Eight years after the civil service system was remodeled in the first major reform since Congress threw out the spoils system in 1883, the Reagan administration is proposing to overhaul it again.
The 1978 Civil Service Reform Act has often been billed as President Jimmy Carter's most significant and successful domestic initiative. Yet, a broad range of critics -- from Reagan to federal employe unions, from federal managers to rank-and-file federal workers -- complain that the civil service system remains inflexible and unable to motivate. Most importantly, pay is out of kilter, rewarding some workers too much -- in the administration's view -- and others too little.
To reform the reform act, the president proposes what amounts to a partial deregulation of the government manager. To make the system more flexible, to motivate civil servants and to reward them for good work, Reagan would replace the traditional 18 "rigid" GS grades with a system of broad pay bands, confer greater authority on supervisors and institute a system of merit pay throughout the work force.
In addition to the president's plan, four major overhaul proposals are pending in Congress -- an unusually high number, congressional aides say.
Why is there so much unhappiness so soon after passage of the 1978 act?
"Maybe the system was more calcified and ossified than we thought," said James W. Morrison Jr., associate director of the Office of Personnel Management, who worked for the Office of Management and Budget on the issue in 1978.
Of the changes proposed by the administration, he said, "This is not a reversal, but a logical extension, a continuation of civil service reform -- Civil Service Reform Act II."
In 1978 the Carter administration tackled what it considered the most serious problems by:
Eliminating the nonpartisan Civil Service Commission and replacing it with the Office of Personnel Management, headed by a political appointee accountable to the president, and balanced by the new Merit Systems Protection Board to guard against political abuse.
Removing top managers from some of the protections of the civil service system and putting them into the Senior Executive Service, where they are eligible for cash bonuses for doing a good job, but can be transferred or removed far more easily than the normal civil servant.
Instituting merit pay for GS grades 13 through 15.
Requiring "performance appraisals" for every federal employe every year.
Giving federal managers new power to withhold government-wide raises for employes whose work was not up to snuff, along with new authority to fire.
The measures the administration proposes have been described as revolutionary by OPM Director Constance M. Horner. But others suggest that they are merely extensions of the 1978 reforms.
Even the key to Reagan's program -- universal merit pay -- is not a new idea. The vision of the comfortable federal worker marching in lock step up the government pay schedule regardless of effort or merit is an enduring political target.
According to administration officials, the absence of merit pay below GS 13 was a key shortcoming of the 1978 reforms.
Morrison said that Alan K. Campbell, who as Carter's personnel chief pushed through the 1978 reforms, "believed in merit pay, but couldn't get it past the unions."
Campbell said in an interview that he supported universal merit pay but felt union opposition would make it impossible to go lower than GS 13. "We discussed going further down. But in view of the potential opposition, we thought we would first try it higher."
Congressional aides point out that limited merit pay already exists in principle for most of the federal work force -- "within-grade increases" can be withheld for cause. Critics, however, point out that within-grade increases are not known as longevity increases for nothing: They are almost never withheld. Establishing "cause" through the performance appraisal system is an art at which many managers are rank amateurs.
Andrew S. Grove, a leading advocate of merit pay and president of Intel Corp., a semiconductor manufacturer, said, "Performance appraisal systems are very difficult to do. Life has not prepared most supervisors to tell a worker he is not doing a good job and needs to improve. If a computer gives out the money, 16 elephants won't make a supervisor do an honest job" of rating an employe.
"It doesn't matter whether we're talking about $35, $50 or $70. Seventy is better, but it's not the money. It's the judgment of a 'significant other' in the organization about an employe's work. Putting money behind the performance appraisal process is absolutely essential. It forces a wimpy supervisor to make decisions."
Others are unsure that merit pay is the answer. "Merit pay is the fad right now," said Annmarie H. Walsh, president of the 78-year-old Institute of Public Administration. "Every mayor in America wants a merit pay and performance appraisal system." She said, "There is no research that shows that merit pay changes any behavior. At the levels of extra pay that they're talking about, behavior is much more likely to be changed by the possibilities for advancement."
At China Lake Naval Weapons Center in California, one of two installations where Reagan's proposal has been tested, the merit pay pool is 2.4 percent of employe annual salaries. "At the levels of 1 to 3 percent," Walsh said, " merit pay is not sufficiently funded to make any difference."
Another respect in which Reagan's proposal extends the Civil Service Reform of 1978 is in offering supervisors further flexibility in hiring, promoting and rewarding workers by grouping them within new pay bands rather than GS grades.
The 1978 reforms, many say, failed to address whether that system of GS grades was part of the problem. The grades pigeonhole people in ways that no longer reflect the work federal employes do, officials said. A brilliant GS 12 scientist who has reached the top of the pay schedule, for example, might have to be promoted to supervisor -- where he may have no ability -- to get a raise.
One big selling point of Carter's civil service reform was that it would be easier to fire people who are not doing their jobs. And the numbers have climbed since 1978, when 9,469 workers were discharged, to last year, when the figure was 13,760.
But the threat of being fired has not been enough to rouse workers to their best efforts, according to the administration. An extreme measure like firing is too idle a threat to work as a motivator, officials said, adding that firing someone is still too time-consuming and too difficult for managers.
Thus, at its core, the administration's plan would go after the lazy or unproductive worker with a new strategy -- the carrot rather than the stick. Under Reagan's plan the best workers would be rewarded with raises and the worst might ultimately be be starved out as their salaries fall in comparison to their officemates. Horner said she hopes that people who "migrate down" in salary in relation to their more-ambitious colleagues will simply leave. There is considerable evidence that this has happened at China Lake.
It is not a forgone conclusion that the China Lake proposal will pass Congress, which has historically kept a hand in personnel management. And, even then, it is problematical whether the approach can solve the problems inherent in a bureaucracy of 2.3 million people doing vastly different things for an ever-changing array of bosses.
According to Mark A. Abramson, director of the Center for Excellence in Government, to ask why the civil service system needs to be reformed again is to pose the wrong question. "The Civil Service Reform Act was only a beginning. The thing about government, you get a bill passed and then the work starts."