Reinventing the Senior Executive Service

SES KeystoneFederal News Radio’s Emily Kopp recently had an excellent series of 4 articles on the Senior Executive Service (SES). Beginning with “It Used to be an Honor, Now it’s a Joke,” they concluded on March 2 with one titled “How to fix the SES: Wipe the slate clean” and were followed by a response from Carol Bonosaro, President of the Senior Executives Association, titled “Do Leaders Have the Stomach for Real SES Reform?” All of these followed a January 2015 report from the Government Accountability Office (GAO) – “OPM Needs to Do More to Ensure Meaningful Distinctions Are Made in SES Ratings and Performance Awards.” Just last week, President Obama met with a White House Task Force of two dozen Federal employees who will provide advice to the Administration on how to fix the SES.

I agree with the premise that fixing problems with the SES requires a clean slate, but most ideas I have seen to date would be incremental changes to a system that has never really lived up to what it was touted to be when it was created. People keep talking about needing “bold” ideas to remake the SES, but what I most often hear are “old” ideas.

Let’s be clear, I do not believe the problems we see with the SES  today are the fault of the executives themselves – they are a result of flaws in the original design of the SES. When it was created, the SES was imagined as a mobile cadre of executives who were highly skilled managers. Executive ability was the key requirement, with technical skills in the work being of lesser importance. The SES would have higher pay and bonuses, but would also come with more risk. It did not work out that way.

Since its creation, the SES has gravitated back to operating much like the GS-16/17/18 “Supergrades” that it replaced. In fact, now that some agencies have created 3 “Tiers” for SES jobs, we are closer to the Supergrade structure than we have been at any time since the SES began. Yes – there are executive core qualifications, but there are also technical qualifications that often limit consideration to people doing the same type of work in government already. The pay is not that different from a GS-15, bonuses are under attack and total compensation is not enough to attract executives from the private sector (and increasingly from the ranks of GS-15s). Members of Congress are attacking individual SES members by name, and many in Congress want to make it easier to fire SES members. GAO and others keep focusing on making “meaningful distinctions” in SES performance ratings, when the real focus should be on results. I do not care how many outstanding ratings SES members or rank-and-file employees get. In fact, we should strive for an organization where everyone’s performance is outstanding. If it really is outstanding, that is a success, not a failure.

There are some fundamental flaws in the SES that assure it will always be criticized. Some are fixable, some are not.

  • The perception that SES is a lifetime appointment. Fixable.
  • Pay that fails to attract enough talent from outside or inside government. Fixable.
  • Lack of mobility. Fixable.
  • Performance management process. Fixable.
  • Selecting 90% of SES from within the Agency where the vacancy is located. Fixable.
  • Our hyper-partisan political environment that makes anyone in a senior position, career or otherwise, a target. No matter what we do to make the SES or any other part of the Civil Service better, partisanship is most likely not fixable.

The key to fixing the problems is not tweaking the SES or writing a set of guiding principles that no one will follow (take a look at implementation of the Clinger-Cohen Act to see how that worked out). The bureaucracy will pay little attention to mild tweaks and will take guiding principles and shred them. Trying to radically remake more than 7000 jobs is also not the answer. I believe the key is an entirely new merit-based construct, neither career nor political, that is focused on a much smaller number of critical Federal jobs.

The Public Service Executive Corps

We have to recognize that simply replacing the Supergrades with the SES did not work. If we want real change, real accountability, real mobility, and real movement back and forth between government and the private sector, we need to design a new system that is built from the ground up with those goals in mind. The SES is not that system. That does not mean we should do away with the SES. It should remain in place as the most senior level of career job, pay compression should be addressed (most likely by bringing back locality pay for executives and requiring a minimum percentage pay increase for people being promoted from the General Schedule or comparable pay systems), and political attacks on SES members should stop. Those changes would make the SES more appealing, but would not fundamentally alter its core principles. They also would not bring the kind of sea change in Federal leadership we need in today’s government.

