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APPENDIX C WORKSHOP ON RECRUITMENT, RETENTION, AND UTILIZATION OF FEDERAL SCIENTISTS AND ENGINEERS Agenda Participants Proceedings 143 145 147 149

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Agenda Workshop on the Recruitment, Retention, and Utilization of Federal Scientists and Engineers National Academy of Sciences Washington, D.C. February 23, 1990 8:00 Continental breakfast 8:30 Opening Remarks and Findings of Previous Studies* Alan K Campbell, chairman, Committee on Scientists and Engineers in the Federal Govemment 9:30 Quantitative Inputs to Federal Technical Personnel Management* Charles Falk retired director, Science Resources Shies, National Science Foundation 10:30 Break 10:45 Organizational and Decision-Making Processes Affecting Recruitment, Retention, and Utilization . 11:30 Lunch, NAS Refectory The Role of OPM in Meeting Federal Work Force Needs with Regard to Scientists and Engineers* John M. Paiguta, deputy director, Office of Policy and Evaluation, U.S. Merit Systems Protection Board 1:00 Differences in Recruitment, Retention, and Utilization Processes: A Comparison of Traditionally Operated Federal Laboratories, GOCOs, and Demonstration Projects* Sheldon B. Clark senior research scientist, Labor and Policy Studies Program, Oak Ridge Associated Universities i:45 The Effects of the Political Appointment Process on Recruitment and Retention of Scientists and Engineers* lames P. Puffer, professor of government and politics, George Mason University 2:30 Break 3:15 General Discussion: Changes in organizational and decision-making processes that might improve the recruitment, retention, and utilization of scientists and engineers Alan K Campbell 5:00 Adjournment *Discussion will follow each 15-~runute presentation. 145

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Participants Workshop on the Recruitment, Retention, and Utilization of Federal Scientists and Engineers National Academy of Sciences-Washington, D.C. - February 23, 1990 Federal Agencies U.S. Department of Agriculture: Essex Finney, acting director, Beltsville Area Agricultural Research Service Department of Commerce: John Lyons, director designate, National Institute of Standards and Technology Robert Mahler, deputy director, Environmental Research Laboratories, National Oceanic and Atmospheric Administration Department of Defense: Larry Lacy, head, Civilian Personnel Policy and Requirements Susan Numrich, Office of Strategic Planning, Naval Research Laboratory William B. Porter, technical director, Naval Weapons Center Karl Steinbach, chief scientist, U.S. Army Belvoir Research and Development Center Department of Energy: Norman L. Howton, director, Organization and Personnel Division, Morgantown Energy Technology Center Mary Parramore, assistant to the director, Argonne National Laboratory Department of Health and Human Services: Phillip Chen, associate director for intramural affairs, National Institutes of Health James Eagen, director, Public Health Service Mary Guinan, assistant director for science, Centers for Disease Control Sharon Holston, Food and Drug Administration Department of the Interior: Stephen E. Ragone, acting assistant director for research, U.S. Geological Survey Department of Transportation: Brian Andrews, supervisory computer scientist, Federal Aviation Administration Nancy Mowry, supervisory personnel management specialist Environmental Protection Agency: Clarence Hardy, deputy director, Office of Human Resources Management National Aeronautics and Space Administration: Dale Compton, acting director, Ames Research Center Robert E. Sutherland, manager, Human Resources Division, Jet Propulsion Laboratory 147

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Merit Systems Protection Board: Paul van Rijn, research psychologist National Science Foundation: Margaret Grucza, director, Governanent Studies Group Margaret Windus, head, Division of Personnel Management Office of Personnel Management: Jack Curnow, chief, Statistical Analysis and Service Division Leonard Klein, acting associate director, Career Entry and Employee Development Group Paul Thompson, project head, Research and Demonstration Division Dona Wolf, director of policy Carnegie Commission on Science, Technology, and Government Jesse Ausube] David Robinson NAS/NRC/IOM William D. Carey, chairman, Office of Scientific and Engineering Personnel (OSEP) Claudia Dissel, associate executive director, OSEP Alan Fechter, executive director, OSEP Michael Finn, director of studies and surveys, OSEP Steve Merrill, director, Office of Government Affairs Lawrence E. McCray, executive director, Committee on Science, Engineering, and Public Policy Others Mark Abramson, executive director, Council for Excellence in Government Barbara Bailar, executive director, American Statistical Association Sandra Fiske, director, Federal Government Service Task Force Ray Kline, president, National Academy for Public Administration L. Bruce Laingen, executive director, National Commission on the Public Service 148

