THE
DEPARTMENT OF HOMELAND SECURITY CHALLENGES THE FEDERAL CIVIL SERVICE
SYSTEM: PERSONNEL LESSONS FROM A
DEPARTMENT’S EMERGENCE
Richard W. Ryan
Public Administration
The establishment of a Department of
Homeland Security has become an opportunity for the reshaping of personnel
rules governing federal employees, both those entering the new department and
throughout the federal service. Policy
debates over the department’s creation and management are giving voice to
different perspectives on the shape of human resources preferences in the new
millennium. This paper examines the
recommendations and goals of competing political perspectives on reforming public
service personnel management and looks to the near future for potential
impacts.
This paper focuses on the establishment
of new personnel rules for the recently created Department of Homeland Security
(DHS). The administration of President
George W. Bush has argued successfully for creating maximum management
flexibility over departmental personnel systems for the sake of realizing the
department’s anti-terrorism goals.
Unions and Democratic supporters in the senate have countered that in-coming
departmental employees, many with marginally sensitive jobs, may lose
collective bargaining rights as well as merit service protection guaranteed by
the 1978 Civil Service Reform Act (CSRA).
This partisan and ideological clash, however, signals creative conflict
over how best to modernize the federal civil service system. Critics of the system from the Heritage
Foundation to the Brookings Institution maintain that the creation of a new
department allows a rare opportunity to reform outdated rules and procedures.
This study examines changes introduced by
the new legislation enabling DHS and the potential for personnel reform in the
federal service over the next several years.
Initially the paper explores the federal personnel reforms suggested by civil
service observers, the administration’s plan for civil service rules at DHS,
and anticipated conflicts growing out of the administration’s DHS personnel
strategies. Indeed, the department has
barely entered into existence so it is necessary to be speculative at points
but within the scope and analysis of the legislation.
The paper is developed in the following
context. 1. There exists a legislative
chronology to the creation of a new federal department and this one begins
largely in the summer of 2002 when the policy agenda was being influenced to
shape the bills creating DHS. 2. The checks and balances between the
congressional and executive branches are examined, as they are apparent in
fashioning any legislation. Also, in the
case of DHS, partisan lines were drawn largely over rights and privileges of
federal employees who would be absorbed into DHS. 3. It
is important to note that the creation of a new department and reforming
personnel systems are evolutionary processes and not accomplished in one fell
swoop. As the Brookings paper notes, it
will require years of adjustments by congress to complete the restructuring
work just begun. (Daalder, et al.,
July 2002). 4. The interest in DHS human resources
management has provided a focal point for civil service reformists, left and right,
to advocate for system-wide changes.
Thus, the DHS “human capital” management debate may continue to be a
catalyst for an overdue recasting of federal personnel management for the next
decade.
Opportunities to reorganize the
federal government on such a grand scale are rare, and nothing as large as this
has taken place since the Truman administration in 1947. (Kemper, 2002). On November 25, 2002, President George
W. Bush authorizing the creation of a Department of Homeland Security signed HR
5005, the Homeland Security Act of 2002, into law. The new department will attempt to integrate
170,000 federal employees from twenty-two agencies with combined budgets of
approximately 40 billion dollars for the purpose of counteracting terrorist
acts against the United States.
Instructive of the complexity of the task, the number of employees to be
integrated into the new department is not precisely known. The Bush administration lists 170,000;
Representative John L. Mica (R-FL) states 190,000; and Paul Light of Brookings
calculates it as many as 225,000 employees.
(Barr, July 18, 2002, p. B2).
The administration’s goal has been to design an agency as unencumbered
as possible by traditional civil service regulations arguing for best practices
and a decidedly business school approach for “the strategic management of human
capital.” The administration has been
assisted by a Republican dominated congress, and from the right by the Heritage
Foundation, the Public Service Research Foundation, and the National Review,
among others. Employee groups critical
of the changes include the American Federation of Government Employees that
argues presidential flexibility already exists in law, specifically the 1978
CSRA. (Lunney, August 28, 2002).
The consolidation of twenty-two
agencies into one federal department falls into Guy Peters’ category of reform
being driven by environmental changes.
The present case reflects both government initiative to respond to
environmental demands and a transition that is fueled by the need to utilize
technologies, technical and managerial, to counteract a threatening
environment. An additional category, the
institutional approach to reform, is useful in pointing out potential
resistance to changes. According to Skelley’s (2002) analysis of Peters,
“Reformers must contend with institutional inertia that confronts them when
they seek to change familiar patterns of interaction, norms, written rules of
work, symbols of organizational identity, and access for client and
constituency groups.” (p.179).
