Seeking Fuller Freedom

hile almost all agencies are struggling with the issue of personnel deregulation, some have gone even further, winning exemptions from the personnel procedures laid out in Title 5 of the U.S. Code. These agencies have much more freedom to design and implement new personnel systems.

Most recently, the IRS convinced Congress last summer that it couldn't modernize tax operations without more flexibility to establish a mission-focused personnel structure and to pay top executives more than allowed for by the General Schedule. The IRS simply couldn't attract employees with the technical skills the agency needs, says David Mader, the IRS' chief of management and finance.

The IRS is only one in a long line of agencies that have received freedom from Title 5 over the years. The Tennessee Valley Authority and the U.S. Postal Service have the most exemptions from various Title 5 provisions. Agencies such as the Nuclear Regulatory Commission have more limited discretion. In some agencies, only certain portions of the workforce are exempt--for example, Foreign Service employees at the State Department. In all, nearly half of federal civilian employees work outside some part of Title 5.

This agency-by-agency withdrawal from the civil service system, though approved by Congress, troubles OPM Director Janice Lachance. "I think agencies that are calling to get out of Title 5 are reaching for too simplistic an answer to some very complicated problems," she says. "It's critically important for the government to maintain a single structure upon which we can build flexibilities."

Managers often have far more discretion than they realize, Lachance says, adding: "In my travels, people talk to me about 'Why can't I do this; why can't I do that.' More often than not, they can do it; they just don't know it." Lachance admits that OPM and many agency human resources offices aren't doing enough to educate managers about existing flexibilities.

One of the main reasons agencies seek exemptions is to pay higher salaries, LaChance concedes. For many jobs, government service will never pay as much as private industry, but OPM has extended several compensation tools in recent years to help agencies attract and keep skilled staffers. For example, it's now easier than ever for agencies to offer signing and retention bonuses, as well as to reimburse relocation expenses, she says.

But for an agency like the IRS, which is heavily dependent on rapidly changing technology to process tax forms and serve the public, Title 5 tools aren't enough, agency officials insist. With computer industry jobs paying many times the senior executive salary level, hiring top talent has been difficult. The IRS, like all agencies, has a unique mission and specific workforce needs, says Ronald Sanders, the agency's director of human resources. It doesn't make sense to impose one system on all agencies, he says.

Some worry that the exodus from Title 5 may erode merit system protections, the foundation of the civil service. The merit principles were created to ensure public service jobs were granted based on skill and experience rather than favoritism, and to prevent unfair dismissals by allowing the right to appeal.

At the Federal Aviation Administration, which won extensive Title 5 exemptions from Congress in 1995, employees no longer can appeal disciplinary actions to the bipartisan Merit Systems Protection Board, whose three presidentially appointed members serve seven-year terms. Instead, they can appeal to an internal three-member panel made up of an advocate chosen by each side and a neutral arbitrator that resolves disputes much faster than the MSPB.

The new system doesn't provide for as impartial a review of disputes as the MSPB, insists Mark Gable, legislative director for the Federal Managers Association, which is working to get MSPB rights reinstated at the FAA. "They've replaced centralized personnel rules with the law of the jungle," Gable says. "The merit system principles don't even apply over there."

Despite concerns, in general there's been a "clear incorporation of the merit system principles or other merit-based organizational values" at Title 5-exempt agencies, OPM concluded in an August report, HRM Policies and Practices in Title 5-Exempt Organizations. In fact, although Title 5-exempt agencies have greater personnel flexibility, OPM "found much commonality among the operating [human resources management] systems designed by Title 5 and non-Title 5 agencies."

Even as the IRS embarks on its restructuring, the agency has no intention of abandoning merit principles, Sanders insists. The challenge is to incorporate them into a more flexible system, he says.

Despite concerns, in general there's been a "clear incorporation of the merit system principles or other merit-based organizational values" at Title 5-exempt agencies, OPM concluded in an August report, HRM Policies and Practices in Title 5-Exempt Organizations. In fact, although Title 5-exempt agencies have greater personnel flexibility, OPM "found much commonality among the operating [human resources management] systems designed by Title 5 and non-Title 5 agencies."

Even as the IRS embarks on its restructuring, the agency has no intention of abandoning merit principles, Sanders insists. The challenge is to incorporate them into a flexible, mission-tailored system, he says. "You still need those principles."