A Merit System for the 21st Century

Uploaded by USOPM on 04.11.2009


When I was your age sitting here,
Professor Scotty Campbell had just returned from
creating the office of Personnel Management in
Washington and serving as its first leader during the
Carter Administration.
It is one thing for a professor to rise to this
position, but it is quite another I would argue
for a student.
As a boy from Rockville, Maryland,
I never imagined that I would be called by the
President of the United States and given the chance
to carry the Maxwell Flag to OPM once more.
This is all the more special because I believe this is a
very historic opportunity for comprehensive reform of
our civil service system.
I think the stars are aligned in a way that occurs
probably only once in a generation.
We have a President who deeply values service and
wants to restore the dignity and respect for our civil
service to what it was during President Kennedy's
stirring hall.
We have a congress that is willing to help and a public
that increasingly recognizes that our current approaches
to hiring, rewarding, appraising and training our
employees is inadequate.
The United States Civil Service is an elite core of
dedicated professionals that are heirs to a proud tradition.
Led by the President of the United States our service to
our country and humanity spans the globe.
The story of the US Civil Services reaches back two
centuries and touches every field of human endeavor.
From arresting the likes of Al Capone to walking on the
moon, Elliot Ness and Neil Armstrong were both GS
employees as were environmentalist Rachel
Carson and Bob Stanton, my friend and the first
African-American to lead the National Park Service.
Federal workers like these are the people who brought
you the lunar landing, who rebuilt the world after war,
who cure disease, fight crime,
protect our constitution, and advance our civilization.
Without them all is lost.
With you all is possible.
We need you and your talents,
your passion and your creativity if government is
to work.
Let me tell you who you'll be joining.
Unsung heroes who quietly go about the business of making
the United States a nation where we can drink the
water, breathe the air, and travel safely.
In most instances our citizens go about their
daily lives unaware of the work of these civil servants
and the risks that they take and yet since 1995,
just since 1995, 2186 people have made the supreme
sacrifice of their lives into civil service on behalf
of their neighbors and their country.
They didn't work for recognition,
they know the value of their mission,
and they know the nobility of service.
However there is an increasing risk that the
nation will not be able to continue to attract and
retain the best and the brightest employees who have
made this nation what it is today.
The very procedures that were supposed to ensure that
job applicants are evaluated based on merit,
are discouraging applicants from completing the arduous
quest of actually getting a civil service job.
We must make changes now if we are to maintain the
quality of our civil service,
and we've got a lot of work to do.
First, we must end the denigration of our civil
servants and stop using them as political footballs.
For thirty years public servants have been
denigrated and maligned by both political parties.
These attacks weren't only misguided,
they were dead wrong.
Civil servants are every bit as efficient as the private
sector, if not more so.
Their integrity and their dedication are unsurpassed.
And to honor their service we have principles that can
not be compromised.
Today I'm going to be focusing primarily on one.
Our core principle, merit.
It's time to reinvigorate merit for the 21st century.
In my opinion there is a lot of entrepreneurial energy
in America.
A lot of dynamism.
So many people who are hungry for a challenge and
an opportunity to meet.
If you're one of those smart ambitious people and you
come into a well run company and show leadership
potential you'll end up on a fast track in most cases.
They'll send you to management trainee programs,
they'll promote you and give you bonuses,
and in return, hopefully you'll work hard.
And from your new hire position your hard work will
pay off.
Company succeeds, everybody wins.
In the government sadly, too often you'll run into a
human resources system and a culture that favors quite
frankly red tape and inertia over an issue.
You'll find that a lot of extra effort might get you a
little more reward, but not that much.
So you'll get disheartened, you'll either settle for the
slower pace or you'll get restless and leave.
And if that happens, everybody loses.
We can do better.
We have to empower our workers and channel their
energy into solving our problems.
We have an economy to rebuild,
two wars to support, crumbling infrastructure to
repair, a pandemic flu to stop and a planet in peril
from climate change.
We need to get the best people into the federal
government and once they're here we need to get them
into the right places.
We need to build that eye for talent that elevates the
wheat and tosses out the chaff.
In a growing company that can be done by one or a few
people and the success or failure of the company
depends largely on their ability to identify,
hire, and promote talented people.
We have 1.9 million employees in the federal government.
We hire 300,000 employees a year,
give or take.
One set of eyes can't do it, we need systems and we need
them urgently.
Getting the best people into positions where they're most
needed is in my opinion one of the greatest
organizational challenges facing our federal
government today.
