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Reinventing Human Resource Management -- Part 3

Accompanying Report of the National Performance Review

Office of the Vice President

Washington, DC

September 1993

Create a System That is Self-Renewing and Continually Improving

HRM11: Strengthen the Senior Executive Service So That It

Becomes a Key Element in the Governmentwide Culture Change Effort


The Civil Service Reform Act of 1978 established the Senior Executive Service (SES) as a separate personnel system. Incumbents of the SES include most of the top policy and managerial positions in the executive branch except for those requiring Senate confirmation. SES executives potentially serve as key links between the top political appointees and the rest of the career civil servants that staff federal agencies.

By September 1992, about 8,800 SES positions had been allocated by the Office of Personnel Management (OPM), and 8,200 positions had been filled. About 700 of these were filled by political appointees. The political appointees provide the necessary policy controls, while the career SES managers provide a politically neutral, responsive, skilled group of managers and leaders. As originally envisioned, SES members

[s]erve the twin objectives of change and continuity: on the one hand, helping the top officials of a new administration to steer their agencies in the directions set by the newly elected President; on the other, carrying forward the institutional memory of Government and maintaining high standards of public service. It is a balancing act of great delicacy.(1)

Need for Change

OPM's role.
The original vision of the SES, as outlined above, is still valid. Missing, at this juncture of its history, is an institution and process to give its members a focus and mission that takes them beyond their individual job and organization performance concerns. OPM's role has been more administrative and technical; as a result, the SES has not evolved to the extent originally envisioned. If the SES is to evolve, OPM's role must become more facilitative and consultative, working in concert with the agencies.

Change involves a long-term commitment. The SES can provide the continuity and long-term tenacity required for significant change governmentwide. This change will involve the federal government culture. Managers at all levels will have to view their roles differently than many do now. A recent Brookings Institution report called for "[a] performance-driven federal government . . . staffed by managers and administrators imbued with a new entrepreneurial spirit. . . . What matters is the ability of the leaders to inspire, to infuse value. . . . Such leaders are in short supply."(2)

The Complex Mix of SES Positions and Roles. It was intended that the SES consist of generalist managers with the ability and incentives to take on assignments where they would be most effective in accomplishing agency missions. For many reasons, however, this objective has not been met.

There is a small group of senior executives who occupy key leadership positions linking the President's top appointed officials with those charged with carrying out public policy. These key executives can be career or non-career. They will play a pivotal role in the success of government programs and policies and in reinventing the executive branch.

The majority of senior executives, however, now serve in the SES because of their technical expertise, often as key advisors and managers of support staffs or as operational managers responsible for parts of line (legislative) programs, rather than as agency-level leaders and program executives. While all are important positions, this mixture of roles makes it difficult to develop and manage the SES as a resource for agency management as originally intended.

Tensions Between Career Senior Executives and Political Appointees. Both the Merit Systems Protection Board and the General Accounting Office have pointed to the poor relationships that often exist between career SES members and political appointees.(3) These relationships often emerge as significant management problems. A certain amount of tension is natural; however, there are a number of aggravating circumstances that should be alleviated.

Over the years there has been an increase in the number of non-career SES appointees. This in turn has meant fewer career executives in key leadership positions and fewer career jobs that are meaningful.(4) In addition, the short tenure of political appointees means that they provide less program stability and continuity because of the abbreviated time frames in which they operate. Change in large organizations takes time, is usually incremental, and needs tenacious and persistent leadership over a period of years.

Agency Weaknesses in Managing the SES. Compounding this problem has been agency behavior in selecting, developing, using, and rewarding executives. Whereas some agencies have done a good job in creating an effective executive cadre, others have not treated their senior executives as a key resource or integrated the selection and development of their executives with their vision of a more effective agency. Because OPM can continually allocate additional SES positions, agencies have less incentive to rethink their current use of SES positions. In many cases, the focus needs to be changed from creating more SES positions to better use of current positions.

The need to more effectively select and develop agency SES cadres is compounded by the expected exodus of SES members in the coming years. A National Academy of Public Administration study estimates that over "one third of the SES--or 2,600 executives--will be eligible to retire" by January 1994.(5) Most will also have completed three years at their highest salary rate, thus creating another incentive to retire. This not only provides opportunities to select executives who can contribute quickly to agency change efforts, but allows agencies to improve the diversity of their SES membership. To achieve this, agency leadership must focus on these needs and incorporate solutions into their strategic planning efforts.

The SES as a Culture Change Force.
For the most part, the executive branch projects an image of a hierarchical, highly conservative, and risk-averse culture. Trust levels are low at all levels of government and in most organizations. Most employees including executives are uncomfortable with this situation and are ready to work toward solutions.

Vice President Gore has offered one alternative. He expects that the National Performance Review will result in and require significant culture change in the executive branch. The real drivers of change will have to be the career and non-career executives. In other words, significant culture change must rely on leadership.

