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Outlook: Civil Service Reform

Donald F. Kettl
Political Scientist
Monday, February 28, 2005; 12:30 PM

Washington's always been a company town -- the place where the federal government can do its business beyond the control of the states. And for more than 100 years, the company workforce -- a politically neutral corps of public servants, bound by a common mission and a core set of values -- has defined the town's personality. But now the town's in a crisis -- the civil service system that drives the bureaucracy is broken, and the government's ability to get what needs to be done is crippled, says political scientist Donald F. Kettl in his Sunday Outlook article, A Civil Service That Fails Today's Test. That's what led to new personnel rules announced this month at the departments of Defense and Homeland Security. Added to changes already underway at the FAA and the IRS, they mean that half of all federal workers could soon be operating under a brand-new system designed to replace rigidity with flexibility and to shift an emphasis on process to an accent on performance. But though reform is badly needed, this piecemeal process that reforms some agencies while leaving others behind can only further undermine the government's ability to get the job done, Kettl argues. What's needed is a more robust approach that promotes a new ethos of high performance to unite, not divide, the company town.

Kettl, a professor of political science at the University of Pennsylvania's Fels Institute of Government and the author of "System Under Stress: Homeland Security and American Politics," was online Monday, Feb.28, at 12:30 p.m. ET to answer questions about his article.

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Government Job Somewhere: This may be a tough question to phrase, but what happened to "common sense" in civil service? It seems one problem is rules are created and followed to the letter without regard to common sense flexibility. I see managers finding ways to create flexibility in the system, such as by not permanently filling positions so the position may be "permanently temporarily" filled by technically unqualified candidates yet who are the best people at doing the jobs. Shouldn't the system be redesigned somehow to allow for common sense flexibility?

Donald F. Kettl: Ahhh . . . Common sense. I once worked at a place where the first rule was that every sentence beginning, "Wouldn't it make sense that . . ." was ruled out of order.

But you're right. The key is creating a system that makes sense. And the keystone is a system that focuses on strengthening government's capacity to maximize performance.

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Boyds, Md.: In analyzing the structure and inadequacies of the Civil Service, you overlooked a huge problem; namely, the top layers of management are political appointees. These people rarely stay longer than four years. Moreover, most come to the job with inadequate technical and policy management skills. Imagine a company where the top managers (CEO, CFO, CTO, CIO) have at best partial required skills and stay in their jobs two to four years. Can a government bureaucracy ever be efficient with such a management structure?

Donald F. Kettl: This is an important issue (and one I've dealt with elsewhere--see CIVIL SERVICE REFORM [Brookings Institution Press, 1996], at http://www.brookings.edu/press/books/servref.htm).

The system has to be built from the top down so it works from the bottom up. Many top officials come in with relatively knowledge about the civil service--and even less enthusiasm for engaging government's workers. But every good manager knows that the key to effective performance is motivating the employees responsible for producing it.

Most civil service reform proposals call for reducing the number of political layers. That's very tough to accomplish, however, because the political incentives for keeping political appointees in place are tremendous. (These are attractive jobs, and presidents believe that the appointments give them extra leverage over the bureaucracy.)

But we've got to work far harder to strengthen the connections between political appointees and the career staff. Friction here is a prescription for problems.

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Silver Spring, Md.: I've heard and read remarks by several pundits concerning the challenges that 9/ll have placed on the federal bureaucracy. I can't think of any impact this event had on the employees of the social security administration, the rural development agencies of USDA, or even air traffic controllers, or most of the civil service employees. Most of your "observations" are unsubtiated in the article. I know you can't use footnotes in an Outlook article. However, you might have offered some examples. The ones you did offer, such as the FBI computer debacle were caused by private sector errors. My experience tells me that the only reform we need in the civil service is to hire enough trained people so that we don't have to depend on contractors. Who's going to support that reform. We'd end up with 10 million or so employees.

Donald F. Kettl: Well, there's no doubt that the job of federal air traffic controllers is *far* different now than before 9/11. Controllers, especially around major cities, now are hyper-vigilant about monitoring aircraft. The controllers at National have a special airspace to protect.

Federal employees at other agencies face big, new responsibilities as well. The range of homeland security risks have multiplied, from food safety to transportation issues. At other federal agencies, every employee now has to exercise greater vigilance, since every federal facility is a potential site for an attack.