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Proceedings Workshop on the Recruitment, Retention, and Utilization of Federal Scientists and Engineers National Academy of Sciences Washington, D.C. February 23, 1990 Opening Remarks and Review of Previous Studies Dr. CAMPBELL opened the session by explaining that the task of the Committee on Scientists and Engineers in the Federal Government assigned to the Office of Scientific and Engineering Personnel by the Carnegie Commission that is examining major issues concerning scientists, engineers, and technology and the general capability of the United States in those areas- is to look at the issues of recruitment, retention, and utilization of scientists and engineers as they relate to the federal government with an emphasis on organizational and procedural mechanisms. The purpose of this workshop is for the Committee to gather as much information as it can in preparation of a report due to the Carnegie Commission in early summer. He noted that the commissioned papers reveal a lack of consensus in specific matters- for example, evidence that scientists and engineers are overpaid or that they are substantially underpaid in the federal government. The basic issue relates to inadequate disaggregation of the data. Among other matters of interest are the following: "inflexibility" of the civil service system and experimentation in the area of personnel management in the federal government, particularly contrasts between those labs directly operated by the federal government and those to which services are contracted; ethics, an area of counter forces: one dealing with issues that relate to people taking advantage of their federal positions and another advocating enough flexibility so that regulations and laws don't discourage prospective employees; differences in pay based on geographic location (Dr. CAMPBELL noted that, in the private sector, much of this is handled by up-front payments such as bonus sign-one and special bonus opportunities rather than trying to deal with base pay issues); ownership of intellectual property; the quality of the working environment, which varies substantially from lab to lab; and the increase in the number of noncareer appointees in the federal government and their effects on the quality of people that are attracted to federal service and institutional memory. Quantitative Inputs to Federal Technical Personnel Management Dr. FALK opened by asserting, 'Jo say that effective management requires good information input is almost a truism. Nevertheless, that one facet of management frequently does not get the type of attention it should." His presentation was divided 149

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into three parts: (~) a description of the types of data needed and sources of relevant data, (2) an analysis as to the extent to which the data are being used, and (3) findings from the data. He divided the relevant data into two broad categories, descriptive and dynamic. Descriptive data provide information on the characteristics of the work force at a given point in time: demography (age, sex, and race); education (highest degree); work activity (occupation, type of work, its relevance to special national interests such as defense or environment, and salary); and quality of the work force. Dynamic data are important to assess what is happening to the work force. providing insights about whv ----rid err , ~ _--- force, providing Insights about why people leave, whether those who stay are satisfied with their jobs, and what is likely to happen in the future. Do Needed Data Exist? The Office of Personnel Management (OPM) regularly gets data from federal agencies about characteristics of their personnel; excepted agencies are the U.S. Postal Service, security agencies such as the National Security Council and the Central Intelligence Agency, and the uniformed services. Data from the Tennessee Valley Authority is not reported regularly to OPM but at certain intervals. OPM's Central Personnel Data File (CPDF) includes most of the descriptive elements and some dynamic ones, primarily those related to acquisitions and separations of personnel, as well as administrative data such as individual pay schedules. The data are compiled quarterly but published only every two years in Occupation of Federal White and Blue Collar Workers, which essentially presents descriptive data (mostly on sex, salary, occupation, and grade) but only in aggregated form by occupational codes. Annual aggregated data are published by the National Science Foundation (NSF) by compiling the OPM data into occupational groups and subgroups-for example, the physical sciences in the sciences and mechanical engineering or electrical engineering in the engineering groups. NSF provides data in 13 different types of tables in its annual Federal Scientists and Engineers. In addition, NSF provides data on the whole national science and engineering labor force, including the federal sector, facilitating comparisons across sectors of employment. For sectors other than the federal government, the NSF data are obtained from the individual 5.5 million scientists and engineers themselves, on a sampling basis. NSF also obtains data from recent graduates, baccalaureates and master's recipients, about a year after they graduate; and the National Research Council maintains a data base on the entire U.S. doctorate population, based on responses to the annual Survey of Earned Doctorates. The NSF numbers and the OPM data vary considerably because different definitions for "scientist" and "engineer" are used by the two organizations. OPM reports data on individuals who are classified in a science or engineering occupation. Based on individual responses to its surveys, NSF classifies as scientists and engineers those who meet two out of three criteria: (~) a degree in a science or engineering field, (2) a job in a science or engineering occupation, and (3) self-cIassification. As a result, NSF data include individuals who are not necessarily working in a science or engineering occupation at the time surveyed for example, an engineer who is now in a nonengineering job but who considers himself or herself an engineer and holds an engineering degree. Discrepancies between OPM and NSF data are inevitable because 150

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they come from different sources: OPM data from employers and NSF data from individuals. Two agencies in Washington, D.C., regularly provide projections about the entire scientific and engineering work force: the Bureau of Labor Statistics (BES) and the NSF. A number of BES publications deal with projections, one being the Occupational Outlook Handbook NSF publishes projections of supply and demand both for doctoral scientists and engineers and for all scientists and engineers, showing what would happen ~ unc er various scenarios. OPM data are primarily used by the central management agencies of the government-OMB and OPM, for example but the dynamic data are not published by OPM. Under those conditions, do the agencies ask for compilations to see how they compare to other agencies? According to OPM staff, this seldom occurs. Therefore, one wonders whether the agencies themselves will use the data that they provide to OPM to analyze their own performance. Findings . . . The Department of Defense (DoD) is the largest employer of federal scientists and engineers, about 50 percent of them, followed by the Department of Agriculture (USDA, 13 percent) and the Department of the Interior (7 percent). In essentially all major occupational subgroups, DoD is the largest employer with two exceptions: USDA is the largest employer of life scientists and the Veterans Administration employs the most psychologists. Only 25 percent of all federal scientists and engineers are actually engaged in R&D, with the rest employed in design, natural resource operation, management, and a host of other occupations. In the federal government, 58 percent of the doctorates in science are in R&D, in contrast to the national Ph.D. total of about one-third. Not all scientists and engineers working on a particular mission are employed in one agency. For example, although the Environmental Protection Agency (EPA) is only the seventh largest employer of scientists and engineers in the federal government, environmental issues are the second largest focus of work activities of federal scientists and engineers. An examination of scientists and engineers by their age group reveals that only 14 percent of federal scientists and engineers fall in the "over 55" group, as compared to 19 percent in the total U.S. work force. Information from a survey by the U.S. Merit Systems Protection Board (MSPB) indicates that members of the Senior Executive Service (SES) leave the government for four main reasons: ceilings on salary, changes in the retirement system, politicization of their organization, and inadequate use of their knowledge and skills. Because salary data are usually presented in terms of median or average salaries, comparisons assume that the distributions in each sector are identical with respect to age, occupation, and highest academic degree, but they are not. 151 a,

