Is the Civil Service Unbreakable?

We often use terms like “broken” to describe the General Schedule pay system and other aspects of the civil service. That made me start thinking about the civil service rules and and the civil servants themselves. Are they broken? If not, can they be broken?

Let’s start with the rules. As I have said before, I believe the core of the the civil service system – the merit system principles – is sound. Those ideas, including equal employment opportunity, fair treatment of employees, equal pay for equal work, using the federal workforce efficiently and effectively, and maintaining high standards of integrity, conduct, and concern for the public interest, were valid when they were written into law and they remain the cornerstone of the civil service. They are not broken in any way. They could be, however, if an attempt to make federal employees “at will” became law. Being able to fire employees for no reason at all would break the structure of the civil service and undermine the government’s ability to function effectively.

Other parts of the civil service rules are either broken of on the verge of breaking. The general schedule was created at a time when more than 75 percent (1,013,000) of white collar federal workers were clerks. Back then, the workforce was spread out over 18 GS grades (GS-16, 17 and 18 later became the Senior Executive Service). Pay compression was not a problem, and the number of higher graded employees was much smaller. Today the government has only 111,000 clerks, and they are less than 6 percent of the government’s 1,896,000 white collar workers. There are more than 925,000 employees in grades GS-11, 12, 13, 14 and 15. When I have talked about this others, the normal reaction is that the problem is solving itself because so many employees are in alternative pay systems. The thinking is that the GS is shrinking rapidly. That is not correct – GS positions still comprise more than 75 percent of the white collar workforce.

Other aspects of civil service rules are also not working well. It is becoming virtually impossible to find people who believe the hiring process works well. That is because it does not work well at all. The pay rules are inflexible. The complaint, grievance, and appeals processes are cumbersome and overlapping. The process of dealing with poor performers is not working well (according to more than 70 percent of federal workers). All of those add up to a civil service structure that does not work well.

Even with all of those problems, it is hard to say that the civil service structure is broken. Agencies hate the hiring process, but they are eventually able to fill most of their jobs with good employees. The pay processes are bad, but quit rates for pay reasons are generally not a big problem. The number of separations (quits, retirement, deaths, RIFs and removals) from permanent federal jobs runs about 6.8 percent. If we take out the retirements, it falls to 3.5 percent. While some occupations and agencies may have problems, the overall turnover rate is not bad at all. But what about the agencies with morale problems? Let’s look at the Department of Homeland Security (DHS), the lowest ranked agency in the Partnership for Public Service “Best Places to Work” rankings. DHS does better than average, losing only 6.6 percent of its permanent employees in FY 2016. If we take out retirements, the number is 4.3 percent. Still not bad.

When we look at all of the problems with the civil service, and all of the dire warnings from good government organizations like the Partnership for Public Service and the National Academy of Public Administration, and from current and former government leaders (including me), why is it that the civil service is not going to hell in a hand basket? With all of these problems, the government should be falling apart.

That leads me to the second part of the answer to my original question. Is the civil service broken? For now, the answer is no. The civil service is not broken. The mid-20th century rules certainly need to be reformed to match the current role of government and today’s labor market, but the civil service still works because of the civil servants. The 2 million people who work for the government are the reason it still works.

Most federal workers (90 percent) believe the work they do is important. While others might disagree, I think they are right. More than 300 million Americans and billions of people around the globe rely on the work of federal employees. More than 70 percent of feds say their work gives them a sense of accomplishment, while 83 percent like the kind of work they do. They think their agencies could do more to deal with problem employees, but it is clear that most federal workers like the work they do.

The reason I believe the federal workforce is not broken goes much deeper than just caring about the mission and liking the work. The best example I can think of happened when I was the HR director for the Defense Logistics Agency. On September 12, 2001, most employees were told they could stay home. The nation was in shock from the terrorist attacks, and we expected many people would want to stay home with their families. When I drove to work that morning, the line of cars waiting to get through the gate was huge. Rather than staying home, they reported for duty. It was not a bunch of goof-offs happy to get a free day off. It was thousands of dedicated civil servants who showed up to work.

The processes that the civil service uses may be broken, or at least badly in need of repairs, but the civil service workforce is far from broken. Those civil servants are the reason antiquated processes are made to work. They are the reason turnover is not wrecking the government. They are the reason government still works, even in the face of years of political dysfunction in Washington.

It is probably possible to break the civil service workforce, but years of pay freezes, being used as a political football, and being badmouthed by politicians and others have not done it. I believe the civil service workforce is far more resilient than most people give them credit for being. In fact, my guess is that the attacks have just make them stronger. As long as federal workers maintain the determination I have seen from them in the past 40 years, I am confident that they will keep government working. They may bend, but I do not think they will break.