The reinventing government effort intends to decentralize authority and accountability to a greater extent. Management will have fewer rules, will be held accountable for results, and will be responsible for significant changes in the years to come. Because culture change on a scale as envisioned by the President, Vice President, and Cabinet is a long-term endeavor, institutions and processes must be developed to support this change. The SES should be managed as a strategic resource to bring about change governmentwide and at the agency level. If institutional leadership means cultivating a shared view of a new direction and culture, then OPM and its director must create new vehicles that help build such a shared view and remove the perception of OPM as a controller and regulator.

The following actions have been developed to support these culture changes. Agency leadership must bear a large measure of responsibility for culture change and the creation of very different management values and behaviors. These changes cannot be made immediately; rather, they will take time to allow for adequate research, experimentation, learning, and consultation with an array of stakeholders. The actions provide for such a beginning.


  1. Create and reinforce a corporate perspective within the Senior Executive Service that supports governmentwide culture change. (1)

To change the culture of the executive branch, a corporate approach to managing executive resources will be needed. Although agencies have primary responsibility for engendering change within their own organizations, the director of OPM is an important link between the government as a whole and individual agencies. As a leader for change and a consultant to agency management, OPM should foster a corps of executives with a corporate vision, committed to fundamental change over the long term and, at the same time, reflective of the civil service values of merit and diversity.

OPM can work toward this goal in the following ways:

OPM, in consultation and coordination with agencies, should promote a corporate succession planning model for agencies to use in identifying, selecting, and developing their senior executive staffing resources. These efforts should be linked to each agency's strategic plans and budget, support their unique and specific needs, and incorporate such objectives as broadening the agency's skill mix and improving the diversity of the agency's SES membership.

3. Enhance voluntary mobility within and between agencies for top senior executive positions in government. (1)

Data show that, prior to entering the SES, incumbents have held a variety of positions and moved functionally and geographically; yet, once in the SES, their career paths have been relatively insular, indicating that the SES corps has been underused.(6) In other words, many senior executives stay in the same functional area or agency and are not encouraged to make use of their abilities to serve in a wider range of jobs or different agencies. The National Academy of Public Administration has called for enhanced and broadened mobility strategies geared not only to agency requirements, but to the corporate objectives of the government as a whole.(7)

OPM will act as a catalyst to encourage mobility of executives both within and between agencies. The purpose would be two-fold: first, to assist agencies in identifying executives who have demonstrated, through actual performance, the ability to bring about changes or manage in different circumstances and who can apply the values inherent in reinvented government principles while dealing with system realities; and second, to provide executives an opportunity to broaden their skills and perspectives and to be placed in positions where they can make their greatest contribution to a reinvented government.

This proposal is intended to establish an SES cadre that not only takes a governmentwide view of its role, but is a vehicle to help individuals move to positions where their special expertise is needed. By no means does the proposal intend to make every senior executive mobile and a generalist, since there are many executives whose expertise, experience, and interests are tied to a particular agency, occupation, or position. In fact, most executives have been chosen for their technical program expertise and need to remain where they are most effective. This is normally an agency issue and needs to be left in the hands of agency management with suitable safeguards in place.

Cross References to Other NPR Accompanying Reports

Creating Quality Leadership and Management, QUAL03: Strengthen the Corps of Senior Leaders.

Federal Emergency Management Agency,
FEMA04: Develop a Skilled Management Team Among Political Appointees and Career Staff.

Reengineering Through Information Technology, IT13: Provide Training and Technical Assistance in Information Technology to Federal Employees.


  1. U.S. Office of Personnel Management, "Handbook for the Senior Executive Service," Washington, D.C., July 1993, p. 3. (Draft.)
  2. DiIulio, Jr., John J., Gerald Garvey, and Donald F. Kettl, Improving Government Performance: An Owners Manual (Washington, D.C.: The Brookings Institution, 1993), pp. 73-74.
  3. U.S. Congress, House, Committee on Post Office and Civil Service, Subcommittee on Civil Service, "Political Appointees in Federal Agencies," testimony by Bernard L. Ungar, Director, Federal Human Resource Management Issues, General Government Division, General Accounting Office, October 26, 1989, p. 13. See also U.S. Merit System Protection Board, The Senior Executive Service: Views of Former Federal Executives (Washington, D.C., October 1989), pp. 19- 21.
  4. Ibid.
  5. National Academy of Public Administration, Paths to Leadership Executive Succession Planning in the Federal Government (Washington, D.C., December 1992), p. 1.
  6. Sanders, Ron, "Reinventing the Senior Executive Service," Virginia, June 1993, p. 8. (Draft.)
  7. National Academy of Public Administration, Paths to Leadership, Executive Succession Planning in the Federal Government: Report Summary (Washington, D.C., December 1992), p. 4.