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Recommendations An examination should be made to determine when data available from OPM and other places are being utilized by the individuals agencies in the management of their science and engineering work forces. There ought to be an evaluation as to whether the dynamic data, those on separations and hires collected by OPM, should be more widely available in published form, at least to other federal agencies. Data on satisfaction or dissatisfaction in the job, as well as on the quality of the federal science and engineering work force similar to that recently compiled by the DoD~hould be generated on a regular periodic basis and made publicly available. Agencies should use projections about the future supply of scientists and engineers in the total U.S. work force to make projections of their own future demand for scientists and engineers. There should be a central body in the federal government that explicitly has the sole responsibility to evaluate the adequacy of the federal science and engineering work force. Discussion Dr. CAMPBELL said that this is a fascinating issue because aggregate turnover numbers are very low: in much of the private sector, turnover rates of 2 percent would be considered too low. He asked the agency representatives whether there would be ways to make the aggregate data more useful to them, or whether the current system of an agency building its own data base for its own management purposes (with the aggregated base being used essentially for broader policy questions) is more preferable. He noted that the Committee will address whether there should be changes in the nature of the federal data-collecting system and the character of what is being collected. Reliability of the Data Inconsistent Definitions: Dr. NORWOOD felt that the basic question really should not be 'why are the data not being used?" but rather 'Mow good are the data?" Having responsibility for the measurement of occupational employment at all levels, BES examined salary data for engineers-learning that those engineers who earn top salaries are managers of engineering work; thus, in the standard occupational classification structure, they are considered to be managers. Yet they are still engineers: they are trained as engineers and many of them are still doing engineering research, but they also are managing. Similarly, she noted that many SES people have to be classified as managers: they manage groups and cannot be classified as experts in a particular area if they are going to reach the higher salary classifications. One also must take into account differences in the people and their skills. At BES, for instance, there are statisticians and mathematical statisticians, each having different kinds of training. For example, although BLS employs three kinds of scientists, data on them is combined with data on scientists in other parts of the Department of 152

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Labor (DOL); thus, the picture drawn from OPM data alight reflect what is happening in DOL overall but totally miss what is happening in BES. Other problems arise when terms such as "turnover" are not clearly defined. For example, BES may have a 16-17 percent turnover rate, but if BES employees merely move to other parts of the DOL, the turnover rate for DOL is not affected. Mr. RAGONE commented on the 4 percent turnover rate cited in OPM data for hydrologists: of the 2,170 federally employed hydrologists, less than 200 work in the research program of the U.S. Geological Survev's Water Resources Division: thus. the aggregated data do not reflect the turnover rate in USGS. In addition, he noted that all employees in the Water Resources Division are considered to be hydrologists, even though their degrees may be in different fields, such as geochemistry. The nature of the discussion pointed out that (~) dealing with the personnel system in the federal government is a very complex undertaking and (2) a main underlying problem is definitions and coverages- for instance, whether turnover just involves quits, includes separations, or recognizes transfers and whether the data deal with permanent staff, temporary staff, or seasonal employment. In the aggregate, one cannot deal with the multitude and myriad of problems that are unique to particular areas. That is why, according to Mr. CURNOW, the agencies themselves should conduct self-studies of turnover, separations, and quits. Using its aggregate data base, OPM looks at organizational supplements but not at program offices in any particular area. Furthermore, because the occupational classification that the government uses stays with an individual if he or she moves into a managerial or supervisory position, another definitional problem exists with respect to how managers are classified in the public sector as opposed to the federal sector. Comparability of Data Sets: Mr. FECHTER said that information collected on individuals is good for tracking career trajectories. However, firm-based data, which is based on occupational classes, will not provide very reliable information about movement of individuals. Instead the issues of promotion and of moving into management, which are part of the dynamics of the system, need to be looked at very carefully. Dr. VAN REIN advocated the use of aggregated data available from the CPDF because various agencies have their own data bases, which may be incompatible and based on different definitions for key terminology. Using CPDF data, researchers can present the turnover rate for all occupations and show variations by length of service and from agency to agency. Although agency-specific data will always be more sophisticated and more detailed, based on the agency's purposes, aggregate data are necessary to determine the baseline. He pointed out that once definitional problems are resolved, agency data appear more similar to CPDF data. In fact, people in the agencies are using the aggregate data to stimulate their own internal research and definition of the problem of turnover. Mr. RAGONE cited the danger of using national statistics, which do not reflect what is happening in significant but small parts of the work force. For instance, USGS has difficulty recruiting individuals at GS-12-15 levels for its national research program: it cannot compete with private industry at those levels. He emphasized that national statistics do not reflect the situation adequately; one must look at the agencies, their specific kinds of expertise, and what they are trying to accomplish. 153

