SES Reform: Accountability or Politics?

The House Oversight and Government Reform Committee approved the “Senior Executive Service Accountability Act” that, if approved by the full House, the Senate and the President, would significantly change conditions of employment for members of the Senior Executive Service (SES). When we see a new bill to “reform” the civil service in any way, we always need to ask, “are you a good bill or a bad bill?” In this case, is the bill really about improving accountability or is it an exercise in politics. I believe the answer is a little of both. Let’s go through the provisions of the bill and see what the effects would be.

  • Modification of Pay Retention for Senior Executive Service Members Removed for Under Performance. Currently, when an SES member is downgraded based upon performance, s/he is granted pay retention. That means you can perform badly, get downgraded, and still make SES pay for doing GS-15 work. When the same thing happens to a GS employee, s/he suffers a pay reduction to anywhere from the first to the 10th step of the pay grade to which demoted. The SES provision has been a bit of a sweet deal that probably should go away. This provision takes away the pay retention and pays them for the grade level they are going to. Verdict on this one: Accountability
  • Requirement that Performance Requirements be Established in Advance. This provision mandates performance standards be in place at least 30 days before the beginning of the performance rating cycle. In theory, it sounds good. In practice, virtually no one in government and most people in the private sector do not have performance standards in place a month before the previous rating cycle has ended. There is little, if any, benefit to be gained from this requirement. In fact, because much of what may be in the standards is based upon what is doable within the budget, and the Congress hasn’t passed a budget before the beginning of the fiscal year in many years, this requirement will result in no benefit. Verdict on this one: Politics
  • Biennial Justification of Positions. This provision would require agencies to justify all of their SES positions, including how the position will affect the agency mission, every 2 years. Doing so would add a significant bureaucratic requirement that is likely to result in nothing. Most agencies have SES positions running key organizations. Absent changes to those organizations, the position requirements do not change often. The verdict on this one: Politics
  • Extension of Probationary Period. Currently the SES probationary period is one year, during which the SES member can be removed quickly and easily with little means of challenging it. The same probationary period applies to most other Federal employees. An argument can be made that the type of work SES members do takes longer to assess and makes a longer probationary period a sound idea. Verdict: Accountability
  • Suspensions for 14 Days or Less. Currently SES members may be suspended for 15 days or more, but shorter suspensions are not allowed. This provision changes that to allow shorter suspensions. The addition of suspensions for 14 days or less may make agencies more likely to deal with conduct issues, although there is no evidence that it will happen. This one is close, but the verdict is: Accountability
  • Removal to “Promote the Efficiency of the Service.” This change deletes “misconduct” as a reason for removing SES and adds “efficiency of the service. The change brings the SES more in line with law that covers the rest of the workforce. Verdict on this one: Accountability
  • Mandatory Leave. This provision would (a) require SES members to take annual leave during the notice period prior to being removed and (b) prohibit them from accruing more leave during that time. It provides that the leave would be restored if the removal were later reversed. This is a bit of a guilty until proven innocent provision that appears to serve no useful purpose. Verdict: Politics

With 4 items being related to accountability and 3 related to politics, the bill tilts more toward accountability. If the 3 political provisions were removed, it could make it possible for agencies to more easily hold SES members more accountable for conduct and performance. That says nothing about whether agencies would actually use that authority. Our experience with probationary periods for SES and other employees does not lead me to believe we will suddenly see a rash of firings. As I said in my June 25th post, firing people is not the cure-all that some people think it is anyway. Overall, this bill is a vast improvement over the bill the House previously passed that would allow the Secretary of Veterans Affairs to fire SES members, “notwithstanding any other provision of law.