The problem here is the systems I emphasize,
not the people.
Every day I come to work I see great employees and
great managers who are hamstrung by regulations
that are unnecessary or have quite frankly
outlived their usefulness.
I believe deeply in public service.
I had my dream job running the National Zoo.
But I left it to serve the people who serve America
because quite frankly public servants are and have always
been my heroes.
We are a very strong professional public service
and this shows in the smooth transition of power from one
President to the next which we take for granted.
We do not need to be reinvented,
but we do need to reinvigorate and unshackle
our best resource, our people.
Our hiring system is quite frankly broke.
Five decades after the last major attempt at pay reform
the cracks are showing.
A significant and growing number of employees are not
in the general service pay system.
This system can not stand another three decades let
alone five.
I don't mean to say it's going to crash tomorrow.
We could limp along for a few more years under the
current GS system, or I would argue we could seize
this moment to build something entirely new.
The central question I ask all of you today is how do
we practice the principle of merit in the 21st century?
Let me add some sub questions to that to inform
that discussion.
The central questions that I want your help on I'm going
to lay out and then I'm going to give you some
thoughts about my own and then we'll open it up for Q&A.
Since I don't have anywhere to go except the Sheraton
across the street, I'm happy to stay as long as you want.
How do we define and appraise merit today?
How do we make our systems flexible enough to let the
best workers and managers run as fast and as far as
their talent and drive can take them but fair enough to
keep the system from running amuck?
How do we motivate and reward good performance and
address poor performance without cronyism or favoritism?
How do we train, educate, and develop workers over the
course of their careers to make the most of their abilities.
Those are the four questions I propose.
I don't pretend to have the answers and that's why I'm
searching far and wide, discussing these issues not
only with professionals at OPM,
and with government agencies,
but with academics and students like you.
Our labor unions in some of America's most innovative
private sector employees and employers as well.
Last week my staff and I participated in a round
table discussion in Washington with leaders from
all these different groups.
We were there to listen and what we heard clearly from
them is that our people are our first asset.
They are an investment, not a cost,
and we need to get back to treating them that way.
I hate the term human capital.
I think it is demeaning as a term.
I think it implies that people are widgets.
I don't care how much money you have,
I don't care how much technology you have,
if you don't have the right people you can't build anything.
So I think its people aren't a piece of the equation,
people are the equation and that's why our government of
the 21st century has got to wrestle with
and solve these issues.
That round table and events like this are only the beginning.
We've got a long way to go in developing this
initiative and I need your help.
So now that we've laid out the initial questions,
let me discuss what I think might be the basis for four
pillars of civil service reform before we go to discussion.
So let's go back to the questions.
First, how do we define and appraise merit today?
How has revolutionary change in the world around us
define merit in the federal workplace?
Let me give you some background.
Our nation's needs have changed dramatically over
the last 125 years.
Our civil service has obviously changed with it.
Our nation has grown and the sum of human knowledge has
grown with it and the complexity of the task we're
facing has grown.
A century ago merit might have meant that a worker
flawlessly hand copied documents or typed 100 words
per minute and that competency might be all that
was required over the course of their career.
Not anymore.
Now I'm not here to philosophize about the
proper size of government, that's not my role,
but it is a simple fact that 125 years ago there were no
nuclear power, pharmaceutical,
telecommunications, or financial derivatives
industries, and if Enron didn't destroy the notion
that these businesses could police themselves,
surely the events of the last two years have.
Our federal workforce today needs people who can
understand all the aspects of our rapidly evolving
economy, provide expert advice to our elected and
appointed officials and serve not only as cops on
the beat, faithfully executing our laws,
but also protecting the American people.
The 21st century definition of merit needs to be geared
to them.
It must assess critical thinking and problem solving skills.
It must assess how well a worker has kept up with
changes in his or her field and contributions that they
have made to the field beyond their immediate job performance.
Shouldn't a good appraisal system evaluate the whole
worker and do so over the entire course of their career?
Instead of maybe meticulously parsed grades
and steps, maybe we should consider career ladders with
just three stages, apprentice,
journey level, expert.
What if we drew bright lines between those stages and had
a high bar to get from one to another,
a performance review board, not just of your supervisors
but of your peers and outside professionals who
would determine are you ready to go to that next step?
Would having your rank follow you no matter what
job you're doing instead of having it tied to a specific
position be more appropriate in the 21st century?
What if you could go from one job to the next at the
level you belong without the HR staff needing to shoehorn
a justification for it.
