Back to the Future

In 1978, Congress passed a law instituting governmentwide reforms for pay and promotions, job classification, collective bargaining, performance appraisals, discipline and firing in the federal workplace.

The Civil Service Reform Act, which turns 25 this week, created the Merit Systems Protection Board (MSPB) to hear employee appeals of personnel actions, the Federal Labor Relations Authority (FLRA) to oversee labor issues and the Office of Personnel Management (OPM) to set human resources policy. Much of the impetus behind passing the law included the need for better methods to deal with poor performers and ways to reward employees who led the pack. The law's creators had high hopes of separating the wheat from the chaff and moving forward with a lean federal workforce. But that may have been too optimistic a goal, according to one long-time federal watcher.

"In retrospect . . . there were some very optimistic outcomes anticipated from the Reform Act and we did not achieve as much as we had hoped," said John Palguta, vice president for policy and research at the Partnership for Public Service, a Washington advocacy group. Palguta worked at MSPB for 22 years and was its director of policy and evaluation when he retired in 2002.

"If you go back and look at some of the arguments that were made in favor of the Reform Act in 1978 and the discussions about what the Reform Act was going to fix, we are having some of the same discussions right now," Palguta said. "That was the last major attempt at major civil service reform; it had high hopes, we got some benefit from it, but not as much as people thought."

For example, Palguta explained, the Reform Act created a new standard for addressing performance problems, lowering the standard of proof an agency had to meet in order for an agency to remove a poor performer.

"But, 25 years later we have exactly the same discussion," Palguta said. "Just changing the burden of proof did not take care of the problem, there was more to it than what standard you had to meet in a legal proceeding."

Over the past few years, such agencies as the Federal Aviation Administration and the Internal Revenue Service have asked for-and received-exemptions from various parts of the law, mostly so they could tweak their salaries and hiring systems to suit their mission and workforce. Last fall, Congress gave broad authority to Homeland Security Department officials to redesign rules in six personnel areas: hiring, pay and classification, labor relations, employee discipline, employee appeal rights and employee evaluation systems. Still others, including the Defense Department, NASA and the General Accounting Office, await congressional approval for what officials at those agencies describe as much-needed "personnel flexibilities." That signals that a new civil service reform movement is afoot, said Steve Nelson, Palguta's successor as MSPB's director of policy and evaluation.

"I think it's apparent that it's time for a broader look at civil service reform," Nelson said. "I think the civil service in total is aching for reform. Most of the agencies have gone out from under the traditional Title 5, mostly for the reasons of pay and benefits."

According to Nelson, many agencies sought those exemptions because the restrictive structure of the General Schedule pay system made it too hard for them to recruit and reward employees.

"I think OPM's role needs to change," Nelson said. "At one time it was the central agency for hiring and that doesn't work. They are still the central agency for pay, and that doesn't work very well either."

OPM's focus should be oversight and management, Nelson said, with officials there developing a pay-band model and pursuing governmentwide authorization for agencies to be able to use it, Nelson said.

"There is going to be some reform; it may end up being piecemeal, but agencies are going to do it with or without [OPM]," Nelson said. "It's going down this hill now, it can go down the hill with no driver, or they can drive it."

The lessons learned from the successes and failures of the Civil Service Reform Act should help direct today's reformation process, Palguta said.

"I think we need a new initiative here-'No Agency Left Behind,'" Palguta said. "If you make a case . . . that DHS needs separate authority and IRS needs it . . . if these are good flexibilities, then they should be available governmentwide, with a common set of merit system principles."