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OMB: when the President says we are going to put the government on a diet but the result is not fewer people, it becomes a political issue. Dr. MESSNER offered two other relevant points: (1) OMB has become less aggressive about setting arbitrary numbers as controls, focusing mainly on a guarantee that the demonstration project not exceed its funding level set by OMB; and (2) it takes a long time for Congress to move. Dr. KLINE said that when he attended Cabinet meetings during the 1980s, support for demonstration projects that would enhance the recruitment and retention of scientists and engineers was not forthcoming because the data showed an attrition rate of only 5 percent for scientists and engineers, half of the government-wide rate in general. He felt that instead the focus should be on how a demonstration project can enhance the performance of government laboratories. However, Dr. AMBLER mentioned the lack of a productivity measure for an R&D institution. M&O Facilities For the management-and-operating-contractor (M&O) facilities, the DOE operations offices negotiate personnel policies and salaries with the contractors at each lab. Although salaries vary from one lab to another, the contractor itself must conduct market survey to Justin the proposed salary schedules. On the other hand, because DOE has final approval authority, staff in the operations offices are aware of the relationships between the salary schedules of their contracted facilities and the GS schedules. Mr. HOWTON said that DOE does operate two GOGO (government-owned, government-operated) research laboratories, one in Morgantown, W.Va., and one in Pittsburgh, Pa., as well as the on-site M&O contractors. In a broad sense, the contractors' salaries are significantly (10-15 percent) above the federal salaries, although the GOGOs and M&Os are almost mirror organizations. There are differences, however, in the deferred compensation costs associated with each type of facility; such costs for the M&Os show up in contract costs to DOE, not in base salary. M&Os also have stock ownership plans and other benefits not offered by the government. Dr. SUTHERLAND described the strong working relationship between the Jet Propulsion Laboratory (JPL) and Cal Tech, whose faculty serve as principal scientists or investigators on JPL projects and whose students are involved in the lab's research projects. All of JPL's policies and procedures are Cal Tech policies, not federal ones. JPL advises NASA of planned changes, and NASA can object within a certain period of time, but the relationship with NASA is superb. In fact, many JPL staff are detailees to NASA headquarters on a non-conflict-of-interest basis, and some Cal Tech faculty are on loan to NASA through JPL. Other Possible Solutions Dr. COMPTON said that the NASA Ames Laboratory had two options to the civil service system: to fix it or to get out. The use of demonstration projects is an example of fixing the problem. Becoming an FFRDC or an M&O is a way of moving out of the civil service system; JPL is a fulfillment of that option. He described the difficulty in acquiring university sponsorship of Ames activities. Respected universities 169

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were not interested in picking up a federal research center as part of their institution for two reasons: Ames was too big an operation, and universities want more control over the lab's activities, particularly because of adverse publicity that might occur if something went wrong in the lab's operations. Dr. COMPTON observed that to establish a strong relationship, a university and a federal agency must "grow up together": they are difficult marriages to make once two mature institutions are involved. Mr. CAREY, mentioning his membership on the University of Chicago's Board of Governors for Argonne National Laboratory, agreed that the university places a high value on its relationship with the laboratory. They have established a positive, mutual relationship, although the inevitable tensions between the parent government department, DOE for example, and the laboratory are sometimes difficult for the trustees of the university to accept. In other words, constraints exist, even in the flow of appropriation funding to the laboratories. Mr. HARDY observed that some federal organizations such as the Atomic Energy Commission (AEC) offer a number of the flexibilities associated with the demonstration experiments. However, the AEC opted for contractor-operated labs because of the frustrations associated with hiring and the desire to use their work force effectively. Dr. CAMPBELL asked whether managing a contractor requires special skills, whether it is more difficult or easier to manage a contractor than it is a federal work force. Mr. HOWTON replied that comparisons are inappropriate because each involves an entirely different set of laws and procurement regulations; management problems that do arise tend to be legal and liability issues associated with nuclear energy: people are scared of what the costs will be for them. However, Mr. HARDY noted that in the Clinch River Breeder Reactor project, which involved both contractor and federal employees, dealing with the federal part of the system was more frustrating and more difficult, having more "traps" and rules. Responding to Compensation Concerns Entry Level: Dr. VAN RIIN was concerned about morale problems that may arise when scientists working in different divisions receive different entry-level pay because they have different managers. Dr. LYONS did not consider that a serious problem: the NIST demonstration project resembles an industrial personnel system. Dr. STEINBACH pointed out that the entry pay in the government is low. For example, hiring a physicist in the area of electromagnetics is difficult not only because there are so few available but also because their initial pay is less than that of a secretary in the Washington area. He also observed that the median salaries indicate insufficient flexibility in the government: just about everybody gets the same pay. Mr. FECHTER noted that a recent review of DoD's science and engineering work force reinforces the impressions that the salary disparity is quite large at the entry level but narrows dramatically after four to five years of employment. Promotion is a mechanism for managing one's work force, although it may not be the right mechanism. The DoD study also examined movements of individuals within the federal government, between positions and across grades. Dr. NUMRICH presented data based on the national Hay Survey of R&D 170