To make that kind of difference, we need something entirely new. I propose that we create a new category of Federal executive position that is designed from the start to be very different from the SES, the General Schedule, and political appointments. By carving a new group from existing SES and political positions, we can create something that is very different and more likely to produce the kind of change we need. It would be a much smaller group that has a greater role in agency management, coupled with better (and risk-based) compensation and a completely different type of tenure.

The new executive cadre (let’s call it the Public Service Executive Corps), would replace those SES positions that today are in the most senior leadership roles. It would replace those political positions such as the Assistant Secretary and other positions that no longer require Senate confirmation and other key positions that require the highest levels of expertise. The number of PSEC positions should be limited to no more than 400 government-wide, replacing 5% of career SES positions and 7% of non-career (political) SES positions. Allocations of the 400 Corps positions would be managed by OMB and OPM and reassessed annually. Other than OPM and OMB, no more than 10% of any agency’s executive positions could be in the Corps. No more than 5% of OMB and OPM executive positions could be in the Corps and no positions in the President’s office could be in the Corps, nor could Corps members be detailed to the White House.

PSEC positions would differ from the current SES in at least 6 key respects:

  1. Tenure. Career SES positions are jobs that have no time limit and have substantial due process requirements for removal. PSEC positions would serve a fixed term (I suggest 5 years), with the ability to be extended for 1 or 2 years. At that point, they must leave the position and would have no guarantee of another comparable role. Corps members could be reassigned to other Corps positions. Corps members could be appointed to a new Corps position and start a new 5-year term, but only in a different agency or department. The move from unlimited tenure to a fixed term provides for continuity, but also eliminates the problem of executives who homestead and never leave. That is not to say every long-term SES is a problem – most are not. But enough are that the problem should be addressed. A 5-year term would allow ample time to have a significant impact on the agency, but not so long that the PSEC member becomes stale. For former political positions that are converted, it is likely that the jobs would become far more stable and eliminate the constant changes of direction that the 18-month average tenure of politicals creates.
  2. Termination. Corps members could be terminated for performance reasons, after being provided 90 days to improve their performance, if the termination is approved by the Agency Head and the OMB Deputy Director for Management. Members terminated based upon performance would receive 6 months severance and have no appeal rights. Corp members could be terminated for misconduct if the termination is approved by the Agency Head and the Director of OPM. Members terminated based upon misconduct would receive no severance and have no appeal rights. No more than 15% of Corps members could be terminated in a fiscal year. That limit is to keep a new Administration from doing wholesale terminations to put their own selectees in place. I am certain some folks will look at this proposal and say severance pay is bad. However, we constantly hear that government should operate more like a business, and using severance packages to ease transitions and avoid litigation is a common business practice. Other folks may say that allowing termination for cause without appeal rights is not fair. That fact is that most people in this country are “at will” employees. I do not support making the SES or rank-and-file employees “at will,” but I do support it for this small group of highly compensated people.
  3. Compensation. Virtually everyone who looks at the SES laments the fact that most SES jobs are filled from within the agency and wonders why we cannot attract people from outside government. One reason is compensation. The idea that we would pay someone $180K a year to manage a workforce of thousands of people and budgets that go into the billions is absurd. Yes – we can appeal to people’s sense of public service, but that is not enough. People in the private sector who make far more than government pay are generally not attracted to the SES. An increasing number of GS-15s are also saying the move to SES is not worth it. All Corps positions would require a multi-year performance agreement in place and approved by the Agency Head or Deputy and OMB prior to appointment. Performance plans would be updated annually. Pay would be set at any level between Executive Level II (currently $183,300) and the Vice President’s salary (currently $230,700), with pay reviewed annually. Corps members would be eligible for a bonus ranging from zero to 50% of pay. Bonuses would require approval of the Agency Head or Deputy and the OMB Deputy Director for Management and would be based upon independently verifiable, demonstrated accomplishments (not just effort) as outlined in the performance agreement.
  4. Appointment and Administration. Current SES positions are filled by individual agencies, with approval by an OPM Qualifications Review Board. PSEC positions would be jointly administered by the employing agency, OPM and OMB, with OPM having oversight of the hiring process and OMB overseeing the performance planning and compensation processes. Selections for PSEC positions would be made by the head of the agency where the position is assigned, approved by the Director of OPM and would be from candidate lists approved by independent panels. By removing control of the selection and compensation process from agencies, we would substantially reduce the parochial approach to selection that results in 90% or more of selections coming from within the agency. We would also have far more objective performance objectives and evaluation, and would base awards on demonstrable results. To ensure the positions do not become a new type of political appointment, citizen panels drawn from industry, non-profits and academia would review and approve the first 200 appointments. Once there were enough PSEC members to allow it, the citizen panels could be replaced with panels of PSEC members.
  5. Mobility as a Condition of Employment. In addition to time limits on their appointments, PSEC members would be subject to assignment to another agency when the needs of the government require their skills elsewhere. In order to encourage retention of Executives who are relocated, appointments would be extended to provide a minimum of at least 3 years tenure after a move is completed. Only one such reassignment would be permitted.
  6. Transparency. Information on terminations would be provided to the House of Representatives and the Senate quarterly. Information on Corps allocations, appointments, performance plans, pay rates, and bonuses would be public information.

