U.S. Office of Personnel Management - Ensuring the Federal Government has an effective civilian workforce

What’s Next: The Framework for Civil Service Modernization

The four principles we have outlined above provide a framework for the way ahead, for modernizing merit. And for those who worry about whether that modernization should be Governmentwide or agency specific, our approach does not require an “either/or” choice between these two paths. Rather, we believe that it is possible to establish, through legislation and regulation, a standard Governmentwide framework for modernization that uniformly (and unequivocally) preserves and protects the core ideals of our civil service, and at the same time affords agencies, under OPM’s leadership, maximum flexibility to design their own HR systems to serve their unique mission needs. This is a logical extension of demonstration project authority, but one that recognizes and takes full advantage of the quarter century of knowledge and experience accumulated under that process. It is time to move forward in that regard, beyond experimentation to implementation.

Reforming the Modernization Process. Instead of more demonstration authority, the way ahead should start with Governmentwide legislation that provides the personnel flexibilities given to DHS and DoD, as well as the same process for exercising them. As with DHS and DoD, that legislation must hold core civil service principles -- merit, due process, veterans’ preference, equal employment opportunity, union representation, whistleblower protections – sacrosanct; provide agencies with the discretion to design HR systems that fit and foster their missions; assure employee and union involvement; and keep OPM in the center of it all…as the overall governor on and of the exercise of that discretion. This approach acknowledges once and for all that a traditional, “one size fits all” approach to reform simply does not comport with the complex reality of our civil service (the General Schedule itself is evidence enough of that); however, it does assert that our civil service system can be modernized via a single, overarching framework.

Reforming Pay and Performance Management Systems. Reform in these areas should be our top priority. We believe that the framework outlined above is particularly well suited for modernizing compensation, classification, and performance management systems, simply because its architecture is so evident. The broad paybands being proposed by DHS and DoD are progeny of the original China Lake demonstration project, as are those developed by the Federal Aviation Administration, the Internal Revenue Service, and others who have been given this flexibility. All told, these paybanding systems, all variations on the same central theme, may soon cover well over half the Federal civil service; indeed, we are long past the “tipping point” in this regard, and if we do not act soon, we risk placing agencies outside this emerging architecture at a competitive disadvantage when it comes to recruiting and retaining the best and brightest.

Other Incremental Pay Reforms. We believe that there is no need for further demonstration and/or delay when it comes to pay-for-performance. We need to expand and extend the DHS/DoD framework, its process as well as its substance, to those agencies that are ready to move forward and modernize their pay and performance management systems. And for those agencies that are not quite ready to move forward, our modernization strategy should also provide for incremental transformation under more controlled conditions…the Human Capital Performance Fund is a good example, providing agencies limited but nonetheless important pay and performance management flexibilities (and funding), subject to OPM approval and oversight. We should consider a similar approach to modernizing the process for setting special salary rates for those agencies that remain under the General Schedule.

Reforming Employee and Labor Relations Systems. There are aspects of the Federal employer-employee relationship that are not so amenable to an agency-by-agency approach, where a greater degree of uniformity is appropriate, and our modernization strategy should address these areas as well. For example, the due process guaranteed every Federal employee may be best protected by a single set of adverse action procedures for both misconduct and poor performance, as well as a single independent adjudicating agency, for all but the most egregious of offenses. This is not to say that the status quo should prevail in this area – both process and adjudication clearly need to be streamlined and simplified, perhaps based on lessons learned from DHS and DoD; however, those lessons may be more appropriately applied uniformly across all agencies. The same may be said for labor relations and collective bargaining.

Other Possible Governmentwide Reforms. Finally, as our four principles suggest, the way ahead must also address those elements of the civil service system that are best modernized across the board, where one size does need to fit all. For example, we have just implemented a new, standardized pay-for-performance system for members of the Senior Executive Service, and there are other common, structural elements of our senior career services that need to be similarly transformed (for example, the increasingly arbitrary distinction between executive and technical/professional leadership). The challenge of modernizing the pay and benefits of our law enforcement and protective occupations may also demand a more uniform approach, particularly given the illogical disparities that exist today. Similarly, we will continue to modernize our common benefit systems, offering all Federal employees enhancements like Health Savings Accounts, to ensure that they remain on par with the best that the private sector has to offer. Thus, there always will be a need for standardization, but it need not necessarily come at the expense of flexibility.