is
a basis by which you can set expectations and you can also be
able to implement a performance appraisal system that has some
credibility and that can meaningfully differentiate in
performance. It is not perfect. There is no system that is ever
perfect, but it is light years ahead of where we were.
Mr. Cummings. You said that 80-some percent was not based
on competency. Do you know what that 80 percent is based on?
Mr. Walker. Yes, sir. Yes, sir. What that is related to is
when the Congress each year passes the across-the-board pay
adjustment, which, as you know, is more than inflation, it is
intended to include a number of factors--for example, last year
it was 3\1/2\ percent. Under current law, it is my
understanding that every single individual is entitled to that
3\1/2\ percent below the SES level, irrespective of their
performance. Furthermore, as you know, under the GS schedule,
you get a step increase due to the passage of time. So if you
combine that 3\1/2\ percent, which was the case last year,
along with the step increase, which is merely due to passage of
time, that is, my understanding, roughly about 85 percent of
comp. And then when you consider that the merit step increases
are based upon performance appraisal systems that, frankly, in
many cases are long outdated and don't meaningfully
differentiate in performance, a vast majority of people, or a
significant percentage of people get those as well. So we have
a system that is really not related very much at all to skills,
knowledge, and performance, and in a knowledge-based work
force, there is a fundamental disconnect.
Mr. Cummings. And having run a law office for about 20
years where, if you don't perform, you don't get paid, I also
understand you have to have a balance there. While you don't
want people to just be sitting and getting a check, where is no
real incentive because it is not connected with merit, you also
want to make sure, particularly in a subjective system, that
there is fairness. And one of the things that--and this will be
my last question. Where does cultural sensitivity come in? Do
you think that should be a part of the criteria when you are
looking at expectations? The reason why I raise that is that
when you look at the private companies that are doing well and
are good places to work for and have the most diversity, there
is a trend taking place, as I am sure you may be well aware,
where cultural sensitivity becomes very significant. They want
to know how many minorities this manager hired, what outreach
he did, how many women did he or she bring in, or whatever. And
that becomes a part of their performance evaluation. Do you
think that is important here?
Mr. Walker. Well, I think you do need to make sure, as we
try to in our performance appraisal system, to try to achieve a
diverse work force that is inclusive, that maximizes
opportunities for all, and that does not have any tolerance for
discrimination at all. And I know that is something that we end
up incorporating into our evaluation. At the same point in
time, one has to make sure that you are hiring people that have
the skills and knowledge, and who can end up performing at the
level that you expect. You can't compromise that, but we should
have an active and ongoing outreach effort to achieve an
inclusive work force, a diverse work force, and to have zero
tolerance for discrimination.
Mr. Cummings. Thank you very much.
Mr. Porter. Thank you.
Ms. Holmes, do you have a question, please?
Ms. Norton. Yes. Thank you very much, Mr. Chairman.
Mr. Walker, I appreciate the work you have done in this
area, but this is not chicken feed we are fooling with here. We
have involved agencies that had nothing in common until
September 11th and, frankly, they don't have a lot in common
now; many of them still have missions that are largely or very
substantially devoted to things that have nothing to do with
homeland security. So we are trying to meld people who we never
would have thought of putting together except for September
11th.
You bragged on what you did before you went to a more
flexible approach. Do I understand--I heard you talk about it
before--that the kind of personnel infrastructure to assure
fairness and collaboration that you had in place before you
went to a new system is not in place when, on March 3rd,
Department of Homeland Security is supposed to move to this new
system?
Mr. Walker. It is not clear to me that they are going to
have the same kind of safeguards that we have in our system.
And I will say, as well, Ms. Holmes Norton, that we have
strengthened our safeguards in the last several years as
Congress has given us additional flexibility, because that is
critically important.
Ms. Norton. So you would recommend, I take it, that DHS do
the same based on your own experience.
Mr. Walker. I think they could be informed by our
experience and adjust it as they deem appropriate, but certain
aspects I think have broad-based application elsewhere in
Government.
Ms. Norton. One of the things you emphasized in your
testimony and in the way you dealt with your own employees was
what you called meaningful collaboration, two-way consultation.
Do you believe that sufficient ``meaningful collaboration'' and
``two way consultation'' has occurred in this instance
involving this agency with 180,000 employees?
Mr. Walker. I haven't made an independent judgment on that.
I will tell you this: it is very clear to me that there were a
number of efforts taken to get input from a variety of parties
and, frankly, a lot more than some other departments and
agencies have done.
Ms. Norton. Well, what other departments and agencies are
trying to put together a brand new system? Mr. Walker, if we
can't get some independent view from you on this because you
haven't made a judgment, which is what this whole thing is
about, I don't know who we are going to get it from. That is
what the GAO is for. I am asking you whether, in your view at
this point, there has been sufficient collaboration, two-way
consultation, or whether you would recommend more of that.
Mr. Walker. Based upon my understanding, there was
significant interaction that occurred in coming up with these
proposed regulations; however, there are differences of opinion
between the parties as to whether or not it was meaningful
enough. And part of it is how do you define what is meaningful
enough. They clearly have done a better job than the Defense
Department has been doing, and the Defense Department is now
trying to be informed by some of the things that DHS did. I
wish I could be more definitive than that.
Ms. Norton. All I can say, Mr. Walker, is that I bet if I
asked your employees, they would have something more definitive
to say. We never expect people to have the same view, but,
again, if we can't get an outside opinion on that, I don't know
how to judge what the unions are saying against what management
is saying.
Let me ask you this. The Department of Homeland Security
has the authority to replace the MSPB appeal system altogether
with an internal review process, and it has chosen not to do
that, with few changes. Would you recommend that they continue
to place themselves under MSPB, as they have now chosen to do?
Mr. Walker. I think unless there is a clear and compelling
reason to change, then I would question why you would. My
understanding is, as you said, that they are not proposing to
change that, although with some modifications.
Ms. Norton. And you think that is wise at this time?
Mr. Walker. I think you have to have a qualified and
independent external body to be able to hear certain types of
employee appeals, and MSPB is obviously one option.
Ms. Norton. If you have emphasized as well the necessity to
have a full personnel approach and evaluation approach in
place, let me ask you this. If these expectations of employees
are not in writing, if the core competencies that you have
testified are not in writing and no one knows what they would
be, and there was some kind of adverse action or somebody
protested her pay, would you tell me how that would be handled
under the present situation, without those things in writing?
Mr. Walker. I would respectfully suggest you ought to ask
the Department of Homeland Security officials on that. I think
it would make it very difficult and it would probably end up
being interviewing people as to who said what to whom when, and
what, if any, evidential matter is there that might exist
through emails or notes or other type of correspondence in
order to be able to corroborate one side or the other.
Ms. Norton. Finally, let me ask you this. Eighty percent of
the people get a satisfactory; you are talking about a
mandatory system, unlike any system in the world. The Civil
Service system was created precisely because of the difficulty,
when people are basically competent, of drawing nice
distinctions. I mean, based on what you say, the implication is
that large numbers of Federal employees are incompetent and,
therefore, you shouldn't expect across-the-board notions of
competence. Beyond that, I would like to ask if the problem is
one that anybody could see is unacceptable, and that is that
even if, as you say, you have unacceptable performance you are
guaranteed a raise, then why in the world haven't we gone at
that first, rather than go at the whole system, as if the
average Federal employee should feel that perhaps she is not
competent because so many of you in fact get raises?
I wonder if you can find a better way to state what the
problem of this system is, rather than implying that large or
much larger numbers of people are incompetent because they are
rated satisfactory and get their automatic raise at the same
time that we here in the Congress give everybody else because
they are not performing so poorly that we think that they
should receive no raise. And, of course, if they are performing
so poorly, I don't know of a Member that would keep that person
working. So I want to know what it is in the present
regulations of the Civil Service that says you don't care how
bad you are, you qualify for your raise, while you haven't come
forward to say this is what we ought to do about that and why
we haven't done something about that earlier.
Mr. Walker. Let me make it clear. I have run three Federal
agencies, three in the executive branch, one in the legislative
branch. I have run worldwide operations of one of the world's
leading consulting firms. My experience has been, at least with
the agencies that I have dealt with, civil servants are as good
or better than the private sector. So let me make that very
clear.
Ms. Norton. Well, it is real important to say that every
once in a while, Mr. Walker.
Mr. Walker. No, no, I think it is very important. I have
said it many, many, many times.
Ms. Norton. Not a word was said of that kind in your
testimony, sir.
Mr. Walker. Well, I just said it.
Ms. Norton. Until I, on cross examination, drew that out of
you.
Mr. Walker. Well, I would respectfully suggest that if you
end up asking 100 people who is a champion for human capital in
the Federal Government, you will get my name probably 90 plus
times.
So understand they are as good or better than the private
sector. My comment was not whether or not they had a meets
expectation rating. My comment is where you have a few people,
and not a lot--for example, at GAO there is less than two dozen
people out of over 2,000 that would be in the category that I
am talking about.
Ms. Norton. How do they get their raises, then?
Mr. Walker. The way that they----
Ms. Norton. What is there in the regulations that
guarantees--that is what you said, guaranteed them their
raises?
Mr. Walker. Federal law guarantee does not provide an
exception. For individuals who are not performing an acceptable
level or who want to--performance improvement plan or whatever,
does not provide an exception for them getting the across-the-
board adjustment. And I have testified on more than one
occasion that Congress ought to re-look at that. I do not
believe that you should guarantee people a raise if they are
not performing at an acceptable level.
Ms. Norton. So you are telling me that if somebody
repeatedly performs at an unacceptable level, his raises keep
coming in?
Mr. Walker. My understanding is unless and until they are
removed, that is the case, if they are ever removed.
Ms. Norton. Have you ever made any recommendations as to
how we ought to handle that?
Mr. Walker. Yes, I have.
Ms. Norton. How should we handle that?
Mr. Walker. I think you ought to change the law such that
if somebody is not performing at an acceptable level, they do
not receive the across-the-board adjustment. There are not that
many people in that category, but especially when we are in a
circumstance in which we are increasingly constrained budgets,
I think it is something that needs to be considered.
Ms. Norton. Well, it certainly is, but I would suggest to
you that when speaking about reforms of an entire system as
large as the 180,000 Homeland Security system, you speak about
that group, not give it as a justification for everything that
has been done with respect to these changes.
Thank you very much, Mr. Chairman.
Mr. Walker. And if I can, Mr. Chairman, come back.
I agree with you on several things, Ms. Norton, and that is
these 22 agencies that were combined to make the Department of
Homeland Security, before September 11, 2001, before they were
combined, many of them weren't in the homeland security
business. OK? A lot of them are in it now, but to very
differing degrees. You have very different kinds of career
streams, very different kinds of cultures, very different types
of systems, even different kinds of uniforms. OK? As little
things as that. So it is a massive undertaking. That is why I
come back to say we need to approach this in a considered
manner, with the right type of attention, on an installment
basis, and it is really important they get it right, because it
is not only important to the Department of Homeland Security,
it has implications beyond the Department of Homeland Security
as well.
Mr. Porter. Thank you, Mr. Walker. I know that you are
trying to depart in about 5 or 10 minutes. I am going to hold
my questions.
Actually, Ms. Holmes Norton, you asked some questions for
me, and I appreciate it.
I would like to turn it over to Mr. Davis for one
additional question.
Mr. Davis. Thank you very much, Mr. Chairman. I only have
one additional question.
Mr. Walker, you described how you select individuals for
the Mandatory Removal Panels from the list, but I understand
the Secretary of DHS can actually ignore anybody that is
submitted or lists that the unions might provide for those
recommendations, and he or she really has sole discretion to
make those selections. The other question, though, is you have
just gone through modernization of your agency, of the GAO. If
you were making recommendations to Homeland Security, what
would you say to them that they really need to do?
Mr. Walker. Well, I think there is quite a bit in my
testimony, and I can tell you that we have shared a lot of our
knowledge and experience with the Department of Homeland
Security, as we are doing with the Department of Defense, about
what we have done and how we have gone about it; what has
worked and what hasn't worked, for their consideration as they
deem appropriate. I would be happy to provide for the record,
if you want, Mr. Davis, if I can think of additional things
that I haven't already put in my testimony or something, to
provide that for the record.