HRM12: Eliminate Excessive Red Tape and Automate Functions and Information


The federal personnel system is clogged with unnecessary process constraints and thousands of pages of regulations. In 1983, the National Academy of Public Administration concluded:

The present personnel management system is far too process oriented. It is much too rigid and needs major change. . . . Thousands of pages of personnel regulations tend to remold personnel managers into personnel technicians. Because of the complexity of these regulations, line managers tend to abdicate their responsibilities for personnel decisions and fail to give personnel management the high priority it deserves. Process drives out substance.(1)

Ten years later, the Federal Personnel Manual (FPM) has expanded to over 10,000 pages of policies, regulations, guidance, and processing instructions. Additional agency directives parallel and often supplement the FPM. While agency directives and the FPM contain information needed by line managers, they are primarily written for the personnel administrators upon whom managers must depend for interpretation. Additionally, until recently, OPM has not led any efforts to use technology to reduce the number of manually prepared required reports or to enhance agency accountability systems.

The past 10 years have also seen a technology explosion. Every agency has a data system that supports internal operations and feeds into the Central Personnel Data File (CPDF) of the Office of Personnel Management (OPM). However, agency systems are outdated and are not interoperable; while complex processes contained in the FPM or agency regulations have been automated, automation has focused primarily on internal personnel office operations almost to the exclusion of managers' needs.

Need for Change

Managers and human resource administrators must be freed from unnecessary process constraints in order to focus on mission instead of efforts to overcome obstacles to its achievement. As process constraints are eliminated, use of technology needs to expand to eliminate manually prepared reports, provide access to information, support management decisionmaking, and monitor organizational performance.


  1. Phase out the entire Federal Personnel Manual and all agency implementing directives. (2)

The President should issue an Executive Order that declares that the FPM will be substantially revised, reduced, or otherwise eliminated by December 1994, and that

The positive implications of this action are the short-term elimination of unnecessary red tape and the potential for streamlining and simplifying all aspects of the personnel system. On the other hand, additional time may be needed to implement it fully, especially in light of other National Performance Review (NPR) recommendations. However, the objective can be met if pursued as a priority and if agencies are involved in the governmentwide effort. Additionally, the process itself will ensure that all NPR personnel recommendations are addressed.

2. Replace the Federal Personnel Manual and agency directives with automated personnel processes, electronic decision support systems, and manuals tailored to user needs. (1)

The director of OPM should accelerate and expand efforts already under way to streamline and automate personnel processes in coordination with the FPM review process and to avoid redundant develop-ment costs. Governmentwide deployment of the Department of Defense/Navy automated personnel action processing system application should be examined for potential cost savings. Costs for centrally developed systems or applications should be shared on a pro rata basis among all participating agencies with OPM providing seed money.

3. Identify and develop useful accountability measures that can be automated. (1)

The director of OPM, with the assistance of agency managers and staff experts (personnel, planning, information management, and budget), should develop, by December 1994, automated methods or accountability measures for use by agency heads to monitor exercise of delegated personnel management authorities. A variety of data sources could be tapped, including OPM's CPDF, the Survey of Federal Employees, and any reports that may continue to be necessary. Indicators that could be used to measure accountability include cash award trends to note unusual patterns, or conversions from excepted to career appointments to identify potential violations of merit principles. Such management information systems can be powerful tools for use in ensuring that managers are properly exercising the increased delegations envisioned by NPR. They also should be an element of the reinvented oversight program called for in the NPR accompanying report on the Office of Personnel Management.

Cross References to Other NPR Accompanying Reports

Department of Defense,
DOD01: Rewrite Policy Directives to Include Better Guidance and Fewer Procedures.

Streamlining Management Controls,
SMC08: Expand the Use of Waivers to Encourage Innovation.

Strengthening the Partnership in Intergovernmental Service Delivery, FSL02: Reduce Red Tape through Regulatory and Mandate Relief.


  1. National Academy of Public Administration, Deregulation of Government Management Project: Personnel Management (Washington, D.C., October 1983), p. i. (Interim panel report.)

HRM13: Form Labor- Management Partnerships for Success


The federal service labor-management relations statute, Title VII of the Civil Service Reform Act (CSRA) of 1978, provided the authority for employees to unionize, bargain collectively, and participate with agency management in making decisions that affect their working conditions. Prior to enactment of the statute, the federal labor management relations program was authorized by a series of Executive Orders. The statute was a blend of policies and approaches from Executive Order and the law governing labor-management relations in the private sector, the National Labor Relations Act.

Title VII of CSRA recognizes that "labor organizations and collective bargaining in the public service are in the public interest"; establishes the Federal Labor Relations Authority to administer the program, issue policy decisions, and adjudicate labor-management disputes; prohibits strikes and lockouts; prohibits agency shop or fair share representational fees; and prohibits bargaining on issues that are the focus of most private sector bargaining such as wages, fringe benefits, and issues related to hiring, firing, promoting and retaining employees.

