Executive Summary

This report assesses the capacity of the federal government to recruit and retain highly qualified individuals needed to fill many important science and engineering positions. It reviews the problems that have been encountered in recruiting, retaining, and using the talents of scientists and engineers in the federal service, examines federal personnel demonstration projects that have experimented with a variety of mechanisms for enhancing the government's ability to recruit and manage well-qualified and motivated scientists and engineers, and recommends ways to build on knowledge gained from such demonstrations. Many useful policies and mechanisms to improve recruitment, retention, and working conditions have been authorized by the Federal Employees Pay Comparability Act of 1990 (FEPCA), but their success will depend on vigorous and creative implementation through the layers of government to have an effect at the working level. Other policies will require legislative action on new executive proposals.

In an earlier report,1 the committee concluded that many kinds of management structures and practices could be used to carry out the different missions of the various federal agencies. This report examines the mechanisms or combinations of mechanisms for conducting federal

1  

Alan K. Campbell and Linda S. Dix, eds. Recruitment, Retention, and Utilization of Federal Scientists and Engineers: A Report to the Carnegie Commission on Science, Technology, and Government. Washington, D.C.: National Academy Press, 1990. The 1990 report also called for a study of problems in attracting top presidentially appointed scientists and engineers, which was conducted by another panel: Science and Technology Leadership in American Government: Ensuring the Best Presidential Appointments. Washington, D.C.: National Academy Press, 1992.



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Improving the Recruitment, Retention, and Utilization of Federal Scientists and Engineers: A Report to the Carnegie Commision on Science, Technology and Government Executive Summary This report assesses the capacity of the federal government to recruit and retain highly qualified individuals needed to fill many important science and engineering positions. It reviews the problems that have been encountered in recruiting, retaining, and using the talents of scientists and engineers in the federal service, examines federal personnel demonstration projects that have experimented with a variety of mechanisms for enhancing the government's ability to recruit and manage well-qualified and motivated scientists and engineers, and recommends ways to build on knowledge gained from such demonstrations. Many useful policies and mechanisms to improve recruitment, retention, and working conditions have been authorized by the Federal Employees Pay Comparability Act of 1990 (FEPCA), but their success will depend on vigorous and creative implementation through the layers of government to have an effect at the working level. Other policies will require legislative action on new executive proposals. In an earlier report,1 the committee concluded that many kinds of management structures and practices could be used to carry out the different missions of the various federal agencies. This report examines the mechanisms or combinations of mechanisms for conducting federal 1   Alan K. Campbell and Linda S. Dix, eds. Recruitment, Retention, and Utilization of Federal Scientists and Engineers: A Report to the Carnegie Commission on Science, Technology, and Government. Washington, D.C.: National Academy Press, 1990. The 1990 report also called for a study of problems in attracting top presidentially appointed scientists and engineers, which was conducted by another panel: Science and Technology Leadership in American Government: Ensuring the Best Presidential Appointments. Washington, D.C.: National Academy Press, 1992.

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Improving the Recruitment, Retention, and Utilization of Federal Scientists and Engineers: A Report to the Carnegie Commision on Science, Technology and Government science and technology-related work that could be used more widely to enhance recruitment, retention, and utilization of federal scientists and engineers. The report also addresses questions of organizational responsibilities for implementing changes that would give the government more flexibility to recruit and retain well-qualified scientists and engineers and the types of data and analysis needed to monitor the effectiveness of the system: Who should be responsible for personnel policy for federal scientists and engineers? What special provisions, if any, should be made for recruiting and administering the federal science and engineering work-force? At what level of the federal government should personnel policies affecting scientists and engineers be implemented and managed? How much of the implementation of personnel policies for scientists and engineers should be the responsibility of the Office of Personnel Management, and how much of the responsibility should be delegated to the mission agencies? At what level within these agencies should the responsibility be located? Who should be responsible for coordination and oversight in such a decentralized management system—the Office of Personnel Management, the Office of Management and Budget, or the Office of Science and Technology Policy? Who should be responsible for producing the information required to formulate policy and to monitor the effectiveness of the system?