Putting a Contract Out on Good Ideas

One of the things bad guys used to do in crime movies was “put a contract out” on someone. Those contracts were not to buy something, they meant hiring someone to kill a person. I was reminded of that phrase when I read a Federal Times article quoting former Defense Secretary Robert Gates. Secretary Gates was discussing IT procurement in the Federal government and said “A sclerotic federal contracting system is not a good match for the fast-evolving information world.”
Becoming rigid and unresponsive; losing the ability to adapt
His concerns about the contracting system being unresponsive, rigid and not adaptable were right on target, but they do not apply solely to information technology procurement. As it is currently structured, the Federal contracting process does not appear to serve anyone particularly well. In fact, the contracting processs is where good ideas often go to die. Many people in government dread dealing with the process because they know they often get nothing like they intended from the process. In effect, we “put out a contract” on the idea and kill it.If a process is cursed by so many people, obviously there is someone who is happy with it and driving it. Right? Not really. I spent nine years running HR for the Defense Logistics Agency. DLA is one of the largest buying agencies in government, with more than 3,000 GS-1102 Contract Specialists. DLA’s contracts staff is superb. They have great training, dedication to the mission, and the resources they need to award over 8,000 contracts and task orders a day. Yet, when I talked with them I found a high level of frustration with the processes they had to use. The Federal Acquisition Regulation (FAR) and the Defense Federal Acquisition Supplement (DFARS) are too complex, require too much training to administer, and tilt far (no pun intended) more toward ensuring compliance than flexibility. As the face of the FAR and DFARS, contract specialists bear the brunt of the criticism from agency staff and vendors, yet they are not the reason for the problems. Many of them have not been given the level of training they need and most of them are doing the best they can in a bad system.Agency program managers are generally even less satisfied with the contracting process. Awarding a contract to get work done often requires lengthy documents, estimates of costs that the program managers often cannot deliver without going through the process first to see what the market is charging for those services, and evaluation criteria that are sometimes driven more by convenience than what program managers actually need. Some agencies allow program managers to talk with the firms who are bidding on work. Others say no way. Some encourage extensive program manager involvement in the process, others do not. As a former Fed with 33 years in government, I have to admit I dreaded the contracting slog every time I needed to buy services. It was a maddening process that rarely turned out the way I would have liked.It’s no better on the industry side of the contracting process. Small businesses argue that the scales are tipped against them. Large firms argue that all the good work is going to small business, and mid-sized firms are left in the middle with few people advocating on their behalf. Proposal writers have to deal with Statements of Work and evaluation criteria that often appear to be written on different planets, solicitations that expect responses within a few days, responses to questions that say nothing informative, and amendments that can change everything at the last minute after days of work. Add to that the all-too-frequent solicitations that firms invest thousands or even millions of dollars responding to, only to see them canceled at the last minute without so much as a “sorry about that” from the agency. And – worst of all, some agencies believe talking to firms that might be bidding on work is bad, because they might get information that would help them in the process. The thinking is that if others do not get the same information at the same time, the government is providing an advantage. Rather than comng up with ways to provide more and better information that will lead to better, more complete and more responsive proposals, the government clams up. Think about that. Is that really the way to make the contracting process better?Since it does not appear many people are happy with the process, what is the answer? Some people argue we should use the normal contracting process for routine work, but for high priority programs we should devise new processes that are outside the normal rules. Given the billions of dollars that are invested in so-called routine work, I think that is not the solution. Why have better processes for highly visible work, but a “sclerotic” process for the programs where most of the money is spent? Much like our government human capital programs, our contracting regulations are the product of many years of iterative work.That type of policy development leads to processes that were not designed by anyone – they just happened over a period of decades. In the end, we get a collection of rules and regulations no one would design if they started over, but everyone feels we are stuck with now. The best solution is a rethinking of the contracting process from the ground up, but that is not likely to happen in our current political climate. In the interim, we should learn from the lessons of agencies that are more flexible in their administration of the FAR and DFARS. We should also recognize that good ideas come from government and industry and academia and the non-profit sectors. One set of good ideas is included in a report issued by the Professional Services Council. If representatives of every sector participate, we should be able to use regulatory changes to improve the contracting process enough that it becomes responsive to agency needs, protects the public interest in a fair and open contracting process, and allows industry to have the information it needs to be responsive and deliver best value services to government.
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Why Can’t the Government Hire Young People?

Last week I wrote about the rapid decline in the number of Federal employees under age 30. The number of under-30 employees dropped from 233,759 to 176,533. The drop has been attributed to aging, a massive wave of resignations among younger employees, and hiring issues. OPM’s Fedscope database shows that, although resignations are up a bit (about 2,000 a year), the biggest problem is hiring.

One of the most successful hiring programs for recent college graduates was the Federal Career Intern Program (FCIP). It was a critical source for DHS and Customs and Border Protection when they needed to ramp up the number of Border Patrol Agents. CBP hired thousands of new Border Patrol Agents, including a high percentage of Veterans. While FCIP was a successful program from the hiring perspective, it had many critics, including most unions and the Merit Systems Protection Board (MSPB). MSPB ruled that FCIP violated Veteran Preference rights because it lacked adequate “public notice” to allow Veterans to apply for jobs filled via FCIP.