It's unlikely that the trend toward contracting is going to change. We have two generation's worth of history here. The trick is figuring out how to make it work better.

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Fort Washington, Md.: Don,

What are the chief impediments to the type of Civil Service reforms identified in your article?

Donald F. Kettl: At the top of the list of impediments is congressional resistance: committees on the Hill guard these jurisdictions as jealously as they do anywhere in government. Fundamental reform would require congressional approval--or at least congressional assent--and that's hard to come by.

Next is a sense that this is a problem that needs to be solved. For lots of people, including top officials in government, civil service reform can seem like an "inside baseball" issue that gets little traction and deserves little notice. But as people in the company town know, there can't be good government without a motivated public service.

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Fort Washington, Md.: Do you see any links between your "ideal" Civil Service and the strategic management of human resources being advocated by the current Administration?

Donald F. Kettl: There are links. The Bush administration is certainly considering these issues. They know that the existing system isn't doing the job, and officials at the Offiec of Personnel Management are trying to crack agencies/departments out of the existing system as the opportunity arises.

But the reality is that this isn't happening as fast as it needs to. Comptroller General David Walker has made this point clearly and repeatedly. And the federal government simply has to do a better job of thinking more strategically about where it wants to go--and of making sure that it doesn't end up with a scattershot system that undermines the core values we most want in our government.

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Washington, D.C.: FAA went to pay banding and those who have been rated as top performers have recieved raises that have not kept up with the annual COLA/STEP increases enjoyed by those on the old system. Tell me again why we should want to change.

Donald F. Kettl: That, of course, wasn't the plan . . . . The new system was supposed to provide strong and good incentives for employees, and to reward high performers. The Government Accountability Office has detailed problems with the FAA system--issues related to inadequate funding and poor follow-through. Morale problems have resulted.

So the system, in general design, is interesting. But it takes solid implementation and adequate funding to make it work. That's been a recurring problem at FAA.

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Arlington, Va.: Very interesting article. I didn't realize that the current system of protecting poor performers came out of the World War II era.

How did the old merit system work? To what extent were civil servants shielded from political whims? Are there methods we can reintroduce today?

Donald F. Kettl: Actually, the existing system was never designed to protect poor performers. However, the protections it created have made it hard (but not impossible) to remove poor performers. And Congress has long been reluctant to fully fund incentive pay, so it's been hard to reward good performers.

The traditional system was built on hiring by merit, advancement without regard to political favoritism, and job security protected from political interference. Over time, lots of problems have gotten locked in as well.

So it's hard to reintroduce the old system. The system we have is the product of the growing pains it's had as time has gone by.

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Fort Washington, Md.: Do you see any constructive role for the employee unions to play? For instance, given the "competition" from contractors, wouldn't it make sense for unions to be able to declare that (and how) their memberships are operating at an optimal level, that definitive results are being produced, and how these results are aligned with the Agency's strategic planning?

Donald F. Kettl: The role of the public employee unions is one of the most intriguing in this debate. Fighting to maintain the old system is a lost cause. For better or worse, the shape of the emerging new system is becoming clear. Trying to stop it is increasingly a losing battle.

Some public employee unions are working hard to increase their membership among private and nonprofit sector employees who are now doing the work that used to be done inside government. That's an interesting response to the loss of membership.

But you point to one of the most important issues: The role that the public employee unions can play to help their members--and all government employees--work at the highest possible level of performance. Some of these conversations are, in fact, ongoing. They need to accelerate.

It's interesting that the most important government reforms in other countries--notably in New Zealand--involve a conversation not only about the role of government and the size of the public sector, but also about the role that government employees need to play in creating a high-performing government.

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Potomac, Md.: What suggestions do you have for current civil service employees who are worried about the upcoming changes?

Donald F. Kettl: It can be a *very* incomfortable situation. Not only are big changes developing for the workforce. There's also the recurring threat of layoffs/downsizing/contracting out, which is undermining the security of government employees. It's a tough environment.

On the other hand, the thing that I find constantly reassuring is the tremendous commitment of the public employees I meet to the public service. There is a quite remarkable sense of the public interest at the core of their work--they still remember why they went to work for the government and, for so many employees, it wasn't just about taking a handy job. The best and most important thing we can do is to refresh the sense of the public interest and the public employees' commitment to achieving it.

