Appendix B:

The Federal Personnel System

The federal civil service system is a large and cumbersome assemblage of laws, regulations, and supplements which strive to achieve internal equity, but inadvertently hamper the government's abilities to compete for talented scientists and engineers and to reward an individual for exceptional performance. Unless bold changes and exceptions to policy are sought, it will always inhibit the Army Research Laboratory 's recruitment and award programs. It will hamper the recruitment and retention of quality researchers; thus hindering its chances of achieving world-class recognition.

THE CIVIL SERVICE SYSTEM

The federal personnel system has been evolving for more than 100 years, growing bigger and bigger with time. Citing a 1988 Office of Personnel Management publication, the recent Gore report, Creating a Government that Works Better and Costs Less, stated: “. . . anecdotal mistakes prompted additional rules. When the rules led to new inequities, even more rules were added. Over time . . . a maze of regulations and requirements was created, hamstringing managers . . . often impeding federal managers and employees from achieving their missions and from giving the public a high quality of service” (National Performance Review, 1993).

The Classification Act of 1949 established the General Schedule (GS), a single, nationwide pay structure for federal employees that today consists of 15 grades, each with 10 pay steps. There are more than 400 GS occupations in the federal government. Each is classified on the basis of that position's complexity and degree of responsibility. Each grade includes scientific, engineering, accounting, medical, and other professions along with administrators, technicians, and clerical positions, that are deemed to be of equal rank, and they are paid within the same relatively narrow range. The system tends to look inward, in order to reduce internal inequity among similar federal agencies, and not be concerned with external or market competitiveness (Office of Personnel Management, 1989).



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THE ARMY RESEARCH LABORATORY: Alternative Organizational and Management Options Appendix B: The Federal Personnel System The federal civil service system is a large and cumbersome assemblage of laws, regulations, and supplements which strive to achieve internal equity, but inadvertently hamper the government's abilities to compete for talented scientists and engineers and to reward an individual for exceptional performance. Unless bold changes and exceptions to policy are sought, it will always inhibit the Army Research Laboratory 's recruitment and award programs. It will hamper the recruitment and retention of quality researchers; thus hindering its chances of achieving world-class recognition. THE CIVIL SERVICE SYSTEM The federal personnel system has been evolving for more than 100 years, growing bigger and bigger with time. Citing a 1988 Office of Personnel Management publication, the recent Gore report, Creating a Government that Works Better and Costs Less, stated: “. . . anecdotal mistakes prompted additional rules. When the rules led to new inequities, even more rules were added. Over time . . . a maze of regulations and requirements was created, hamstringing managers . . . often impeding federal managers and employees from achieving their missions and from giving the public a high quality of service” (National Performance Review, 1993). The Classification Act of 1949 established the General Schedule (GS), a single, nationwide pay structure for federal employees that today consists of 15 grades, each with 10 pay steps. There are more than 400 GS occupations in the federal government. Each is classified on the basis of that position's complexity and degree of responsibility. Each grade includes scientific, engineering, accounting, medical, and other professions along with administrators, technicians, and clerical positions, that are deemed to be of equal rank, and they are paid within the same relatively narrow range. The system tends to look inward, in order to reduce internal inequity among similar federal agencies, and not be concerned with external or market competitiveness (Office of Personnel Management, 1989).

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THE ARMY RESEARCH LABORATORY: Alternative Organizational and Management Options OTHER STUDIES For years, study committees and task forces have identified the shortcomings of the federal personnel system. Many view that these shortcomings have to be strengthened since the lifeblood of an R&D laboratory—its scientific and engineering personnel—is an ever declining asset. Predictions made a decade ago are seeing their fruition today. To quote from the report of the White House Science Council Federal Laboratory Review Panel (1983): The inability of many Federal Laboratories—especially those under civil service constraints—to attract, retain, and motivate qualified scientists and engineers is alarming. The personnel problem is most serious at government-owned, government-operated laboratories (GOGO's) [and] . . . if not corrected will seriously threaten their vitality. The system, however, has always seemed to be too large to overcome. Recently, however, Vice President Al Gore pushed this problem into the national limelight with his report on Creating a Government that Works Better and Costs Less (National Performance Review, 1993). Not surprisingly, his findings were no different that those in the National Research Council's study, Improving the Recruitment, Retention, and Utilization of Federal Scientists and Engineers (National Research Council, 1993); the U.S. Merit Systems Protection Board's special study, Federal Personnel Offices: Time for Change? (1993); and the Congress, Office of Technology Assessment study, Holding the Edge, Maintaining the Defense Technology Base (1989). THE MAZE OF REGULATIONS AND REQUIREMENTS The above studies discovered the same bureaucratic barriers that inhibit federal organizations like ARL from running a high-performance personnel system. The following information summarizes and quantifies the rules and regulations which govern the federal personnel system: Federal personnel law (Title 5 of the U.S. Code) consists of 850 pages, and there is related material in other titles of the statutes, such as Title 29, the Fair Labor Standards Act. There are over 1,300 pages in the regulations published by the Office of Personnel Management (Title 5 of the Code of Federal Regulations) to prescribe implementation of the statutes.