OPM replaced the FCIP with the Pathways programs. Pathways includes an internship program for current students, a program for hiring recent (within 2 years) graduates, and the Presidential Management Fellows Program. The Partnership for Public Service reports that Chief Human Capital Officers have expressed dissatisfaction with Pathways. FCIP used an Excepted Service appointing authority called Schedule B. The Pathways recent graduate program uses Schedule D. I decided to take a look at hiring for permanent positions using Excepted Service Schedules B and D to see how Pathways is doing relative to the FCIP. Fedscope does not provide a breakdown of specific Schedule B appointment types, but the majority of them traditionally were for FCIP.

What I found was not encouraging. The FCIP was terminated in February 2011. Hiring of under-30 applicants dropped by 58% between 2010 and 2011. When Pathways was introduced in 2012, total hiring continued to drop. We cannot show direct causation between problems with Pathways and decreased hiring, but the curve definitely moved in the wrong direction in 2011 and fell off a cliff in succeeding years. Last year the government hired less than one tenth the number of employees it hired in these programs just five years ago.

Federal Schedule B & D Hires 2009 - Q1 2014

The drop in under-30 hiring presents many long-term problems for the government. If it is not corrected, it will send the message that the Federal government is not a welcoming environment for young people, create a “missing generation” in the work force, and exacerbate inter-generational issues. It may also reduce opportunities for 18 – 24 year old Veterans, who have an unemployment rate over 20%.  None of those are good outcomes.

The government cannot return to FCIP because of its legal deficiencies, and it cannot rely on Pathways as it is now being implemented. OPM and the CHCO Council should commission an independent review of this issue by a third party (such as the National Academy of Public Administration) to identify the causes of the lack of hiring under-30 applicants and to recommend public policy changes that can ensure the government meets its intake needs in a way that does not  disadvantage young people and create other long-term issues.



What Happened to All of the Young Federal Employees?

In 2009 there were 233,759 Federal employees under age 30 – now there are 176,533. In 2009 there were 224,775 employees age 60 and over. Now there are more than 268,000 and the number is growing. What happened? Why is the workforce getting older? Should we even care? After all, older employees are often more experienced, more stable in their careers, and likely to continue to working for a number of years.

The problem the government is facing is that the number of younger employees is a good indicator of the talent the government will have available for critical mid-career jobs in the next 15 – 20 years. The lack of 30 and under talent means we will be facing significant shortfalls as current mid-career and older employees retire. We have seen this problem before. During the Clinton administration, employees in human resources, procurement and other “control” jobs were significantly downsized. Every Chief Human Capital Officer and Chief Procurement Officer I have talked with says they are still paying the price for those cuts. When GS-14 and GS-15 jobs are advertised, the number of high quality candidates is often inadequate. These are jobs where we used to see large numbers of excellent applications. Now a handful of good candidates is considered to be a good result.

The current workforce demographics are shifting rapidly. When we look at Federal employment by age group, we see the number of under-30 employees is dropping precipitously (from 11.4% of the workforce to 8.5%) and the number of 60+ employees is growing (from 11.0% to 13%). The rapid shift of the workforce profile is significant and a bit shocking. While some of the change can obviously be attributed to employees aging out of the 29 and under and 30 – 59 categories, that doesn’t explain everything. Why are things changing so quickly? Are younger employees leaving faster than older ones? Is the government hiring fewer young employees?

Fed Employment trend - Agencies by age group

Turnover is Not the Problem

Some of these questions are easy to answer. Publicly available data show the number of people leaving government and the numbers who are hired. What we see is interesting – the raw number of young people leaving peaked in FY 2010 at 69,656, and dropped to only 46,319 in FY 2013. The number of mid-career (age 30 – 59) employees and the number of older employees leaving have increased. A higher turnover rate among younger employees is to be expected. Early in a career, more employees change jobs than they do later in their careers. In almost every occupation and in most employers, turnover is highest in the first two years of employment. The number of permanent employees under 30 who are quitting is up by about 2000 per year, but that is a small fraction of the drop in employment in that age group. What these numbers tell me is that we do not have the extreme problems with retention of younger workers that some argue we have. Quit rates are up, but overall losses of under-30 employees are down, not up.

Federal Departures from Civil Service by Broad Age Groups

Hiring is the Problem

Where we do see a clear problem is in hiring younger workers. Overall hiring is down across the board, but hires of young people have dropped far more than those of mid-career and older workers. The number of new hires under age 30 has dropped by 54.8% since FY 2009, while mid-career hiring has dropped 37.2% and age 60+ hiring has dropped 24.4%. It is clear that what is driving the number of younger employees down is not turnover – it is hiring. The intake of younger employees has dropped so much that, even though younger employees are actually quitting less than they did 5 years ago, the new hires are not keeping up.