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organizations contracted by DOE. On a maturity curve basis, NRL lags about 40 percent at the 90th percentile for entry-level engineers (special rates are included in the NRL figures). At the higher experience levels, the differences are about 20 percent for nonsupervisory positions. However, when the comparison is based on a comparable private-sector organization, salaries for all types of degree recipients (B.S., M.S., Ph.D.) working in either supervisory or nonsupelvisory roles lag by a figure closer to 25 percent, representing dollar lags of as much as $25,000 for lead researchers. Fully aggregated data show only a 2-5 percent lag. She emphasized that analyses of data relating to federal recruitment and retention should include examinations of private-sector organizations doing similar work. Mid-Career and Senior Levels: Agencies-particularly demonstration projects-have devised special provisions to address issues dealing with supervisors and senior scientists. At NIST these included higher salary offers, a program of NBS fellows, and supervisor differentials of 3 percent for group leaders and 6 percent for division chiefs (NIST has no employees in the super grades GS-16 to -18, about two dozen on the ST salary schedule, and slightly more than 100 in the SES). Dr. MAHLER noted that although both NIST and the National Oceanic and Atmospheric Administration (NOAA) have facilities in Boulder, Colo., the initial concern-that the higher salaries offered by NIST would encourage NOAA employees to transfer to NIST-has not been realized. He felt that NOAA was able to retain its staff because salary is not the only issue: nonsalary items such as the work performed are important, too. CDC has no trouble recruiting young scientists, both because of the bonus pay option and because of its research orientation: the excitement of research institutions in the federal government is a lure for young scientists, who are willing to put up with a lot of things to work in an exciting environment. However, Dr. GUINAN noted CDC's difficulty in recruiting at the middle and upper levels because the excitement of the environment is overshadowed by prospective employees' concerns about money and sending their kids to college. A middle-level scientist with two children in college cannot survive on a federal salary. In spite of the difficulty of recruiting at the mid-level, Dr. GUINAN felt there is not enough turnover once career scientists reach the upper levels: the lack of new blood coming into the upper strata could lead CDC away from the cutting edge. She concurred that there is a particular shortage of scientists in any emerging field: CDC needs molecular biologists to conduct research on retroviruses but cannot compete with the higher salaries paid in the private sector. Mr. RAGONE found it difficult to justify noncompetitive salaries at a time when the research work force is aging dramatically. At GS-5-9, the U.S. Geological Survey is being "eaten alive" by the consulting firms that offer hydrologists much higher salaries. He also noted the lack of discretionary funds that would enable federal employees to attend professional meetings. Pay for Performance: The criteria for evaluating performance is based on comparing an individual with his or her peers in the scientific area-how many papers they write and how much basic research they do. In general, scientists seem satisfied with these criteria. Mr. PORTER said that China Lake has been able to establish a link between 171

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pay and performance that works better than the old system; although there is not universal satisfaction with the new system, external studies indicate that, in general, it is accepted and people are happier with the system now than they were before. According to Dr. AMBLER, pay for performance was implemented at NIST before the demonstration project; it is a lot of work but is considered to be much better than the alternative. In fact, NIST hesitates to give retention bonuses because the whole system is based on pay for performance, and it is better to give employees permanent adjustment to base salary. Dr. AMBLER also clarified that its authorizing statute says nothing about revenue neutrality, but the NIST administration wanted it. (After the authorizing act was passed, NIST was told to be budget neutral and not to exceed the civil service pay cap. However, because half of NIST's income comes from other federal agencies, Dr. LYONS wondered whether anybody knows what "budget neutral" is.) He concurred with Dr. CAMPBELL that, in order for a pay-for-performance system to work, there must be clearly established objectives to be achieved in a particular time period. Responding to a question of Dr. Numrich, Mr. THOMPSON said that OPM considers the Performance Management Recognition System (PMRS), established in 1984 by Congress, to be a system based on pay for performance. However, he noted two important distinctions between pay for performance in the Navy and NIST demonstration experiments and the PMRS: (1) the potential for large rewards under the demo systems has been much greater because of greater funding, and (2) the demonstration project systems have won greater employee acceptance because of the way they were implemented, beginning with communication of objectives and follow- through dialogue between employee and supervisor. Dr. CAMPBELL questioned whether promotions in the federal government are a result of performance or simply a way of catching up and making the government competitive. Dr. NORWOOD responded that federal scientists almost automatically progress from GS-S to GS-11; after reaching GS-11, it becomes harder to get a promotion. Dr. CAMPBELL said that a variety of gain-sharing programs exist in private industry but are primarily restricted to mid-level management as opposed to being total- employee programs. Dr. MAHLER cited the inequities in the federal government's bonus systems: A scientist could receive a bonus under the PMRS, while the bonus system for nonmanagers is the General Workforce Performance Appraisal System (GWPAS). The PMRS has a finite pool of money that can be used for bonuses, whereas GWPAS has limitations only on the size of each individual award. Thus an outstanding manager might receive an $800 bonus while an outstanding performer under GWPAS could receive $2,000. Dr. CAMPBELL contrasted this policy with that in the private sector: companies want everybody to maximize their bonus because if that is true, the corporation is doing great. Dr. GINZBERG said that this awkward, inflexible, complicated system of personnel management in the federal government is closely connected with less-than- optimal performance. That fact should be the basis of any case for greater agency discretion. In response, Dr. NUMRICH declared that NRL has historically performed excellent research and continues to do so: '~e are in a situation of diminishing returns and maintain our influx of talent only because of heroic efforts in recruitment and retention and the presence of excellent scientific leadership." The real issue is that in 10 172