Mr. Davis. OK.
Mr. Porter. Thank you.
Mr. Davis. Thank you very much, Mr. Chairman.
Mr. Porter. Thank you.
And we thank you, Mr. Walker, for being here and for your
testimony.
Mr. Van Hollen. Mr. Chairman, if I could ask Mr. Walker
just a few questions.
Mr. Porter. Certainly.
Mr. Van Hollen. I know your time is short, but just to
followup on the pay-for-performance issue, because we have had
a lot of testimony in this subcommittee and the full committee,
and even joint committees with the Senate, on this, and I think
everyone agrees that the concept of paying people based on
performance or merit or contribution, the result we want for
taxpayers, is important. The devil is in the details. And I do
recall testimony you gave before a joint Senate-House committee
last year where you sort of graded different agencies and
departments within the U.S. Government as to how prepared they
were at laying the groundwork for that. And I know you and the
GAO worked very hard over many years to try to build
predictability, reliability into the system, and I am very
concerned that rushing into this is going to create havoc, it
is going to undermine the confidence in the system. There is a
story in the Metro section today about pay-for-performance at
NASA, I believe, where people feel that employees are being
rewarded based on going along to get along, as opposed to
merit, and that is always the trouble when you go to these
systems, where there are not clear indicators.
Are you confident that the Department of Homeland Security
has in place today the kind of system that would inspire
confidence, predictability, clear standards for performance
that would make sure that we avoid what I think we probably all
want to avoid, is people being rewarded based either on
political loyalty or because they're the boss's favorite, or
something other than merit.
Mr. Walker. Well, they have stated their intention to have
it in place. They don't have it in place today. Several
comments that I would make that I think are relevant to this.
First, you need to move on an installment basis, and they have
intimated that is what they intend to do. You have 170,000-plus
individuals, very different occupations, a number of different
locations. You need to move on an installment basis. Second,
you need to have that modern effective and credible, and
hopefully validated, preferably validated, performance
appraisal system based on competencies or other written factors
in place, and I would recommend tested for 1 year, before you
go to broader-based pay-for-performance. And I do, however,
believe that, as Ms. Holmes Norton and I exchanged earlier,
that individuals, even before you go to the broader-based pay-
for-performance, I do not believe that individuals--and there
are not many, let me make that clear, there are not many--who
are not performing at an acceptable level should be guaranteed
any pay increase, whether they are under the GS system or under
a more flexible market-based and performance-oriented
compensation system.
Mr. Van Hollen. Thank you. I hope that the Department of
Homeland Security will take your advice and hopefully what will
be the advice of this committee in that regard, because, again,
if you undermine confidence in the system at the beginning, it
is very difficult to gain that confidence down the road; and I
think it very dangerous to move too quickly in this particular
area. Talk about expanding this whole notion beyond, to the
rest of the Government, before we have even begun a small
installment program at the Department of Homeland Security
worries me a lot, and the whole Defense Department, given the
management problems at the Defense Department that you at GAO
have chronicled, I am really concerned about it there as well.
So, Mr. Chairman, I just hope that we will make sure that
this is not done in a way that will, in the end, undermine
confidence and destroy the merit system that has been in place,
albeit with some certain faults, which you have identified.
Mr. Porter. Thank you, Mr. Van Hollen. I appreciate your
questions and input.
I have a couple of questions I wish you could respond to
later. One, I am very, very concerned about the collaborative
process and some additional insights on that. Also, I am a
large supporter of keeping things simple, and it seems to me
this pay system is very complicated. And as I mentioned
earlier, the term flexibility has a tendency to frighten
people. If you would, again--you don't have to do it right now,
Mr. Walker, because I know your time is limited, but if you
would give some of your insights on this not very simple pay
system and how we can help share that with some of the
employees.
Having said that, let me conclude by saying that I concur,
we cannot rush into a major change. I am anxious to hear from
DHS this morning to get their perspective. My understanding is
that they are going to be considering extending this through
2009. But I share those concerns and definitely appreciate your
input and your comments this morning, Mr. Walker.
Mr. Walker. Thank you, Mr. Chairman. Happy to answer any
questions that you or other Members may have for the record.
Thank you so much.
Mr. Porter. Thank you.
I would like to bring up the next panel, the second panel
of witnesses. If they would come to the table, please.
Good morning, gentlemen. Do you all agree that our meeting
should be in Las Vegas? Is that OK? Just checking.
First to open with a statement from the Honorable Mr. Neil
McPhie, the chairman of the Merit Systems Protection Board.
Following the Honorable Mr. McPhie, we will have Mr. Ronald
Sanders, the Associate Director of Strategic Human Resources
Policy at the U.S. Office of Personnel Management; and,
finally, we will hear from Mr. Ronald James, Chief Human
Capital Officer to the Department of Homeland Security.
I thank you all for joining us today.
Mr. McPhie.
STATEMENTS OF NEIL A.G. MCPHIE, CHAIRMAN, MERIT SYSTEMS
PROTECTION BOARD; RONALD SANDERS, ASSOCIATE DIRECTOR FOR
STRATEGIC HUMAN RESOURCES POLICY, U.S. OFFICE OF PERSONNEL
MANAGEMENT; AND RONALD JAMES, CHIEF HUMAN CAPITAL OFFICER,
DEPARTMENT OF HOMELAND SECURITY
STATEMENT OF NEIL A.G. MCPHIE
Mr. McPhie. Thank you, Mr. Chairman. Mr. Chairman, members,
I am Neil McPhie. I am the chairman of the U.S. Merit Systems
Protection Board. As you know, the Board is an independent
quasi-judicial agency established to protect Federal merit
systems against partisan, political, and other prohibited
personnel practices. We carry out our statutory mission through
the adjudication of employee appeals of personnel actions and
by conducting objective studies of the Federal merit systems.
I appreciate the opportunity to appear before you this
morning to discuss the potential impact of the new Department
of Homeland Security appeal system on the Board. I respectfully
submit my written statement and request that it be included in
the hearing record.
I will use this time simply to summarize some of my
comments.
Mr. Porter. Thank you.
Mr. McPhie. As mandated by statute, the Board participated
in the consultative process with DHS and OPM for developing
these regulations. The Board took its consultant role very
seriously; it is a small agency. However, members of my staff
attended numerous meetings with DHS and OPM representatives
throughout this process. We provided comments and written
responses to draft regulations. After numerous hours of
consulting with DHS, the results were that DHS decided to keep
MSPB as the adjudicator of the employee appeals, with modified
and expedited process.
I want to tell you this, in my judgment, was a major
accomplishment for the Board. Beginning this process, there was
palpable fear in the agency that the Board was going to be
deprived of some 40 percent of its cases. While we are pleased
that DHS has decided to retain the services of the Board for
the adjudication of employee appeals, the new regulations will
significantly impact the Board's procedures and operations.
Let me first begin by what has not changed. The DHS appeal
system provides an employee who is subjected to an adverse
action, such as removal or suspension, the right to a de novo
review before an outside body, the Merit Systems Protection
Board. An appeal is filed with a Board administrative judge,
and upon either party's request the administrative judge's
decision is reviewable to the full Board. The burden of proof
remains on the employing agency, and the standard of proof is
preponderance of the evidence. After a final Board decision has
been made, if dissatisfied, the employee has the right to seek
judicial review.
As someone who values the Board role in the Federal Civil
Service system, I am pleased that DHS has included these basic
features in its appeal scheme.
Now to the changes. At Board headquarters, the most
significant effect of the new appeal system is that the
shortened timeframes may require the Board to create two
administrative tracks for processing the appeals. We call them
petitions for review. Traditionally, the Board has adjudicated
cases on a first-in, first-out basis at headquarters. The Board
will not be able to treat DHS cases in this way, given the
deadlines that DHS has imposed for Board decision. It is
possible that the Board will have to create a separate track
for DHS cases and place priority on these cases over other
equally important cases. This arrangement may likely mean that
parties to non-DHS cases will have to wait longer than they
otherwise would have for a Board decision.
At the Board's regional offices, the DHS system would also
change many aspects of the processing of cases by
administrative judges. The point is both the agency and the
employee will feel the immediate impact of this compressed time
table. They will have less time for discovery, less time to
pursue settlement discussions, and less time to prepare for a
hearing that they would under the Board's rules governing non-
DHS cases.
Another major change in practice before Board judges is the
introduction of summary judgment. Summary judgment is a well
known and well utilized device in courts of law; however, that
system has not been used in the Board's procedure before now.
Therefore, it seems to me the average employee who suddenly
discovers that he or she no longer has that right to a hearing
before a judge will be, in all likelihood, surprised, confused,
and in some instances even angry. A similar right, the right to
a hearing, is a staple of Civil Service systems in many States.
This is no longer the case with DHS employees.
My red light is on, but with your permission, there are a
couple of more points I would like to make.
The overall thrust of the other changes are described in my
written statement, and that is to reduce the discretion of
Board administrative judges to manage cases according to their
individual circumstances, a discretion that historically has
been exercised and, in the main, exercised wisely. For example,
the DHS system imposes detailed rules on case suspensions and
the conduct of settlement conferences, matters that ordinarily
have been left to the administrative judge's discretion to
manage a case.
Perhaps the biggest limit on discretion of administrative
judges, a limit that also applies to the Board, concerns the
mitigation of penalties. The designers of the new system
apparently believe that administrative judges and the full
Board have too much freedom to set whatever penalty they deem
appropriate. As explained in detail in my written statement,
the Board has not chosen penalties willy-nilly , but instead
has historically given deference to the judgment of agency
managers and the mission of the agency. In any event, under the
new system, the Board may not mitigate a penalty unless it is
to disproportionate to the offense as to be wholly without
justification. Naturally, this new standard will be the subject
of interpretation by the Board and ultimately by the court, so
I can't tell you, at this point in time, what a Board's
decision will be until a live case comes before it.
I want to also point out I was intrigued by the focus on
mitigation and asked for and received statistics. I wanted to
know how many cases, on average, have been mitigated by the
Board over time, and I looked at some 3 years worth of numbers,
2002, 2003, and 2004; and what I find is at the field level,
between 2 to 3 percent of cases involve mitigation. Some of
those cases, when appealed, that decision is reversed by the
full Board, so the number of cases in which mitigation is
issued is even smaller.
It should also be noted that the portion of the DHS rules
concerning mandatory removal of fences may not work as well as
intended. First, in some cases, this portion of the rules could
work against the stated goal of streamlining the appeals
process. As DHS envisions it, if a mandatory removal action is
taken but not sustained, DHS may take a second action based on
the same conduct. The second action would then be appealable.
DHS rules do not allow for hybrid action based on a mandatory
removal charge or lesser included charge. If there was such a
hybrid action, the possibility of two Board appeals, and
perhaps inconsistent decisions, arising out of the same conduct
would be eliminated.
The second problem spot, and I think it is a significant
problem spot, concerns judicial review in mandatory removal
matters. According to the DHS rules, if the Board does not
render a decision within 30 days, or 45 days if the deadline is
extended, the Board will be considered to have denied review.
In that situation, again, according to the rules, the DHS
decision will become the final Board decision and, therefore,
appealable to the circuit court. There is no right to judicial
review without a final Board decision. That is in 5 U.S.C.
Section 7703. The statute says it quite clearly. What remains
to be seen is whether the Board's reviewing court will take
jurisdiction in a mandatory removal matter where the Board has
not actually rendered a decision. Here too the answer will have
to await the word of a court in a live case, but I will be
surprised if the court does in fact find jurisdiction in such a
case.
The changes I have discussed, and I have discussed in more
detail in my written response, will impact all aspects of the
Board's processes. It is likely that the Board will have to
increase its career staff so as to meet the expedited
timeframes in the DHS appeal system, and still provide fair and
timely adjudication for cases involving other agencies.
Whatever the cost, we are confident that we will provide the
same high quality of services for which have become known, even
in the compressed timeframes mandated by the new appeals
system.
