It looks like federal employees are about to take a ride on the reform roller coaster.
The Department of Homeland Security has nailed down its policies for a new personnel system that will markedly change the way 110,000 civil service employees are paid, promoted, deployed and disciplined. The system will launch this spring, with curbs on union rights and a tighter process for appealing disciplinary action. There will be dramatic changes in how employees are rated on job performance, starting with about 10,000 employees later this year, and gradually phasing in more.
The Defense Department selected 60,000 employees last month for the first phase of its new personnel system -- which will eventually cover 300,000 employees -- and hopes to announce proposed rules in the next few weeks. The Pentagon estimates that revamped pay and workplace rules will be in place by 2008, affecting all of the department's 746,000 civil service employees.
Shortly after Homeland Security unveiled its new personnel system, PresidentBush's administration said it will propose legislation to give other agencies the ability to restructure their pay, personnel, labor relations and related systems.
It's probably safe to say that 2005 is shaping up as one of the most dramatic years for changes in civil service policy since 1978, when Congress approved the Civil Service Reform Act.
That law locked in the 15-grade General Schedule for pay, encouraged bonuses to reward good performance and created agencies to administer personnel rules, hear labor-management disputes and provide due process for employees faced with discipline or management reprisal.
Although Homeland Security and Defense pledge to retain employee protections and continue to give veterans a preference in hiring, it seems clear that major parts of the civil service framework, only 27 years old, will soon be dismantled and rebuilt.
For example, Homeland Security will phase out the General Schedule and the annual raise approved by Congress. Recommendations on pay raises will come from a Compensation Committee, made up of 14 members, with four seats reserved for unions. Final decisions on pay will be made by the secretary.
The General Schedule will be replaced with a pay system based on occupation, national and local labor markets and job performance.
The GS grades will be converted into "pay bands," which have wider salary ranges than the GS provides. Salaries in the bands will vary by occupation and by labor market, potentially allowing the department to pay more to a Border Patrol agent in Southern California, which has a competitive job market, than an agent working on Montana's border with Canada.
The pay bands will likely group occupations into common categories -- such as new hires, full performance employees, senior experts and supervisors.
Most Homeland Security employees will receive two annual pay adjustments -- a market adjustment, which keeps them on a par with similar jobs in the private sector and GS increases, and a performance raise, which will vary in size according to job rating. Employees who are turning in unacceptable performance at work will not receive any annual pay increases.
The department also will create a Homeland Security Labor Relations Board, with three members appointed by the secretary, to sort out union and management disagreements. The department will establish a separate panel to hear cases of employees who are being fired because of serious infractions and gross violations of duty.
Under the current system, unions take their complaints to the Federal Labor Relations Authority, and employees turn to the Merit Systems Protection Board when appealing stiff disciplinary actions. The two independent agencies will continue to handle some Homeland Security matters, but on a diminished and more expedited basis.
The department has worked on the regulations for the new system for two years, sparking employee complaints that the framework for the new system is too vague, too difficult to understand and looks open to abuse by managers.
The employees are not far off point. Department officials say much work remains ahead -- such as defining occupational clusters, setting up pay bands, establishing rigorous job performance standards and figuring out what should be mandatory firing offenses.