The General Accounting Office (GAO) summarizes the differences between the federal labor-management relations program and the labormanagement relations program in the nonfederal sector as follows:

Bread and butter issues, such as wages, fringe benefits, and any of many other issues relating to hiring, firing, promoting, and retaining employees, which are the focus of private sector bargaining, generally cannot be negotiated in federal contracts. . . . [F]ederal sector bargaining has been generally limited to the way personnel policies, practices, and procedures are implemented. Traditional bargaining incentives, i.e., strikes and lockouts, are prohibited. Agency shop or fair share representation fees, are prohibited. Under the federal program, employees are entitled to select a union to represent them, but they cannot be compelled to join or pay a fee for the representation that the union is required to provide.(1)

Currently, about 60 percent of the federal workforce--1.3 million employees--are represented by federal unions; 80 percent of the employees who are eligible for union participation are represented by an employee union. They are represented by approximately 125 labor organizations in approximately 2,200 bargaining units. The three largest federal employee unions are the American Federation of Government Employees, which represents more than 600,000 employees; the National Treasury Employees Union (NTEU), which represents more than 150,000 employees; and the National Federation of Federal Employees, which represents approximately 150,000 employees.(2)

Need for Change

The federal workforce is changing. While the number of employees has remained constant for the past 10 years, the workforce has changed in a variety of other ways: it is much more diverse, with more minorities and women; it is better educated; it is more mobile; and more employees work in professional, scientific, and highly technical jobs than ever before.

Consistent with national trends, federal employees want to participate in decisions that affect their work. Employee involvement is accomplished through a variety of means including employee unions, quality circles, quality of work life initiatives, self-managed work teams, and perhaps most significantly in recent years, Total Quality Management (TQM). The rapid expansion of TQM in the federal government has dramatically increased the opportunities for employee involvement. GAO reported that 68 percent of federal installations are working on various phases of TQM, with involvement of about 13 percent of their employees.(3) TQM experts point out that unionmanagement cooperation is a prerequisite for a successful TQM program. GAO reported that 59 percent of the installations surveyed reported that employee unions were involved in TQM implementation. The National Academy of Public Administration (NAPA) cites as an example of labor-management cooperation the Internal Revenue Service (IRS)-NTEU Joint Quality Improvement Process, which was started in 1987, and which has spread throughout IRS, resulting in cost savings as well as improved labor-management relations. NAPA recommends that this success be replicated.(4)

In a report issued in 1991, GAO concluded that piecemeal technical revisions to the federal labor-management relations program would not be appropriate and comprehensive reform was needed. The report noted that "the federal labor-management relations program is not working well . . . (1) the program is too adversarial and often bogged down by litigation over procedural matters and minutiae; (2) some dispute resolution mechanisms are too lengthy, slow, and complex; and (3) ineffective FLRA management has weakened the program."(5) These conclusions have been widely supported, for example, by NAPA in its 1993 report on federal human resource management.

The following example of traditional bargaining illustrates the current state of affairs:

. . . traditional negotiation techniques were used to address all term and mid-term collective bargaining matters. Union and management developed positions on issues, submitted inflated proposals to each other, argued vigorously, and concealed the degree of importance they attached to each proposal in order to demand a significant concession by the other party to drop any proposal, however inflated or unimportant. The eventual outcome or agreement was determined through a series of power plays using a number of different tactics. For example, sometimes the union or management walked out of the negotiations. Discussions focused on personalities and anecdotal data rather than the issues. On occasion, the union picketed to draw attention to its concerns. Information was withheld by both parties. Sometimes management ended the dialogue by merely declaring issues to be nonnegotiable. The net result of these tactics was a labormanagement relationship built on acrimony, distrust, confrontation, and litigation. Few efforts were made to resolve problems informally. Once negotiations were concluded, problems arising during the administration of negotiated agreements were usually addressed through grievance procedures or unfair labor practice charges.(6)

In developing its report, GAO solicited the views of union officials, management officials, and neutral experts at the national level, as well as union officials and managers at the local level. To summarize the views of these participants in the federal labor-management relations program:

FLRA, the Federal Mediation and Conciliation Service (FMCS), and a few individual agencies have been encouraging and facilitating labormanagement cooperation and partnerships in federal labor relations. However, their efforts have been hampered by a statutory framework that focuses on the traditional adversarial model.

Given bargaining processes that are too legalistic and adversarial, and dispute resolution processes that are slow, lengthy, and complex, virtually all participants consider the federal labor relations programs to be very costly and ineffective. A comment by one of the experts interviewed by GAO succinctly illustrates the prevailing view: "We have never had so many people and agencies spend so much time, blood, sweat, and tears on so little. In other words, I am saying I think it is an awful waste of time and money on very little results."(7)

While there is agreement that the program is not cost-effective, it is difficult to determine the exact cost. Several agencies that were asked for information about the cost of their labor-management relations program responded that cost data were not available and that lengthy, costly studies would be required to determine them. In 1982, GAO conducted its only study of federal-labor management relations costs, estimating the cost to the government of processing the 6,448 unfair labor practices (ULPs) filed in that year to be $25.9 million.(8) The cost of processing the 8,851 ULPs filed in 1992 must be significantly greater than $25.9 million.