I know there is a lot of detail in this proposal and there are many more details that would have to be worked out to make it happen. It is also a big change that would upset a lot of apple carts. The alternative is to continue making changes around the edges of the SES and then to blame the SES members when the system they work in continues to be flawed. That does not make anything better and just kicks the can down the road for a few more years. Is this proposal the only idea that might work? No. Is it a bigger change than what we are likely to get out of the normal political process? Yes. Will it please everyone on the left and right? No.

Regardless of the approach we take, it is time to stop, change direction, and go for a direct challenge to the status quo to make our government work better. That is the least we can do for the Federal workforce and the American people.

 

 

If it Works, Kill it: How Bureaucracy Stops Progress

Stopsign_sing

I have been reading a lot recently about two issues – shared services and the Federal Information Technology Acquisition Reform Act (FITARA). Shared services are in the news because they offer a way for agencies to reduce costs and potentially improve the quality of support services. Both the Partnership for Public Service and the Office of Management and Budget are talking more about them. FITARA is in the news because it requires significant improvements in the way the government budgets for and buys IT. Both shared services and FITARA are getting a lot of push-back from people who argue both can do more harm than good.

People who provide services that can be considered for shared service providers (generally in HR, IT, Financial Management and Procurement) often believe it is not in their interest to move to shared services. Self-interest is also driving some of the opposition to implementing FITARA as it was intended. That should not surprise anyone. Bureaucracies may be good at some things, but they always excel at one – self-preservation. The people who live and work in the bureaucracy may not be consciously aware that they are engaging in bureaucratic behavior. They most likely have convinced themselves they are acting in the interest of their agency.

Here are a few responses we always hear when the interests of a bureaucracy are threatened:

  • “We need to be able to control this process. Having someone else do it creates too much risk for the agency.” Control is the ultimate need of a bureaucracy. For services such as human resources, many agencies are unhappy with what they have now, but fear another provider that they do not own (i.e., control) could be worse. When we were consolidating all of the Defense Logistics Agency’s HR services, one General told me he would rather have a bad HR provider that he owned than a better one that he did not control. That is unfortunately not an uncommon view.
  • “This is a great idea, but we are undergoing a lot (or too much) change right now. Let’s look at it again when there is not so much going on in the agency.” This one is used to fight virtually anything that challenges the power of a bureaucracy. The problem with it is that most organizations (government or private sector) have big things going on all the time. The bureaucrat uses this argument because s/he knows there will never be a time when nothing big is happening.
  • “It sounds good, but we need to study it more.” Studies can be incredibly helpful. They can lead to a better understanding of risks, cultural issues, and many other aspects of change. They become a problem when they are intended to delay rather than move the issue forward.
  • “We need a business case analysis (BCA) for this.” This one is a variation on the study tactic, but it is more focused on the numbers. A solid business case for a big change is important and it can be a great tool for moving forward, but it also can be one of the best delaying tactics. Be wary when the BCA concludes that more study is necessary.
  • “We tried that before and it did not work for us.” Every organization has tried a lot of things that did not work. They should be learning experiences, but can also be used to object to any kind of change. When we hear the same type of idea being brought up over and over, it does not send the message that you should not do anything. On the contrary, it is telling you loud and clear that there is a problem that people want to fix.
  •  “We cannot possibly have our (fill in the blank) service provided by someone else.” Yes you can. What matters is not who does the service for you, but rather are you getting good service at a fair price. If another agency or someone in the private sector can deliver what you need at a lower price, let them. Agencies do not have to provide their own services, but they do need people who can exercise a reasonable degree of oversight over the people who provide them. They also need to maintain in-house the ability to determine their needs and strategy. If NASA can outsource much of the work around rocket science, other agencies can do the same for work that clearly is not rocket science.