Fed New Hires by Age Group 2009 Q1 2014

What is causing the hiring of young people to dry up? Three reasons stand out:

  • First is younger applicants’ lack of interest in Federal careers. In recent years we have seen pay freezes, a partial government shutdown and almost non-stop Fed-bashing by the press and members of Congress. Someone just starting a career is far less likely to choose an employer where they have difficulty getting pay raises, are vilified by the press and senior government officials, and run the risk of having their income cut off suddenly because of political fights in Congress.
  • Second is agencies hiring filling fewer entry level jobs because of budget cuts. An agency that can fill only a small percentage of its vacancies may elect to fill them with more experienced new employees who can be productive immediately. Until budgets stabilize, this problem is likely to persist.
  • Third is the lack of effective programs for hiring recent graduates. Two of the hiring programs that target such applicants are the Pathways and Presidential Management Fellows programs. A recent report by Jason Miller of Federal News Radio said neither program is meeting agency needs today. The Partnership for Public Service 2014 Chief Human Capital Officers survey showed agencies are not satisfied with the Pathways program and 47% are not using it in a meaningful way. Some argue the program’s public notice requirement are too onerous, while others say agencies simply have not adjusted to the program since it was deployed in 2012. Whatever the reason, there does not appear to be a clear “Pathway” to Federal service for recent graduates. That says nothing about the continuing challenges applicants of all ages face in navigating the overly complex and slow Federal hiring process.

The shift of the Federal workforce to one that is much older is likely to reignite talk of a pending retirement wave. Although previous predictions of retirement doom proved to be unfounded, they were based upon projections of a workforce that had hiring and turnover numbers closer to historical norms. This rapid demographic shift is unlike what we have seen in the past and it is safe to say no one knows when current employees will retire. Societal trends are moving in the direction of longer careers, both for lifestyle and economic reasons. That may mean the workforce will continue to increasingly be populated with older workers. If that continues, we are likely to see a retirement bubble at some point in the future. If the government develops a reputation as a workplace that is not hospitable to recruiting younger applicants, we will likely see the trend accelerating for a few years until something is done to proactively deal with it. Until that happens, we should expect to see these trends continue.

Federal agencies will face a number of challenges as the workforce profile becomes more titled toward older workers. In my next post I am going to address the consequences of these demographic shifts and what I believe the government must do to adapt.


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You’re Fired! and Other Federal Management Fantasies

The recent news about the Department of Veterans Affairs has generated a lot of talk about performance – lack of it, failure to deal with problems, rating inflation, and so on. During a June 20th hearing of the House Committee on Veterans’ Affairs, the VA revealed that none of its Senior Executives had gotten a rating below fully successful in the past 4 years. While that may seem shocking, the VA is not that out of the ordinary. Sub-par ratings for SES members are not common and firing them is even less common. Firing anyone in a management job is rare. There are a lot of reasons for that, including a selection process that weeds out unqualified applicants long before they could be selected and a lack of will to deal with problem employees.

The raw numbers of removals for employees below the SES level are higher, but overall there are not large numbers of supervisors and managers who get less than fully successful ratings.

The overall number of permanent Federal employees who have been fired in recent years is not large. A recent article in Federal Times cited numbers of 11,564 in FY 2009, 11,733 in FY 2010, 10,373 in FY 2011, 9,980 in FY 2012 and 9,513 in FY 2013. That ranges from a high of 0.57% of Federal employees fired in 2009 to a low of 0.46% in FY 2013. Those numbers may actually be a bit higher than true number of people fired for poor performance or misconduct, because they include people who were terminated because their appointments expired and for other reasons.

The Federal Times article points out the higher numbers of people fired from the Transportation Security Administration (TSA is exempt from most Federal employment laws as a result of authority it has in Section 111(d) of the aviation and Transportation Security Act) and the higher numbers of people at lower grades (particularly GS-5) who are fired. The high number of GS-5s is not surprising. More people enter Federal service at the GS-5 level than any other grade and, as new employees, they are much more likely to be let go. GS-5s also represent the largest number of resignations of any grade.

Federal Employee Terminations and Removals FY2009 – FY 2013

The raw number of SES terminations and removals is very low:

Senior Executive Service Removals and Terminations FY 2009 – FY 2013

Federal Times noted that lower graded employees are fired at a much higher rate than higher grades. What is not often mentioned is that SES members are fired at the same or higher rate than GS-14s and GS-15s. In fact, the FY 2012 SES firing rate was almost twice that of GS-15s and one-third more than the rate of GS-14s. In 2012, 7 of 7,815 SES (.09%) were fired for performance or misconduct, while 28 of 59,216 GS-15s (.05%) and 86 of 119,507 GS-14s (.07%) were fired.

