What’s Really in Those New Executive Orders?

Late on Friday afternoon, the White House announced that President Donald Trump had signed 3 Executive Orders that will affect the civil service. They are:

Executive Order Promoting Accountability and Streamlining Removal Procedures Consistent with Merit System Principles

Executive Order Ensuring Transparency, Accountability, and Efficiency in Taxpayer Funded Union Time Use

Executive Order Developing Efficient, Effective, and Cost-Reducing Approaches to Federal Sector Collective Bargaining

OPM Director Jeff Pon issued a statement saying “These Executive Orders are about protecting taxpayers’ dollars, including those of our dedicated federal employees, and putting those resources to use in the most efficient and effective way possible. By holding poor performers accountable, reforming the use of taxpayer-funded union time, and focusing negotiations on issues that matter, we are advancing our efforts to elevate the federal workforce. The vast majority of our employees are dedicated public servants who are dedicated to their missions and service to the American people. It is essential that we honor their commitment, and these measures reflect just that. Looking ahead, our focus will be on continuing to leverage technology to digitize our federal human resources infrastructure, build modern public human resources systems for the 21st century, and celebrate the hardworking federal employees who serve our great Nation each and every day.’

The new Executive Orders got a quick reaction from others, with American Federation of Government Employees President J. David Cox saying “Our government is built on a system of checks and balances to prevent any one person from having too much influence. President Donald Trump’s Executive Orders will undo all of that. This administration seems hellbent on replacing a civil service that works for all taxpayers with a political service that serves at its whim.”

Virginia Congressman Gerry Connolly tweeted “Trump continues his assault on the federal workforce with today’s executive orders. Attacking unions and demagoguing federal workers won’t help morale. Show the federal workforce that serves all Americans the respect it deserves, Mr. President.”

Heritage Foundation President (and former OPM Director) Kay Coles James tweeted “Encouraged to see POTUS executive orders for our civil service. These are important reforms and will make our government work more efficiently for taxpayers!”

So what are these Executive Orders? The death of democracy? The salvation of our nation? Those extremes overstate the impact these orders will have, both good and bad. With that in mind, this is the first of 2 posts I will write to go through the provisions of the orders. This post will focus on the order streamlining removal procedures, while the next will cover the 2 orders that address union issues. I will highlight key provisions of each order, along with my take on what it means and how it might affect federal workers. Let’s start with the order titled “Executive Order Promoting Accountability and Streamlining Removal Procedures Consistent with Merit System Principles.”

Section 1 — Purpose.

This section outlines the requirements in the Merit System Principles that employees be held accountable for performance and conduct (Merit System Principles 4, 5 and 6). It goes on to say that employees, via the Federal Employee Viewpoint Survey, have said their agencies do not do enough to deal with poor performers. Those are both facts, so I do not have anything to add, other than that I agree with the employees.

Section 2 — Principles for Accountability in the Federal Workforce. 

This section requires that “removing unacceptable performers should be a straightforward process that minimizes the burden on supervisors” and “agencies should limit opportunity periods to demonstrate acceptable performance under section 4302(c) (6) of title 5, United States Code, to the amount of time that provides sufficient opportunity to demonstrate acceptable performance.” It goes on to say “Supervisors and deciding officials should not be required to use progressive discipline. The penalty for an instance of misconduct should be tailored to the facts and circumstances.” After a brief discussion of the reason why discipline should be tailored to each employee’s circumstances, the order states “Suspension should not be a substitute for removal in circumstances in which removal would be appropriate. Agencies should not require suspension of an employee before proposing to remove that employee, except as may be appropriate under applicable facts.” It goes on to say that agencies should make decisions on proposed removals within 15 days of the end of the employee reply period, and that agencies should use Chapter 75 (adverse action) procedures where appropriate rather than the more common Chapter 43 (performance) procedures when dealing with poor performance. It also reminds agencies that the probationary period is the final step in the hiring process. A final paragraph says agencies should “prioritize performance over length of service when determining which employees will be retained following a reduction in force.”

