Shortly after K. William O'Connor became special counsel to the Merit Systems Protection Board in October, he telephoned a high-ranking Reagan administration official.

"We have a hell of a problem in this office," O'Connor recalled telling him. "I need to expand, . . . consolidate and modify this office, and I have a reputation going here that is like the black plague."

O'Connor's predecessor, Alex Kozinski, had resigned after 14 tumultuous months, the third person to leave the post under fire since Congress created it in 1978, primarily to protect federal whistle blowers.

Rep. Patricia Schroeder (D-Colo.), chairman of the House civil service subcommittee, was working to abolish the office. A number of its key employes had resigned, and several whistle blowers had said it was a "sting operation" to single out whistle blowers, not protect them.

O'Connor, who had been the inspector general of the old Community Services Administration, said he had to move quickly to restore confidence.

He asked for some public relations help, and got a person sent over from the Office of Management and Budget--as well as a staffer for a defeated Senate candidate to act as his own spokesman. Then he changed several office policies that had contributed to low morale, including a Kozinski order requiring all agency attorneys and investigators to keep daily logs, listing by the minute which cases they had worked on.

O'Connor also created an inspector general's position and reorganized the staff. Rather than having investigators review all cases and decide which ones to pursue, O'Connor told office attorneys to decide which cases could be prosecuted and then assign investigators only to those. He also expanded his staff from the equivalent of 76 full-time employes to 113.

During the past three months, O'Connor also has taken two actions that are believed to be unprecedented for his job:

He held up the firing of 19 Senior Executive Service members at the Energy Department after he found a "pattern of prohibited personnel practices" there.

He announced plans to investigate charges that John V. Graziano, the inspector general at the Agriculture Department, had hired a number of "cronies and girlfriends." The White House and another IG already have conducted their own probes and have cleared Graziano of wrongdoing. O'Connor, however, said investigating the charges is his responsibility, not the IGs'.

Despite all this, some of the critics remain unconvinced.

"It will take a long time to rebuild confidence after such a dry spell," said Schroeder. "I am very, very, very cautious about predicting any improvement."

Louis Clark, executive director of the private Government Accountability Project, credited O'Connor with making improvements, but said there was still more to be done.

O'Connor says he has given himself six months, "on my internal clock," to make the office effective.

O'Connor, 51, a Washington native, wants to reduce to 90 days the time it takes to respond to a whistle blower's charges. In the past, some cases have taken more than a year. He also said whistle blowers deserve an explanation when their cases are dropped, which they didn't always get in the past.

"The best way to become effective is to have people understand what you do or why you don't do something," he said.

O'Connor also said it isn't his job to teach federal agencies about the merit system--something his predecessor emphasized through seminars that taught federal managers how to fire an employe correctly.

"The agencies' function is to administer the merit system," O'Connor said. "It's my job to correct it."

"The federal civil servant ought to be held to high conducts of efficiency and ought to be treated fairly," O'Connor said. "He should be fired for the right reasons and not the wrong reasons, and ought to be promoted for the right reasons and not for the wrong reasons.

"I don't think it is possible for that kind of protection to exist unless you have an office like this," he said. But, he added, "I don't know that for sure."

O'Connor, who has nearly 20 years of government experience in such diverse jobs as chief justice of American Samoa and adviser to the grand jury that investigated the 1970 shootings of Black Panther leaders in Chicago, said that within the next few months he hopes to determine whether the office is needed.

By mid-1983, he said, his office should have completed processing the more than 1,000 charges and complaints that he now faces.

"If there are indeed real problems" in the government's personnel practices, "then they will emerge out of the things that we are presented," he said. "If nothing needs to be done, then I will work to close this office. The government doesn't need a federal Ann Landers."