GAO cited the need for a new labor-management relations framework that "motivates labor and management to form productive relationships to improve the public service; makes collective bargaining meaningful; improves the dispute resolution processes; and is compatible with innovative human resource management practices that emphasize employee involvement, team building, and labor-management cooperation."(9)

NAPA supported the GAO recommendation for comprehensive reform, concluding, "The labor-management relationship is critical for the employee involvement so vital to organizational change. Without the improved participation and communication that comes with greater employee involvement, efforts at empowerment and commitment will flounder. Adversarial bargaining on win-lose issues will coexist with cooperative win-win bargaining. But cooperation will create more forums for joint problem solving and planning that improve results for both labor and management, and ultimately the employee and the organization."(10)

The changes envisioned by the National Performance Review (NPR) will result in a government composed of high-performing organizations that are mission-driven and results-oriented with a clear focus on meeting the needs of customers. Hierarchy will give way to participation and teamwork. Employees will be highly skilled and motivated, empowered to make changes and continuously improve the quality of services provided. The transformation from the current to the desired state of government can only be achieved by transforming the labor-management relationship from an adversarial relationship to a partnership for reinvention and change.

One of the first steps in reform of any system is development of a vision of the future that key stakeholders are committed to achieve. A vision for federal labor-management relations describes the desired federal government workplace of the future and, within that workplace, the labor-management relations program that is one of its essential elements. A group of union officials, managers, and neutral labor-management experts met with NPR staff to develop the following vision of labor-management relations in the year 2000.(11)

Vision of Cooperative Labor Management Relations in the Federal Government

In the future, the federal workforce should be valued as a full partner in decisionmaking. There should be equal access to information among management, employees, and unions. As a result, employees will be involved in decisions that affect them. Where employees are represented by an employee union, labor and management should be partners in carrying out the mission of the organization. Both labor and management should value diversity. There should be a shared sense of mission and values throughout the organization that is understood by everyone.

Federal organizations should be model employers providing the private sector with exemplary models of high-performing organizations. They should place authority and decisionmaking at the lowest appropriate level of the organization--the work unit. Issues should be resolved through a single, collaborative process that is not destructive to the partnership. Given the effectiveness of federal organizations, public service should be viewed as a desirable career by both current and potential employees.

There should be a partnership between union and management that enables government organizations to become high-performing organizations. This, in turn, should result in high-value, highquality, effective government. The purpose of the partnership should be to provide an open forum for the discussion and resolution of problems, both procedural and substantive, dealing with conditions of employment that significantly affect the operation of the organization. Problem resolution should be accomplished through a deliberate, consensual team approach that is shaped by the input of all concerned partners rather than through traditional negotiating postures. The goal is to create an effective labor-management relationship based upon partnership and trust that utilizes the strengths of both parties to meet and mutually resolve issues in a way that enhances the effectiveness of both labor and management.

Employees, management officials, and union leaders should be continuously trained in support of the labor-management relationship, which in turn should lead to creation of high-value, high-performing government organizations. Training should be provided in the areas of facilitation, problem-solving, negotiation, leadership, and quality.

Performance should be continuously improved on an organizational and individual level throughout the entire government; unnecessary conflict should be avoided; unavoidable conflict should be recognized and channeled to closure quickly, without animus; and individual and institutional (i.e., labor-management) cooperation should be encouraged and rewarded. The appeals process should be fair, simple, determinative, fast, and inexpensive. There should be incentives for labor-management cooperation and strong disincentives for labor or management to violate the partnership or to fail to settle or resolve issues within the partnership.

Union effectiveness is one of the cornerstones of the productive workplace partnership. Union effectiveness requires a strong, professional, financially secure union that represents the interests of all employees.

Unions and management should work together as partners to transform the way organizations are structured, work is performed, and services are delivered. Management and unions should design systems and solutions to issues involving efficiency, productivity, quality, and how the job gets done. Placement of authority and decisionmaking in the work unit should be aided by the absence of artificial barriers to bargaining at any level.


The President should issue an Executive Order that identifies labormanagement partnership as a goal of the executive branch and establishes the National Partnership Council. (2)

When many people think of labor-management relations, they visualize an adversarial relationship. Depending on their viewpoint or experience, they may see management assuming a posture to protect its authority and do all it can to ensure efficiency at the cost of reduced benefits and wage cuts. Others may see unions as wanting work rules that prevent organizations or work groups from being more effective, and insisting on bargaining or grieving over the most mundane and inconsequential issues.

Depending on their perspective, some people may see ideas such as labor-management partnership and cooperation simply as code words for allowing managers to bypass unions to get employees to work harder, faster, and less wisely, with fewer protections. Others may see cooperative initiatives simply as opportunities for unions to bargain over pay, organization mission, and goals, and receive more concessions in work and seniority rules, benefits, and protections for ineffective workers.

The Executive Order would dispel these images. It would make it clear that the goal is an entirely new concept of labor-management relations. The Executive Order should contain two parts and be accompanied by a presidential statement, as outlined below.

Executive Order, Part 1: Concepts.

Executive Order, Part 2: Methods. Following are some methods that should be put into place through the Executive Order to support goal attainment. The National Partnership Council may suggest other methods.

