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.

 

 

One thought on “Reinventing the Senior Executive Service

  1. Nicole Wright says:

    Thoroughly enjoyed this post.

    Like

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