Pentagon Has a Plan to Revamp Layoff Procedures

By Stephen Barr
Wednesday, April 27, 2005

The Pentagon, as part of a plan to overhaul pay and personnel rules for civil service employees at the Defense Department, intends to revise the procedures that determine who goes out the door during layoffs.

The proposal to create the National Security Personnel System would simplify the "reduction in force" procedures, minimize the disruption and make job performance ratings an important factor in deciding who stays and who goes, according to Bush administration testimony.

In general, federal agencies try their best to avoid layoffs, which lower morale and disrupt operations because remaining employees often must change jobs or take on added duties. During the post-Cold War downsizing that took place in the 1990s at Defense, managers worked to minimize layoffs by offering early retirements, cash buyouts and job transfers to affected employees.

The Bush administration's plan to change layoff procedures at Defense has drawn criticism from unions and some congressional Democrats, who see the proposal as a way to weaken the rights of veterans and the job security of longtime employees.

Some Defense employees also have raised questions about the proposal, in part, because a base-closing commission may recommend another round of shutdowns or consolidations at military installations that could lead to layoffs.

Pentagon officials have pledged in congressional testimony that veterans will not lose their job protections, which are guaranteed in law. Under the proposed layoff rule, disabled veterans and other veterans would be placed at the top of retention lists and would be able to bump a non-veteran out of a job. Veterans would lose employment only when their positions were being eliminated and there was no one for them to bump. Non-veterans would displace only other non-veterans, under the proposal.

Whether the revised layoff rules could be used for the next round of base closings is uncertain. President Bush is scheduled to receive later this year a list of military bases that could be closed or reduced in size. Most Defense employees will not fall under revised layoff rules for at least a year, and perhaps longer, according to the Pentagon's timetable.

For most employees, the biggest change would be the Pentagon's decision to flip-flop criteria in layoff decisions, making performance ratings more important than length of service in determining who gets to keep a job.

Now an employee's length of service means more than job performance, in part because many employees work in pass-fail systems. But Defense is planning a more ambitious management system that would allow managers to use more rating levels.

In theory, employees with the lowest performance ratings would be the first to go out the door. In most cases, the displaced employees probably would be non-veterans.

But the proposed rule is vague on what terms and time frames would be used to determine employee ratings. The Pentagon has not defined the kind of performance management system it will use. Closed-door meetings with unions are underway to work though such issues.

In another break with past practice, the proposed rule would make it possible for Defense managers to target slices of the workforce for layoffs rather than broad groups or entire organizations, as often happened in the past.

In drawing the boundaries for layoffs, the proposed rule would permit Defense to use such factors as geography, lines of business, product lines and work units, according to the notice published in the Feb. 14 Federal Register.

Having a narrower "competitive area" would minimize layoffs to a subset of a Defense agency, reduce the number of employees getting bumped into other parts of the agency and make it easier to abolish jobs. That last consideration could be important if Congress eliminates a weapons program and the people working on it are so specialized that they cannot qualify to work in another program.

Defense managers, in theory, could wipe out entire work units through the revised rules. But experts familiar with the proposal said they doubted that would happen, because those managers would risk losing some of their best workers. Managers faced with layoffs probably would try to balance the need for layoffs against the interests of employees, allowing as many people as possible to take early retirement or transfer to new positions while ensuring that the best workers were not lost in a downsizing, the experts said.

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