The National Partnership Council. The Executive Order should provide the charter for the National Partnership Council and encourage similar partnership arrangements at a variety of levels in each agency. By October 1993, the President should announce the appointments to the council and the date it should begin its work. He should explain that achieving the partnership goal throughout the executive branch requires a knowledgeable and experienced group to champion such a change. Such change will be incremental and build on actual models and successful experiences. The council should serve as such a group and help steer the executive branch toward the partnership goal. In describing the council, the Executive Order should contain the following elements:

Agency Partnership Committees and Councils. The Executive Order should encourage each agency to foster partnerships with employee unions. This may involve creating, at various levels, processes and groups to foster partnerships, or adapting existing structures and processes to meet this need. Each agency should be responsible for the form this takes. However, agencies should be asked to ensure that their processes and groups

Presidential Statement. The presidential statement will accompany and provide the rationale for the Executive Order and make the case for the partnership by articulating the following:

Cross References to Other NPR Accompanying Reports

Department of Labor,
DOL03: Expand Negotiated Rulemaking and Improve Up-front Teamwork on Regulations.

Reinventing Federal Procurement,
PROC05: Reform Labor Laws and Transform the Labor Department into an Efficient Partner for Meeting Public Policy Goals.


  1. U.S. General Accounting Office (GAO), Federal Labor Relations: A Program in Need of Reform, GAO/GGD-91-101 (Washington, D.C.: U.S. General Accounting Office [GAO], July 1991), p. 14.
  2. U.S. Office of Personnel Management, Union Recognition and Agreements in the Federal Government (Washington, D.C., January 1991), pp. 6-7.
  3. U.S. General Accounting Office, Quality Management: Survey of Federal Organizations, GAO/GGD-93-9BR (Washington, D.C.: GAO, October 1992), p. 2.
  4. National Academy of Public Administration (NAPA), Leading People in Change: Empowerment, Commitment, Accountability (Washington, D.C., April 1993), p. 40.
  5. GAO, Federal Labor Relations, p. 2.
  6. Goodwin, Larry K. "Win-Win Negotiations: A Model for Cooperative Labor Relations," The Public Manager (Potomac, MD, Summer 1993), p. 19.
  7. GAO, Federal Labor Relations, p. 76.
  8. U.S. General Accounting Office, Steps Can Be Taken to Improve Federal Labor-Management Relations and Reduce the Number and Costs of Unfair Labor Practice Charges, GAO/FPCD-83-5 (Washington, D.C.: GAO, November 5, 1982), p. 7.
  9. GAO, Federal Labor Relations, p. 76.
  10. NAPA, pp. 40-41.
  11. A problem-solving team was formed under NPR auspices to develop a vision for the future of the federal workforce and federal-labor management relations, and make recommendations to achieve the desired future--more cooperative labor-management relations. Members of the problem solving team included: Joe Coffee, National Performance Review (NPR); Brian DeWyngaert, Executive Assistant to the President, American Federation of Government Employees (AFGE); Frank Ferris, Director of Negotiations, National Treasury Employees Union (NTEU); Brian Flores, Deputy Director, Federal Mediation and Conciliation Service; Phil Kete, Staff Attorney, National Federation of Federal Employees (NFFE); Frank Mason, Associate Director, Commodities Directorate, McClellan Air Force Base; Jean McKee, Chair, Federal Labor Relations Authority; Jerry Ross, arbitrator; Mark Roth, General Counsel, AFGE; John Sturdivant, President, AFGE; Jeff Sumberg, Deputy General Counsel, NFFE; Robert Tobias, President, NTEU; Roy Tucker, NPR; Robert Wenzel, Assistant Commissioner, Internal Revenue Service; and Ann Wilson, Office of Personnel Management. Bonnie Kasten, Independent Consultant, served as facilitator.

HRM14: Provide Incentives to Encourage Voluntary Separations


Throughout the federal government, departments and agencies are being asked to work more efficiently, that is, with fewer resources. To achieve this goal, many organizations are facing potentially massive restructuring and downsizing. Incentives are needed to encourage voluntary separations, thereby reducing or eliminating the need for relocating, reassigning, or separating employees under reduction in force procedures.

Need for Change

According to the Office of Personnel Management (OPM), voluntary early retirements among eligible employees have dropped from approximately 17 percent in the mid-1980s to 4 percent in 1992. After remaining relatively constant at approximately 36 percent during the same time period, regular optional retirements dropped to 23 percent in 1992.(1) Overall attrition from federal service is at its lowest level since 1973, when OPM began tracking these data.