H.R. 5005, creating the DHS,
was a clear victory for the president giving him and his supporters the
management flexibility they sought. Yet,
as the Brookings assessment notes, “Indeed, there is not a single reorganization
over the past seventy years, that has not been changed in some material
way later on.” (Daalder, et al., July 2002, p.36) More so, since the creation of a new
federal agency, one that will be the third largest, is a Promethean
undertaking, not all the necessary organization is expected to be in place at
the outset. Additionally, numerous
public affairs institutes, opinion leaders, and members of congress argue that
the birth of DHS is that rare opportunity to seize the momentum for personnel
reform and extend it throughout the federal service. Surprisingly, groups from across the
political spectrum concur that the federal service’s hiring and rewards system
is antiquated. Some would agree with the
Volcker Commission’s charge that, “It’s time to blow up the civil service
system.” The National Commission on the
Public Service recommended discarding the, “General Schedule, the pay and job
classification system for the government’s nearly 1.8 million white-collar
employees.” (Barr, January 8, 2003,
p.B2). It is unlikely that reformers
will be able to succeed in achieving such major personnel changes in the next
several years. However, the shaping of
DHS’s human resources systems will keep reform in the public eye and on
congressional agendas.
The administration and its
supporters cite state experiments with personnel systems that have eliminated
civil service protection and job tenure in favor of procedures allowing hire
and fire at will. Florida, Georgia and
Texas have discarded traditional civil service protections and, according to
observers (IBM Endowment, 2002) have not succumbed to spoils or other
abuses. These three states have adopted
various versions of civil service systems favoring management and discarding
centralized personnel operations in favor of department-centered
functions. Indeed, Harvard recently
cited the State of Georgia for innovation in government personnel systems and Governing
magazine’s 2000 state “report cards” awarded Georgia’s H-R system a “B-.” (Governing, February 2001, p.50). It is these systems, as well as the
private sector, that the Bush administration seeks to emulate at the federal
level.
The president and his appointees
tirelessly remind the public and congress that the United States is a nation at
war. As a response to the events of
September 11, 2001, decisive government action is expected, and the
administration has been skillful in delivering the message of integrating
mission requirements, public security, and management power. Thus, the administration has sought to create
a department with maximum management flexibility unencumbered by outdated civil
service regulations. Kay Cole James, the
Director of the Office of Personnel Management (OPM), is accurate when she
speaks of an emerging consensus on what is broken and what needs to be fixed in
the federal civil service:
First, that the current
system is indeed broken—it does not and cannot serve our modern workforce
well. Second, that now is the time to
fix it-there is urgency, evidenced by the threat to our national security, and
there is opportunity. And finally, that
we can and we must create a better, fairer system based on the merit principles,
a system that will attract and motivate the best and the brightest of the
rising generation to heed the call to public service. (James, July 15, 2002, p.4).
During the summer prior to the
congressional vote on DHS, OPM Director James was delivering speeches that made
the administration’s points on the need for a flexible personnel system at
DHS. The organizational challenge
consists of integrating anti-terrorism responsibilities spread over one hundred
administrative units, with seven different salary systems, including employees
represented by seventeen different bargaining units. “The President’s legislation allows the
Secretary of Homeland Security, working in conjunction with the Director of
OPM, to develop a new personnel system.
The …development of this system will be fair, balanced and objective,
with participation by all stakeholders-including unions, interest
organizations, and employees.” (James, July 15). James went on to argue the case for
reforms in pay for performance and in replacing the “antiquated” General
Schedule. In her speeches, James
advocated market rate pay for talented employees and touted recruitment changes
for the Senior Executive Service (SES).
The implementation of market and merit pay plans in light of numerous
presidents’ and congress’ failure to request and appropriate funds is, however,
suspect.
While James made it clear that the
administration’s perspective is one of “corporate HR,” the OPM director
enumerated rights and protections that DHS employees can expect. Among these are whistle blower protection,
veteran’s preferences, and coverage by the Civil Rights Act, the Fair Labor
Standards Act, and the Hatch Act, as well as participation in employee
bargaining units. (James, July 15,
2002, p.2) In a speech to the House
Select Committee, also in July, James declared that the administration’s
attempts to modernize personnel management and to create a “Culture of Urgency”
were not attempts at “union busting.” (James,
July 16, 2002, p.2).