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Improving the Recruitment, Retention, and Utilization of Federal Scientists and Engineers: A Report to the Carnegie Commision on Science, Technology and Government How should the effectiveness of the system be evaluated? Who should do the monitoring, and how frequently should the system be monitored? What is the role of Congress in this process? In arriving at answers to these questions, the committee took into account several background events that have dramatically changed the situation since the first report was written. CHANGES IN THE EXTERNAL ENVIRONMENT Several recent factors are affecting the recruiting environment in a major way, especially the end of the Cold War with the collapse of the Soviet Union, a long-lasting recession, and the passage of FEPCA in late 1990. FEPCA not only provides a process for achieving greater comparability with private-sector pay; it also contains a number of mechanisms for greatly increased flexibility to deal with specific problems as they occur. FEPCA and the significant cutbacks in defense and nuclear weapons spending pose a challenge—and an opportunity—for the departments and agencies to use the flexibilities that have recently become available to create a more effective program of human resources management, including programs affecting federal scientists and engineers. Given current conditions, the federal government is in a relatively favorable competitive position for recruitment and retention of scientific and engineering talent. The economy has been suffering an unusually long recessionary period, which has reduced private-sector opportunities and reduced turnover among federal employees. Independent of the business cycle, the private sector is engaged in downsizing activities in an effort to remain competitive in world markets, which will tend to dampen any future growth in demand that might occur when the economy emerges from its current doldrums. Similarly, academic labor markets are currently sluggish. As the military threat to the United States

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Improving the Recruitment, Retention, and Utilization of Federal Scientists and Engineers: A Report to the Carnegie Commision on Science, Technology and Government lessens and changes, there will be less need for scientists and engineers in some defense areas. Future conditions may operate to undermine this favorable position, however. Long-range projections of total requirements for scientists and engineers indicate further substantial growth. The number of experienced scientists and engineers who will be retiring from the federal workforce is expected to increase dramatically in the 1990s. The pool from which new scientists and engineers are recruited is shrinking and will continue to decline until the mid-or late 1990s, and the fraction of that pool expressing interest in careers in science and engineering is declining. The academic labor market is expected to revive in the mid-or late 1990s, and it is reasonable to expect the period of economic stagnation to have ended by then. Thus, although current economic conditions are relatively favorable for recruitment and retention of federal scientists and engineers, the recession is only a temporary condition. When the economy resumes growing, the government will be competing for scarce talent again. It is not too early, therefore, for the departments and agencies to begin to develop a personnel program taking advantage of useful pay flexibilities authorized by FEPCA. COPING WITH THE CIVIL SERVICE SYSTEM The federal civil service system, with its strong emphasis on internal equity, has long hampered the government's abilities to compete for scarce talent in the labor market and to reward exceptional individual performance. Many of these instances have involved scientists, engineers, and medical personnel. Accordingly, over the years, a number of special authorities have been used to enable the government to be more successful in recruiting and retaining technically trained employees. The empirical growth of these authorities underlines the need for flexibility in recruiting highly qualified personnel and indicate the nature of mechanisms that can be usefully employed. They include special rates, which now apply to 12 percent of federal white-collar positions; Title 38 authority to pay medical personnel in the Department of Veterans Affairs and the National Institutes of Health (NIH) at market