There is a lot in this section. The statement about progressive discipline does not actually change anything. There is no requirement to use progressive discipline when it is not appropriate. For example, if an employee physically assaults another employee, and agency could go directly to a removal. There are other offenses for which removal on the first offense is appropriate. Most agency tables of penalties have numerous offenses where the prescribed penalty for a first offense is “reprimand to removal.” The part about probationary periods is right on target. Many agencies do a poor job of using the probationary period to weed out employees with conduct or performance problems and probation is, in fact, considered to be the final step in the hiring process. If agencies made better use of probation, many problem employees would go away long before they could become problems.

One of the most interesting provisions in this section is the requirement that OPM rewrite the regulations for reduction in force to “prioritize performance over length of service.” My first thought was that they could not do that because the law requires the current hierarchy of tenure group (career or career-conditional), then veteran preference, then length of service, and finally, performance, in determining RIF retention standing. The RIF provisions in the United States Code do not appear to specify that those factors be considered in that order. They are listed in that order and OPM regulations prioritize them in that order. It appears the administration does have the authority to rewrite the regulations to place performance higher in the list of considerations. Putting performance first has already been done in the Department of Defense, based on provisions in the 2016 National Defense Authorization Act.

Section 3 — Standard for Negotiating Grievance Procedures.

This section requires that “Whenever reasonable in view of the particular circumstances, agency heads shall endeavor to exclude from the application of any grievance procedures negotiated under section 7121 of title 5, United States Code, any dispute concerning decisions to remove any employee from Federal service for misconduct or unacceptable performance.” The idea here is that removals would not go through a negotiated grievance procedure (and arbitration), but rather would go to the Merit Systems Protection Board. This one is much easier said than done. Negotiated grievance procedures are exactly that — negotiated. Unions may not want to agree to such provisions and agencies will not be able to impose them unilaterally. What the president ordered is within his rights as chief executive, but refusing to go along is within the rights of unions. Getting anywhere on this one is going to take a long time.

The bigger question is whether it will actually make a big difference, even if fully implemented. In reality, unions often encourage employees to appeal to MSPB rather than going through the grievance/arbitration process. That is because typically because the union and agency split the cost of arbitration. What we may find is that this provision of the executive order may have little real impact.

Section 4 — Managing the federal workforce.

This section lays out a number of things agencies cannot do, including subjecting ratings and awards to a grievance or arbitration process, agreeing to limits on the agency’s ability to use Chapter 75 rather than Chapter 43 procedures, and giving employees more than 30 days notice before a removal. Like the changes in Section 3, most of this is negotiable. That means nothing will change quickly in response to the executive order.

Section 5 — Ensuring integrity of personnel files.

This section says “Agencies shall not agree to erase, remove, alter, or withhold from another agency any information about a civilian employee’s performance or conduct in that employee’s official personnel records, including an employee’s Official Personnel Folder and Employee Performance File, as part of, or as a condition to, resolving a formal or informal complaint by the employee or settling an administrative challenge to an adverse personnel action.”

There are 2 sides of this issue. The first is the idea that agencies should not agree to let a problem employee walk out with a clean record and go to work in another agency. The second is the idea that settlement agreements can save a lot of time and money and get a problem employee out of the agency for good with no risk of being overturned by a third party. Both arguments have merit. In an ideal world, settlement agreements would include language that an employee would not seek federal employment again, but agencies tend to think about the problem in front of them rather than the problem they might be creating for another agency a year from now. The president has the authority to issue this direction to agencies, but may find that getting them to abide by it is more difficult.

Sections 6, 7 and 8 — Implementation guidance.

These sections state that the executive order will need implementing guidance and regulations and that the order does not abrogate collective bargaining agreements.

What does really do and what does it miss?