We look forward to working with DHS to ensure the success
of its new personnel system. Thank you very much for the
opportunity.
[The prepared statement of Mr. McPhie follows:]
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Mr. Porter. Thank you, Mr. McPhie.
Next, Mr. Sanders.
STATEMENT OF RONALD SANDERS
Mr. Sanders. Thank you, Mr. Chairman. I am Ron Sanders,
Associate Director for Strategic Human Resources Policy at the
Office of Personnel Management. It is my privilege to appear
before you today to discuss the final regulations implementing
a new human resource management system in the Department of
Homeland Security, a system that we truly believe to as
flexible, contemporary, and excellent as the President and the
Congress envisioned. It is the result of an intensely
collaborative process that has taken almost 2 years, and I want
to express our appreciation to your subcommittee for its
leadership in this historic effort. Without that leadership, we
wouldn't be here today, and we look forward to your personal
involvement in the future.
Mr. Chairman, with the Homeland Security Act of 2002, you
and other Members of Congress gave the Secretary of DHS and the
Director of OPM extraordinary authority, and with it a grand
trust, to establish a 21st century human resource management
system that fully supports the Department's vital mission
without compromising the core principles of merit and fairness
that ground the Federal Civil Service. Striking the right
balance between transformation and tradition, between
operational imperatives and employee interests is an essential
part of that trust, and we believe we have lived up to that in
these final regulations.
I would like to address that balance this morning with a
particular focus on performance-based pay, employee
accountability, and labor management relations. First, pay-for-
performance.
The new pay system established by the regulations is
designed to fundamentally change the way DHS employees are
paid, to place far more emphasis on performance and market in
setting and adjusting rates of pay. But would it inevitably
lead to politicization, as some have alleged? Absolutely not.
All Federal employees are ``protected against arbitrary action,
personal favoritism, or coercion for partisan political
purposes.'' That statutory protection is still in place and
binding on DHS, and it most certainly applies to decisions
regarding an employee's pay.
If a DHS employee believes that such decisions have been
influenced by political considerations or favoritism, he or she
has the right to raise such allegations with the Office of
Special Counsel, have the OSE investigate and, where
appropriate, prosecute them, and to be absolutely protected
from reprisal and retaliation in so doing. These rights have
not been diminished in any way whatsoever.
The new system also provides for additional protections
that guard against any sort of political favoritism in
individual pay decisions. Under the new system, supervisors
have no discretion with regard to the actual amount of
performance pay an employee receives. That amount is driven
strictly by mathematical formula, an approach recommended by
DHS unions during the meet and confer process. With but one
exception, the factors in that formula cannot be affected by an
employee's supervisor. Rather, they are set at higher
headquarters, with union input and oversight through a new
compensation committee, another product of the meet and confer
process, that gives them far more say in such matters than they
have today.
The exception is the employee's annual performance rating.
That is the only element of the system within the direct
control of the employee's supervisor. And the regulations that
allow an employee to challenge it if he or she doesn't think it
is fair, all the way to a neutral arbitrator if their union
permits, another product of the meet and confer process.
Mr. Chairman, with these statutory and regulatory
protections providing the necessary balance, as well as
intensive training and a phased implementation schedule to make
sure DHS gets it right, we are confident that the new pay-for-
performance system will reward excellence without compromising
merit.
Let us take a similar look at accountability and due
process. DHS has a special responsibility to American citizens
in that regard. Many of its employees have the authority to
search, seize, enforce, arrest, even use deadly force in the
performance of their duties; and their application of these
powers must be beyond question. By its very nature, the DHS
mission requires a high level of workplace accountability. We
believe the regulations assure this accountability, but without
it compromising any of the due process protections Congress
guaranteed. In this regard, DHS employees are still guaranteed
notice of proposed adverse action and a right to reply before
any final decision is made in the matter. In addition, the
final regulations continue to guarantee an employee the right
to appeal an adverse action to MSPB or to arbitration, except
those involving mandatory removal offenses; and I am sure we
will talk about those.
Further, in adjudicating these employee appeals, regardless
of forum, the final regulations place a heavy burden on the
agency to prove its case against an employee. Indeed, in
another major change resulting from the meet and confer
process, the regulations actually establish a higher overall
burden of proof, a preponderance of the evidence standard, for
all adverse actions, whether based on conduct or performance.
While this standard currently applies to conduct-based adverse
actions, it is greater than the substantial evidence standard
presently required for performance-based removals.
Finally, the regulations authorize MSPB, as well as
arbitrators, to mitigate penalties in adverse action cases. The
proposed regulations precluded such mitigation, as does current
law in performance-based adverse actions. Let me repeat. Under
current law, no mitigation under performance-based removals.
However, the final regulations allow mitigation when the agency
proves its case against an employee by a preponderance of the
evidence. The standard in the regulation is admittedly tougher
than those MSPB and private arbitrators apply today, with far
more authority in performance cases, where, again, mitigation
is not allowed. However, given the extraordinary powers
entrusted to the Department and its employees, and the
potential consequences of poor performance and misconduct to
its mission, DHS should be entitled to the benefit of the doubt
in determining the most appropriate penalty. That is what the
new mitigation standard is intended to do, and it is balanced
by the higher standard of proof.
Finally, a quick look at labor relations. Accountability
must be matched by authority, and here current law governing
relations between labor and management is out of balance. Its
requirements potentially impede the Department's ability to
act, and that cannot be allowed. Now, you will hear that
current law already allows the agency to do whatever it needs
to do in an emergency. That is true. However, that same law
does not allow DHS to prepare or practice for an emergency, to
take action to prevent an emergency, to reassign or deploy
personnel or new technology to deter a threat, not without
first negotiating with unions over implementation, impact,
procedures and arrangements. On balance the regulations ensure
that the Department can meet its critical mission, but in a way
that still takes union and employee interests into account.
Mr. Chairman, if DHS is to be held accountable for homeland
security, it must have the authority and flexibility essential
to that mission. That is why Congress gave the Department and
OPM the ability to create this new system. That is why we have
made the changes that we did. However, in so doing, we believe
that we have succeeded in striking an appropriate balance
between union and employee interests on the one hand and the
Department's mission imperatives on the other.
That concludes my statement. I would be happy to answer
questions at the appropriate time.
[The prepared statement of Mr. Sanders follows:]
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Mr. Porter. Thank you, Mr. Sanders. Appreciate it.
Mr. James.
STATEMENT OF RONALD JAMES
Mr. James. Mr. Chairman, members of the committee, I am Ron
James, the Chief Human Capital Officer for the Department of
Homeland Security. It is a privilege to appear before this
subcommittee to discuss the final regulations implementing the
new DHS Human Resources Management System. I am proud to report
these regulations are the successful culmination of months of
difficult work by many players to accomplish the charge that
Congress set before us. They contain significant changes that
are necessary for the Department to carry out its mission. They
also unlock the full potential of our DHS civilian employees.
The collaborative processes used were designed to ensure
that a broad variety of viewpoints were considered and the best
options were adopted. For example, when the proposed
regulations were published, we made a conscious decision to
utilize an electronic comment process, facilitating the
involvement of DHS employees, their representatives, and the
general public. Over 3,800 responses were received,
demonstrating the success of this tactic and the very important
engagement of our employees.
Another component of our collaboration stemmed from
congressional direction that we engage in a ``meet and confer
process'' with employer representatives. We complied with both
the letter and the spirit of that direction, meeting before the
formal meet and confer sessions to help us better understand
each other's positions and extending the overall meet and
confer time period in an effort to resolve ongoing issues. The
collaborative process has been a meaningful one, and we have
made a number of significant changes to our final regulations
as a result.
For example, we have created a compensation committee that
includes representatives from our two largest labor unions to
address strategic compensation matters such as the allocation,
as one example, of funds between market and performance pay
adjustments. We provided our employees and unions a meaningful
role in the design of further details in the pay-for-
performance system in a process of ``continuing collaboration''
in the development of implementing directives. We have modified
our schedule for implementing the pay-for-performance system in
response to strong union concerns, as well as others, that the
proposed schedule did not allow adequate time to train
managers, to evaluate system effectiveness, and we agree that
mandatory removal offenses [MROs] will be published in the
Federal Register and made known annually to all employees.
Throughout the entire collaboration process, we followed a
set of guiding principles adopted from the onset of our design
process. First and foremost, DHS must ensure that its HR
management system is mission-centered, performance-focused, and
based on the longstanding principles of merit and fairness
embodied in the statutory merit system principles. While we
believe that our final regulations achieve that balance, there
remains several areas where we have fundamental disagreements
with union leadership on aspects of the new HR system. We
believe that these issues, such as using performance rather
than longevity as the basis for pay increases and providing for
increased flexibilities to respond to mission-driven
operational needs, or balancing our collective bargaining, go
to the very core of congressional intent in granting these
flexibilities.
The final regulations emanating from the collaborative
process point to the way to a new paradigm for human capital
management not just for DHS, but for the entire Federal
service. This paradigm includes a strong correlation between
performance and pay, and greater consideration of local market
conditions. It adopts streamlined procedures for ensuring
conformance with the principles of equal pay for work of equal
value; includes simplified and streamlined adverse action and
appeals procedures, while ensuring fairness and due process;
and reaches a balance between core Civil Service principles and
mission essential flexibilities.
Significant changes in the compensation plan include:
replacing the General Schedule with open payroll ranges;
eliminating the steps in the current system that are largely
tied to longevity; creating performance pay pools where all
employees meeting performance expectations will receive
performance-based increases; basing compensation on local
market conditions for different job types, rather than
providing all job types in a market with the same geographic
pay adjustment; absent such a market-based system, we cannot
assure DHS's ability to compete for top talent. And we are
making and going to make meaningful distinctions in performance
and holding employees accountable at all levels. Current
systems which provide a general across-the-board increase and
rarely denied within-grade increases do little to encourage or
reward excellence in the work force.
Some of our significant changes regarding adverse actions
and appeals include: streamlining the adverse action appeals
procedures by shortening minimum notice and reply periods. By
working with MSPB to modify their procedures to gain
efficiencies, without impairing the fair treatment and due
process protection; simplifying a process that is confusing to
both employees and supervisors by eliminating the requirement
for managers to differentiate between an individual's inability
or unwillingness to perform in order to address performance
issues; creating a category of offenses that have a direct and
substantial impact on the ability of the Department to protect
homeland security. These offenses would be so egregious that
supervisors have no choice but to recommend removal.
Our regulations contain major changes regarding labor-
management relations, such as requiring that we confer, not
negotiate, with labor unions over the procedures followed to
take management actions, such as assigning work or deploying
personnel. Also, bargaining over the adverse impact of
management actions on employees is only required when the
impact is significant and substantial, and the action has
exceeded 60 days. Neither the confer process nor the obligation
to bargain impact can delay our taking action. Providing for
mid-term bargaining over personnel issues, personnel policies,
practices, and matters affecting working conditions only when
the changes are foreseeable, substantial, and significant in
terms of impact and duration. The substantial and significant
test is consistent with current FLRA and private sector case
law. And in response to additional union comments and concerns
of others, we provided for binding resolution of mid-term
impasse by the Homeland Security Labor Relations Board.
Establishing a separate labor relations board focused on
the DHS mission to ensure independence and impartiality valued
by both us and the unions, the Board will not report to the
secretary. Its three external members will be appointed for a
fixed term and will be subject to removal only for
inefficiency, neglect of duty, or malfeasance.
We pledged at the beginning of this process to preserve
fundamental merit principles, to prevent prohibited personnel
practices, and to honor and to promote veterans' preferences.
We have honored those commitments. These are core values of
public service that will not be abandoned. We also set out to
fulfill the requirements of the Homeland Security Act to create
a 21st century system for human capital management. We believe
that the system we have developed accomplishes these
objectives. We are proud of what we have created and of the men
and women who have made it possible, especially those at DHS.
That concludes my remarks, Mr. Chairman, and I would
welcome any questions.
[The prepared statement of Mr. James follows:]
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Mr. Porter. Thank you, Mr. James. I appreciate it. I have a
couple questions.
