Systemic Management of Human Capital June 24, 2002

The Coalition for Effective Change (CEC), and its thirty-two executive, managerial and professional association members, give a high priority to actions that will shape the federal workforce of the future. The federal government has downsized and eliminated supervisory layers and other positions, and continues to do so, but the work to be done has not been reduced. In many cases, the work and its complexity are expanding.

Downsizing has also left fewer experienced people left who can train new employees. There is a growing need for the federal government to ensure that good people and particularly good managers and professional employees are retained, despite reduced promotion opportunities. Managers need more flexibility to hire and promote qualified workers quickly, yet fairly and openly following the Merit System Principles.

CEC believes that the most crucial issue for the operation of federal agencies today is the need to manage human resources in a more positive and effective way. Actions to meet this need should include the following.

Emphasize the need in all Federal agencies for systematic management of their human capital.

Federal employees are the principal resources for accomplishing agency missions. Ensuring effective workforce planning, recruitment, development, training, leadership, and retention of high quality workers should receive the highest priority in the immediate future. The President, committees of the Congress, the Comptroller General, the Office of Personnel Management, and the National Academy of Public Administration have all emphasized the importance of this issue.

Provide for a continued intake of new talent for the future

Downsizing realities aside, agencies still need pipelines for new employees with requisite competencies, who can be developed to lead agency programs in the 21st century. Currently, there are a variety of ways for agencies to acquire needed new talent. These include the following, which should be better understood, used and expanded:

• Some contacts at colleges and universities have been established and must be added to and maintained. Students should be provided better access to information about federal career opportunities.


• One excellent way to attract recent college graduates is hiring through the Presidential Management Intern Program (PMI) those who are completing a master's or doctoral degree program. PMI's are routinely rotated through several jobs in the agency during their intern period, learning how agency programs operate and are related to each other. The number of PMI jobs offered in recent years has increased, while still numerically very small. This program should be strengthened and expanded.


• Under a new Schedule B appointing authority, agencies now are able to establish an agency Career Intern program for hiring college graduates. Included is a training program and after two years interns are able to make the transition to permanent, career appointments. This new program should be an important way to attract young people.


• Another excellent way agencies have acquired new talent has been to hire college graduates with an undergraduate 3.5 or higher grade point average through the Outstanding Scholar Program based upon the authority of the Luevano consent decree. Although proper use of this authority is as a supplement to competitive examining for hiring African-Americans and Hispanics who are under-represented in the workforce, this authority should be used more widely.


• Agencies also are able to hire college students who are working on their degrees. Using Schedule A excepted appointing authorities, agencies may hire college students to work under a Cooperative Education Agreement through the Student Career Experience Program with a college or university. After satisfactory completion of 640 hours of work, students may be converted non-competitively to permanent, career appointments.

Specialized and accelerated hiring programs should continue to be offered. Where the demand for talent exceeds the supply or where compensation is restricted, as it is in the information technology occupations, the government must act decisively before the problem impacts the ability of agencies to perform their mission.

Increasingly, it is being recognized that some of the new talent hired by the federal government will be temporary, and not permanent. Agencies, following the example of many other sectors of the workforce are making increased use of contract and other supplemental workers where permanent workers with specialized skills may not be needed over the long term.

Today's employees are more likely to change jobs during their career than were their parents. The federal retirement system no longer offers the "golden handcuffs" of a 30-year career, but instead offers benefits that are transportable to another employer. When properly designed, many young people express an interest in short-term employment

CEC believes that the Government must continue to search for new, faster, and better ways to acquire the new talent needed in the future. Recent steps by OPM in the right direction have included setting up special pay rates for employees in hard to fill jobs; extremely important are the new regulations allowing federal agencies to repay student loans.

Emphasize a customer-oriented role for OPM

In staffing and in all areas of human resources management, OPM has been realigned to provide a broad, overarching framework, while leaving to agencies the freedom to build their own human resources systems under the umbrella of the Merit System Principles. OPM now seeks to partner with agencies in developing a long-range view, to provide strategic planning and support for agencies, to facilitate agency programs, to enhance the quality of the federal workforce, and to provide top quality service to the public.

OPM has enjoyed some success in its new partnership role with agencies. To ensure continued success, OPM should be encouraged to speak more clearly and be aggressively customer oriented about this new role, particularly in supporting faster and simpler hiring processes. At the same time, agencies should be encouraged to embrace a system of trust and partnership in this endeavor and to accent the positive. Further, OPM should be encouraged to develop, publicize and promote flexible, streamlined, and simplified methods for effective agency human resource management. Examples are the Career Intern Program, tuition assistance, noncompetitive conversion, retention allowances, student loan repayments and superior qualification appointments.