This order is unlikely to result in immediate changes that will affect most federal employees. Agencies do not fire large numbers of people and are unlikely to start doing so now. We may see fewer settlement agreements and agencies taking a harder line on contract negotiations. Employees with performance problems may find they have less time to improve, or, if the agency elects to use Chapter 75 procedures, no time to improve before receiving a notice of proposed removal.

There are a few things that this order could have included that might have made a more immediate difference. For example, rather than getting into a discussion of the merits of progressive discipline (which often works in the agencies’ favor), agencies could have been ordered to update their tables of penalties to make removal the preferred penalty on the first offense for some particularly egregious offenses. For example, if an employee physically assaults another employee, uses certain illegal drugs, or commits other severe offenses, the agency would consider those as mandatory removal offenses in the absence of some compelling individual circumstances. Some agencies have no table of penalties, making it harder for managers to decide what is a proper penalty. Requiring every agency to develop a table of penalties would be another good step.

Another more consequential change would be to focus on the time between the offense and the proposed discipline. The executive order focuses on the time between the proposed notice and the decision, when the reality is that much of the time is often in the gap between an employee doing something and the agency issuing a proposal letter. It may be months after an offense before the agency gets around to doing something about it. The time lag makes discipline less effective because it is so long after the offense occurred. That time is not typically governed by law, regulations or collective bargaining agreements. Significantly reducing the gap would have the dual benefits of reducing the time to take an action and making actions such as reprimands and suspensions more effective by reinforcing the cause-and effect nature of misconduct and discipline.

The bottom line is that this Executive Order may make a small dent in the problem of dealing with poor performers and misconduct. It may result in changes to collective bargaining agreements at some point in the future. For the vast majority of federal workers who do their jobs and do not have performance or conduct problems, there is likely to be no impact at all. With respect to this Executive Order — in the words of the British Ministry of Information during World War II, Remain Calm and Carry On.

Hiring Freeze, Hiring Thaw, Hiring Freeze? What OMB’s April 12 Memo Really Says

Last week, OMB Director Mick Mulvaney published a new memo (OMB M-17-22) to agency heads titled “Comprehensive Plan for Reforming the Federal Government and Reducing the Federal Civilian Workforce.” When people read the memo, the lede was something along the lines of “Trump lifts hiring freeze.” Later, folks started noticing other parts of the memo, including its focus on dealing with poor performers. There is actually a lot of news in the memo’s 14 pages, so let’s break it down and see what it really says.

“Begin taking immediate actions to achieve near-term workforce reductions and cost savings, including planning for funding levels in the President’s Fiscal Year (FY) 2018 Budget Blueprint”

The key word here is “begin.” Later in the memo (page 10) it says “To support the goals of the FY 2018 President’s Budget Proposal, OMB directs agencies to identify workforce reductions over a four-year period (FY 2018 through 2022) consistent with discretionary outyear levels included in the FY 2018 Budget this spring and forthcoming OMB guidance on FY2019 Budget submissions. Agencies should begin planning for these reductions now, as achieving associated personnel reductions takes time to implement and realize savings.”  Even though the president’s “skinny budget” proposed large reductions in employees in Fiscal 2018, the new memo appears to recognize that it is too late to do widespread reductions in force this year or next. An agency running a RIF would need to get people off the payroll very early in the fiscal year to have any chance of realizing savings from the RIF. The longer they wait, the less likely they are to save anything. In fact, running a RIF later than the first quarter of the fiscal year would likely cost an agency more than it would save by getting the employees off the payroll. That is due to the costs of severance pay, buyouts and lump-sum annual leave payments. Spreading the reductions over several fiscal years is more prudent and could be accomplished with far less disruption.