The most successful civil service reform will be the one that finds a way to make that happen. Today's public employees can find a way to make that happen by refreshing that commitment, every day on the job.

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Washington, D.C.: What studies have been done that indicate that hiring contractors saves the government money? My experience, from both the inside and the outside, is that private industry treats the government as a giant ATM machine. How can paying 2-3 times the salary cost of a given employee possibly "save the government money?"

Methinks the cost-savings benefits of privatization are not so self-evident; I would like to see some unbiased data on this.

Donald F. Kettl: We've been fighting about this one for almost 50 years. There is an assumption that whatever the public sector can do, the private sector can do better and cheaper. In fact, there's very interesting evidence from the local government experience that government employees can--and do--out-compete the private sector on a regular basis. The prime issue seems to be the presence of competition to encourage changes in behavior---to shake people out of existing routines and to think about new ways of doing the job better.

Some of the impetus toward contracting out is purely ideological. Some of it is political: it's a way of increasing the reach of government without increasing its size, at least as measured by the number of government employees. Some of it is logistical: it's handy for the government (at least in theory) to be able to dial up or dial down the size of support activities by hiring/firing contractors. And it's often been handy to hire contracators to do quickly what the government would have a hard time gearing up itself to do. (This is how private contractors ended up in the business of producing nuclear weapons during World War II.) Some of it is economic: private provision sometimes is cheaper.

But, as you suggest,the evidence is often muddled. The cross-currents in the debate make it hard to nail down good numbers. And even where there are good, direct cost comparisons, the puzzle of how to compare fringe benefits vastly complicates the economics.

All of these complexities, of course, make it that much easier to retreat back into ideology.

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Silver Spring, Md.: It's me again. You've made my point. Sure, air traffic controllers have to be more vigilant and civil servants need to look around with more care, but this doesn't call for a major piece in The Washington Post, let alone a call for civil service reform. The major problem with the civil service system is the about which you say nothing can be done. We're trying to do the work of a huge organization by contracting out. I spend 25 years being not much more than a contract officer's special assistant. The contractors didn't know how we worked, or what our mission was, nor did they care. It always took me more time to train them than it would have taken if I had the staff to do it ourselves. The task would have been accomplished quicker and more accurately, and probably at less cost. I agree that there isn't any way to fix this, but that means we can't fix the problem.

Donald F. Kettl: Good to have you back.

I remain convinced that we *must* have civil service reform. Even if we wanted government employees to perform all government work, the pace of change and the increasing complexity of the job demands new strategies for hiring, training, promoting, and paying people for high performance.

And, for better or worse, the question of whether to contract out much of the federal government's work was settled a ***long*** time ago. There's no going back. The central question: how can we *now* best improve goverment's ability to get the job done.

It's very clear that the current civil service system is a poor match for a government in which so much activity is in fact contracted out. Hence the need for reform.

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Herndon, Va.: The big flaw in implementing any of these "new" systems -- lack of strong mid- and lower-level management. Remember Carter's reforms for a part of the workforce? No "automatic" annual increase? Increase and a bonus were predicated on the yearly evaluation report. Guess what? Most of the managers "caved" and rated most of their people at the top level, so no one would be angered by not getting all the money for which eligible. If you don't have good managers, with some backbone, then, in the new system, everyone will "band" at the top level.

Donald F. Kettl: It's very tough to ask managers to make hard decisions differentiating among employees. It's even harder to do so when the stakes are so low--when there is little money to spend on performance bonuses.

Things often are little different in the private sector. People are people, and managers don't like to stir up hard feelings. There's a strong tendency in all these systems to rank people high.

But underlying your question is the important point: the need to strengthen mid- and top-level management in the federal government. This is as important a point as any in the debate.

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Donald F. Kettl: In this debate, by the way, it's worth examining the experiences of some leading state governments. Georgia, for example, has pioneered a new state personnel system. The recently completed Government Performance Project found it one of the best--and most intriguing--state systems in the country. For more information on this, see http://results.gpponline.org/StateOverview.aspx?id=102&relatedid=1

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Martin, Tenn.: I am a retired federal employee (U.S. Forest Service) and retired Army reservist. I saw the best and worst features of both personnel systems in my career. In your view would the "up or out" military personnel system enliven the civil service and improve performance?