Maybe such a three stage system could help ensure
that we're promoting the best people and it would
take also some of the pressure because most of the
pressure is focused on the hiring decision because our
managers feel, "My God we're hiring this person,
they're a tenure for life, if we screw this up we're
stuck for life" so it puts too much of a burden on the front.
We spread that concept of review throughout a person's
career, we could take some of the pressure off the
front end.
Now we don't want hiring managers to have that paralysis.
Maybe the entire apprentice stage is probationary,
or maybe the probationary period is shorter,
but we would instead require an affirmative step to keep
someone on at the end of that probation instead of
what we do now which is after one year you're
automatically tenured.
So we have the concept of setting a high bar at the
beginning of each of these three stages,
apprentice, journey level, and expert.
What might that bar look like?
For me the three most important qualities are
fairness, comprehensiveness, and transparency.
Fairness means that we build workable standards,
apply them uniformly, hear all voices and do not leave
ultimate decisions at one person's discretion.
Comprehensiveness means that we look at the entire
breathe of your professional contributions both inside
and outside of office.
What training courses have you taken?
Where have you been published or presented?
What seminars have you gone to?
Who have you mentored or recruited?
What volunteer work have you done?
Pro bono does not have to be only for lawyers.
We can't be so zealous in avoiding irrelevant factors
that we neglect to look at the whole person.
Now transparency means the promotion process and
criteria are clearly spelled out for people and the
results explained.
Transparency is key to getting buy in from workers
and from the public.
One possible way to achieve these goals might be through
those performance review boards composed by
colleagues in fields, managers,
labor representatives, even maybe members of the public.
What if the boards could review personnel files,
do their own research and listening and reach
independent judgments that would have to be accepted by
all stakeholders?
Their operation could reinforce the underlying
principle that seniority may,
but does not always equal merit.
Next point, flexibility.
How do we give our people room to run,
but not to run amuck?
One thing I think we need to consider is a results only
work environment, ROWE.
That is what they did at Best Buy,
many of you might be familiar with that word.
People who did that wrote a book called Work Sucks.
The basic premise of it is that you throw out the time
clock, you unchain people from their desks and you
say, "We don't care where or when or how you work,
as long as you get the job we told you we want done, done."
Why can't we let folks pick up their kids from school
and finish their work once the kids are in bed?
Have you ever been in a government office when it
shuts down mid day for snow?
Some of you might be interns who come from the
government, you're familiar with this.
I remember one time the announcement went out about
3:00 that we were shutting down and you never saw
people so happy.
They weren't happy because they hated their jobs.
They were happy to be free from the rigid time clock.
In a ROWE system it's just the opposite of that.
It would great our employees like responsible adults,
and if we do it right with proper training for workers
and managers and flexibilities like telework
and alternative work schedules built in,
I would argue I think it might boost morale,
increase productivity, and deliver good value
to the taxpayer.
Switching gears, another idea for increasing
flexibility might be entirely eliminating the
classification system.
The system that parses the grades and steps that we now
have and it attempts to define every job in minute detail.
The classification system was designed in the 19th
century for a noble purpose.
To ensure equal pay for equal work.
And that is a core value to which we must continue to
pay great deference.
But when it prevents managers from adapting their
job responsibilities to the ever shifting
responsibilities of their departments,
it becomes a millstone, and classification today has
become so stilted, our HR staffers have become so used
to manipulating it, that in the words of one of them,
a good classifier could make a Dixie cup a GS 14.
Classification today is not protecting the equal pay
principle, but it is taking up a lot of time and it is
limiting our flexibility to define jobs properly and
promote the best people quickly.
So maybe we should just scrap it entirely.
Now I spoke a few minutes ago about the high bar to
get from stage to stage, from apprentice to journey
level to expert.
But what about when you're within the stage?
What happens in between those big promotion reviews?
A lot of people in fact are going to retire at the
journey level, after a very long,
fulfilling career.
Not everyone is going to want to become an expert and
so they'll only really face that promotion board once in
their career.
As will some people with advanced degrees and
extensive qualifications who might enter government at
the journey level or maybe even the expert level.
How do we motivate and reward good performance and
address poor performance?
This is not an easy nut to crack.
I don't think anyone, public sector or private sector
would come up to you and stand here and say,
"We have nailed performance appraisal,
here is the solution."
Parents don't like to go home and tell their kids
when they're messing up.
Why do we expect they're going to be able to do it as
managers in the workplace?