Modify the rule-of-three selection criteria

The current rule requiring selection from among the top three candidates on a ranked list was established more than 125 years ago to counteract political manipulation. It often blocks consideration of high-quality candidates with identical scores. States, other governments, and even federal demonstration projects have shown the wisdom of making a change. The rule-of-three should be modified to allow consideration of a quality group based on the top five or perhaps ten scores in an examination.

Simplify and speed-up the application and examining process

It is essential that selection continue to be based on open competition and applicant possession of requisite knowledge, skills and abilities. Unfortunately, competitive examining has generally been unnecessarily complicated-too much paperwork and too time consuming. Because competitive examining must be used first for hiring new talent, OPM must simplify and speed up the examining process, and encourage agencies to try alternative employee assessment and selection tools within the context of agency delegated examining units. Wherever possible, examining tools need to be automated to facilitate rapid examining of applicants when jobs need to be filled.

The former standard federal employment application form (SF-171) is no more, but some agencies still require that applicants put similar content in a resume. A simple resume should be enough for initial consideration, without each agency asking for varying details as often happens. The new résumé format on the Office of Personnel Management's (OPM's) USAJOBS is a big improvement that agencies should accept for job applications without requiring complicated paper applications.

The current examination process is too complex and time consuming. It should be simplified and accelerated. Greater agency use of delegated examining can help. OPM delegation to agencies of examining authority for Administrative Careers with America (ACWA) positions is a helpful step in this direction. Also, OPM and agency examinations should be further simplified allowing applicants to apply electronically by responding to a simple list of questions about their qualifications and competencies for those jobs. Similarly, OPM qualification standards and agency job descriptions should be simplified and aligned with core job competencies or series related to key examinations. This would speed up the application and examination process and reduce the need for applicants to make repeated applications for similar jobs. To further speed up this process, OPM and agencies need to automate it aggressively. Applicants should simply be able to check choices on an established answer sheet that can be electronically scored. OPM's new USA Staffing software is a step in the right direction of helping agencies to automate and simplify the application and examining process.

Simplify internal merit promotion rules and make them more creditable

Merit promotion should continue to be based on open competition and applicants' possession of requisite knowledge, skills and abilities to do the work. Merit promotion should not be based on seniority or other non-merit factors. The merit promotion process needs to be more clearly competitive to give credibility to employees watching and involved in the process. However, agency internal merit promotion rules are too complicated and contribute to selecting officials avoiding competitive merit promotion practices. OPM needs to simplify and clarify its government-wide merit promotion regulations to make clear that agency internal merit promotion rules should in turn be simplified. Where those agency rules are part of a collective bargaining agreement, simplified rules should be negotiated between labor and management.

Agencies should be encouraged to work with employee organizations to simplify internal merit promotion rules to allow flexibility to promote, without advertising, people in the same unit over which the selecting official has control. Agencies also should be encouraged to give agency managers the flexibility to select from a "best qualified" group without further ranking, first from displaced employees and second from current employees. This flexibility would place responsibility for promoting a diverse group of employees representative of America squarely on agency managers who would still be expected to make representative selections.

Also, nonpermanent employees with two years of acceptable performance who were initially hired under competitive procedures should be allowed to compete for permanent appointment for jobs announced under merit promotion procedures.

Provide for continuous development of highly qualified Federal employees and managers

Agencies should adopt continuous learning polices and the resources to support them. Young people are attracted to developmental opportunities, and current employees are more likely to stay in a continuous learning environment.

Federal supervisors, managers and executives are concerned that the supervisory and managerial training provided them has not always been of high quality. Supervisory, managerial and executive development is needed, not just for entering such positions, but also for continued development in support of the agency mission and strategic plan. Too often higher level managers do not support such training and funds are not made available. To ensure the development of highly qualified federal managers to lead the government programs of the 21st century, agencies should be required to make at least 3 percent of current supervisory, managerial and executive payroll available for such training each year.

For non-supervisory employees, agencies should be required to set-aside 3 percent of employee payroll for training costs. This money should be used not just for enhancing skills for current jobs, but to pay training costs for learning new skills. Training funds should also be provided for additional education at any level and particularly for advanced degrees and certification for jobs that will be essential for government programs of the 21st century.

Provide restructuring flexibilities

A permanent authority should be established to offer separation incentives such as cash buyouts. The authority for voluntary early retirement should be amended to allow more flexibility, and a gaining and losing agency should be authorized to share the obligation to pay severance pay to a surplus employee given a subsequent time-limited appointment.

Make greater use of recruitment, relocation and retention bonuses

Recruitment, relocation and retention bonuses should be used when needed to attract and retain the best and the brightest technical and managerial talent. Agencies should budget funds for such uses when they have "hard-to-fill" positions and recognize that the cost of training new employees can be greater than the cost of paying bonuses to retain current employees.

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