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Improving the Recruitment, Retention, and Utilization of Federal Scientists and Engineers: A Report to the Carnegie Commision on Science, Technology and Government rates; special authority to pay engineers and some scientific experts higher salaries; advance in-step hiring authority, which is used mostly for scientists and engineers; and special pay systems for agencies with difficult hiring situations. More recently, authority to conduct personnel management demonstrations contained in the Civil Service Reform Act of 1978 has been used to address the problems of recruiting, retaining, and motivating scientists and engineers. These demonstrations were the basis for many of the pay-related flexibilities contained in FEPCA. Three of the projects are efforts to improve the recruitment, retention, and performance of scientists and engineers. The longest-running demonstration is the Navy's, popularly known as ''China Lake.''2 Compared with control labs (1) starting salaries for scientists and engineers have increased substantially; (2) larger pay increases are given to highly rated employees, which has greatly increased the link between performance and pay; and (3) turnover among scientists, engineers, and other professionals with high performance ratings has fallen and has consistently been lower at demonstration labs than at control labs. While they are not true experiments, these demonstration projects are consistent with the proposition that a more flexible pay and position structure improves the ability of federal research and development (R&D) agencies to recruit more qualified scientists and engineers and to reward and motivate good performers and thus retain them. They also show that the direct cost of such efforts is modest, in part because the agencies can (and do, because of budget constraints) tailor the compensation package to each case rather than increase salaries across the board. In addition, the differences among the demonstrations designed by each agency to meet its needs show that the various mechanisms can and should be adapted to the particular conditions facing each agency. Thus the agencies faced with implementing FEPCA should consider it an opportunity to design their own recruitment and retention programs. 2   The other two are being carried out at the National Institute of Standards and Technology and the Department of Agriculture (Agricultural Research Service and Forest Service).

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Improving the Recruitment, Retention, and Utilization of Federal Scientists and Engineers: A Report to the Carnegie Commision on Science, Technology and Government FEDERAL EMPLOYEES PAY COMPARABILITY ACT FEPCA is an important step in revamping the civil service so that it can attract and keep well-qualified scientific and technical experts. It could go a long way toward improving the government's capacity to compete for scarce talent in the labor market. FEPCA does not, however, address all the important problems associated with the recruitment, retention, and utilization of scientists and engineers. For example, simplification of the position classification system would greatly increase the flexibility of the pay-related features of FEPCA, as shown by the China Lake and other personnel demonstrations. Several flexibility provisions broaden the application of current authorities; the rest are mechanisms that have been tested in the personnel demonstration projects. FEPCA also created a Senior Biomedical Research Service (SBRS) in the Public Health Service for outstanding basic science or clinical researchers with doctoral-level degrees in a biomedical or related field. The SBRS will have its own pay scale, pay bands, and performance appraisal system. In addition, the act authorizes the President's pay agent to create special pay systems for individual occupations or groups of occupations that should not be under the regular civil service system "for reasons of good administration." This authority could be used to begin to plan and establish a governmentwide Senior Research and Development Service for senior scientists and engineers engaged in research or similar activities (although legislation would be needed to make such a service fully comparable to the Senior Executive Service). RECOMMENDATIONS Implemented appropriately, the new pay comparability act will help federal agencies to manage more effectively the recruitment and retention of scientists, engineers, and other experts needed by the government to conduct its science and technology (S&T) enterprise. It could go a long way toward making the federal government more competitive where it needs to be by increasing the flexibility of agencies

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Improving the Recruitment, Retention, and Utilization of Federal Scientists and Engineers: A Report to the Carnegie Commision on Science, Technology and Government to pay more in higher-pay areas and higher-pay occupations and to better performers. The committee believes, however, that effective implementation of the law will require careful monitoring and encouragement, and makes the following recommendations for ensuring that the federal government and its departments and agencies are more effective in managing recruitment and retention of scientists and engineers. Implementing FEPCA Recommendation 1. The pay reform provisions and related flexibilities provided by the Federal Employees Pay Comparability Act of 1990 (FEPCA) should be implemented as fully as possible by the President and the departments and agencies, in order to redress pay inequities and reward superior performance among all federal employees, including scientists and engineers. Given the severe pressures on the federal budget, however, implementation of pay comparability is by no means assured. The act permits reductions under certain conditions. We believe, however, that presidents should invoke their authority to reduce pay increases only under the direst circumstances of economic distress or national emergency contemplated in the law. The long-term costs of noncompetitive federal salaries can outweigh the short-term savings in terms of the government's ability to carry out its national S&T functions. Responsibilities of the Office of Personnel Management (OPM) Recommendation 2. OPM should follow its aggressive effort to delegate its authorities under FEPCA with an equally strong effort to see that FEPCA authorities and flexibilities are decentralized to the appropriate levels within the departments and agencies.