Well we're going to try to take a shot at this.
Building a new performance appraisal system getting
agency, manager, and worker buying it and backing with
the training and resources it needs to succeed will pay
huge dividends now and very far into the future.
What if managers and employees had to define at
the beginning of the year three must do items and
three nice to do items for each job and each person.
What if managers were actually given training on
how to have difficult conversations in the workplace?
What if we mandated a six month and year end review
where the employee was clearly told whether they
were in one of three categories: in good
standing, for 80% to 90% of workers who were doing a
solid job; outstanding for the 5% to 10% who have
really helped move the ball on achieving core agency
mission and results; and then finally not in good
standing for the 5% of workers who are in need of
improvement or removal.
Now that would replace the existing 5 measurements we
currently use which are: outstanding,
more than fully successful, fully successful,
less than fully successful, or unsuccessful.
Well the reality is that 80% of your employees are in
that middle category and they're doing a good job,
and they're showing up for work on time and they've got
a great attitude in the workplace,
and having been a manager and having to do this,
it is very hard to sit down and tell somebody,
you're fully successful.
Now as the Dean was mentioning,
I was a 4.0 student.
If somebody told me I was fully successful,
I'd quit, cause don't kid me,
I know I'm either C, C+ or C-,
so what you end up with in our current appraisal system
is you demoralize 80% of your workforce every year.
You panic managers who don't want to have that
conversation in the first place because all they want
to do is thank them for doing a good job and pat
them on the back and give them their cold and get them
out of their office quickly.
Well let's do that so that managers can focus on the
ends of the spectrum where managers need to focus:
rewarding superstars and disciplining and helping
those employees that need it.
At the end of it we need to build a timely appeals
process that ensures fairness.
What if we model that on the jury system with a panel of
representatives made up of labor,
management and other stakeholder groups that
would review your file, hear your case,
and give you a quick decision?
But frivolous complainers beware,
because how about if this panel not only can take you
up, they can take you down?
And managers beware because what if we empower that jury
panel to also discipline and remove managers who aren't
doing their job correctly.
As much as we wish it weren't so,
in any organization wit 1.9 million employees there are
gong to be a few bad apples and it should not take years
to fire one of them.
The decision to fire someone,
don't get me wrong, has to be fair and the reasons have
to be clear.
It ought to be reviewed because the power to take
away someone's livelihood, quite frankly shouldn't rest
in one person's hands.
But we have to think of other workers too.
Nobody likes to carry dead weight and nobody should
have to.
I've had a couple of times in my career where I've had
to fire people who weren't doing the job.
It wasn't easy, but afterwards it was the
coworkers who came up and thanked me for showing the
backbone to take the action I did.
So we fire people when we have to,
but only as a last resort.
First we want to try giving them training and support to
see if that helps.
But right now our managers only have one stick,
one hammer in the toolbox which is the threat of
removal, and since everybody knows it's so hard to use,
it's rarely if ever taken out of the toolbox.
We need to give managers more tools in that box.
What if they could pull a stick and slap you up side
they head and say, "You're losing a couple
weeks annual leave.
You're losing your within grade.
You're losing your..."
Now you give the manager gradations that they can
send a signal to you, I am not happy with your
performance, get into line, I want you to be in good
standing, you are not in good standing.
And ultimately if people don't get the message,
they have the ability to fire them.
That's on the disciplinary end.
What about the reward end?
It can't all be about discipline because in fact,
point of fact, I think there are far less employees in
need of discipline than there are in need of reward.
We have many outstanding people in the federal
government, they do amazing things,
miracles everyday.
If you're in the Senior Executive Service,
one of 2000 people you're eligible to compete for a
bonus system that is 10, 20 and 30 percent of your pay.
Now I'm not real good with numbers but 30% of $177,000
is a lot of money and that's a real incentive for
the Senior Executive Service.
If you're in the GS schedule,
what do you get?
Three to five percent and yet your miracle may be just
in every bit as significant as the SES.
We ought to have the same system for everybody and
what if we gave our managers the ability up to 5% for
bonuses but we create a 10, 20,
30% category for all workers,
not just the SES and we allow people to nominate
their coworkers.
Your supervisor could nominate you too,
in fact you could nominate yourself and it will go to a
performance review board that will assess it,
rank it, and decide who wins and who loses.
And whatever they conclude, it would be published.
It'd be public, it'd be completely transparent.
So right now those workers feel that people are getting
bonuses that they aren't.