Mr. McPhie, having had a chance to look at your written
statement and then, of course, hearing your verbal statement,
it appears to me that you have made it quite clear that you are
not very much in favor of this change.
Mr. McPhie. Oh, no, not at all, sir.
Mr. Porter. If I can finish. I appreciate your role is very
important in the process, but my understanding is, from some of
the discussions that you had with staff prior, that you were
concerned about losing some caseload compared to what you have
today; and in your testimony it sounds like you are expecting a
major burden upon your organization. I know that you gave some
specifics, training of judges, needing additional resources,
and I can appreciate that, but can you tell me what you see is
good about the change? Do you see anything good that could come
of this if it is done properly?
Mr. McPhie. Oh, absolutely. Our role is a little bit
different from everybody else here. Everybody here at this
table is a stakeholder in any case, in any outcome of any case.
We are not. Our role simply is when the system that is
created--and we take the system that is created as it is
created. When that system breaks down in some individual
dispute, then we step in and sort of decide who wins, who
loses, so on and so forth. So we come at this completely
differently.
When I talk about the system--and I have had many a
conversation with my good friend now, Dr. Sanders, and he knows
where I stand on issues. We have had some very tough
conversations and very friendly conversations, but in the end
very helpful conversations. I assume that the best way I can
serve the Federal employees and the best way I can serve the
President, who appointed me, was to do the best darn job I
possibly could when it came to establishing an appeals system.
I have practiced law before these kinds of systems for many a
year. Some of the conversation that was brand new to them had
been there, I had seen that. I have represented employers. I
have a unique capacity to understand what makes agency people
tick; why they get upset with review bodies like the Board. I
can tell you I have been privy to many discussions regarding
mitigation. They hate it. Why? Because it is a limit on their
power to do what they think is right. So there is a natural
tension here.
The Board is not in a popularity business. We felt that the
best way they can use us in a consultative role was really to
say to our colleagues, the designers, have you thought of this
or have you thought of that, and so on and so forth. I believe,
contrary to what I have read in many statements, that the
process provides due process to people. I think what people are
reacting to are some of the particulars about the process. But
the fundamentals of due process is in this: notice and
opportunity to defend yourself in a meaningful fashion. Due
process doesn't necessarily require defending before an
external body, but this process says let us continue the
external body, which is the Board. I think that is a good
thing.
So when I talk about some of the timeframes and so forth, I
am facing reality. Reality is I look at current caseloads and
current performance, and the Board turns around cases pretty
quickly, all things considered. And then you have a whole body
of cases that come in the door--and remember, we are going to
have DOD cases too, at some point, I hope--and we are required
to stop what you are doing and shift all your resources to this
case that takes precedence. Well, you know, if you are in a
non-DOD or a non-DHS, I am sorry, agency, they would argue that
is unacceptable. So we are sort of between a rock and a hard
place. But we have given our commitment to DHS. I think they
struggled with a lot of different concepts and so forth. I
think they started off with the desire not to have the Board,
and I think they have come a long way in, in fact, giving the
Board some power over their cases, and I think that is
extremely important.
Mr. Porter. Thank you, Mr. McPhie. I appreciate your
comments. My point was that some of the discussions had with
staff was contrary to what your presentation was this morning.
We can continue this some other time, but I appreciate your
response to that.
Mr. Davis.
Mr. Davis. Thank you.
Chairman McPhie, are you saying that your Board does not
have the resources to meet the expedited timeframes of DHS
relative to appeal?
Mr. McPhie. No, we can meet the expedited timeframes. The
question is once we meet those expedited timeframes, how does
it impact everything else. I heard Ms. Norton speak in terms of
backlogs at the EEOC and what she had to do, so I assume she
would appreciate the whole notion and displeasure and distaste
of having to explain to people why they can't get a decision.
Mr. Davis. Well, when you say impact, are you speaking of
positively impacting or negatively impacting?
Mr. McPhie. There is a potential for negative impact. I
mean, we won't know for sure until--this stuff is a work in
progress. We are looking at the numbers, the cases, where they
are, the dynamics of personnel, that type of thing, and what we
have to do at the various offices to make sure this thing
works. Frankly, our preference--and I have been told this by
staff over and over and over--in terms of regional offices,
where the first-time action is, where the case is filed, where
the hearing occurs, where there is a lot of interaction with
the public, we don't want to create two tracks of cases.
Mr. Davis. Thank you.
Mr. Sanders. Mr. Davis, let me just interject too. One of
the projections that we built into the regulations in response
to the concerns that Mr. McPhie shared with us during the
consultation process was a provision that says if the Board
fails to meet the time limits imposed, that will not prejudice
any party to a case. So there is not an automatic default. If
they don't meet the 90 days for an AJ decision, which is in
fact the current time targets anyway, or 90 days after that for
a full Board decision, a total of 180 days, if they fail to
meet that, that doesn't mean that one side or the other
automatically loses. The regulations say that doesn't prejudice
either party, they simply go about their business and render
their decision.
Mr. Davis. Very good.
Mr. Sanders, let me just ask you. In your testimony you
talked about a mathematical formula for performance payouts.
Could you amplify that a little bit? How would that work?
Mr. Sanders. There are four variables, and at the risk of
giving you all migraines: performance rating, pay pool and the
dollars in the pay pool, and the ratings distribution. We have
already talked a little bit about the rating. You will see a
multi-level rating system, except for trainees, no pass-fail,
and the pay-for-performance system in the Department of
Homeland Security. So fully successfully, most likely fully
successful exceeds an outstanding. Let us say three levels. If
you are unacceptable, you don't participate in performance pay.
And as Ron James said, nor do you get across-the-board
increases.
So let us focus on those people who meet expectations,
exceed expectations, and who are outstanding. Managers rate
those employees just as they do today. Each of those ratings
has a point value. That point value is established at a higher
headquarters through oversight of the Compensation Committee.
The funding in that pay pool is also established at a higher
headquarters with oversight from the Compensation Committee.
You simply take the rating, multiply it times the point value,
and divide the points into the dollars, and you get your share
of the pool.
And let me anticipate a question. The regulations
absolutely positively bar and prohibit forced distributions of
ratings. You can't bust the budget because the pool is finite.
You simply divide the available dollars in the pool amongst the
employees based on their rating. And the amount in the pool,
the amount of the Department's payroll that will go to
performance pay is set by the secretary on the advice and input
of the Compensation Committee, four members of which are from
the Department's two major unions, far more influence in those
matters than unions currently enjoy today, where they sit on
something called a Federal Salary Council and get to talk a
little bit about locality pay. Under the Compensation Committee
they will determine how much of the Department's annual
appropriations increase in payroll goes to performance, the
national market adjustments and local market adjustments.
Secretary reserves the right to make final decisions; after
all, he is accountable for the budget. They will decide how
that is divided up by location and occupation, and how much
goes into the performance pay pool set up under the system.
Again, unions have involvement. It is not collective
bargaining, which is what they preferred, but they have
substantial involvement in that process to provide the
oversight and credibility to make sure it works.
Mr. Davis. Let me ask you what happens to an individual who
is rated unacceptable?
Mr. Sanders. A individual who is rated unacceptable
somewhere in the salary range simply doesn't get a pay
increase, either performance pay or across-the-board. If the
employee is at the bottom of the range--and this is one of the
details the unions asked us to address. You have undoubtedly
heard a lot of folks complain about the lack of detail in the
regulations. I am here to tell you we added substantial detail
during the meet and confer process. This is one of those
details. If the employee is at the minimum level of pay, he or
she is unacceptable and everybody else in the pay range goes up
because they get across-the-board increases, the regulations
require management to take action in 90 days. They don't just
let the employee sit there. Either the employee's performance
improves and they move back up into the range with everyone
else, or the Department either demotes or removes the employee.
The unions actually asked us for that provision because it
requires management to take on the burden of proving the
unacceptable rating and proving the adverse action by a
preponderance of evidence against the employee. But if they are
in the middle of the salary range, if they are unacceptable,
they do not get performance pay or an across-the-board
increase.
Mr. Davis. So they get counseling, they get help to improve
their rating, or they know----
Mr. Sanders. Exactly, Mr. Davis. That is what that 90-day
period is for. It is not an immediate action; 90 days to
improve, and hopefully, if they do, they move up in salary
along with everybody else who is fully successful. But if they
don't, then action is taken.
Mr. Davis. Thank you very much, Mr. Chairman, and I ask
unanimous consent to have inserted into the record these two
articles here from the Washington Post.
Mr. Porter. Thank you. With no objection.
[The information referred to follows:]
<GRAPHICS NOT AVAILABLE IN TIFF FORMAT>
Mr. Porter. I have received numerous questions from law
enforcement officers. There is a concern about how they will be
evaluated under this, whether it be from Border Protection, but
certainly all law enforcement has been very consistent. Could
one of you gentlemen address some of those concerns
specifically, please?
Mr. Sanders. How about if I start, Ron, and you leap in?
The key here is what you measure. David Walker talked about
competencies. You can measure competencies, you can measure
behaviors, you can also measure results. Everyone agrees that
measuring results amongst a team of law enforcement officers is
problematic. So if you take care as to what you measure, and if
teamwork is the most important criterion for performance, you
simply structure your performance management system to ensure
that is the competency or the behavior that you reward. And we
all know that some people contribute more to a team than
others. There are observable, objective behaviors that manifest
somebody who is an excellent team member and somebody who
isn't; and as long as the Department takes great care--and I
can tell you, Mr. Porter, the Department is very concerned
about the notion of creating destructive competition amongst
employees not just in law enforcement groups, but in any
workgroup, where they have to operate as a team. And if you
take great care as to what you measure, then you can reinforce
positive behaviors that actually help the team perform at a
higher level rather than negative ones.
One of the reasons the Department has gone to a far more
measured implementation schedule, with employees having a
minimum of 1 year under the new performance appraisal system
before their pay is affected, and in the law enforcement arms
of the Department 3 years before their pay is affected, is to
make sure that they deal with that very concern you have
expressed and that we have heard from numerous employees and
their managers.
Mr. Porter. Thank you.
Ms. Holmes Norton.
Ms. Norton. Thank you very much, Mr. Chairman.
I must say all your testimony has done, Mr. Sanders, is
illustrate just how difficult it is to come up with an
objective system for pay-for-performance. Again, I speak from
some experience, where, in an agency that wasn't doing well, we
had great differences among employees. I am trying to put
myself in the place of a manager who finds herself with truly
outstanding employees at a certain level, less outstanding at
another level, no real incompetent employees. You really drive
me back to my other profession. I still am a tenured law
professor at Georgetown, and we mark on the curve. When you get
to law school, you don't expect anybody to fail, but,
particularly if it is a good law school, there is a real
necessity to drive yourself as between the As, the A-minuses
and the B-pluses. Now, no money is attached to that. And when
you tell me there is a number that you divide into the number
of employees, I see either what we are trying to get away from,
which is kind of driving toward some medium point, perhaps even
mediocrity, or rewarding my truly outstanding employees and
leaving everybody else in the lurch. Tell me how to get out of
that.
Mr. Sanders. There is enough in the performance pay pool to
make sure that fully successful employees get shares that are
worth something, those who exceed expectations get shares that
are worth more, and those that are outstanding get even more.
Let me drive you to another of your professions--and you have
alluded to this--your experience in transforming EEOC. In that
experience, it is a sort of microcosm of what is going on at
DHS. There are some who are going to take on the tough work of
transformation, they are going to do everything they can, they
are going to work long hours and take risks to see improvement
in the system, and there are others that don't. Some are along
for the ride, they still contribute; others actively opposing.
I am sure you would have loved to have a tool like this to take
those people who took on the risks, worked hard, made the
transformation work, where under the General Schedule the best
you could do was pat them on the head and said, well, if you
are due a step increase this year, you get it, but your
colleagues who may not have worked as hard may also get one,
and, by the way, everybody else is getting----
Ms. Norton. You contemplate a kind of curve division of
some kind, and yet we heard in the prior testimony from GAO
that you had no performance infrastructure in place, that no
core competence is spelled out, employee expectation spelled
out. I am really wondering if managers aren't in some kind of
jeopardy or in as much jeopardy as employees in this so-called
scientific system that you have just elaborated.