Most people who work in government are not bureaucrats in the negative sense of the word. They are simply people who do their work in a bureaucracy. There are others who are bureaucrats and they are the ones who actively use the tools of the bureaucracy to maintain control and hamper progress. Be on the lookout for them and do not hesitate to call them out on their behavior. The bad bureaucrat hates sunlight and certainly does not want their tactics to be noticed.

How Many Contractors Does the Government Have?

3d human with a red question markRepresentative Chris Van Hollen recently asked the Congressional Budget Office (CBO) how many contractor employees the Federal government has. CBO’s answer should not surprise anyone who is truly familiar with the subject. They said “Regrettably, CBO is unaware of any comprehensive information about the size of the federal government’s contracted workforce.” CBO took 6 pages to explain their answer, providing a comprehensive explanation of why they do not have a number.

I would have been stunned if the CBO said anything other than what they did. Does that worry me? Not really, because it does not tell us anything actionable. When I was at the Department of Homeland Security (DHS), we spent a lot of time trying to explain how many contractors we had. A lot of numbers were reported, including one that said we had over 200,000 contractors (more than the number of civilian DHS employees). It turned out that number was wrong. The best estimate was less than half that. We spent a lot of time debating the number before we started doing what we really should have been doing all along – making informed decisions about the degree to which we should rely on our own employees and rely on service contracts. Those sourcing decisions can generally be based on empirical data and assessments of risk.

Congressman Van Hollen’s request was prompted by proposals to cut some arbitrary percentage of the Federal workforce. Proposals to cut the number of any sector of the workforce – Federal, contractor or grantee – by an arbitrary number should be taken with a grain of salt. When someone calls for a 10% reduction in Federal employees or a 10% reduction in the value of service contracts, ask what they want to cut. Doing a salami slice across-the-board cut is unlikely to make government better. When we need to make cuts, we should follow the good management practice of making informed decisions based upon priorities, costs  and risks.

I know this is a subject where there is a lot of disagreement. You can disagree with whether a particular function should be performed by government or industry. You can disagree with who costs more. You can disagree about who does better work. People tend to treat the Fed/Contractor question like it is a religious argument. Either all Feds are great and contractors stink, or all contractors are great and Feds stink. The truth is that both statements are absurd over-generalizations. There are great Federal workers. There are great companies that do super work for their clients. There are grantees who provide outstanding services in their communities. We need all of those sectors to have a healthy and balanced workforce that accomplishes the people’s work at a fair cost.

So – we can disagree about a lot, but here are some facts.

  • Government uses a lot of contractors and a lot of civilian employees.
  • We think we know how many Federal employees there are, but we really do not.  The numbers of employees in some agencies are classified. We also have thousands of non-appropriated fund employees who do not show up in most counts.
  • We do not know how many contractor employees there are, because they are not the government’s employees and the government does not generally contract for FTE. It contracts for services. When we pay a firm to provide a service, we should care whether they are providing the service, doing it effectively, and at a reasonable cost. In some cases government can get the number of FTE, but in many cases the number may be proprietary and disclosing it could harm a company’s ability to compete for work (because it gives their competitors too much information).
  • Government uses a lot of grantees to do government work. We do not really know how many employees they have either.