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THE ARMY RESEARCH LABORATORY: Alternative Organizational and Management Options There are about 7,000 pages in the Federal Personnel Manual published by the Office of Personnel Management. In addition to the basic manual, there are numerous supplements that provide additional detail. For example, the Federal Personnel Manual Supplement 289-33, whose 900 pages give instructions on completing Standard Form 50, “Notification of Personnel Action.” There are nearly 12,000 pages in the white-collar position classification system. Besides the federal system, the Department of Defense publishes an extensive amount of its own implementing policies and procedures. In 1992, DOD had collected 30,000 pages of printed material from the Departments of the Army, the Navy, and the Air Force, in an effort to consolidate and reduce defense civilian personnel policies and procedures (McAllister, 1992). THE PROBLEM GROWS Since 1992, even more personnel policies have been developed in response to the growing need to reduce the size of DOD. Some examples are: Executive Order 12839 of February 10, 1993, which requires federal agencies with more than 100 employees to eliminate not less than 4 percent of its civilian personnel positions over the next 3 fiscal years. At least 10 percent of the reductions are to come from the Senior Executive Service, GS-15, and GS-14 levels or equivalent. The recent Defense Management Review Directive 974 considers consolidating personnel administration in geographical regions. AMC, not waiting on a DOD decision, has drafted an implementation directive—Civilian Personnel Consolidation Mandate 93-01 (July 19, 1993). Defense Planning Guidance, dated September 13, 1993, mandated a 20 percent decrease in personnel at all research, development, test and evaluation activities by fiscal year 1999. This decrease is in addition to reductions directed by Program Budgetary Directive 755. AMC quickly responded and drafted a letter which will reduce the ARL's personnel levels to 2,678 by fiscal year 1999 (Prather, 1993). Many DOD and Army pamphlets are being revised and policies are being established to define programs that will attempt to “minimize the adverse effects on employees caused by actions required for the effective management of the Department of Defense, such as, but not limited to, reductions in force, base closures, consolidations, contracting out, position classification decisions, rotation from overseas, and transfers of functions” (DOD Manual 1400.20-1-M which implements the policies outlined in DOD

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THE ARMY RESEARCH LABORATORY: Alternative Organizational and Management Options Directive 1400.20). These programs include decisions such as filling vacant Senior Executive Service positions with Senior Executive Service personnel whose positions have been eliminated. ATTACKING THE PROBLEM There have been efforts to cut through the bureaucratic red tape to assist managers of laboratories in recruiting and retaining quality scientists and engineers. For example, the Civil Service Reform Act of 1978 allowed for personnel management demonstrations which would 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 the Federal Employees Pay Comparability Act of 1990 (National Research Council, 1993). However, ARL has seen little benefit from these initiatives, primarily because the Army and AMC have failed to implement many of these demonstration initiatives (see Figure 3-1). ARL may have renewed hope with initiatives that will spawn from Vice President Gore's report. The personnel recommendations made in that report will create an environment that will support requests for bold personnel changes within the Army Research Laboratory. Some of Vice President Gore's recommendations are (National Performance Review, 1993): Create a flexible and responsive hiring system. Authorize agencies to establish their own recruitment and examining programs. Abolish centralized registers and standard application forms. Allow federal departments and agencies to determine that recruitment shortages exist and directly hire candidates without ranking. Reduce the types of competitive service appointments to three. Abolish the time-in-grade requirement. Reform the General Schedule classification and pay system. Remove all grade-level classification criteria from the law. Provide agencies with flexibility to establish broad banding systems built upon the General Schedule framework. Authorize agencies to develop programs for improvement of individual and organizational performance. Authorize agencies to design their own performance management programs which define and measure success based on each agency's unique needs. Authorize agencies to develop incentive award and bonus systems to improve individual and organizational performance. Authorize agencies to develop their own incentive award and bonus systems. Encouraging agencies to establish productivity gain sharing programs to support their reinvention and change efforts.

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THE ARMY RESEARCH LABORATORY: Alternative Organizational and Management Options Strengthen systems to support management in dealing with poor performers. Develop a culture of performance that provides supervisors with the skills, knowledge, and support they need to deal with poor performers, and holds supervisors accountable for effectively managing their human resources. Reduce by half the time needed to terminate federal employees for cause. Considering these recommendations, now may be the best time for the Army to buy into a new personnel system for ARL.

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THE ARMY RESEARCH LABORATORY: Alternative Organizational and Management Options REFERENCES McAllister, B. August 10, 1992. Pentagon begins unifying civilian employee rules. Washington Post. A-17. National Performance Review. 1993. Creating a Government that Works Better and Costs Less. Washington, D.C.: U.S. Government Printing Office. September 7. National Research Council. 1993. Improving the Recruitment, Retention, and Utilization of Federal Scientists and Engineers. National Research Council. Washington, D.C.: National Academy Press. Office of Personnel Management. 1989. Research Report I, Framework and Operation of the Governments White Collar Pay System, in Supplement, Federal White-Collar Pay System: Report on a Market-Sensitive Study, Research Reports I through IX. August. Prather, Maj. Gen. T.L., Jr. 1993. Proposal for new staffing levels for U.S. Army Materiel Command (AMC) research, development, test and evaluation (RDT&E) activities. Memorandum to Army Materiel Command subsidiary commanders. U.S. Congress, Office of Technology Assessment. 1989. Holding the Edge: Maintaining the Defense Technology Base. OTA-ISC-420. Washington, D.C.: U.S. Government Printing Office, April. U.S. Merit Systems Protection Board. 1993. Federal Personnel Offices: Time for Change? August. White House Science Council Federal Laboratory Review Panel. 1983. Report. May.