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years the federal government can expect catastrophic failure because senior leadership will be eligible for retirement, and new employees (those under FERS), although they may be well-trained and have sound scientific reputations, will leave because of being in high demand and facing the financial problem of meeting college tuition payments: the federal government Will be like a university without sernor professors. Dr. NORWOOD asked whether demonstration projects have been tried in an atmosphere where at least the m~ddle-level employees are unionized. Dr. CLARK responded that Tennessee Valley Authority used a pay-for-performance system for its nonmanagerial, white-collar workers for seven years but abandoned it because of perceived inequities, both individually and across organizational units. The Political Appointments Process and the Recruitment of Scientists and Engineers Dr. CAMPBELL said that certain facts and observations prompted the Committee to consider the relative significance of noncareer appointments to the recruitment, retention, and utilization of scientists and engineers. Of concern were the increase in the number of political appointments; the number of vacancies in those positions; their influences on the culture, performance, and productivity of the federal organizations that make extensive use of scientists and engineers; and the slowness of the appointment process. Dr. PFIFFNER began by describing the pressures of a Presidential transition: at a time when policy, power, and position are "up in the air," one must handle personnel recruitment, likened by some to "trying to take a sip from a fire hydrant." Of about 550 PAS positions (Presidential appointments with the advice and consent of the Senate) in the executive branch, the subset of scientists, engineers, and people that supervise them equals about 250 (according to National Research Council calculations). These numbers exclude noncareer SES and Schedule C appointments. Recruiting the best and brightest people for these positions is not difficult at the Cabinet level because of the prestige and power associated with Executive Level I appointments. However, recruitment of the subcabinet-that is, Executive Levels II through V and noncareer SES is difficult for a number of reasons: noncompetitive pay, ethics requirements, financial disclosure, post- employment restrictions, the short tenure in office, and the daily risk of being dismissed (because one serves at the pleasure of the President). Determining how the increased numbers of political appointees affect the career force may be difficult, but the size of the increase is significant: PAS positions increased from 152 in 1965 to 527 in 1985; the number of noncareer SES rose from 582 in 1980 to 658 in 1986; and Schedule Cs increased from 911 in 1976 to 1,665 in 1986. These increases reflect a deeper penetration of political appointees into the career bureaucracy. In addition, control of political appointments has been centralized in the White House. Although PAS's are all presidential appointments, in the 1950s and 1960s, most sub-Cabinet appointments were determined by Cabinet Secretaries. But beginning in the Nixon administration, Presidents have felt that they gave away too much of their appointment power, leading the Reagan administration to centralize all political appointments, including noncareer SES and Schedule C, in the White House. The potential implication is that agency heads and cabinet secretaries might have 173

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J different criteria in mind than the White House staff Certainly an agency head watt Took for somebody who has expertise and competence in management because that person watt make the agency work or not work. The White House, on the other hand, may very well have a different perspective and be especially sensitive to political pressures for rewarding the party faithful and appointing those with certain ideological values. Dr. PFIFFNER agreed with a VoIcker Commission task force chaired by Elliott Richardson: the problem is systemic such that higher numbers in combination with deeper penetration and centralization do have some relationship to the diminishing quality of political appointees. Also important to scientists is the leadership and vision of the President. In addition, the President's science adviser plays an important symbolic role: if it appears that person has to compromise his or her professional ideals to do something political, fewer scientists watt be welling to enter public service, even for a few years. Scientists and engineers said that it is important that they be able to respect the technical competence of their boss and fee] comfortable with his or her ability to evaluate their work. Finally, scientists and engineers expect political appointees to duly consider their work and to buffer these technical people from the whims of the political wind. Discussion Dr. CAMPBELL asked for comments on the degree to which it makes any differ- ence whether assistant secretary or deoutv assistant secretary appointments which have , ~, . ~ ~. ~ ~ ~^~ ~ some supervisory responsibility In relation to the K~L' sloe or government, t1) are Ellen or left vacant and (2) affect the quality and tenure of people appointed to those jobs. Problems Associated with Unfilled Positions Dr. CHEN pointed out that the NTH director was not a presidential appointee until passage of the National Cancer Act in 1972. Since that time the job has become quite political, to the point that for the last six months, NTH has not had a director, resulting in a certain loss of momentum, morale, and overall sense of purpose. A search committee suggested individuals to serve as NIH director, but there were sufficient political ramifications that none of those candidates were interested in the job. The secretary of the Department of Health and Human Services has convened a second high-level committee to determine how to make the job more attractive. Once issues such as salary and authority are worked out with the Secretary, it is hoped that the job can be made sufficiently attractive to initiate a second search. Dr. CHEN felt that such situations would be less prevalent if the position were not a political appointment. Dr. ROBINSON believed that having an assistant secretary for health who can override decisions of NIH staff, including the director, is a problem as is the fact that the director is many levels removed from the actual running of a $6 billion agency. Quality of Presidential Appointees Many participants said that having a boss who has a reputation in his or her respective field is important, even more important than salary levels, all the way down the line, even in hiring decisions. 174

