The Bush administration unveiled a new personnel system for the Department of Homeland Security yesterday that will dramatically change the way workers are paid, promoted, deployed and disciplined -- and soon the White House will ask Congress to grant all federal agencies similar authority to rewrite civil service rules governing their employees.
The new system will replace the half-century-old General Schedule, with its familiar 15 pay grades and raises based on time in a job, and install a system that more directly bases pay on occupation and annual performance evaluations, officials said. The new system has taken two years to develop and will require at least four more to implement, they said.
"We're not rushing into it," DHS Secretary Tom Ridge said.
Under the new plan, employees will be grouped into eight to 12 clusters based on occupation. Salary ranges will be based, in part, on geographic location and annual market surveys by a new compensation committee of what similar employees earn in the private sector and other government entities. Within each occupational cluster, workers will be assigned to one of four salary ranges, or "pay bands," based on their skill level and experience.
A raise or promotion -- moving up in a pay range or rising to the next one -- will depend on receiving a satisfactory performance rating from a supervisor, said officials with homeland security and the Office of Personnel Management.
"We really have created a system that rewards performance, not longevity," OPM Director Kay Coles James said in a briefing for reporters. "It can truly serve as a model for the rest of the federal government."
And soon it might. The White House will propose legislation within a month to allow all agencies to restructure their personnel systems in a similar way, said Clay Johnson III, deputy director for management at the Office of Management and Budget.
"We don't want to have long periods of time out there where we have one set of [civil service] flexibilities for half the government . . . because I think it puts the inflexible part of the federal government at a great disadvantage in terms of attracting, motivating and retaining quality people," Johnson said in a telephone interview.
Leaders of federal employee unions, however, immediately denounced the new DHS system and any plans to expand it government-wide. They said the system would undermine the morale of homeland security employees and make it harder to attract and keep talented workers. They said they would file a lawsuit to block its new restrictions on collective bargaining and employee appeals. They conceded that such a move would do nothing to curtail the new pay system, however, which by 2009 will cover at least 110,000 of the department's 180,000 employees.
"They are encouraging a management of coercion and intimidation," said John Gage, president of the American Federation of Government Employees. He added: "This is not a modern system. This is a step backward."
No employees will lose their jobs or see a reduction in pay during the transition to the new system, officials said. About 10,000 employees, including those at DHS headquarters and at the Federal Emergency Management Agency, will switch over to the new evaluation system this fall, but will not see their first raises -- or lack of them -- until January 2006.
An additional 12,000 DHS workers, including non-uniformed members of the Secret Service and civilian employees of the Coast Guard, will switch to the system in January 2007, receiving their first pay adjustments in January 2008. The rest of the affected DHS workers will make the switch in 2008 and begin receiving raises in January 2009.
"We're not rushing into it," Homeland Security Secretary Tom Ridge said.
OPM officials said many details, such as salary levels and how performance will be measured, still need to be worked out. But as outlined, a former GS-10 worker, for instance, would not be able to count on the sort of regular pay increases that he received as he moved up within his pay grade over time. Instead, he would receive a raise only by meeting certain performance standards, although his pay could in theory increase faster than it would under the General Schedule if he is an exceptional worker. Base pay would be determined in part by his occupation and where in the country he works.
If a worker disagrees with his annual job evaluation, he can appeal it internally.