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Improving the Recruitment, Retention, and Utilization of Federal Scientists and Engineers: A Report to the Carnegie Commision on Science, Technology and Government This especially involves the line program managers and supervisors who are ultimately responsible for carrying out agency missions under widely varying circumstances. OPM also should expand its capacity to assist the departments and agencies, for example in workforce planning and personnel system design, so they make better use of the flexibilities of FEPCA to meet their strategic needs. Recommendation 3. To help carry out its responsibilities for encouraging, assisting, and overseeing the departments and agencies, OPM should develop an organizational focus for science and engineering personnel policy staffed by individuals who have had experience as senior managers of scientists and engineers. A specific organizational locus for science and engineering personnel policy within OPM would provide an ongoing, governmentwide S&T perspective on personnel policy and program development. It could provide a focal point for communication with career scientists and engineers throughout the government, particularly those in the Senior Research and Development Service (Recommendation 9). The staff should be highly experienced science and engineering managers who support the director of OPM as chair of the Committee on Federal Science and Engineering Personnel of the Federal Coordinating Council for Science, Engineering, and Technology (FCCSET) recommended below (Recommendation 5). Department and Agency Responsibilities Recommendation 4. Each federal agency with a science and engineering workforce should develop a comprehensive action plan, with assistance from OPM, to (1) identify agency goals and develop an appropriate science and engineering staffing plan, and (2) use the authorities provided under FEPCA to improve recruitment, retention, and utilization of scientists and engineers.

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Improving the Recruitment, Retention, and Utilization of Federal Scientists and Engineers: A Report to the Carnegie Commision on Science, Technology and Government The first step in implementing FEPCA is for officials and managers in the personnel offices of each agency to meet with line program and laboratory managers to develop a plan to meet that agency's needs. This approach creates the potential of achieving more than an incremental improvement in the traditional civil service system. It could be used to adapt the civil service system to each agency, within broad parameters that ensure the merit principle. This will require a dialogue between those in the agency responsible for planning and managing substantive programs and those managing the personnel system. Otherwise, FEPCA's flexibilities will be adopted piecemeal and incrementally, and its full advantages will not be realized. Interagency Coordination Recommendation 5. A new interagency committee on federal scientific and engineering personnel should be established in the Executive Office of the President under FCCSET to (1) evaluate and recommend science and engineering personnel policies and their implementation; (2) develop model strategies for combining the relevant flexibilities in FEPCA and for science and engineering personnel program evaluation; (3) share successful and unsuccessful experiences; (4) monitor the overall success of the government in recruiting and retaining scientists and engineers across agencies; and (5) provide a forum for identifying and working out solutions to common problems. The major purpose of FCCSET is to develop more effective science and technology policies that involve multiple federal agencies. One major activity of the FCCSET Committee on Federal Science and Engineering Personnel would be annual reports to the President and Congress describing the status and approaches of the agency action plans for implementing FEPCA and related laws recommended above (Recommendation 4) and the overall progress in carrying out those plans

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Improving the Recruitment, Retention, and Utilization of Federal Scientists and Engineers: A Report to the Carnegie Commision on Science, Technology and Government (the OPM organizational unit focusing on science and engineering personnel policy should review and critique the individual agency plans). Congress Recommendation 6. Congress and the executive branch should work together to make further changes in the civil service system that address the problems beyond pay flexibility per se. Meanwhile, Congress and OPM should continue the personnel demonstrations as testbeds for policies and practices that are not necessarily permitted under FEPCA or other federal personnel laws. FEPCA does not make desirable changes in other aspects of personnel policies that also affect the recruitment, retention, and motivation of scientists and engineers, for example, simplifying the position classification system to permit more flexible pay banding, making performance appraisal more suitable for research scientists and engineers, and linking pay more closely with performance. OPM, with the advice of the FCCSET interagency committee on federal scientists and engineers, should formulate and propose legislative measures that would address these gaps. Congress, through its oversight activities, should monitor the performance of OPM and the departments and agencies in carrying out FEPCA and subsequent legislation. Evaluation Recommendation 7. The President's science advisor, working with the director of OPM, the FCCSET Committee on Federal Science and Engineering Personnel, and Office of Management and Budget (OMB) statistical staff, should develop better methodologies, data, and criteria for evaluating the effectiveness of the science and engineering personnel system.