Rethinking Position Classification

One aspect of the civil service that is ripe for reform is the position classification process. People outside government struggle to understand the meaning of the hundreds of job series that are included in vacancy announcements. They do not know the difference between a program analyst, a management analyst, a business analyst, a management/program analyst, or any of the other types of “analysts” they see advertised, or the countless other job identifiers. With the general schedule and other pay plans such as the wage grade system for trade and craft jobs, there are about 400 job series in the federal government, along with more than 100 pay grades. The result is thousands of possible job classifications.

Years ago, when most of these classification processes were created, position classification was considered to be a serious business. Classifiers did detailed analyses of jobs, often going on-site to audit positions. Those audits included interviews with managers and employees, and observations of work being done. The intent was to make certain that federal workers got the correct pay for the work they did. Job classification also included something called “position management” that was intended to make certain jobs were structured in a way that was effective and that did not waste government resources (specifically, taxpayer dollars).

The idea behind position management is simple, but the execution is not. Here is an example. An organization has 10 jobs, all doing basket weaving. The work is 50 percent GS-11 level work and 50 percent GS-12. The agency could structure the work so all of the GS-11 work is assigned to 5 employees and all of the GS-12 work is assigned to the other 5. The result would be 5 employees at each grade level. Alternatively, the agency could assign each employee a mix of 50 percent GS-11 work and 50 percent GS-12 work. The result would be 10 GS-12 positions. If we apply the Washington pay scale, using the representative rate (Step 4) for each grade, the cost of the first option would be $804,265, while the second would cost $876,930. The easy answer is to go with option A. But what happens if it is hard to fill those jobs, and a GS-11 does not attract the right talent? What happens if there is an organization nearby that has far more GS-12 work, and they are constantly hiring away your GS-11s? What happens if trying to break out the work by grade level creates workflow problems? Those considerations go into position management decisions.

At some point in the past 20 years, the approach to position classification changed, In response to shrinking HR offices and the difficulty in finding or growing experienced classifiers, along with management frustration about the inflexibility of the process, agencies and companies developed tools to help managers and classifiers prepare and evaluate job descriptions. The goal shifted from accurate classification to quicker and easier job classification. The tools provided the option of starting with a grade level and working backward to get the words that would support that grade. That approach accelerated the demise of position classification as an HR occupation. Now it is hard to find an experienced classifier, and even harder to find agencies that treat position classification as much more than an administrative exercise. In effect, the attempts to game the system won.

The old approach to position classification had its benefits and was probably superior to today’s approach, but I certainly would not support going back to it. It was too arbitrary, unresponsive to labor market trends, and encouraged the type of gaming the system that eventually won.

If we want to start improving how we manage the civil service, addressing job classification is crucial early step. The pay plans are mostly based in law, so changing those will take an act of Congress. The job series are mostly not driven by law. OPM has the authority to radically simplify them, and should do so now. Agencies also have the authority to assign work, so they can take steps now to implement position management strategies that make reasonable trade-offs between cost and the ability to recruit and retain talent.

Agencies should make affirmative decisions regarding who has the authority to make those trade-offs, but they may not have the expertise in-house to do it. Is that trade-off made by a manager who knows very little about the state of the job market and the adequacy of compensation? Or is it an HR specialist who also knows very little about compensation and the state of the job market? The answer is neither. Agencies need compensation professionals who can make that kind of decisions, or at least provide informed guidance and options to the people who have the authority to make them. That means they need to either create those jobs or contract for them, and they need to increase the investment in training in-house compensation experts.

A radically simplified set of job series that make the job classification process far more understandable to current and potential federal employees is an initial move that can be implemented within a reasonable amount of time, but the long-term goal should be legislation that creates a market-based approach to federal pay and allows the federal government to recruit and retain the talent it needs. That would mean we do not apply an arbitrary standard to a job and decide that every basket weaver should make the same amount of money, regardless of what the labor market says a basket weaver is worth. The labor market would, over time, dictate what we pay people. That may mean that some federal jobs pay much less, while others earn far more than is possible today.

That last possibility is one that may get in the way of a true market-based approach to federal pay. People who argue feds are underpaid rarely want to see pay go down, while the other camp never wants to see pay go up. We have to accept the idea that a job paying $100K today may really be worth only $75k, and at the same time recognize that we may have another $100K job that is really worth $150K or more. We may have federal jobs that are worth $250K or more. If we want to make the argument that federal pay should be based on the labor market, we have to be willing to let it go where the market drives it. That means market forces, rather than political ideology, have to be the driver.