So consequently there's an enormous rumor mill in the
federal government, it's like "Why did they get it
and I didn't" And even when people do get bonuses and it
is accurate, no one tells them why they got it and
they didn't.
If we're giving somebody 30% of their salary,
I think we ought to be willing to tell the
taxpayer, this is why.
If this person invents a cure for cancer that is
going to save millions of people,
or came up with a process that's going to allow us to
more quickly serve 3000 disabled veterans a year,
they deserve 30%, thank you very much.
And we ought to be proud to give it to them.
And we ought to be proud to defend that in any
congressional district in the land.
It's the transparency and the review that's got to
give credibility to it that can sustain it,
would be my opinion.
Which brings me to the final fill in.
You all have been very patient and I know those
seats aren't very comfortable having sat in
them myself.
The federal government does a pathetic job.
The defense department is the only one that spends any
money of note.
It's shameful.
Training is always the first thing to get cut from the
budget and it's the last thing to get put back.
I shutter to think how much productivity is lost and how
much our work suffers while people struggle to teach
themselves things that any other organization in the
world would train them on.
Performance management is a great example.
In a way training is the foundation on which all the
previous pre fillers that I've been discussing rest.
Because we can devise the greatest system in the
world, but if we don't train managers to manage in it,
and we don't train workers to work in it,
it will fail.
So how do invest in our workers to get the most back
from them?
Training should be both formal and ongoing.
It means taking courses at institutes.
It means funding education, continuing education and
college credits.
It means working a partnership with
universities across the lane.
It means dedicating a percentage of your budget to
actual training so that it gets done because right now
it is not occurring.
Let me also just end, obviously I'm here talking
to students, let me discuss very briefly because I know
the pain that you're going through under the PMF
program and applying for positions in the government.
I was in the job - well actually the President
called me, he said, "John I want you to make government
cool again."
I told him, "Mr. President
I just turned 50, you know by definition do
the opposite of what I say and you're closer to cool."
And so I've been wrestling with this how am I going to
make this cool again?
I was at a reception and this young man came up about
the age of many in this room and he started wagging his
finger at me saying, "I just had this injurious
experience with the inspector general,
it was a nightmare.
They gave me a stack of papers,
they put me in a windowless room,
it was horrible, I was not supported,
nobody, the next nearest person was....I stayed two
weeks and quit, got the heck out of there,
you need to fix this!"
And I said, "How would you like to fix this?"
And he said, "Well I'm still in school."
I said, "When do you get out?"
He said, "Six weeks."
I can wait six weeks.
So I hired this kid who just got his MBA from Stanford
and he just led a group of other students and brilliant
people from across the government and they have
submitted a reform initiative that is going to
totally overhaul our student program,
our student hiring program.
It's going to revitalize the Presidential Management
Fellowship, we're going to try to go from 400 a year to 2000.
We're going to try to increase the grade that
you'd be hired by.
We're going to try to relieve your debt burden
that many of you have had to assume to get through your
graduate educations and quite frankly,
your undergraduate educations and so we need to
be about creating clear pathways that make sense,
so that if you want a summer internship,
get on this path.
You want a job after getting a bachelor's degree,
you're on this path.
You got a graduate degree, line up here.
So we're going to try to sort of clear away the
clutter and make this as simple and as streamlined as
we can because we have got to bring you into this government.
Over a third of our government is eligible to
retire in the next ten years,
we've got to be able to replace it with the next
generation of the best and the brightest.
That is why I hope that we can achieve this,
and I'm anxious to get it achieved before Christmas.
We're also working to relieve the debt as we
mentioned that you all have been talking about and
building the Sarbanes Bill and the service requirement
to lower some of the timeframes.
Take legislation so it won't be done by Christmas,
but we're going to try and build as many incentives as
we can so that serving your nation isn't as much of a
burden as it otherwise could be.
So those are some of my initial thoughts.
At the core of this vision are principles that are
moral truths.
Applicants and employees should be judged on their
ability to do the job and nothing else.
Work of equal value should get equal reward no matter
who's doing it.
By breathing new life into these truths we breathe new
life into our government, our nation,
and the principles of America's family.
And even as our challenges evolve,
the charge to each generation remains constant,
so much so that we can find it in the annals of
classical history.
When the young of Ancient Athens became adults who
were inducted to full citizenship they swore out,
one that you walk by each day,
just as I did in 1980, an oath to transmit our nation,
not only, not less, but greater,
richer, and more abundant than it was given to us.
That is the task at hand.
Thank you, God Bless you.