The administration’s spokespersons
have done well in capitalizing on the interest among groups, left and right,
for government reform while walking a fine line between corporate HR, on the
one hand, and traditional protections, on the other hand. The creation of a new and large department
affords an opportunity that occurs rarely in Washington, D.C., to reorder
personnel systems, and this occasion has attracted widespread support. Volcker’s National Commission on the Public
Service recommends a more sweeping personnel agenda, yet, one that parallels
James’ call for sharp reforms of the existing service and for increasing
executive powers but with significant qualifications. The Volcker Commission supports James’
recommendation for “…compensation related to current market comparisons,”
reorganizing SES, and reforms to streamline employee recruitment. Called for are “new personnel management
principles” aimed at increasing employee performance and flexible personnel
systems shaped by agencies to attain goals.
However, the commission also calls for reducing the number of
presidential appointees and a strong role for congress in fashioning federal
service personnel reforms. (National
Commission on the Public Service, January 15, 2003). Professor Paul Light, a co-author of the
Brookings report, “Assessing the Department of Homeland Security,” supports the
necessity to reform outmoded personnel practices. Light is not optimistic that the new
department can integrate disparate services or agency cultures, but he does see
an opportunity to create more flexibility in management and in personnel
practices including expediting presidential appointments. (Daalder, et al., July 2002; Light, June
12, 2002).
According to a June 2002 White House
document, “The President proposes to create a new Department of Homeland
Security, the most significant transformation of the U.S. government in over a
half-century by largely transforming and realigning the current confusing
patchwork of government activities into a single department whose primary
mission is to protect our homeland.” (Bush,
June, 2002, p.2).
However much agreement exists on the need to reform the
federal service, the devil is, indeed, in the details. The clash that took place throughout the
summer and early fall 2002 was largely between the administration’s proposal
for extraordinary personnel authority and the Democratic controlled senate’s
opposition in approving such measures in the bills circulating in
congress. The disagreements were, at
times, constitutional. Senators Robert
C. Byrd (D-W.VA) and Representative F.James Sensenbrenner, Jr.(R-WI) opposed
the legislation as granting too much executive power. Professor Stephen Wayne points out that Vice
President Dick Cheney and others who have served in pre-Watergate Republican
administrations and who come from the private sector seek to restore power to
the weakened executive branch. (Dalrymple,
November 16, 2002, p.3005).
Then senate majority leader, Tom Daschle, spoke against the
administration’s attempt to deny DHS employees union representation, and senate
minority leader, Trent Lott (R-Miss.), countered, “The homeland security
department is being blocked by senate Democrats who are determined to protect
the interests of their union bosses in the bureaucracy.” (Bettelheim, October 19, 2002, p.2741). Senate Democrats accept that Zell Miller
(D-GA) lost his seat as a result of such political rhetoric. With the Republicans gaining a senate
majority in the November 2002 elections, President Bush pushed for a vote, and H.R.5005
was approved.
The administration’s management
authority and plan for DHS is as follows.
1. Primacy of management rights
The ascendancy of management rights is
considered of paramount importance due to national security concerns. Management retains maximum flexibility
pertaining to hiring, pay, discipline, reassignment of personnel and rewriting
job descriptions. (Barr, January 21,
2003, p.B02). Indeed, the secretary
can reorganize the agencies coming into the department and notify congress
within sixty days. Congressional
committees will not have the oversight written into an original version of the
bill by one of its early authors, Senator Joseph Lieberman (D-CT). Thus, the secretary will have power to be
flexible with human resources. The
secretary will consult with union leaders and bargaining unit representatives
to discuss changes in work rules. The
legislation provides for notification of and review by employee representatives
of any civil service rule changes.
Unions can appeal to congress if they object to the secretary’s changes,
but in the end, the secretary can impose new rules even if congress
objects. (Friel, November 22, 2002;
Dalrymple, p.3002).
2. Preservation of Employee Rights
In a December 2002 speech by Department
Secretary, Tom Ridge, to incoming DHS workers, he sought to allay fears. “All of the civil service protections…the
Fair Labor Standards Act and the Hatch Act and the whistle-blower protection
and a variety of other protections—they move right along in the
department.” (Barr, December 18,
2002, p.A33). The official DHS web
site, “Working with DHS,” also seeks to reassure employees that despite the
transition, their work worlds will remain stable, at least for a year. Veterans benefits and spoils protection will
remain intact as will collective bargaining units. (U.S. Department of Homeland Security,
2003).