“To facilitate any necessary reductions, OPM will provide streamlined templates to agencies for requesting approval to offer Voluntary Early Retirement Authority and Voluntary Separation Incentive Payments (VERA/VSIP) and OPM will provide expedited reviews for most requests within 30 days. However, eliminating unnecessary vacant positions can begin immediately” (emphasis added). There are two key points here. First, there is clearly an intent to use early retirement and buyouts to mitigate the effects of reductions. That is good news. Second, the administration expects agencies to start reducing now. That means an agency that is projected to have large reductions is going to be expected to show results in this fiscal year. For those agencies, the hiring thaw is going to revert right back to a hiring freeze of some sort. We have a already seen that in State and other agencies. I know some folks believe the agencies should wait until the budget is passed before they start making cuts. However, if they keep hiring until they have a firm budget, they are likely to find themselves in a deeper hole.

“Develop a long-term workforce reduction plan.” Again we see the emphasis on “long term.” The memo requires agencies to determine what the right numbers and grades of employees should be, rather than simply looking at previous budgets. It directs agencies to revise their organizations, delayer them, and pay particular attention to “deputy positions, lower level chief of staff positions, special projects, and management analysts that may duplicate the work performed in such areas as procurement, human resources, and senior management.”  This section was written by someone who has worked in the federal government. That last section was a direct swipe at the “shadow” staff in many agencies that act as go-betweens between managers and service providers. The Trump administration is not the first to try to solve the “shadow office” problems. My guess is they will not be the last. Playing whack-a-mole with shadow staffs is bureaucratic game that is rarely satisfying to any of the participants.

Shared services also get a mention in the memo. As I have written before, there is a good case to be made that the government buys the same services far too many times. Agencies are encouraged to look at “alternative service delivery models” and to “streamline mission support functions.” There is nothing new in that recommendation, but the memo does encourage use of outsourcing, insourcing and other options that would provide “greater efficiency while maintaining or improving quality.” The nod to insourcing is a bit of a surprise, but given that some of the better shared services organizations are in government agencies, it is a good idea. The overall move to more shared services is sound, and is a good example of using a business-like approach that can work effectively. The memo also encourages use of “Best in Class” contract vehicles. It avoids the false binary choice between insourcing and outsourcing and recognizes that there are many ways to deliver shared services effectively. Those who argue such work should always be done in-house may be unhappy, as might a handful of large companies that advocate for outsourcing everything to them. All told, this section of the memo is a common sense approach that should not draw too much criticism.

“Streamline policy creation by eliminating the common tendency to recraft/restate policy for a component or regional office.” Another provision written by someone with experience in government, this one is addressing the all too common tendency of people at every level of an agency to create “policy” documents that are not policy are rarely necessary. It is a good way to eliminate unnecessary work.

Plan to maximize employee performance. This section focuses on steps agencies can take to increase performance, with the emphasis very heavily on dealing with poor performers. Among other things, it requires agencies to update their policies on dealing with poor performance and conduct, limiting the use of administrative leave, providing transparency in the performance improvement plan (PIP) process, training managers and supervisors, building accountability in manager performance plans, and establishing “real-time manager support mechanisms.” All of those are reasonable proposals, but that last part is the most significant. One of the biggest problems with dealing with poor performance and misconduct is that managers often get no support when they try to do it. Senior political appointees often want no controversy, so they want problems to just go away. Lawyers often want to settle every case. Every step of the way, there is another hurdle. It is no wonder that dealing with poor performers is a perennial issue in the Federal Employee Viewpoint Survey. These support mechanisms have a good chance of making a difference and are an excellent idea.

While dealing with poor performers is a great idea and would probably win praise from a wide range of people, what was missing from the memo is dealing with good performers. The percentage of federal employees who should be fired because of their conduct or performance is most likely small. Even if we take a huge percentage – say 10% – that are problem employees, then deal with them effectively, we are left with the remaining 90%. Those are the folks who get the government’s work done. How they are doing, and how they are treated, is more likely to have a significant impact on government performance. Even if you take into account the demotivating effect of poor performers, the fact is that the good employees do the work. They need good training. They need recognition when they do a great job. They need to be treated as the valuable contributors that they are. Good employers in the private sector recognize that an act accordingly. Let’s hope there is more to come on this issue.