Mr. Sanders. With all due respect to General Walker, the
regulations are superimposed upon departments and agencies that
have exited for some time. For example, Customs and Border
Protection, created out of the Customs Service and part of
Immigration, has a long history of excellent human capital
practices, of identifying competencies and evaluating employees
based on them. They are not in the regulation. General Walker
is correct, the regulations do not require competencies, but
they list competencies as among those things that employees
should be evaluated on.
Ms. Norton. And what else, if not competencies, are you
going to be evaluated on?
Mr. Sanders. Depending on the job, it could be results, it
could be behaviors, it could be knowledge and skills.
Ms. Norton. And it is left up to the manager? Who is going
to decide this?
Mr. Sanders. No, ma'am. That is what the overarching system
provides. The Department and its components will be setting
those particular performance elements. It is not going to be up
to a manager to say, well, I think I am going to judge you on X
today and Y tomorrow.
Ms. Norton. So we are just at the very beginning of this
process, because then these various departments--which are all
supposed to be in the same thing, but in any case I understand
the differences--are not going to have to get together and, I
take it, department by department decide their own
competencies, performance standards, etc.?
Mr. James. No. If I could just weigh in. Let me make clear
that----
Mr. Porter. Excuse me. Mr. James, would you just state your
name for the record?
Mr. James. Yes, sir. Yes.
Mr. Porter. Thank you.
Mr. James. It is Ron James, of DHS.
The regs in fact have been published, but the regs do not
take effect until the secretary signs them. We anticipate that
labor relations, adverse actions, and appeals will probably go
into effect sometime in the fall.
Ms. Norton. What is March 3rd?
Mr. Sanders. That is simply the minimum time----
Mr. Porter. Mr. Sanders, if I could ask the panel, when you
comment, if you would state your name, it would help when they
do the minutes. Thank you.
Ms. Norton. And March 3rd is? I am sorry, I am trying to
reconcile that with what was just said. March 3rd what happens?
Mr. Sanders. That is simply the minimum period of time, 30
days after they are published, they can go in effect. But the
regulations provide in the very first subchapter that because
of that phase-in that we have talked about, the secretary then
signals at the appropriate time, when the infrastructure is in
place, it is now time to implement the labor relations and
adverse subchapters, or later it is now time to implement the
performance management subchapters.
Ms. Norton. OK, I am going to disregard--particularly based
on what you just said, I am going to disregard March 3rd and
assume that no rational being would put these into effect
before things like core competencies for each of these
agencies, does an agency, if so, were developed, before
employee expectations were fully down in writing and
understood. Is that correct?
Mr. James. It is Ron James again, and that is exactly where
I was going. I was going to share with you that right now we
are doing employee focus groups. We are doing those in 10
places around the country. We are getting employer management
input on our job clusters, that is, what is similar, what is
alike, what kind of job make sense. We are doing that with both
employees or union employees and non-union employees. At least
from our two major unions we have solicited union employees to
be involved in those focus groups. We have solicited
specifically law enforcement focus groups to be involved,
because we understand that we need to understand the dynamics
of that particular group.
And let me just add again that we are looking at this very
carefully and very slowly; not only feedback from the focus
groups, but feedback from the union. We anticipate that our
first pilot group to put our performance management in place
probably in January of next year. That will be put in place for
all of our employees, but the only employees who will be
affected pay-wise in January 2007 will be a group of 8,000
employees out of roughly about 90,000 employees who will be
impacted, because TSA, which has 45,000 employees, and the
Military Coast Guard, which has about roughly 40,000 employees,
will not be impacted and will not be part of the pay-for-
performance system.
Our second wave, which will take place the following year,
will be roughly 18,000 people. And our last wave, which will be
almost 65,000 to 70,000 people, mostly law enforcement, they
will not be impacted based on the new performance management
system or will be impacted in terms of pay until January 2009.
We have taken General Walker's comments to heart; we have
taken the unions' comments to heart. We understand that we need
to do this, evaluate it, get feedback, and we may need to make
changes; and that is part of the reason that we wanted the
flexibility of not putting details into the actual regulations,
because we may in fact understand we will need to make
adjustments. We should let the data and the feedback of the
employees drive us where we are going.
Ms. Norton. Absolutely so. Just so it gets put at some
point down in writing.
Mr. James. That is where we are heading.
Ms. Norton. You are going to have a slue of various kinds
of actions of just the kind the whole reform is designed to get
rid of unless these things are written down so that employees
can understand. I mean, that is minimally what, of course, we
would require, and that is something, it seems to me, the
committee ought to follow very, very closely.
I have to ask a question about so-called mixed cases. When
I was at the EEOC, what really confounded us most was these
mixed cases, Mr. McPhie, where you have a combination of an
adverse action of some kind and a discrimination action. Now, I
understand that some of these cases will be handled within this
so-called internal appeals system that is being set up. Will
this special panel have members of the EEOC and the MSPB
sitting on the panel, the internal panel?
Mr. Sanders. Yes, ma'am. One of the things we did, although
the law--I am sorry, Ron Sanders from OPM. One of the things
the law allowed DHS and OPM to do was modify the mixed case
procedures. We chose not to do that. We did not want to do
anything in the regulations that diminished an employee's right
to file a complaint of discrimination. So they can still file a
mixed case before the Board, and you know that process probably
better than we do. With the Mandatory Removal Panel, the same
process identically; the only exception is that instead of MSPB
members it is Mandatory Removal Panel members. When the special
panel convenes, it is EEOC and the Mandatory Removal Panel
getting together to adjudicate the case.
Ms. Norton. So it is a mixture of the--then the MSPB isn't
really involved in that internal system.
Mr. Sanders. For the cases that the Board does not hear.
For the cases it does hear, it sits with EEOC. For the cases it
does not hear, but are heard by the Mandatory Removal Panel, it
is the panel that sits with the EEOC.
Ms. Norton. Well, Mr. McPhie, what was your recommendation
on that matter, the exclusion of an MSPB member from the mixed
case notion, where it could be either discrimination or it
could be an adverse action?
Mr. McPhie. The special panel hasn't been used for some
time, for one reason or another, so there is no recent board
history about how effective the special panel is. However, the
special panel ought to have the adjudicators where the dispute
arises on it.
Ms. Norton. Can you speak more into that mic, please?
Mr. McPhie. It seems to me I don't really understand the
distinction in the composition of the panel between mandatory
removal offenses and all other kinds of offenses. I heard Ron
say that we don't hear those cases, but we do in some respect.
We don't hear them initially, but there could be a review of a
mandatory removal case before the Board, and then the Board can
issue its decision. To the extent that decision conflicts with
what EEOC's view of the outcome should be, then it seems to me
the two agencies that really have the dispute are EEOC and the
Board, as to whether or not discrimination occurred or didn't
occur.
So I go back. I have to follow----
Ms. Norton. And there is an appeal after that.
Mr. McPhie. Yes, ma'am.
Ms. Norton. Well, why is there any time saved?
Mr. McPhie. You know, I have to bow to the expertise of my
colleagues here. For better or for worse, the Congress intended
the statute to work in the way in which it has worked, OPM and
DHS are the designers, period.
Ms. Norton. But if there was an MSPB member and the EEOC
member, or somebody with expertise in both sitting on this
internal review panel when it hears these mandatory matters,
might not that decision be more inclined to be seen as final
than having one panel--and God help this internal review
person, I can tell you. If he is going to understand this mixed
system, he better start going to college right now all over
again. But wouldn't it help to bring finality if both agencies
were somehow represented in this rather small group of cases
for mandatory removal?
Mr. McPhie. Well, I hate to speculate. Cases are funny
animals. The things you expect to happen don't happen. The
things you don't expect, those are the things that happen. I
think there is a potential for some improvement in timeliness,
but until we really see this thing in action, I don't know that
we know for a fact whether or not the special panel is going to
be effective or not effective. I don't want to go too far
afield in guessing and speculating about matters that may or
may not occur, and I hope you understand that. At some point I
am going to have to put on my adjudicative hat and decide
somebody's case, and I can't bring any preconceived notions or
some baggage----
Mr. Porter. Ms. Norton, we have gone beyond our time, and
there certainly----
Ms. Norton. Yes. Thank you, Mr. Chairman. You have been
generous.
Mr. Porter. We will have another round also, if you would
like, and you are welcome to use some of my time if necessary,
but if we could wait for a moment.
Mr. Van Hollen.
Mr. Van Hollen. Thank you, Mr. Chairman.
Thank you, gentlemen, for your testimony. I just have one
comment and a couple quick questions, I hope. The first is on
the pay-for-performance. You heard the testimony of Mr. Walker
and you have heard some of the comments from the committee. The
issue is making sure when you put a system like this in place
it has the trust of the employees, the confidence of the
employees, it is reliable, it is predictable. People have been
working out with these different assessments in the private
sector for a long time, and in many cases successfully, in some
cases not successfully. But the key--and the Government
Accountability Office itself implemented a similar pay-for-
performance system. But if you don't do it right, as I said,
you are going to undermine the confidence of employees, and it
is very difficult to retrieve that once it is lost. So I think
I would just urge you to tread very carefully and consult with
this committee and others as you move forward on that.
With respect to the grievance procedure, first I want to
say that I am pleased that you decided to adopt the
preponderance of the evidence standard. There had been some
talk earlier on of having a different standard the traditional
standard. I am a little concerned and really question why you
would interfere with the Board's ability in some of its current
powers in the area of mitigation. And I think, Mr. James, you
would agree that part of the reason for having a Merit Systems
Protection Board review is because it is an independent body
outside of the agency. Is that right?
Mr. James. Yes.
Mr. Van Hollen. OK.
Mr. James. Ron James. Yes, sir, that is right.
Mr. Van Hollen. OK. And so right now the standard is that
they would support whatever action is taken by the Department,
so long as it is ``within the range of reasonableness.'' That
is the standard currently in use. So my question to you is why
would you be opposed to having an independent agency mitigate
the damages if they found that the action taken against the
employee was not within the range of reasonableness? Why isn't
that a good standard for an independent body to hold? Why do
you want to throw that out in favor of some new standard that
has no precedent associated with it and really is not clear?
Mr. James. Sir, this is Ron James again, and let me try to
do this without practicing law and be a good client. I have
been reliably advised, and I have actually read some of the
cases, but I have been reliably advised by our counsel that
they read the MSPB cases as requiring deference to managers.
Our overriding concern has, and continues to be, deference to
mission. And we would respectfully submit that the current case
law and the current standard that MSPB has in place doesn't get
us to that second critical goal, that is, deference to mission.
We happen to believe that we are just a little bit
different than other Government agencies; that when employees
don't show up to a duty or post, that is not the same at
Homeland Security as it should be at some other agency; and
that is a rationale. There are people that disagree with that,
but that is how we got there. We do agree that it still needs
to be an outside agency. We also have a very strong belief that
in order to accomplish our mission, we need to have that
mission essential fundamental principle grounded in the
mitigation principle, and we don't believe it was there.
Mr. Van Hollen. Well, let me just say I think part of
looking at the reasonableness standard, the Board, as an
independent board, can take into account what I think we all
agree is the special mission of the Department of Homeland
Security and make a determination within the context, within
the range of reasonableness. That can be a pretty big range,
given the fact that they give deference to the agency.
Anyway, I don't want to belabor the point, but I do think
that concocting a whole new standard when you have a standard
that is very broad here to begin with, I think is a mistake.
Let me just ask you----
Mr. Sanders. Mr. Van Hollen----
Mr. Van Hollen. Let me ask you quickly, before my time runs
out, and I would be happy to hear the response.
With respect to an issue regarding the ability of employees
within the Department of Homeland Security to be part of a
bargaining unit, as I understand right now, there are about
1,900 employees who are currently within the combined Bureau of
Customs and the Border Protection [CBP], who are currently
designated as bargaining unit employees eligible for union
representation, and that under the proposals you have made
there has been a re-designation of those employees, and they
would no longer be covered within the bargaining unit. I would
appreciate--first of all, I don't know if you are aware of that
issue and, second, if you are, if you could please comment.