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Dr. NUMRICH felt that having both political appointees and vacant positions at the top leads to less stable funding. When department heads lack institutional memory and knowledge of what ought to be going on, particularly in the administration of funding, fewer risks are taken. She said that R&D labs perform risk-oriented work that is possibly high gain, but such work is not now regarded as primary. Another issue brought to the Committee's attention is the inadequate management preparation of career executives and career managers. More than once, a newly appointed SES member admitted to attending his or her first management training session after being appointed. Dr. PFIFFNER said that the uniformed services develop their executive talent by sending them to special schools, but less is done on the civilian side. Dr. CAMPBELL agreed that moving people from technical specializations into managerial positions has always created problems; he prefers to take a specialist and give him or her managerial training rather than assume that a manager can manage anything. Tenure of Presidential Appointees Dr. MESSNER stressed that the engineering and scientific community in the government cannot exist separate from the political process; it would not be a realistic goal to build a wall around the scientific engineering community, treating it differently from other government employee groups. Without political participation, however, there is no way to prevent the erosion of the attributes of the scientific and engineering existence in the federal workplace. If an agency does not have an advocate at the table when budgets are reviewed, an agency not only will not get training money, but also probably will not get facility money, parking places, or health care for its occupational safety program. MS. MOWRY said that the current system makes a big impact. During the first year political appointees must develop loyalties with the career employees. A PAS member must develop a better image of the federal employee and be open-minded and willing to cooperate with the career staff. Since the average stay of a political appointee is 18-24 months, there is constant change at the top, with subsequent change in loyalty as well as much reorganization. Dr. AMBLER said that when Presidential appointees are not allowed to do the job they are supposed to do, they start to micromanage. They are appointed because, presumably, they are of the same opinion as the President on political affairs; however, scientists and engineers become nervous by the implication that ideology would overwhelm scientific objectivity. Advocacy, in the budgetary sense, will go to agencies whose programs fit what the President is trying to do. Fixed Term of Office Workshop participants offered several insights and suggestions: (~) According to Dr. KLINE, a fixed term is not a bad feature but does not guarantee that the appointee will hold the position for the entire term. (2) Dr. ROBINSON advocated a fixed term for the directors of NSF and NTH so that when the time comes for appointment, consideration can be given to reappoint 1 7C

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ment of the person in a technical position who has done a good job. Some thought that fixed terms established SO as not to expire around the time of a presidential election would be beneficial. While not disputing this point, other participants considered having the confidence of the Administration more important to agency staff: if an appointee has a s~x-year term but not that confidence, he or she has little besides an office. There are inconsistencies within the system: the commissioner of Labor Statistics has a four-year term, but the director of the Bureau of the Census does not: therefore, the latter position is considered a political appointment. (3) Designated Positions Dr. CAMPBELL asked where political appointees should be in the system. The civil service Reform Act, which eliminated the designation of positions as either political or career and specified that no more than 10 percent of the SES appointments could be noncareer, attempted to open up higher level positions to career people, thereby making it possible for them to be appointed to assistant secretary positions and the like. He wondered whether the government should return to a system of designated positions, rather than leaving the classifications open. According to Dr. PFIFFNER, after lengthy examination, the head of personnel at the Department of Health and Human Services has concluded that we might as well use the former system, because as soon as a political appointee is placed in a job that was formerly a career position, the job becomes politicized; the next administration thinks that is its slot. Dr. CAMPBELL said that, if that occurs, career people can never aspire to become assistant or deputy assistant secretaries: taking a political appointment would eliminate their rights back into the civil service system. Mr. CAREY said it is important to give career people the opportunity to accept political appointments with some falIback protection. Dr. NORWOOD said that during her long tenure in a PAS position, even though it has a fixed term of office? she has seen a continuing erosion: many positions that could be filled by either a careerist or a presidential appointee have been designated PAS unless a career position has been clearly protected. The 10 percent limit on the number of PAS positions has been ~ maxlmlzec .. Dr. MESSNER observed, based on personal experience with the White House personnel office under five different administrations, that the political appointment process as it regards scientists and engineers is nonexistent. He wondered, if one really cannot resolve this issue by designating jobs as political or career, if a solution might be to advocate identifying positions that should have professional criteria, limiting the President's appointment power. Dr. ABRAMSON added that staff in the White House personnel office complained that they did not have enough names of scientists and engineers for PAS positions. He suggested that national groups supply the personnel office with names of qualified people in the scientific community. In addition, the personnel office staff find that the individuals whom they do contact think the pay offered is not worthwhile and the ethical requirements are bothersome. Based on his own experience, Dr. CAMPBELL said that the White House personnel office does not try to identify and recruit people except for the Secretary 176