3.
Application of “best practices”
There will be an application of
“best practices” and the importation of private industry models in HR management. (Kamarck, June 2002). It has already been noted that George W.
Bush is the nation’s first MBA president.
His executive experience derives from private industry, and he
enthusiastically promotes private sector models. (Friel, 2002; Firestone and Bumiller,
2002). It requires noting that the
Democratic administration of Bill Clinton acted similarly inviting William
Ouchi as a management advisor, and adopting Osborne and Gaebler’s Reinventing
Government as the blueprint for the much touted National Performance
Review. The difference is that
the Bush administration is presented with the unique opportunity of
implementing H-R reforms in a new department and using this as a model of its
vision for the entire federal service. (Gore,
1993).
The high profile conflict in framing
the legislation has been over union representation of DHS employees. Seventeen different unions represent incoming
employees of the twenty-two agencies, and union leaders have feared that the
administration was using the DHS’s national security mission to disarm unions
as well as terrorists. (Bettelheim,
2002, p.2030). Union leaders point
out that the president already has the power to disband unions if their
representation of employees in sensitive areas is compromising national
security. Under labor-management
guidelines within the Civil Service Reform Act of 1978, “…the president can
issue an executive order blocking employees from organizing under a labor
union…but it would have to determine that collective bargaining would get in
the way of national security.” (Lunney,
August, 2002). In fact, bargaining
units for the National Imagery and Mapping Agencies were abolished under the
agency’s 1996 enabling legislation when the agency’s mission changed to include
more sensitive defense and anti-terrorism goals. The law vested this power in the agency’s
director, and he exercised it in January 2003.
Recent rulings by the Federal Labor Relations Authority have upheld such
actions reflecting adjudicatory changes and caution since September 11,
2001. (Barr, February 10, 2003,
p.B02) Some senators, such as Arlen
Specter of Pennsylvania, think this power should be the president’s alone. (1)
While union representation of DHS
employees will continue, union power has been lessened in the November 2002
legislation. Undoubtedly, sweeping
reorganization legislation such as this will be revisited (Light 2002),
and the influence of unions will wax and wane depending on the philosophies
dominant in congress. In December 2002,
a moderate group in the House of Representatives, the Republican Main Street
Partnership, issued a plan advocating “training and simulation programs” for
DHS employees. But the thrust of the
report was to signal support for government employees who have been anxious
over possible loss of protections. (Barr,
December 11, 2002). Similarly,
during Tom Ridge’s confirmation hearing, Senator Dan Akaka (D-HI) warned Ridge
not to tamper with employees’ rights or to use DHS to test “untried management
initiatives.” Other senators issued
similar cautions to Ridge, himself a former union member. (Barr, January 21, 2003, p. B02). The
point here is that both congressional Democrats and Republicans are keeping a
watchful eye on enhanced executive powers.
The power conflict is also between branches of government although it is
too often portrayed simply as a partisan fight.
SYSTEM-WIDE CIVIL SERVICE REFORM, THE LONG-TERM
VIEW
Although
the National Review doubts that even presidential power is sufficient to
challenge the “divine rights of federal workers,” civil service reform does
appear to be spreading in Washington, D.C.
(O’Beirne, July 15, 2002).
The Volcker Commission is recommending DHS as the model for extensive
federal system revamping and consolidating government into a lesser number of
“mission-related executive departments.”
The Department of Defense, for one, is considering reorganizing its
civilian work force. (Barr, January
21, 2003, p.B02).
Senators
George Voinovich (R-OH) and Daniel Akaka (D-HI) included legislation in the
Homeland Security bill creating eight H-R reforms throughout the federal
system. Prominent among these are
changes in the hiring process whereby managers can utilize “categorical
ranking,” clusters of qualified applicants, instead of the rule of three. And for severe personnel shortages and
“critical hiring needs,” OPM can grant the agency direct hiring power. Agencies will also be able to offer $25,000
buy outs for employees whose positions have become redundant as part of
“workforce restructuring.” Senior
Executive pay caps would increase to $154,700, however, agencies must be able
to demonstrate to OPM that they utilize performance evaluation systems in
awarding pay increases. Finally,
agencies’ ability to pay for employees’ higher education costs will be
facilitated. (Friel, November 19,
2002; Barr, May 11, 2003, p.C02).