Mr. James. It is Ron James again, sir, and I am aware of
that issue. I was aware that was before the FLRA. My
understanding is, and I will correct this if it is wrong, as of
2 days ago, that we were in intense discussions with unions
about how many of the 30,000 employees, if any, should be
excluded from bargaining unit positions; and my understanding
is we were down to under 2,000. That was my latest information.
But my understanding also is that the discussions have not been
completed and that it is a matter that will ultimately be
resolved by the FLRA if the parties can't reach a consensus.
And if I could supplement my comments to make sure that my
status report is in fact up to date and accurate, I would
appreciate that.
Mr. Van Hollen. Mr. Chairman, in fact, I would appreciate
it if you would supplement your comments in writing.
Let me, in closing, just on that last point. Is it your
intention that employees who are currently being covered by the
bargaining unit continue to be allowed to be covered by the
bargaining unit?
Mr. James. I am not sure how to answer that question. It is
Ron James again. If we move somebody from a position that
doesn't require a security clearance, and they are currently
covered and they are going to get a security clearance, it
would be our anticipation that--or if we were to promote them
where they were actually a working supervisor or supervisor,
they would in fact move outside the bargaining unit. I am not
quite sure how to answer.
Mr. Van Hollen. OK. Well, within the current
classifications that exist.
We can pursue this later, Mr. Chairman.
Also, I would also appreciate your response in writing.
Mr. James. It is Ron James again, sir, and I would be happy
to followup and provide the Chair and you with information on
the status and exactly what we are intending to do.
Mr. Van Hollen. Thank you.
Mr. Porter. Thank you, Mr. Van Hollen, very much.
I have an additional question regarding the pass-fail
system. I know we have touched upon it a little bit this
morning, but the final regs say that the entry level employees
and others in extraordinary situations will be placed under a
pass-fail system. How is it possible that such a system can be
compatible with a performance-oriented? Could you help us with
that?
Mr. James. It is Ron James again, and we are not absolutely
committed to doing that, but we felt, and I concur, that we
need the flexibility. And let me give you a couple examples.
For example, if we want you to get certified, that is, to carry
a gun, you either pass that or you fail that; you either go up,
out, or you go back. If you are in school for 9, 9 months, and
there are certain technical competencies with regard to IT,
that is either pass-fail; you either match the technology or
you don't. We simply wanted the flexibility to build in at more
of the classroom setting or the marksman certification setting
or at the IT setting where it is really a question of yes, I
understand I have mastered this particular field. We would not
see that as something we would use at other levels; we see it
as being used on a very limited basis. In many instances some
of our employees are in school for 6, 8, 9 months, and don't
have a supervisor, and they are basically going to school and
passing courses or failing courses.
Mr. Porter. Thank you.
We do have a time limitation. Are there any additional
questions?
Mr. Davis. Just one, Mr. Chairman.
Mr. Porter. Yes, Mr. Davis.
Mr. Davis. Mr. James, I understand that training on the new
system is going to begin this summer. If that is the case, who
will be trained and who will do the training?
Mr. James. It is Ron James from DHS, and let me begin with
a thesis that we are really talking about paradigm change in
terms of how our managers react and how our managers get
evaluated, and how, if our managers fail, our system will
hopefully provide consequences. We have started training
already. We have $10 million this year in our budget; we would
hope to have $10 million for next year, because we can't do
this change management without training our labor relations
specialists, our HR folks, our first-line supervisors, our
managers, the managers' managers. And we also plan to work with
Mr. McPhie, Chairman McPhie. We would anticipate--and I don't
know if we could call it training, but some cross-training with
MSPB. We also hope to have some briefing sessions with our
union brothers and sisters so that we are both dealing with the
same data base. And we would hope that would cascade down. We
also are going to need to train our employees, because we would
expect our performance management system not to be a one time a
year system, but to be an inter-reactive system, that the
employee and the manager would collaborate, establish goals,
mutually agreed upon that a line with the unit's mission and
with the departmental's missions.
So we are going to have some training all across the board.
And that is again the reason why we decided to phase this in
over a 3-year period. The training is absolutely, unequivocally
the predicate to making this work.
Mr. Davis. Thank you very much, Mr. Chairman.
Mr. Porter. Thank you.
Mr. James, Mr. Sanders, Mr. McPhie, we appreciate your
being here today. Thank you very much for your testimony. Look
forward to working with you.
We are going to have to vacate the room at approximately 1,
so I guess that is good and bad, depending on whether the
witnesses want to have a lot of questions.
So now I would like to invite our third panel of witnesses
to please come forward. We will hear from Ms. Colleen Kelley,
national president of National Treasury Employees Union; next
hear from Mr. T.J. Bonner, president of the Border Patrol
Council of the American Federation of Government Employees; and
finally we will hear from Mr. Darryl Perkinson, national vice
presidente of the Federal Managers Association.
Thank you all. You each will have 5 minutes. I will wait
for you to get situated just a moment.
I would first like to recognize Ms. Kelley. Welcome. Thank
you for being here.
STATEMENTS OF COLLEEN M. KELLEY, NATIONAL PRESIDENT, NATIONAL
TREASURY EMPLOYEES UNION; T.J. BONNER, PRESIDENT, BORDER PATROL
COUNCIL, AMERICAN FEDERATION OF GOVERNMENT EMPLOYEES; AND
DARRYL PERKINSON, NATIONAL VICE PRESIDENT, FEDERAL MANAGERS
ASSOCIATION
STATEMENT OF COLLEEN M. KELLEY
Ms. Kelley. Thank you very much, Chairman Porter. It is an
honor to be at your first hearing, and we appreciate it being
on this important subject.
Ranking Member Davis, it is always a pleasure to be here,
and I know the importance that this committee puts on issues
around Federal employees and those who we represent.
I appreciate the opportunity to testify before the
subcommittee on the final human resource management regulations
for DHS on behalf of the 15,000 DHS employees represented by
NTEU. The Homeland Security Act requires that any new human
resource management system ``ensure that employees may
organize, bargain collectively, and participate through labor
organizations of their own choosing in decisions which affect
them.''
NTEU believes that the final regulations do not meet the
statutory requirement in the following ways. First, under the
final regulations, the responsibility for deciding collective
bargaining disputes will lie with this three-member DHS labor
relations board appointed, as we heard, by the secretary with
no Senate confirmation of the board members. A true system of
collective bargaining demands independent third-party
determination of disputes, and the final regulations do not
provide for that. Second, under the final regulations, not only
will management rights associated with operational matters,
such as the deployment of personnel, assignment of work, and
use of technology, be non-negotiable, but even the impact and
the implementation of most management actions will be non-
negotiable. Third, the final regulations further reduce DHS's
obligation to collectively bargain over the already narrowed
scope of negotiable matters by making Department-wide
regulations non-negotiable.
A real-life example of the adverse impact of the
negotiability limitations on both employees and the agency will
be in an area determining work shifts even when they will last
for more than 60 days. The current system provides employees
with a transparent and explainable system. After management
determines the qualifications needed for employees to staff
shifts and assignments, negotiated processes provide
opportunities for employees to select shifts that take into
consideration important quality of life issues of individual
employees, such as child care, elder care, the ability to work
nights or rotating shifts. There will be no such negotiated
process under the regulations as issued. The impact of these
changes will be a huge detriment to Homeland Security's
recruitment and retention efforts of employees.
One of the core statutory underpinnings of the Homeland
Security Act was Congress's determination that DHS employees be
afforded due process in appeals they bring before the
Department. We have heard a lot about that already today. But
the HSA clearly states that DHS Secretary and OPM Director may
modify the current appeals processes only in order to further
the fair, efficient, and expeditious resolution of matters
involving the employees of the Department. Instead, what these
final regulations do is to undermine the statutory provision by
eliminating, as we have heard, the MSPB's current authority to
modify unreasonable agency imposed penalties, and authorizing
this new standard only when wholly unjustified. And this is a
new standard that will be virtually impossible for DHS
employees to meet.
The final regulations as they relate to changes in the
current pay performance and classification systems of DHS
employees remain woefully short on details. In spite of the
information that was provided today, there is still very little
out there for employees or the unions to work with on this
matter. Currently, performance evaluations have very little
credibility among the work force, but it appears that these
subjective measures will become the determinant of individual
pay increases under the new system. This again will lead to
more recruitment and retention problems in homeland security,
not less. This kind of a system will be particularly
problematic for the tens of thousands of DHS employees, such as
CBP officers who perform law enforcement duties where teamwork
is so critical to successfully achieving the agency's goal.
To get more information from DHS front-line personnel about
the new regulations, NTEU conducted an online survey. To date,
over 300 responses have been received, and some of the findings
of the survey are highlighted on this chart to my right. The
survey shows a number of startling things that I would hope the
Department would be paying attention to: 65 percent of
employees did not believe that U.S. borders are more secure
today than before September 11th; 65 percent of employees would
not recommend a job at the Customs Bureau or Protection to
friends or to family; 80 percent of employees report their
morale has dropped in the last year; 88 percent of employees do
not support the proposed pay system; and 88 percent of
employees named better management as the top measure needed to
improve homeland security.
These results are very troubling and clearly point out the
need for further review of these regulations. Additionally,
NTEU urges Congress not to extend them throughout the Federal
Government, as proposed in the President's 2006 budget. The
Homeland Security Act provided for these changes based on
national security considerations. Those considerations do not
apply to the rest of the Federal Government. I appreciate and
agree with comments made by several members of this committee
in opposition to expanding them Government-wide in that this
would be premature and irresponsible at this point. I look
forward to continuing to work with this committee to help the
Department of Homeland Security to meet its critical mission
and to help the employees who want to successfully deliver on
that mission. And I look forward to any questions you would
have. Thank you.
[The prepared statement of Ms. Kelley follows:]
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Mr. Porter. Thank you, Ms. Kelley. Appreciate it.
Mr. Bonner.
STATEMENT OF T.J. BONNER
Mr. Bonner. Thank you, Chairman Porter, Ranking Member
Davis, for the opportunity to come before this subcommittee and
talk about something that is very important. I have been a
Border Patrol agent for the past 27 years and am very proud to
have served with thousands of dedicated and patriotic Board
Patrol agents and other Federal employees who do a tremendous
job of protecting our Nation. Recently we were folded into the
Department of Homeland Security, and I am proud to be a member
of that Department because it has one of the most important
charges of any Federal agency in this Government, protecting
the homeland.
A lot of the debate has seemed to lose the focus in talking
about union rights, employee rights. But they created this
Department to protect this country. And who protects this
country? It is not systems; it is not technology; it is good
people. And to the extent that this system drives away those
good people, it has failed, and that is my biggest fear. The
system that is being proposed now affects people negatively,
affects the ability of our Government to attract the best and
the brightest, and to hang on to those people.
I am very concerned because now I see people that I have
worked with for years, as soon as they are eligible for
retirement, they are putting their papers in. I see younger
agents putting applications in for other departments outside of
the Federal Government, State and local law enforcement
departments, because they don't like the changes that are
coming down the road, not because they feel that some union
right is being taken away from them, but their basic sense of
fairness is offended. When they see their pay at the mercy of
their boss, and when they see their job at the mercy of their
job, and when they see the playing field just turned upside
down, they become very concerned.
They harken back to an incident that happened right after
September 11th, when the standard company line was that we had
enough Border Patrol agents on the northern border. Well, in
fact, we had 283 to patrol 4,000 miles of border. Two very
courageous Border Patrol agents spoke out and said we need help
up here. As a result of that disclosure, as a direct result of
that disclosure, the Congress authorized within the USA Patriot
Act, a tripling of not just the Border Patrol, but of
Immigration and Customs resources along the northern border. As
thanks for that patriotic action, these employees were proposed
termination by their bosses for speaking out and bucking the
company line.
Under this new proposed personnel system, it would be quite
simple for their pay to just go stagnant. They have made a
guarantee to these employees that their pay won't be reduced as
long as their performance remains acceptable. Well, had they
made that promise to me when I came into the Federal Government
27 years ago, I could still be making less than $10,000 a year,
and they would have honored that promise. That is not enough to
hang on to the best and the brightest. We have to treat these
people fairly. These new personnel regulations are not fair.