And here are some opinions, informed by spending 33 years in government (from GS-5 to Chief Human Capital Officer of DHS) and more than 3 years working for a firm that has many government clients.

  • We cannot have it both ways. The government should not contract for services, then try to tell the firms how many employees they can use to do the work, what they should be paid, and how they should be assigned. Those are management decisions that the firms have to make on their own. If the government wants that level of control, they want a Federal employee.
  • Using only Federal employees is not going to happen. Our political climate would not allow the government to hire hundreds of thousands (or millions) of new employees.
  • Using only Federal employees should not happen. There are a lot of things the government does extremely well. There are others where government either does not do well, cannot effectively compete for talent to do the work, or where the work is temporary and hiring government employees to do it does not make sense. There are other situations where government needs and wants the flexibility that service contracts provide.
  • We have a mix of Federal employees, contractors, and grantees and are likely to always have a mix. We can debate what the numbers should be, but no one is arguing that we should insource everything or outsource everything.
  • Just like Federal workers, contractor employees are a vital part of the economy. Their firms provide direct jobs, indirect jobs (in their suppliers, landlords and subcontractors), and generate billions of dollars in taxes that go back into the government’s coffers.

I believe most taxpayers care about good, effective and efficient government. They care about the government getting what it pays for from its contractors. They care about the government writing good contracts so contractors know what is expected and how to price it. They care about integrity in the workforce (and I have seen it on display both in government and in industry). The number of contractor employees may be interesting, but I do not believe knowing it will result in any of those things that most taxpayers care about.

 

Does Your Job Follow You Home?

More and more people are finding their jobs are not only following them home, they follow them like shadows to the golf course, the kids’ soccer games, the theater, and everywhere else they go. It seems like it is sometimes impossible to escape work. It would be great if that was because everyone has such a fantastic job that they just cannot bear to stop working, but the truth is that works follows us everywhere because technology allows and enables it and many organizations allow or even encourage it.

The Federal Leaders Digital Insight Study (FLDIS), conducted by the National Academy of Public Administration (NAPA) and ICF, revealed a lot about how digital technology has created an “always on duty” environment for many people (35% of respondents). It also revealed how the same technology has made it possible for many  people (37% of respondents) to have better work/life balance and integration and have more time for their personal lives. The FLDIS gave respondents the opportunity to write open-ended responses to many of the questions. Their view of the work/life issue came through loud and clear in those responses. Here is a word cloud from the folks who thought digital technology allowed work to follow them home:

Word Cloud Harmed WL Integration

Not surprisingly, those folks thought they were expected to be available all the time. They were concerned about intrusion into their personal time, being expected to work more and more, and having to respond to email at all hours of the day.

Here is a word cloud from those who thought digital technology had helped work/life integration and balance:Word Cloud Helped WL Integration

They viewed digital technology much more favorably because it enabled telework, improved their ability to spend time at home with their families, reduced their commute time, and allowed them to be engaged with work while doing personal activities rather than having to be in the office and missing those activities.

Why such a big difference? It is not as simple as the type or level of job. There are executives who believe technology tethers them to work, but there are also those like this one:

“I am a Federal Executive with 3 small children. With my blackberry and laptop I have been able to be present for my children while still meeting the requirements of my job. I have been able to be on the road, pick up kids and do a telecom before their school activity. Without this technology I would have to miss important moments in their lives or not take the current job I have today.”