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positions. Dr. MESSNER agreed and added that the source of the name that is sent to them is screened by the personnel process; one must have certain political prerequisites to have his or her suggested nominee even considered. Mr. HOWTON agreed that a long-term civil servant with the right political connections will not get through the personnel office because the Hatch Act prohibits such contacts. He said that political appointees can be good or bad, but if an agency has no political appointees, it will instead have a congressional oversight committee a situation that creates its own set of complications. General Discussion Dr. MESSNER opened this session by saying that in a buyer's market, one can afford to be much more sloppy in dealing with human resource issues, but in a shortage situation, one can get in trouble quickly. The engineering community is concerned about the potential lack of human resources in the near future partly because of the changing demography: There are fewer young people. During the next 15 years, 85 percent of the entering work force will be women and minorities, but historically the engineering profession has been unsuccessful in attracting women and even less successful in attracting minorities. Enrollment in engineering schools is down, even for women, who for a short time were enrolling in engineering schools in greater numbers; 50 percent of the students now in U.S. engineering schools are foreign and could be a resource if they choose not to return to their own countries. Statistics show that the United States will have a shortage of about 400,000 engineers as we enter the 2Ist century. Dr. MESSNER questioned the effectiveness of the U.S. education system, stating that some scientific and engineering specialties are more successful in preparing students for the work force. As an employer, he is concerned about investments in the engineering person power and felt the federal government must engage in forward thinking about the human resource pool and how it will attract that pool to its programs. Dr. NORWOOD asked whether the supply of scientists and engineers is actually a bigger problem for the federal government than for the private sector. In response, Dr. FALK said that his industry contacts say they can get the people they want, as long as the pay is high enough. Mr. RAGONE said that federal agencies provide a training ground for industry, hindering the agencies' abilities to fulfill their missions, but the loss of small groups of highly trained scientists and engineers is not reflected in aggregated statistics. Mr. ANDREWS said that he had had the same experience: the Federal Aviation Administration hires engineers who, after a training period of three to four years, take positions in industry at salaries $10,000 higher. Dr. STEINBACH noted similar problems in the fields of electromagnetics and computer software and predicted that the current national shortage will get worse. Dr. NORWOOD concurred that many agencies face similar problems: scientists and engineers come in, get valuable experience, and then go on. 177

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Dr. MESSNER said the federal government must plan with greater because its infrastructure causes the government to move so slowly. Industry can move more quickly because firms can operate without adjusting to the labor market, either through pricing or, more importantly, through strategies to recruit from underparticipating groups. For instance, industry can attract more women by responding to special problems that women have in the work place. Constraints Mr. FECHTER asked participants to define the real constraints. He noted that mechanisms are being used to get around pay caps, and promotion is a mechanism to get around pay inequities. However, what other constraints exist and what are the mechanisms for getting around them? Dr. CAMPBELL pointed out that today OPM may delegate most personnel authorities other than pay caps and some other limitations. Dr. CHEN said that NIH, because of the Public Health Service Act and some of its special authorities, does not have the same constraints as many agencies about hiring foreigners. As a result, about one-third of its doctorates are foreign. In ensuing discussion, participants suggested that language in appropriation acts might be changed so that other agencies could hire foreign nationals. Two other points raised by Mr. ANDREWS are that technology now has a more international focus, and the rate of technology changes so quickly that engineers must spend much time to even keep pace with it. Past Initiatives To Recruit Scientists and Engineers Dr. NUMRICH suggested looking at various initiatives, including DoD's attempt to extend the Naval Ocean Systems Center/Naval Weapons Center demonstration project to the rest of the department's laboratories, and evaluating why they have failed. To move forward we must understand how and why those failures happened so they will not recur. Dr. CAMPBELL said that some initiatives fail because of opposition based on the proposition that they should be made government-we rather department-specific. He surmised that legislation now before Congress to grant special salary pay rights to specific departments and agencies may, in fact, be attractive but lead to further fragmentation of the total federal employment system. Dr. CHEN cited an example to support that belief: NTH developed a legislative proposal for higher salaries for its scientific faculty (equating its scientists with comparable ranks in medical school faculty) based on an annual salary survey conducted by the Association of American Medical Schools. Another aspect of the proposal was to link the retirement system to the TIAA- CREF, allowing faculty from medical schools to come into the government for a brief period, remain in the same retirement system, and then maybe move out of government. The proposal was not successful because of objections by OMB and by other sectors that wanted to have similar special legislation. Dr. MAHLER mentioned NOAA's Environmental Research Laboratories' use of a large part of its global change money to finance six joint institutes done cooperatively with universities and co-Iocated in its laboratories. ERL does not pay the principal 178

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investigators' salaries but does pay postdocs' and graduate students' salaries, thus promoting the study of science and engineering by providing monetary support. There are not many environmental scientists, and the supply has been going down. Thus NOAA is trying to encourage potential environmental scientists by putting more money into the universities, where the training is available and these cooperative institutes work. NOAA hopes not only to encourage undergraduate students but also to broaden the spectrum of new entrants. This discussion led Dr. GINZBERG to ask: To what extent does the goverrunent really get in its own way in terms of attraction, retention, and utilization of people by underinvesting in the continuing education of its scientific people? Participants described the effective programs of DOE, NRL, and CDC but noted that training money is being cut back for 1991, and providing such training does not ensure that those in agency-sponsored education programs will not use that training to acquire higher paying jobs in industry or academe. Future Initiatives Dr. MAHLER believes there is a new mode of operations whereby the government runs programs across agencies, not through agencies. An intergovernmental committee on earth sciences, for instance, is advocating the global change program now: . . . . . c;~11 a'~t;ll`;y 1~lVulVea naS agreed on ltS ContrlOUtlon to the program and the ~nmmitt~ ^~- It ~1..~4 ~_~ ~_~1 _ :~ '1~ . _ .1 has created realistic budgets and is selling the program to Congress. Such programs are more salable, but they take some control from the agency heads and put it in the program areas. These interagency committees have broad scientific and management support of attempts to find solutions across the board, a far more effective mechanism than single-agency programs. Dr. FALK said that although such committees could be effective, the real solution is establishing one central organization responsible not only for the welfare of science but also for the effectiveness of the federal science and engineering work force; such an organization could be the one to fight the political battle. . r ~--, ~_ 179