I would urge you to reexamine these, make sure that
fairness is incorporated into them. The sand is running out of
this hourglass. Once these changes take effect, people are
going to be heading for the exit doors in record numbers, and
they won't come back. You can change the system back and make
it fair and try and hire new people, but the only way you can
replace that officer with 15 or 20 years of experience is to
hire someone new under a better system and then wait 15 or 20
years, and we simply don't even have 15 or 20 second; the
threat of terrorism is too real. This is a matter of national
security. We need the best and the brightest, and we have to
ensure that this personnel system attracts them and hangs on to
them, and as it is currently structured, it simply doesn't do
that.
Thank you for your time.
[The prepared statement of Mr. Bonner follows:]
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Mr. Porter. Thank you very much.
Mr. Perkinson.
STATEMENT OF DARRYL PERKINSON
Mr. Perkinson. Chairman Porter, Congressman Davis,
distinguished members of the subcommittee, as the National Vice
President of the Federal Managers Association, let me begin by
thanking you for allowing me this opportunity to express FMA's
views regarding the final personnel regulations of DHS. I look
forward to more opportunities in the future to engage in this
dialog about the best way of governing the most efficient and
effective work force to protect American soil.
Managers and supervisors are in a unique position under the
final regulations. Not only will they be held responsible for
implementation of the new personnel system, they will also be
subjected to its requirements. As such, managers and
supervisors are a pivotal part to ensuring the success of the
new system. We at FMA recognize that the change will not happen
overnight. We remain cautiously optimistic that the new
personnel system may help bring together the mission and goals
of the Department with the on-the-ground functions of the
Homeland Security work force.
Two of the most important components to implementing a
successful new personnel system are training and funding.
Managers and employees need to see leadership from the
secretary on down that supports a collaborative training
program and budget proposals that make room to do so. We also
need the consistent oversight and the appropriation of proper
funding levels from Congress to ensure that both employees and
managers receive sufficient training in order to do their jobs
most effectively.
As any Federal employee can tell you, the first item to get
cut when budgets are squeezed is training. Mr. Chairman, it is
crucial that this not happen in the implementation of these
regulations. Training of managers and employees on their
rights, responsibilities, and expectations through a
collaborative and transparent process will help to allay
concerns and create an environment focused on the mission at
hand.
Managers have also been given additional authorities under
the final regulations in the areas of performance review and
pay-for-performance. We must keep in mind that managers will
also be reviewed on their performance, and hopefully
compensated accordingly. As a consequence, if there is not a
proper training system in place, and budgets that allow for
adequate funding, the system is doomed to failure from the
start. Toward this end, we at FMA support including a separate
line item on training in agency budgets to allow Congress to
better identify the allocation of training funds each year,
especially as similar personnel systems are considered for
other agencies and departments.
Our message is this: As managers and supervisors, we cannot
do this alone. Collaboration between manager and employee must
be encouraged in order to debunk myths and create the
performance and results-oriented culture that is so desired by
these final regulations.
Managers have also been given greater authorities in the
performance review process that more directly links employees'
pay to their performance. We believe that transparency leads to
transportability, as inter-department job transfers could be
complicated by a lack of a consistent and uniform methodology
for performance reviews. FMA supports an open and fair labor
relations process that protects the rights of the employees and
creates a work environment that allows employees and managers
to do their jobs without fear of retaliation or abuse.
The new system has relegated authority for determining
collective bargaining to the secretary. Recognition of
management organizations such as FMA is a fundamental part of
maintaining that collaborative and inclusive work environment.
Title V of C.F.R. 251-252 allows FMA, as an example, to come to
the table with DHS leadership and discuss issues that affect
managers and supervisors. While this process is not binding
arbitration, the ability for managers and supervisors to have a
voice in policy development within the Department is crucial to
its long-term vitality.
There is also a commitment on the part of OPM, DHS, and DOD
to hold close the merit system principles, and we cannot stress
adherence to these timely standards enough. However, we also
believe that there needs to be additional guiding principles
that allow and link all organizations of the Federal Government
within the framework of a unique and single Civil Service. OPM
should take the current systems being implemented at DHS and
create a set of public principles that can guide future
agencies in their efforts to develop new systems, systems that
parallel one another to allow for cross-agency mobility in
evaluation, instead of disjointed ones that become runaway
trains.
We at FMA are cautiously optimistic that the new personnel
system at DHS will be as dynamic, flexible, and responsive to
modern threats as it needs to be. While we remain concerned
with some areas at the dawn of the system's rollout, the
willingness of OPM and DHS to reach out to employee
organizations is a positive indicator of collaboration and
transparency. We look forward to continuing to work closely
with the Department and official agencies.
Thank you again, Mr. Chairman, for this opportunity to
share FMA's views on these significant Civil Service reforms.
[The prepared statement of Mr. Perkinson follows:]
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Mr. Porter. Thank you very much for your testimony.
First, a comment. Having represented an area for over 20
years with substantial public employees and more intense in the
community where we live--we have National Park Service, Bureau
of Reclamation [BLM], Fish and Game; we can go on and on--I
have spent many, many years, and some of them are my very close
friends. But let me give you a little additional perspective;
not necessarily different, but additional from some of your
comments today.
This is what I have heard for years: Many Federal employees
aren't really sure of their expectations. They are not really
sure about the current reward system, other than they know that
they have 10 years left to retire or they have 8 years left to
retire. Many of these employees are not really sure what their
role is, and it changes so frequently sometimes they have
trouble tracking exactly what is expected.
Again, I am not here to disagree with your comments, I am
adding additional perspective.
To many of them it isn't about pay and benefits, because
they are very pleased with what they are receiving, and
certainly would like to have increases and would love to work
for that. But I have found from my experience not only with
Federal employees, but the private sector, that the pay and
benefits aren't everything. They really want to know that they
belong. And they really want to know what is expected and they
really want to accomplish those goals, because they feel good
about doing something exciting, that is positive, and they have
a direct reflection, especially those in law enforcement. They
get really frustrated sitting out there for hours and hours and
hours, protecting our Nation. They get very frustrated.
And I am sure we can probably agree or disagree; you may
hear this, you may not. But there are a lot of those folks out
there that are looking for something other than an automatic
increase; they are looking for something, and this may or may
not be the answer. But I just want to add that from the
perspective of knowing many, many Federal employees that are
personal friends of mine that want to have some pay performance
measures available to them, because when they excel, they want
to know that they have excelled.
So that puts a lot of pressure on you, Mr. Perkinson.
Management is so critical, and we have to make sure that your
management is funded properly and you have the proper training,
because especially management, you are to blame, whatever
happens. You seldom will get credit, but you will always be
blamed. But your comments are very well taken. Actually, all
three of you. I appreciate what you are saying.
But I really wanted to add that part for the record for
those folks out there that really want to have some measure of
their success other than an automatic increase. There are so
many Federal employees that are counting the days to retire
because they are not sure what their worth is. And to all those
I applaud them for what they are doing also.
And I am not asking questions. Another comment.
I can put Federal employees up against any corporate
employee any time, any place. We have some of the finest
Federal employees. Corporate America can be a bigger
bureaucracy than the Federal Government, and there are
corporate employees out there that are struggling to find
exactly what their mission is. But know that my principles as
chairman is to make sure that we provide efficient, solid,
strong service to the taxpayers.
But what I hear from constituents, and I think probably the
panel and other members could agree, when it comes to Federal
employees, the bulk of what we do as Members of Congress is try
to open the door for a constituent, to try to get to the right
person within the Federal system. They are frustrated because
they may have gone to the Social Security Administration
because they didn't get their check or it was lost, or it is a
member of the military that didn't receive his pay or lost his
benefits, or it is a senior citizen that hasn't received their
Social Security check, or it is a single mom that is frustrated
because she is not getting the services. So I am looking at
this from both sides, and I want to make sure that we have the
best, the brightest, the best trained, best compensated, most
efficient work force. And when I call an agency, I want to make
sure I can help this constituent, because people are frustrated
with the Federal Government at times because they can't get
help, or their paperwork is sitting on a desk someplace.
So I am hoping as we evolve this process and have continued
discussions, that you will keep those in mind as my principles
as chairman, that your points are well taken. And I have
numerous questions that I am going to submit to you for some
other time because of our time constraints, but know that I
appreciate your comments. Thank you.
So that is the end of my questions.
Mr. Davis.
Mr. Davis. Thank you very much, Mr. Chairman.
Let me just say that I appreciate the testimony of each one
of the witnesses. Each one of you expressed some level of a
lack of confidence in the new proposed system. If you were able
to give two concrete suggestions or recommendations to the
secretary as to what should be changed in the proposal that
would make you feel that the system was going to be more fair
and would increase your level of comfortability relative to it
netting what people are hoping to get out of it.
Why don't I start with you, Ms. Kelley?
Ms. Kelley. In the pay area, Mr. Davis, in particular?
Mr. Davis. Yes.
Ms. Kelley. I think, first and foremost, employees do want
to know what is expected of them. That is true under today's
system, and it will be under any future system. There is no
belief that they will know what it is the goals are, when they
accomplish it, and if they do accomplish them, they will be
appropriately rewarded or recognized for that. So having clear
expectations that--surely this issue about them not being in
writing. I mean, why anyone would want to even set up that
dynamic I just don't understand. It is not good for the
managers or for the front-line employees who are the recipients
of the evaluation. So I would say that clear goals in writing
and, using your words, a system that is fair, credible, and
transparent. Employees need to be able to see that they were
given these four goals--it has to be clearly defined also for
them how to meet those goals and how to excel. And managers
should be able to explain that to employees so they know what
they are striving for. And then at the end of that there has to
be a fair expectation that they will be appropriately
recognized and rewarded.
One of the biggest potential failures for this system is
the lack of funding. There will be no additional funding
provided to the Department to implement this new pay system,
and that means one of two things: either the dollars come from
some employees to others, or there will be very little
recognition or reward at the end of the year when employees do
strive for and accomplish what it is they want.
Just as a side note, many have said to me, well, Federal
employees don't want pay-for-performance, they like this
current system. Well, if this current system was working the
way it was supposed to, we wouldn't have to be talking about a
new system. The failure is not with the system, it is with the
implementation of it. And the failure of a new system will be
with the implementation.
I have to tell you I was very surprised to hear Ron Sanders
testify earlier that, in today's system, when an employee takes
risks and excels at their job, all a manager can do is pat them
on the head. I would say shame on that manager if that is all
they think they can do, and shame on that agency who hasn't
supported the manager to let them know what else they can do.
They have the opportunity to provide quality step increases;
they have discretional awards in a managers' awards pool they
can distribute. They have a lot of ways to recognize employees
above a pat on the head. So that is a perfect example to me
that this is not--the current system isn't broken, it's the
implementation of the system that is broken. And that will be
exacerbated with the new system if not clearly defined, and
that is what employees are afraid of. And based on today's
experiences, that is why they don't trust what will happen
tomorrow.
Mr. Davis. Mr. Bonner.
Mr. Bonner. Thank you. T.J. Bonner.
Mr. Chairman, just building on what you said, most of the
complaints that I get are from employees who say, they won't
let me do my job; I know what my job is, but they won't give me
the resources or support to let me do my job. And their other
big complaint is they don't treat me fairly. And that gets to
the ranking member's question.
The recommendations I would have is in the arena of
discipline, give the flexibility for mitigation back to the
neutral adjudicators; eliminate mandatory removal offenses. In
the arena of collective bargaining, expand it back out to what
it is now. They are robbing employees of the ability to have
fair systems for such things as where they are assigned. I had
a young Border Patrol agent in San Diego call me last week,
told me they gave me 72 hours to pack up my things and my
family and move to Artesia, NM, to be a law instructor for 4
months, and I really don't want to go. And I have had these
discussions with managers. Why would you want to force that
person to go who is going to have an attitude about that, and
that is going to rub off on all of those young impressionable
trainees there?
