Central Personnel Agencies: Managing The Bureaucracy

OVERVIEW

The “personnel is policy” is our fundamental principle guiding the government’s personnel management.

As the U.S. Constitution makes clear, the President’s appointment, direction, and removal authorities are the central elements of his executive power.1 In implementing that power, the people and the President deserve the most talented and responsible workforce possible. Who the President assigns to design and implement his political policy agenda will determine whether he can carry out the responsibility given to him by the American people. The President must recognize that whoever holds a government position sets its policy.

To fulfill an electoral mandate, he must therefore give per- sonnel management his highest priority, including Cabinet-level precedence. The federal government’s immense bureaucracy spreads into hundreds of agen- cies and thousands of units and is centered and overseen at the top by key central personnel agencies and their governing laws and regulations. The major separate personnel agencies in the national government today are:

lThe Office of Personnel Management (OPM); lThe Merit Systems Protection Board (MSPB); lThe Federal Labor Relations Authority (FLRA); and lThe Office of Special Counsel (OSC).

Title 5 of the U.S. Code charges the OPM with executing, administering, and enforcing the rules, regulations, and laws governing the civil service.2 It grants the OPM direct responsibility for activities like retirement, pay, health, training, federal unionization, suitability, and classification functions not specifically granted to other agencies by statute.

The agency’s Director is charged with aiding the President, as the President may request, in preparing such civil service rules as the President prescribes and otherwise advising the President on actions that may be taken to promote an efficient civil service and a systematic application of the merit system principles, including recommending policies relating to the selection, promotion, transfer, performance, pay, conditions of service, tenure, and separation of employees. The MSPB is the lead adjudicator for hearing and resolving cases and contro- versies for 2.2 million federal employees.3 It is required to conduct fair and neutral case adjudications, regulatory reviews, and actions and studies to improve the workforce. Its court-like adjudications investigate and hear appeals from agency actions such as furloughs, suspensions, demotions, and terminations and are appealable to the U.S. Court of Appeals.

The FLRA hears appeals of agency personnel cases involving federal labor griev- ance procedures to provide judicial review with binding decisions appealable to appeals courts.4 It interprets the rights and duties of agencies and employee labor organizations—on management rights, OPM interpretations, recognition of labor organizations, and unfair labor practices—under the general principle of bargain- ing in good faith and compelling need.

The OSC serves as the investigator, mediator, publisher, and prosecutor before the MSPB with respect to agency and employees regarding prohibited personnel practices, Hatch Act5 politicization, Uniformed Services Employment and Reemployment Rights Act6 issues, and whistleblower complaints.7

The Equal Employment Opportunity Commission (EEOC) has general respon- sibility for reviewing charges of employee discrimination against all civil rights breaches. However, it also administers a government employee section that investi- gates and adjudicates federal employee complaints concerning equal employment violations as with the private sector.8 This makes the agency an additional de facto factor in government personnel management.

While not a personnel agency per se, the General Services Administration (GSA) is charged with general supervision of contracting.9 Today, there are many more contractors in government than there are civil service employees. The GSA must therefore be a part of any personnel management discussion.

ANALYSIS AND RECOMMENDATIONS

OPM: Managing the Federal Bureaucracy. At the very pinnacle of the modern progressive program to make government competent stands the ideal of professionalized, career civil service. Since the turn of the 20th century, progressives have sought a system that could effectively select, train, reward, and guard from partisan influence the neutral scientific experts they believe are required to staff the national government and run the administrative state. Their U.S. system was initiated by the Pendleton Act of 188310 and institutionalized by the 1930s New Deal to set principles and practices that were meant to ensure that expert merit rather than partisan favors or personal favoritism ruled within the federal bureaucracy. Yet, as public frustration with the civil service has grown, generating calls to “drain the swamp,” it has become clear that their project has had serious unintended consequences.

The civil service was devised to replace the amateurism and presumed corrup- tion of the old spoils system, wherein government jobs rewarded loyal partisans who might or might not have professional backgrounds. Although the system appeared to be sufficient for the nation’s first century, progressive intellectuals and activists demanded a more professionalized, scientific, and politically neutral Administration. Progressives designed a merit system to promote expertise and shield bureaucrats from partisan political pressure, but it soon began to insulate civil servants from accountability. The modern merit system increasingly made it almost impossible to fire all but the most incompetent civil servants. Complying with arcane rules regarding recruiting, rating, hiring, and firing simply replaced the goal of cultivating competence and expertise.

In the 1970s, Georgia Democratic Governor Jimmy Carter, then a political unknown, ran for President supporting New Deal programs and their Great Soci- ety expansion but opposing the way they were being administered. The policies were not actually reducing poverty, increasing prosperity, or improving the envi- ronment, he argued, and to make them work required fundamental bureaucratic reform. He correctly charged that almost all government employees were rated as “successful,” all received the same pay regardless of performance, and even the worst were impossible to fire—and he won the presidency.

President Carter fulfilled his campaign promise by hiring Syracuse University Dean Alan Campbell, who served first as Chairman of the U.S. Civil Service Com- mission and then as Director of the OPM and helped him devise and pass the Civil Service Reform Act of 1978 (CSRA)11 to reset the basic structure of today’s bureaucracy.

A new performance appraisal system was devised with a five rather than three distribution of rating categories and individual goals more related to agency missions and more related to employee promotion for all. Pay and benefits were based directly on improved performance appraisals (including sizable bonuses) for mid-level managers and senior executives. But time ran out on President Carter before the act could be fully executed, so it was left to President Ronald Reagan and his new OPM and agency leadership to implement.

The new law seemed to work for a few years under Reagan. But the Carter–Reagan reforms were dissipated within a decade.

Today, employee evaluation is back to pre-reform levels with almost all rated successful or above, frustrating any rela- tion between pay and performance. An “outstanding” rating should be required for Senior Executive Service (SES) chiefs to win big bonuses, but a few years ago, when it was disclosed that the Veterans Administration executives who encouraged false reporting of waiting lists for hospital admission were rated outstanding, the Senior Executive Association justified it, telling Congress that only outstanding performers would be promoted to the SES in the first place and that precise ratings were unnec- essary.12

The Government Accountability Office (GAO), however, has reported that pay raises, within-grade pay increases, and locality pay for regular employees and executives have become automatic rather than based on performance—as a result of most employees being rated at similar appraisal levels.13