Firing rates for higher grades are most likely lower because those employees have been screened repeatedly as they have moved up through the grades. Another factor may be the familiarity that more senior people have with one another. Firing anyone is hard, but it is easier to fire someone you don’t know as well. Firing the people you work most closely with every day is much harder.

All these numbers about firing lead to the question – why aren’t more people being fired if we want to make government better? A June 24 Government Executive article on a a House/Senate conference committee was headlined “VA Conferees Agree on One Thing: Fire More Bureaucrats.” Wouldn’t it be better if we give managers the ability to fire people much more easily so they can clear out the deadwood? Wouldn’t that lead to a general housecleaning that would make government far more effective? Shouldn’t government fire people at a rate similar to the private sector?

In a word, no.

The simple idea that it should be easier to fire people sounds good in theory. If we let good managers make good management decisions about letting poor performers go they will get rid of the poor performers. Like many simple ideas, that one is too simple. The real world is a bit more complex. Here are just a few of those complexities:

  • The simple view assumes managers will manage. This post started with the story about every SES member in the Department of Veterans Affairs getting a fully satisfactory or better rating. The numbers are not a lot better in other agencies. Most managers who talk about how hard it is to fire people have never tried to fire anyone. Keep in mind that MSPB’s 2005 report, The Probationary Period: A Critical Assessment Opportunity, MSPB reports that 1.6% of competitive service employees are removed from their jobs during their probationary period. Those are employees who can be fired easily and have little avenue of appeal. Firing them doesn’t require a lot of documentation or time. Firing probationary employees is as simple as it gets, yet only 1.6% of them are fired every year. Why should we believe a quick and easy process for firing everyone else would have different results?
  • The simple view assumes Federal employees who cannot perform are the reason for many of government’s problems. In that scenario, there are tens or hundreds of thousands of employees who contribute nothing and wiping out large numbers of them will make government better. That view doesn’t assign the blame for government’s biggest problems to the people and cultures that are actually responsible for them. Federal employees do not cause duplication of services across agencies. They don’t cause money to be appropriated for wasteful projects. They do not cause most of the problems of the federal government. For the most part, the ability of anyone other than the most senior employees to dramatically change anything is next to non-existent. By shifting the focus to them, we lose focus on the bigger systemic problems our government faces and guarantee we will never deal with the underlying causes. Are there poor performers in government? Yes. Is the number massive? No. Will rolling a few heads distract attention from the bigger problems? Absolutely.
  • The simple view also assumes those managers who do have the backbone to deal with poor performers will deal only with poor performers and not the people they do not like for personal or political reasons. The federal civil service was designed to protect government workers and the American people from a government spoils system and the toxic results it produced in the past. The great champion of the civil service, President Theodore Roosevelt, said “The spoils-monger and spoils-seeker invariably breed the bribe-taker and bribes-giver, the embezzler of public funds and the corrupter of voters.” President Roosevelt was right. “Reforms” that would lead us back to a spoils system would do far more damage to the interests of the American people than any harm that can be done by a ten or twenty or thirty thousand people who do not perform.
  • The simple view assumes performance is an individual accomplishment. I have worked 33 years in government and 6 years in the private sector. During all of that time I have seen very few accomplishments that are the result of just one person’s actions. Virtually all good results come from teams of people working together.  Most bad results are failures of a team or an organization. They fail to deal with systemic problems. They fail to provide training for their employees. They fail to provide the technology that would enable success. They fail to create a culture that gets good results. Yet, when they have a failure, they always seem to default to finding someone to blame so they do not have to accept the fact that they might be part of the problem too.

We seem to have reached a point where the solution to a problem is to hunt down the offending party and say “You’re fired!” Maybe it makes us feel better to think we made someone pay for their failure. While we would be better off if we dealt effectively with poor performance, the truth is that government is so complex, cultural norms in agencies are so powerful, and our political process is so broken, that there is rarely a single person or even a small group of people who are truly responsible. If we want to make government better, we need to deal with cultural issues that drive the kind of problems we have seen at the Department of Veterans Affairs. We need to deal with the political dysfunction that can make Congressional oversight more of a sideshow than the powerful tool it was designed to be. We need to deal with the lack of training for Federal managers that would help equip them to deal with problem employees and problem organizations. We need to deal with the unresolved questions of the scope and reach of government. None of those are easy. None are likely to be completed within a daily news cycle, and none of them give someone the satisfaction of finding someone to blame and firing that person. But – if we want to make our government better, they are what we have to do.


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