Donald F. Kettl: In some parts of the federal service, especially in the foreign service, this is already reality.

If applied more broadly, many civil servants would worry that it would be used as an excuse for politically motivated housecleaning--that it would give senior political executives an excuse to squeeze out people with whom they disagreed. Providing government employees with protection from political interference was one of the most important motivations for the traditional civil service, when it was created 125 years ago.

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Washington, D.C.: I have a question about federalism, something you have studied more than most people. Given 9/11, is federalism as it was envisioned by our Founding Fathers "dead"?

Donald F. Kettl: Good question--a bit off the point, in a way, but absolutely central to it in another.

Federalism was envisioned by the Founding Fathers as a strategy to glue together the different factions of a new and struggling nation. There has always been the rhetoric of a clear line between federal and state responsibilities; there has always been the reality of strong links between them.

From homeland security to environmental protection--and especially in medical assistance--the intergovernmental piece of American policy is important. Indeed, more and more of domestic policy responsibilities are falling to the states.

So the state have many of the same civil service problems the federal government has. And federal managers increasingly need new skills to help manage these important intergovernmental partnerships. The 9/11 attacks have made these partnerships even more important. In fact, of all the problems that the Department of Homeland Security is wrestling with, there has perhaps been the least progress in devising a strong, vibrant partnership with the states. That's a crucial problem that needs attention. It has to begin with the people on both sides--and they need a strong system of public service in which to work.

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Federal Cube-ville: Sadly, since government employees can't easily be fired, there is a junior-high level type of management where cliques and connections rule the day. You can't fire anyone, but you can torment them. People that have been used to being managed and managing like this for decades in charge of "performance-based pay" scare me.

Donald F. Kettl: Anxiety about life for those in the cubes is real . . .

One of the problems with the current system is that it all too readily breaks down into torment on both sides.

To break out of this will require new thinking by everyone: a shift from a game dominated by the rules and constraints to one shaped by a search for performance. If government managers move into a system where they must measure their results, and where everyone is rewarded for their performance, there will be less room for the kind of problem you identify

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Annandale, Va.: I've been working as a contractor for different got agencies for 20 years. Government workers cannot, and I mean cannot, keep up with the computer technology. They don't work 24/7 and they have too much vacation and leave. If technology has to be employed, only contractors can do it because they are under far more deadlines and have far more knowledge about the cutting edge of technology than govt workers. What government workers can do well is adminster contracts. Actually far too well -- they have reduced contracts to task orders and keep contractors employed for only six months at a time. Government workers probably should have less vacation and sick leave also because it keeps them away from their jobs too long. Nobody in the private sector gets the benefits that govt workers get (nor the job security or training).

Donald F. Kettl: There are two separate questions here. One is the level of benefits. For many government employees, the benefits are perhaps the most important reward for the job these days. More so as pay issues increase.

But the other is perhaps more important and worrisome: the capacity of government to build and manage a system that is responsible for buying high-tech equipment. GAO reports are littered with tales of what happens when that capacity isn't there.

Government needs to be a smart buyer--to know what it wants to buy, how to buy it, and how to measure what it's bought. Government's personnel system needs to ensure that public employees are up to the job.

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Accokeek, Md.: While this issue resolves itself, what are some things that current managers/executives can do to mitigate the negatives associated with the current system?

Donald F. Kettl: It is being resolved. And a lively debate is underway about it. Getting engaged in that debate--like this chat--is a good first step.

More broadly, it's time for a searching reexamination abou the nature of the public service. What the public's work demands, and how best to seve the public interest.

What's most exciting about this current debate is that, one way or another, everything heads back to this same basic issue. For public employees to figure out what it means for them, in their jobs every day, is the most important thing that can happen now.

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Donald F. Kettl: Thanks so much to everyone for joining in a truly lively discussion. I'm sorry I wasn't able to get to all the questions that were posed. There's lots more for another day.

But in the meantime, it's clear that the very ethos of the company town is undergoing dramatic change. It's time, in the middle of that debate, to step back, think it through, and to ensure that we find a way to create a public service that serves the public interest.

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