Rethinking management

When President Bush signed legislation last month creating the Homeland Security Department, he also put into play broad new management provisions that affect not only the new department, but also agencies governmentwide.

The provisions for the department, which give the secretary broad power to hire, fire, pay and manage employees, are more sweeping than those offered governmentwide, which in some cases extend existing authorities.

Nevertheless, the management reforms are a significant milestone for how federal employees will be managed. "In creating the department, civil service was the focus of debate," Dan Blair, deputy director of the Office of Personnel Management, said at a conference last month. "It's the first time in 25 years [they've] talked about civil service on the House and Senate floor."

The legislation gives the department secretary the opportunity to develop a new personnel system for the department's 170,000 employees, said Jonathan Breul, director of federal management and performance for IBM Corp.'s Business Consulting Services.

By June 2003, plans to develop a new personnel system should be well under way and ready for approval. The new department's employees will keep their current jobs and pay for at least one year after transferring to the new organization, which will occur March 1, 2003, at the earliest.

To make the department a success, "we will need to bring everyone to the table," Breul said at last month's National Academy of Public Administration (NAPA) fall meeting. "It's never been more important for labor and management to find common ground."

In the end, the homeland legislation received bipartisan support, but early on Senate Democrats had opposed the workforce provisions contained in the legislation. Employee unions, which still have concerns, have accepted the fact that the new department is inevitable.

There are still many unanswered questions about how the legislation will play out, said Colleen Kelley, president of the National Treasury Employees Union. NTEU's biggest concern is not change itself, but that there is no proposal to replace the current personnel system with another system, she said at the NAPA meeting. "What needs to be changed rather than throwing out everything?"

Talks between OPM and NTEU officials about the homeland legislation broke down earlier this year, Kelley said. But OPM Director Kay Coles James and Tom Ridge, Homeland Security Department secretary designee, recently contacted Kelley and are ready to start discussions again.

One thing is clear — changes are in store. "This is the beginning of the end of the civil service system as we know it," Paul Light, director of the Center for Public Service at the Brookings Institution, said at the NAPA meeting. "OPM is sending the right signals, but it's the subtext to this that makes civil servants nervous." The [Bush] administration needs to send the message to employees that there isn't a plan to "deforest the civil service."

Light predicts that within five years, 95 percent of federal employees will be under the same system as the one being developed for the Homeland Security Department. The problem, he said, is that no one knows what that will look like.

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Personnel changes

The legislation that created the Homeland Security Department provided department-specific and governmentwide employee flexibilities.

Agencies will have the authority to:

* Appoint chief human capital officers.

* Align workforce strategies with agencies' missions and goals and hold managers accountable.

* Include workforce planning in performance plans.

* Hire someone directly if there is a critical need or shortage of candidates.

* Provide a new way to rank and select job candidates based on their qualifications.

* Offer early buyout payments up to $25,000.

The Homeland Security Department's secretary will have the authority to:

* Develop a system to link employee performance and accountability to the department's goals, objectives and mission.

* Create a new job classification system and modern pay system doing away with the GS pay grades.

* Establish a labor management system that gives unions up to 30 days to negotiate changes to current staff policies.

* Streamline the process that allows employees to challenge and appeal staff actions.

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