What a week for federal employees:

* Congress signaled it will punt the civil service pay raise into next year. More than likely, lawmakers eventually will provide a 4.1 percent raise. For now, employees are guaranteed a 3.1 percent raise in January because of a formula in federal pay law. Congress took action on the military raise, authorizing a minimum raise of 4.1 percent for the armed forces and higher raises for hard-to-fill jobs.

* President Bush won key votes on legislation to create a Department of Homeland Security. The measure -- approved by the House and nearing a vote in the Senate -- would allow Bush to revamp how nearly 170,000 homeland security employees are to be hired, fired and paid. It seems likely to reduce the clout of federal unions in the new department.

* The White House announced its plan to streamline a regulatory process used to decide whether federal work should be turned over to the private sector. The announcement reinforced a Bush campaign pledge to put thousands of federal jobs up for competition with industry. The week's events provided little comfort to many federal employees, outraged federal union leaders and underscored the incredibly difficult task facing Bush and his key aides as they seek to reorganize the government.

Paul C. Light, a civil service expert at the Brookings Institution, said most employees coming into the Homeland Security Department are highly motivated. But the debates over union rights and contracting-out come at a cost, he said.

"There's nothing worse in the federal government than having employees saying, 'Am I the first to go?' and 'What does this mean for me?' It just distracts from the core demands of this new department," Light said.

"The president is going to be held accountable for the operation of this department in a way a week ago he wouldn't have been," Light added. "He wants that accountability and is willing to take that responsibility, but his own people aren't helping him very much in trying to create a climate focused on the mission."

Employees of the new department will be spread across the nation -- on the borders, at the seaports and airports, Light said. "How you get them to work together will be the real challenge."

Max Stier, president of the nonprofit Partnership for Public Service, said the contentious issues that played out last week show "it is essential that attention be paid to the morale of the federal workforce. . . . We need a gigantic effort to make the employees part of the change process."

Administration officials are drawing up plans to provide more information over the Internet (www.dhs.gov) and through office mail to employees who are to be transferred to homeland security. "Our understanding is that we cannot communicate too much or too often with our employees. We are committed to creating this new department with them and will make every effort to do so," said Clay Johnson III, a top Bush adviser.

Officials also hope to cut through the confusion that surrounds the president's plan to conduct more outsourcing reviews.

"This is not to send federal jobs out the door. We want to use public-private competitions as a management tool. We want federal employees to win competitions. We want the best provider to win competitions," said Angela Styles, the head of procurement policy at the Office of Management and Budget.

By some accounts, the administration is struggling to meet its October 2003 deadline of opening to competition 15 percent of the federal jobs that are considered commercial in nature.

"It is taking time to build the infrastructure to compete even 5 or 10 percent," Styles acknowledged. "People shouldn't be afraid of this. Management hasn't been good about asking federal employees: 'How can you do your job more efficiently? How can you do it better? How can we better serve the taxpayers?' I think we force that through public-private competition."

But many employees, particularly union members, are skeptical of the administration's plans, promises and pronouncements.

"The real test," Sen. George V. Voinovich (R-Ohio) said last week, "is going to be how the administration handles work rule changes -- whether or not disputes are handled openly and the unions' concerns treated fairly."

Without cooperation from all sides, Voinovich said, the chances of the new Homeland Security Department succeeding "will be remote."

Stephen Barr's e-mail address is barrs@washpost.com.