The federal government's recent experience with separation incentives suggests that a large percentage of employees will choose regular or early retirement if incentives are included. The Office of Thrift Supervision (OTS) and the U.S. Postal Service (USPS), in 1991 and 1992, respectively, offered lump sum payments equivalent to six months' salary to persons eligible for either early or regular retirement. In OTS, 38 percent of early retirement and 53 percent of regular retirement eligibles accepted the offer. In USPS, 27 percent of early retirement and 43 percent of regular retirement eligibles accepted. In 1993, Department of Defense (DOD) employees were offered the lesser of $25,000 or the amount the employee would otherwise be entitled to receive as severance pay. About 20 percent of early retirement eligibles and 40 percent of regular retirement eligibles have retired from DOD recently.(2)


  1. Provide departments and agencies with the authority to offer separation pay. (3)

By October 1993, OPM should forward draft legislation to Congress to permit any department or agency to offer cash payments to encourage eligible employees to voluntarily separate from the federal service, whether by retirement or resignation, to avoid or minimize the need for involuntary separations due to reduction in force, reorganization, transfer of function, or similar action. The legislation should include a comprehensive, governmentwide strategy for determining the dates during which cash payments would be offered to maximize acceptance rates. Eligible employees would be those serving under permanent appointment without time limitation for a continuous period of at least 12 months, excluding reemployed annuitants and employees who would otherwise be eligible for disability retirement. The law will include a provision requiring repayment of separation pay should the individual become reemployed by the federal government within two years of the date of separation. Departments and agencies will fund the costs of this measure from within their available appropriations.

2. Decentralize the authority to approve early retirement. (3)

By October 1993, OPM should forward draft legislation to Congress to allow OPM to assess an actuarial charge against agencies to cover the estimated present value of the added cost to the retirement fund of early retirement, currently estimated at 9 percent of final pay. Once the new legislation has been enacted, OPM should delegate broad authority under the relevant section of the current law(3) to permit departments and agencies to make their own determinations using the criteria outlined in the law to allow their employees to retire early.(4)

3. Authorize departments and agencies to fund job search activities and retraining of employees scheduled to be displaced. (3)

By spring 1994, OPM should convene an interagency task force to develop proposals, including legislation if necessary, by September 1994 to allow departments and agencies to fund job search activities and retraining to facilitate placement of employees who are otherwise scheduled for downgrade or separation.

4. Expand outplacement services. (1)

By March 1994, OPM should develop and implement a comprehensive, readily available, state-of-the-art information system for the purpose of informing employees about the availability of federal and other public sector job opportunities.

5. Limit annual leave accumulation by senior executives to 240 hours. (3)

By October 1993, OPM should forward draft legislation to Congress to delete the section of the law that exempts the annual leave accumulated by members of the Senior Executive Service, the Senior Foreign Service, the Defense Intelligence Senior Executive Service, the Senior Cryptologic Executive Service, and the Federal Bureau of Investigation and Drug Enforcement Administration Senior Executive Service from the limitation otherwise imposed by that section on annual leave accumulation.(5) Annual leave accumulation for individual senior executives will be limited to 240 hours. This limitation would bring senior executives in line with other government employees and serve as an incentive for some senior executives to take advantage of separation incentives.

Cross References to Other NPR Accompanying Reports

Improving Financial Management,
FM13: Charge Agencies for the Full Cost of Employee Benefits.

Transforming Organizational Structures, ORG01: Reduce the Costs and Numbers of Positions Associated with Management Control Structures by Half; and ORG02: Use Multi-year Performance Agreements between the President and Agency Heads to Guide Downsizing Strategies.


  1. Office of Personnel Management, "Retirement Trends With and Without Incentives: Summary Through July 30, 1993," p. 1. (Unpublished.)
  2. Ibid., pp. 1-3.
  3. Title 5, United States Code, sec. 8336(d).
  4. Title 5, United States Code, sec. 8336(d)(2).
  5. Title 5, United States Code, sec. 6304(f).


Appendix A:

Summary of Actions by Implementation Category

(1) Agency heads can do themselves
HRM01.5 Abolish the time-in-grade requirement. Create a general qualifications framework that permits agencies to augment or modify qualification standards for both internal and external placement actions.

HRM01.7 Create a governmentwide employment information system to inform the public of job opportunities. Coordinate the development and operation of common automated systems to facilitate agency staffing policies and operations.

HRM04.2 Encourage agencies to establish productivity gainsharing programs called Federal Performance Sharing to support the reinvention and change effort.

HRM05.2 Develop a culture of performance that supports supervisors' efforts to deal with poor performers.

HRM05.3 Improve supervisors' knowledge and skills in dealing with poor performers.

HRM06.2 Give agencies the flexibility to use savings realized from reinvention to increase their investment in employee training and development.

HRM07.4 Allow employees to use sick leave to care for dependents.

HRM07.5 Give returning employees credit for previously accrued unused federal sick leave.

HRM08.2 All agencies should establish alternative dispute resolution (ADR) methods and options for the informal disposition of employment disputes.

HRM10.2 Require appropriate cross-training for human resource management professionals.

HRM11.1 Create and reinforce a corporate perspective within the Senior Executive Service that supports governmentwide culture change.

HRM11.2 Promote an agency corporate executive level succession planning model.

HRM11.3 Enhance voluntary mobility within and between agencies for top senior executive positions in government.