Senator Voinovich will introduce additional legislation in 2003 allowing
more agencies to experiment with pay for performance systems through
demonstration projects. While such
demonstration projects are not new to the federal service, their utilization is
limited to ten at any one time. (Barr,
December 9, 2002, p.B02).
President Bush’s fiscal year 2004 budget
emphasizes the need for pay for performance across the federal service as well
as outsourcing of “commercial” jobs in government. Needless to say, these proposals are widely
criticized by union groups. The budget
document reports that, according to the administration, little progress is
being made in either area, noting that only six of twenty-six agencies have
made progress in personnel areas such as pay for performance. (Barr, February 2, 2003, p.C02). Part of the problem is that the federal
service has a poor record of training managers to implement pay for performance
reforms. Another is that congress and the executive are both guilty of
rhetorically supporting pay reforms but failing to budget and appropriate the
necessary pay supplements.
CONCLUSION
While both the opportunity and consensus
for civil service reforms exist, larger, cross-cutting questions persist
concerning the transferability of private management practices to
government. Although the status of
corporate America’s management ability, recent scandals aside (Schley,
2002), is emulated worldwide, the applicability of private sector
management to government operations and personnel is still dogged by
substantive differences. Most public
sector employees would prefer to be equipped with industry’s computer
technology and telecommunications equipment.
The FBI and INS (now the Bureau of Border Security and the Bureau of
Citizenship and Immigration Services, both in DHS) lack efficiency, in part,
because of their dependence on outmoded systems. There is little dispute on the
transferability of modern equipment, though cost and privacy concerns are more
significant issues in the public sector.
However, on
more fundamental and intrinsic points of management, those very “functions of
the executive,” (Barnard, 1968) that work so well in the private sector
may lack traction in the public. Thus,
key aspects of cultivating career civil servants may not be aided by business
models, the end purpose of which are to increase profitability. How employees are motivated and rewarded, the
acculturation of employees to large agencies, and gaining their commitment to
the career service-- each of these are important H-R issues. The public and private sectors often present
different worldviews and models from accountability to the public to reasons
for entry into a career and staying.
Graham Allison’s essay (1984), “Public and Private Management:
Are They Fundamentally Alike in All Unimportant Respects?” reminds us that
management’s decision making process, chain of command, and the ability to
select its goals are vastly different in public and private organizations. Means and ends do vary in each sector and the
differences cannot be glossed over simply because the current administration
favors private business models. (2)
As the
Brookings assessment of DHS points out, creating a new department out of
twenty-two existing agencies is a challenging organizational task, one that
will take years to complete. For the
federal service in general, it is fortunate that OPM and critics such as the
National Commission on the Public Service and numerous others agree on so many
reforms: abolishing the existing GS pay
system, modernizing hiring, granting managers more flexibility to change job assignments
as the agency’s mission changes, and increasing pay and benefits for federal
workers. There are disagreements too,
most expected, as the executive branch seeks to maximize its power. In dispute are the following: the number of presidential appointees in DHS
and throughout the federal service, the oversight power of congress in
approving H-R changes, and the point at which unions become impediments to an
agency’s national security mission.
These issues will not be resolved during this administration’s
tenure. The promising element is that
due to the heightened mission of the federal service since September 11, 2001,
there may be sufficient momentum for continuing changes in many of the areas
enumerated.
Notes
1. The argument over an administrator’s
discretion has existed since this country’s founding. For a discussion of the Carl Friedrich-Herman
Finer debate, see Michael M. Harmon and Richard T. Mayer, Organization
Theory for Public Administration, Boston: Little Brown & Co., 1986, pp.
334-335.
2. Robert B. Denhardt (2000) succinctly
contrasts opposing administrative approaches, the new public administration vs.
the new public management, the former rooted in democratic tradition and
humanism. Theories of Public
Organization, 3rd edition, New York: Harcourt Brace, pp.190-191.
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BIOGRAPHICAL SKETCH
Richard Ryan coordinates the MPA and undergraduate Public
Administration programs at San Diego State University-Imperial Valley
Campus. He teaches Public Personnel
Administration to undergraduates and Administrative Theory in the MPA
program. He received his doctorate in
Public Administration from the University of Southern California.
Please send comments to rryan@mail.sdsu.edu