Fairness is key in all of these areas. And with regard to
pay, I think that you need to have a floor for the pay that is
pegged to something that Congress controls, rather than having
it at the whim of the agency. I have a number of our agents
transfer to the Air Marshal Service. For the first 2 years of
that agency they said you guys are doing a great job, but we
don't have the budget for raises this year, so you are not
getting one. And that is simply not fair, because the cost of
living keeps going up for all of us, and nobody gets a little
piece of paper that says please exempt this person from the
higher cost of gas or the higher cost of housing out there
because we don't have it in our budget. Everybody has to absorb
that in their own personal finances, and it is simply not fair
to those employees. If we want to keep the best and the
brightest, we have to treat them fairly.
Mr. Davis. Mr. Perkinson.
Mr. Perkinson. Darryl Perkinson. In this issue, I think
there definitely needs, for management and employees, to be a
performance blueprint. We have to have a blueprint of what the
expectations are for the employees and also give a guideline to
the managers on what they are being assessed on during a year.
The training piece that we talked about in our testimony is key
to that. We need to have a clear understanding of those
guidelines that are going to face an employee and face a
manager in how that person is going to be rated. It has to be
transparent; it has to be clear; it has to be concise.
Additionally, another concern for me, and one thing that I
clearly want to recommend, is we have to have the budgetary
allowance to execute. I have heard all the talk about we are
not going to have a forced distribution or a quota system, but
in times when budgets are tight, I think a lot of times we get
driven to that. So there has to be an assurance, as we
implement this system, that budget doesn't become key, because
it will and it will create forced distribution, and it will
affect the quota system. And for a manager's perspective, the
understanding is management is not the enemy; we are going to
be included in this process too, and be judged on it just as
well as the employees that are going to be affected.
Mr. Davis. Thank you very much, Mr. Chairman.
Mr. Porter. Thank you. Thank you very much.
Congresswoman.
Ms. Norton. Thank you, Mr. Chairman.
First, I would like to say to all of you, you have
certainly made some headway, and I want to congratulate you for
having sat down and gotten as much movement as you have. I know
it was tough, and I know you expected more and, frankly, I
think you have seen by the questions on both sides here, we
expect more as well, if only because we expect at least the
best practices in the private sector will be followed. There is
a lot of precedent for how to move folks wholly from one system
to another, and we don't have a lot of it in the Federal
Government, and I can tell you from having served on the board
of three Fortune 500 companies that nobody in the private
sector who has a bottom line and who expects to meet it and
make it grow would think of making a wholesale change with
their employees, union or not union, without the kind of
consultation that would guarantee that they would not be kicked
back by reaction from their employees when they are in place.
I don't want to use the analogy of consent of the governed,
the way we do things in a democracy, but there is something to
be said about that, because people are willing to obey laws
they don't agree with when they have had just the kind of give
and take that says, well, I had my chance, but I lost. It is
very important, it seems to me, that we be able to show that
has occurred here.
I don't take it at all as an idle threat about retirement
and early retirement. This is something that on this committee
and in the Senate we have even had joint hearings on. We are so
concerned that the Federal Government's record of getting and
keeping the best and the brightest is in great jeopardy not
just because of what we do, but because, frankly, the private
sector has become so attractive, so sexy compared to Government
employment, and we are so far behind in trying to keep up with
them. So the last thing we want to do is to make that any
worse, because it has been awfully bad for the last several
years.
I have some particular questions of Mr. Perkinson, but I
would like to ask Mr. Bonner--and Ms. Kelley, I would like to
have her respond to this as well. You said, when you came to
the Federal Service, that your pay would have been reduced,
they could have kept you where you were then. I wonder if you
would spell out how you think this system would work. Do you
really expect that most employees will not in fact get annual
increases? What number do you expect not to get increases? How
do you think this will play out in practice?
Ms. Kelley. So much of the system has been undesigned that
we really can only speculate. For example, when there was
discussion this morning about this formula, the math formula,
one of the things that isn't clear to us is if you are an
employee who is rated acceptable, exceeds, or outstanding, what
is the value of the points attached to each of those. If it is
1 point for acceptable and 10 points for outstanding, then that
means that probably an awful lot of employees will be rated
acceptable and receive a very small amount of compensation
added on each year. If the points are closer together, then it
could mean that the ratings would be distributed differently.
We just have no sense right now of what they intend to do.
They could also decide that of the dollars--you heard DHS and
OPM say they would decide how much money would be used for the
performance system. So they could decide that 50 percent of it
will be used for locality pay in areas that they have
identified as perhaps difficult to hire, and that 50 percent
will be used for performance. Or they could decide that 90
percent will be for performance. We just don't know much about
it.
During the meet and confer process, we were hoping to
develop an awful lot of these details jointly. We were hoping
to work through them. And they made very clear during that
process they did not want to do the compensation building, the
building of the system during meet and confer; and that is one
of the reasons the details are so sketchy in the regulations.
Now, they talk about the compensation committee and the ongoing
work that they are going to do with us, and we have just
started, we just had one meeting, and they have committed to
meet with us regularly now, because, of course, they have hired
a contractor to build this compensation system. So we have----
Ms. Norton. Is the contractor meeting with you too?
Ms. Kelley. We have never met with him yet. We have a
commitment from 2 weeks ago that we will be briefed by the
contractor and have an opportunity to start sharing our views
with him, but to date we have not.
But they also talk about the compensation system and how
there will be four seats for the two largest unions. Just to
make clear, there are 14 seats on this compensation committee,
and during meet and confer, what we had argued for was to have
half of those seats be union representatives so that there
really could be a true discussion and hopefully a meeting of
the minds so that we could roll these details out together. But
as you see in the final regs, there will be 4 of the 14 seats
will be union representatives. And I have no doubt that we will
get to say what it is we want to say; I think time will tell
whether or not those four seats result in our opinions and our
suggestions being adopted, much like they were or were not
during the meet and confer to date.
Ms. Norton. And since the final decision would be with the
secretary anyway, wouldn't it?
Ms. Kelley. In the end, of course.
Ms. Norton. What in the world is to be lost, since there
are so many different agencies with so many different missions
and so many different backgrounds, in having a fair number of
both sides, since you can nullify what they say? This is the
kind of thing I mean when I say you invite people to believe
they haven't been given a fair shake and, therefore, they don't
think there is anything they should in fact carry out as
promised.
I have already said that I think that there is a dangerous
confluence here when you are--if they go to put pay reform,
this pay banding across the board in place while eliminating
traditional projections at the same time, this is a perfect
storm. And I got some comfort from the prior panel about
implementation with the employee expectations and the
competencies in place first, and I have to believe that is
going to happen, since it seems to me one would have to be a
mad man to rush forward without that.
I was particularly interested in Mr. Perkinson's testimony,
frankly, because in a real sense, Mr. Perkinson, you are on the
hot seat here. You talk about training, but you all are really
on the hot seat.
Mr. Perkinson. Yes, ma'am.
Ms. Norton. The unions will continue to do what they have
always done, to represent the rank and file employee, but it
seems to me that the committee has to take very seriously your
admonitions here. First of all, you are understanding you are
getting, in some cases, entirely new responsibilities. You
always, of course, evaluated people and you know what adverse
actions are, and you know you win 80 percent of them anyway.
But in your testimony you say, for example, collaboration
between managers and employees must be encouraged in order to
debunk myths and create a performance and results oriented
culture. You talk about the change in the Federal Labor
Relations Authority--and here I am quoting you now--``as an
independent negotiating body to what is now proposed and
independent labor relations board made up of members appointed
by the secretary.'' ``This immediately,'' you say, ``calls into
question the integrity, objectivity, and accountability of such
an important body.'' It seems to me you have to listen to the
on-the-line managers who are saying, hey, the secretary isn't
on the hot seat, it is your line manager who may, according to
what we have heard today, decide better to leave the Federal
service, where, by the way, these employees are in high demand,
we having trained them and invested in them. They won't have
any trouble, particularly in this region, getting employment
with contractors and others.
You call, Mr. Perkinson, in your testimony, for--you talk
about, ``continuing collaboration'' and that not being made
more specific. You ask for that to be spelled out rather than a
blanket statement that the Department intends to do so. And you
actually say that DHS should set up regular meetings--this
sounds like it comes from the unions. This comes from a manager
who has worked with employees. Says set up regular meetings,
monthly or bimonthly, depending on the status of
implementation, in order to ensure this important dialog takes
place. You talk about adverse actions, concerned that the new
system and internal processes that might again call into
question--these are very important words--the integrity and
accountability of the appeals process.
Here we are hearing from managers, Mr. Chairman, who people
are taking appeals from, saying this to us. You know, some of
this testimony in the law would be considered against interest,
which is to say coming from a party who might not benefit from
what he is saying. But it seems to me this committee has to
benefit from what you are saying.
And I would like you, particularly given the number of
caveats to the present system, you describe in your testimony
to indicate what it is you think now needs to be done so that
some of these problems will not fall on the back of the
managers whom you represent if the system goes into place
forthwith.
Mr. Perkinson. Yes, ma'am. Darryl Perkinson. I will try to
respond for the time constraint.
Ms. Norton, one of the key fundamental issues of
implementing any cultural change that we are trying to
implement with this new personnel system is that we have to
have communication and collaboration between those that have to
apply the system and those that are going to be affected by the
system. That is why, in our testimony, we do encourage the
regular meetings, the oversight to make sure as we implement
this thing--and we heard in previous panels' testimony that we
wanted to make sure when we did this, we did it right, that it
goes out the right way; it is not helter-skelter, it doesn't
come out in a form that builds mistrust.
My personal experience in Government has been, over the
last decade and a half, that we did make great strides in labor
management relationships, and I do have a concern that if we go
helter-skelter into a new system, that it could build mistrust
and it could take us back to a day that we don't want to go
back to, where we don't communicate, where we don't do things
daily. When I supervise my people, I supervise a great number
of people that do a great job for this great country. And in
the Department of Homeland Security we have a fundamental issue
that we are protecting the borders of our country, and that
mission has to be carried out for the American people. And we
have a great deal of civil servants that every day do that, and
we owe it to them that if we are going to convert a pay system,
we need to do it in a fair, transparent manner, where
discussion and changes are made as necessary.
Ms. Norton. Mr. Chairman, I appreciate your indulgence, and
I want to just say that I think in a real sense the testimony
of this witness is extremely enlightening to me. Obviously, the
unions have to do what they have to do. I find their testimony
compelling. But in a real sense I am not sure I would like to
be a manager in the Federal Government, who is told, OK, there
you go, let us see what you can do.
And it is interesting that you testified, Mr. Perkinson,
that you are going to be evaluated on how you carry out this
system. Good luck, brother.
Mr. Perkinson. Thank you.
Mr. Porter. Thank you.
Due to time constraints, I have numerous questions that we
are going to be sending you regarding the Labor Relations
Board, collective bargaining questions, the adverse action and
appeals process, and some specific pay questions.
Also, again, Mr. Perkinson, you are certainly pivotal to
the future as it is being laid--not that you weren't in the
past, but even higher expectations, so I will have some
questions for you.
I think there has been some very thoughtful comments made
by all the panelists, and I certainly believe by the committee
today, asking as to your insights. You can depend upon having
additional questions as we move along.
As I mentioned earlier, I know that employees and
management prefer to have rules and guidelines, whatever that
is, whether they haven't been implemented, as I think said very
well by Ms. Kelley, is something that we have to look at. And
my principles, I have said a couple of times, whether you are a
maintenance worker or in management, or a CPA or a chemist or a
scientist, we need to make sure everyone is treated fairly,
that they have opportunities, and that they treat every
taxpayer, every customer fairly.
Again, I know that we cannot rush to change. It is a
massive undertaking, and I know that, as the Congresswoman
mentioned, this is a massive undertaking whether it be in the
private sector or the Government, this is a major change, so
know that we will be anxious to hear your insights as it
evolves.
At this time, I would like to adjourn the meeting. Thank
you all for being here.
[Whereupon, at 1:05 p.m., the subcommittee was adjourned.]
[Additional information submitted for the hearing record
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