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Improving the Recruitment, Retention, and Utilization of Federal Scientists and Engineers: A Report to the Carnegie Commision on Science, Technology and Government Methodologies, data, criteria, and assumptions for achieving an effective science and engineering personnel system need to be developed in a concerted, long-term effort involving OPM and the departments and agencies, and coupled with the mechanisms that would be needed—e.g., special allowances to recruit scarce but uniquely defined pools of talent; bonuses to retain highly valued staff; and training programs to accommodate changing needs arising from shifting federal priorities. Recommendation 8. OPM should assume the lead in developing a data base that can be analyzed to monitor the performance of the federal science and engineering personnel system. This development activity should also involve the federal agencies with expertise and experience in large-scale data collection efforts to describe the human resource base (e.g., the Bureau of Labor Statistics, the Division of Science Resources Studies at the National Science Foundation, and the Bureau of the Census), probably coordinated through the proposed FCCSET Committee on Federal Science and Engineering Personnel. A Senior Research and Development Service Recommendation 9. A Senior Research and Development Service should be established with a separate pay system, an appropriate performance review and promotion process, and other features conducive to maintaining a high-performance workforce for senior science and engineering positions directly involved in intellectually significant work in research and development or other activities requiring a high level of technical training and expertise. A Senior Research and Development Service would provide a dual-

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Improving the Recruitment, Retention, and Utilization of Federal Scientists and Engineers: A Report to the Carnegie Commision on Science, Technology and Government career track that is appropriate for senior scientists and engineers who are more productive in the laboratory than in administration. Such a senior service would enable the federal government to use more appropriate performance review, merit pay, and promotion systems for senior R&D personnel (described in the next recommendation). Thus the Senior Research and Development Service would be separate from but parallel and equal to the Senior Executive Service, mirroring similar organizational arrangements in the private sector and in academia. Peer Input for Science and Engineering Personnel Decisions Recommendation 10. Compensation and promotion of scientists and engineers should be based in part on evaluation of their job performance by their peers. Governmentwide evaluation programs should be devised drawing on the experience of universities and industry. Research personnel in the federal government—for example, scientists and engineers working in the laboratories at NIH, the National Aeronautics and Space Administration, and the Department of Defense—function more like faculty members in universities and researchers in industrial laboratories than the mainstream of federal employees. Although the academic model is not fully applicable to federal government work, especially for scientists and engineers working at the more applied and development end of R&D activities, its reliance on peer review may be usefully adapted, as it has been in many industrial laboratories. Pay and promotion decisions would be improved if there were more and better input from peers. At least two federal research agencies, NIH and the National Institute of Standards and Technology, already use advisory input from visiting committees of outside experts on individual promotion decisions, as well as on the group performance of an entire research group or laboratory in carrying out organizational goals with imagination and creativity. Now that FEPCA provides an arsenal of ways to recognize and reward high performance, we believe that mechanisms for incorpo-

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Improving the Recruitment, Retention, and Utilization of Federal Scientists and Engineers: A Report to the Carnegie Commision on Science, Technology and Government rating peer reviews of individual and group performance should be developed and used more widely. More Flexible Position Classification Recommendation 11. OPM should develop legislation to create a simplified position classification system in federal research and development agencies both for the Senior Research and Development Service and for those now at the regular GS levels (GS-9/11 through 15), with grade levels comparable with those of counterparts in industry and academia. This flexibility could be combined with pay pools and longer evaluation periods to more closely link performance and pay. With input from the R&D agencies, OPM should develop a simplified position classification system that would permit use of pay banding, one the most successful mechanisms used in the personnel demonstrations. The President and Congress should then agree on legislation that would establish such a simplified classification system for R&D agencies. The linkage between pay and performance would be strengthened further if the funds for within-grade increases, quality step increases, and other pay supplements and awards were pooled and used to reward high performers. At the same time, given the long-term nature of most R&D work, it would be beneficial to make the evaluation intervals longer. Quadrennial Review of the Science and Engineering Personnel System Recommendation 12. The director of OPM should have a quadrennial review of the science and engineering personnel system undertaken by a reputable nongovernmental organization to assess the performance of the system in light of current and expected future needs and conditions and to recommend improvements.