I see this as good news. It means it is possible to have a job, even at a high level, and still have a life. One big difference between the people who say technology is a tether and those who see it as the enabler of better balance is the culture in which they work. Agency leaders who expect their employees to be available day and night simply because they gave them a means to do it will create employee attitudes like the first word cloud – dominated by the weight of greater and greater expectations. Those who respect workers’ time and need for balance will create environments where technology enables telework, freedom from the office and time with family and friends. Three key recommendations from the FLDIS can, if adopted, help ensure agencies create the right kind of environment for a healthy work/life balance:

  • An agency’s mission and culture are the most important factors in defining work/life balance issues where digital technology is concerned. Federal Leaders should recognize that their own behavior defines workforce expectations surrounding work/life balance. As many agencies provide vital services delivered by dedicated employees who will take the time needed to do a job well, Federal Leaders should model desired behavior and ensure technology is a tool rather than a tether that prohibits employees from having free time or privacy.
  • The Chief Human Capital Officers Council, in consultation with the Chief Information Officers Council, should work with agencies to develop model best practices access for work/life balance, use of email, and other technologies in off hours.
  • Agencies should develop written policies that define clear expectations and behaviors for use of technology during off-work time and train supervisors to ensure they do not excessively or unnecessarily burden workers after-hours. Agencies should consider the context of their unique missions and types of occupations when developing such policies—considering needs of senior leaders, emergency personnel, personal use of agency devices, bring-your-own device policies, and the need for personal time.

These recommendations are not that difficult to implement, do not require an act of Congress, and can be implemented quickly. There is no reason not to do them, and the benefits are compelling.

DHS Shutdown Twofer: Burning Money and Morale at the Same Time

It is hard to open a newspaper or go to a news site on the Internet without seeing a story about the impending shutdown of the Department of Homeland Security. Like most everything in our modern political discourse, we see extreme views, uncivil behavior and more misinformation than information. Here is some real information about what is going on: Money is being wasted and employee morale in DHS is being harmed (yes, it can still get worse).

Shutdown is Not Free. I have been stunned to hear people saying there is no harm in talking about a shutdown, particularly if the House and Senate make a deal to avert it. Shutting down a department with 230,000 military and civilian employees takes planning. People I am talking with at DHS have been involved intensely for the past couple of weeks in the planning process to execute a shutdown order. The department and its components have to decide who works and who stays home. They have to decide which contracts can continue to be executed and which have to stop work. They have to decide which grant programs are stopped and how (while localities that rely on that money are out of luck). They have to decide how to notify all of the employees. They have to talk with the unions who represent employees. They have to answer inquiries from OMB, OPM, the House, the Senate, the Press, and the public, and most of all, the workforce. While they are doing all of that, they have to continue normal operations of the department. All of the shutdown activity consumes resources and time that should be focused on the mission. Those resources are wasted. The time is gone and can never be recovered. I have actually been told by some folks that DHS should not waste time preparing for a shutdown, because it is not likely to happen. The same folks said that in 2013 and we saw what happened. DHS is preparing because it has no choice. Its mission is vital to our security and failing to prepare for an orderly shutdown would be irresponsible.

How Much Can We Abuse the DHS Workforce? Anyone who pays attention to Federal workforce issues knows DHS has morale problems. They began when the Department was hastily thrown together in 2003 without proper planning and continue to this day. DHS leaders are taking steps to make things better for the workforce, but it is difficult (maybe impossible) to bring up morale in DHS when 30,000 people are told to go home without pay and wait until the political fighting is over and the remainder are told to come to work without pay until the shutdown is over. Nobody will be paying their bills for them. They are on their own. DHS employees I have spoken with are angry. They resent being put in this position, are offended that their mission is put at risk over politics, and question whether remaining in DHS is worth it. The effect on morale is made worse by the fact that it is the mission that is being put at risk. DHS has morale issues, but it certainly does not have “commitment to the mission” problems. The DHS workforce recognizes the importance of their work. They are committed to the mission and to serving the American people. It is a good workforce, made up of dedicated men and women who will do what is needed to accomplish the mission. If they are told to show up without pay, they will do it. If they are told their training may be delayed or canceled because of the shutdown, they will live with it. If they cannot get the contract support they need, they will find a temporary way to make do. They will do that because they care. Because they are committed. Because they are the type of workforce any employer would be proud to have. But make no mistake, they can be broken. Their dedication can be crushed, and at some point the mission of DHS will be at great risk of failure. I do not think we are there yet, but we cannot risk getting much closer.

 

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