“Rule of three” in federal hiring may get tossed

Federal managers would no longer have to pick new employees from a list of three candidates under a proposal debated on Capitol Hill Tuesday.

Under the proposal, the "rule of three," a law that requires federal managers to choose one of three pre-selected candidates, would be eliminated. Instead, managers would choose job winners from a wider range of qualified applicants, a process called categorical ranking. Under categorical ranking, applicants would be lumped into several categories, such as "most qualified," "qualified" and "unqualified," and predetermined criteria would be used to rank applicants. As a result, a number of people could be in the "most qualified" category. Managers could then consider all of them, rather than just the top three as now required.

"When it's done well, I've seen managers happy to have more people to look at," said Carolyn Ban, dean of the University of Pittsburgh Graduate School of Public and International Affairs. Ban spoke before the House Governmental Affairs Subcommittee on International Security, Proliferation and Federal Service. "I have not seen [the categorical ranking process] abused," she said.

The subcommittee's chairman, Sen. Daniel Akaka, D-Hawaii, and its ranking member, Sen. George Voinovich, R-Ohio, asked Ban and other experts on the federal service for their thoughts on several proposals to improve the way federal agencies manage their employees. The proposals are included in two bills, S. 1603 and S. 1639, as well as a supplemental list of proposals that the subcommittee is drafting. "The focus of these bills is management flexibility," Voinovich said.

The Tuesday hearing with public service experts followed a subcommittee hearing Monday that included testimony from Office of Personnel Management Director Kay Coles James, Comptroller General David Walker and union leaders.

Categorical ranking has been tested at the Agriculture Department and the Internal Revenue Service. It is often used when an agency is hiring a large number of people for a particular job at one time. The Agriculture Department's Forest Service has used categorical ranking to hire thousands of firefighters, while the IRS used it last year to hire hundreds of revenue agents.

Veterans groups have raised concerns about categorical ranking, saying that managers could use it to skirt veterans preference in hiring. But studies have found that more veterans are hired under categorical ranking than under the rule of three. At the Forest Service last year, when hundreds of permanent firefighting positions opened up, qualified veterans basically had their pick of jobs, since they were given priority over other qualified candidates.

"Veterans have been benefiting from categorical ranking," said Max Stier, president of the Partnership for Public Service, a Washington-based nonprofit organization that promotes the civil service.

At Monday's hearing, American Federation of Government Employees President Bobby Harnage said categorical ranking wouldn't speed up hiring. Harnage said slow hiring is the fault of supervisors who take too long to ask that a vacancy be filled, take too long deciding the duties of positions and find themselves too busy to interview candidates.

National Treasury Employees Union President Colleen Kelley also objected to categorical ranking. Union officials "question whether or not a new system will be perceived as fair by current and prospective employees, will preserve merit principles and whether or not it will ultimately lead to the best candidate being hired," she said.

Steven Kelman, a public policy professor at the Kennedy School of Government at Harvard University, said the rule of three already hurts applicants' views of the federal government, because managers often tell favored applicants that they have to skirt the system to get them on to the list of the top three candidates.

The proposals before the subcommittee, including elimination of the rule of three, are not likely to advance in the legislative process for at least several months.

Other proposals that the subcommittee is considering include:

• Creating a chief human capital officer position in each federal department, just as agencies have chief financial officers and chief information officers. The chief human capital officer would spend most of his or her time developing strategies for improving the performance of the workforce, rather than on traditional human resources functions such as processing paperwork.
• Letting federal managers hire more people without competition among candidates.
• Giving agencies the authority to offer buyouts without requiring that a position be eliminated for each buyout offered.
• Reducing the notice period for employees who are fired from 30 days to 15 days.