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Improving the Recruitment, Retention, and Utilization of Federal Scientists and Engineers: A Report to the Carnegie Commision on Science, Technology and Government It would be prudent to undertake periodically a comprehensive assessment of how well the system is performing and especially how the new personnel management authorities of FEPCA are being used. Such an assessment would examine the adequacy of the various mechanisms aimed at meeting federal needs for scientists and engineers in areas such as compensation, career development, performance evaluation, and position classification. Based on this examination, recommendations for structural changes would be made, where appropriate, to Congress, the President's science advisor, OMB, and, via the director of OPM, the FCCSET Committee on Federal Science and Engineering Personnel for consideration. Issues Beyond FEPCA Adequate pay is a necessary but not a sufficient condition by itself for ensuring a well-qualified science and engineering workforce. Scientists and engineers are motivated to enter and stay in federal service by a number of nonpay factors, such as the opportunity to identify and develop the solutions to important national problems, the satisfaction of conducting scientifically important research and managing large-scale engineering projects, the quality of the facilities and equipment in federal labs, and the opportunity to engage in long-term projects. They also value the opportunity for further training and education and to engage in professional recognition and advancement. Adequately Equipped and Staffed Laboratories Recommendation 13. In order to attract and retain talented scientists and engineers, and increase their productivity, the federal laboratories must have adequate technical and support personnel and up-to-date equipment and facilities comparable with those available to their professional peers in other research settings. The agencies and OMB should strive to strike a balance in the staffing and equipping of federal research laboratories.

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Improving the Recruitment, Retention, and Utilization of Federal Scientists and Engineers: A Report to the Carnegie Commision on Science, Technology and Government Professional Development Recommendation 14. OPM should develop and implement professional development policies and programs that meet the needs of federal scientists and engineers, including continuing professional training and education; retraining for occupational changes; support of participation in professional associations; and support of academic degree training for employees in hard-to-fill occupations. The departments and agencies should make active use of these authorities to encourage career development among their science and technology professionals. OPM has begun to take a more systematic career-path approach to employee development policies and programs. We endorse this approach in the federal service, because continuing education, training, retraining, and participation in professional activities are especially integral to the career development of scientists, engineers, and other professionals. Fairer Ethics Rules Recommendation 15. In updating the code of ethical conduct for federal employees, the Office of Government Ethics (OGE) should take special care not to unnecessarily restrict appropriate involvement of federal scientists and engineers and other professionals in professional associations. OGE should continue to let federal employees be as involved in science and engineering societies as their agencies deem is helpful to their missions. The attractiveness of federal employment to scientists and engineers is influenced by more than federal personnel policies per se. Scientists and engineers are especially sensitive to restrictions on professional development and recognition. Federal ethics laws and regulations are especially problematic in this regard, because federal employees are often

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Improving the Recruitment, Retention, and Utilization of Federal Scientists and Engineers: A Report to the Carnegie Commision on Science, Technology and Government subject to stricter rules than their private-sector colleagues. Recently, for example, OGE proposed a rule to tighten restrictions on federal employee involvement in professional societies. Because participation in such societies is important to professional development and is often used in pay and promotion decisions, the committee urges OGE to let current practice continue, which is to (1) urge federal employees to participate actively in professional associations, (2) encourage agencies to cooperate with professional associations, and (3) permit agency heads to grant excused absences for purposes that benefit the public interest. These practices are already regulated by OPM regulations and agency rules.