HRM12.2 Replace the Federal Personnel Manual and agency directives with automated personnel processes, electronic decision support systems, and manuals tailored to user needs.

HRM12.3 Identify and develop useful accountability measures that can be automated.

HRM14.4 Expand outplacement services.

(2) President, Executive Office of the President, or Office of Management and Budget can do

HRM07.1 Implement family-friendly workplace practices while continuing to ensure accountability for quality customer service.

HRM08.1 Eliminate jurisdictional overlaps.

HRM09.1 Charge all federal agency heads with the responsibility for ensuring equal opportunity and increasing integration of qualified women, minorities, and persons with disabilities into all levels and job categories, including middle and senior management positions.

HRM10.1 Establish an Interagency Equal Employment Opportunity and Affirmative Employment Steering Group under the joint chair of EEOC and OPM.

HRM10.3 Combine all equal opportunity and affirmative employment reports into one comprehensive assessment of the total workforce EEO/AE data.

HRM10.4 Modify the Central Personnel Data File to enable total automation of the EEO/AE data reporting requirements.

HRM12.1 Phase out the entire Federal Personnel Manual and all agency implementing directives.

HRM13.1 The President should issue an Executive Order that identifies labor-management partnership as a goal of the executive branch and establishes the National Partnership Council.

(3) Requires legislative action

HRM01.1 Authorize agencies to establish their own recruitment and examining programs. Abolish central registers and standard application forms.

HRM01.2 Allow federal departments and agencies to determine that recruitment shortages exist and directly hire candidates without ranking.

HRM01.3 Reduce the number of competitive service appointment types to three.

HRM01.4 Permit nonpermanent employees to compete for permanent positions under agency procedures for internal placement.

HRM01.6 Eliminate all statutory rules on detailing employees to temporary assignments.

HRM02.1 Remove all grade-level classification criteria from the law while retaining the 15-grade structure.

HRM02.2 Provide agencies with flexibility to establish broadbanding systems built upon the General Schedule framework.

HRM02.3 Modify the standard 15-grade classification system that applies to those employees not covered by a broadbanding system.

HRM02.4 Provide agencies under the standard 15-grade system with additional flexibilities in setting base pay rates.

HRM02.5 Establish reporting requirements that apply to both the modified standard system and any broadbanding system.

HRM03.1 Authorize agencies to design their own performance management programs.

HRM04.1 Authorize agencies to develop their own incentive programs.

HRM05.1 Reduce by half the time required to terminate federal managers and employees for cause. Make other improvements in the systems for dealing with poor performers.

HRM06.1 Deregulate training and make it more responsive to market sources.

HRM07.2 Provide telecommunications and administrative support necessary for employees participating in flexiplace and telecommuting work arrangements.

HRM07.3 Expand the authority to establish and fund dependent care programs.

HRM07.6 Expand the demonstration project authority to allow projects on employee benefits and leave.

HRM07.7 Reauthorize voluntary leave transfer/bank programs.

HRM14.1 Provide departments and agencies with the authority to offer separation pay.

HRM14.2 Decentralize the authority to approve early retirement.

HRM14.3 Authorize departments and agencies to fund job search activities and retraining of employees scheduled to be displaced.

HRM14.5 Limit annual leave accumulation by senior executives to 240 hours.

Appendix B:


The issues and actions contained in this report were developed based on input from federal employees, managers, labor unions and personnelists; state and local government representatives; personnel management organizations and professional associations; members of the academic community and others.

Data collection methods included:

Appendix C:

Accompanying Reports of the National Performance Review

Governmental Systems Abbr. ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^ Changing Internal Culture

Creating Quality Leadership and Management QUAL

Streamlining Management Control SMC

Transforming Organizational Structures ORG

Improving Customer Service ICS

Reinventing Processes and Systems

Mission-Driven, Results-Oriented Budgeting BGT

Improving Financial Management FM

Reinventing Human Resource Management HRM

Reinventing Federal Procurement PROC

Reinventing Support Services SUP

Reengineering Through Information Technology IT

Rethinking Program Design DES

Restructuring the Federal Role

Strengthening the Partnership in
Intergovernmental Service Delivery FSL

Reinventing Environmental Management ENV

Improving Regulatory Systems REG

Agencies and Departments Abbr.

Agency for International Development AID

Department of Agriculture USDA

Department of Commerce DOC

Department of Defense DOD

Department of Education ED

Department of Energy DOE

Environmental Protection Agency EPA

Executive Office of the President EOP

Federal Emergency Management Agency FEMA

General Services Administration GSA

Department of Health and Human Services HHS

Department of Housing and Urban Development HUD

Intelligence Community INTEL

Department of the Interior DOI

Department of Justice DOJ

Department of Labor DOL

National Aeronautics and Space Administration NASA

National Science Foundation/Office
of Science and Technology Policy NSF

Office of Personnel Management OPM

Small Business Administration SBA

Department of State/ U.S. Information Agency DOS

Department of Transportation DOT

Department of the Treasury/
Resolution Trust Corporation TRE

Department of Veterans Affairs DVA