Create a Flexible and Responsive Hiring System

Create a Flexible and Responsive Hiring System

Background

The system through which applicants are considered for competitive
appointment to positions in the federal government is a merit system-
-candidates are selected based on their relative ability to perform the
job without regard to nonmerit factors, including political affiliation.
There are nine merit system principles, covering (1) recruitment to
achieve a work force from all segments of society, and selection and
advancement following fair and open competition; (2) employment without
regard to nonmerit factors; (3) equal pay for work of equal value; (4)
standards of conduct; (5) efficient and effective use of the federal
work force; (6) retention and separation based on performance; (7)
effective education and training; (8) protections against arbitrary
action and prohibition against interfering with an election; and (9)
protection against reprisal for disclosing violations or
mismanagement.(1)

The law also defines prohibited personnel practices, including
discrimination on the basis of nonmerit factors such as nepotism,
political affiliation, and marital status.(2) It stipulates that "the
head of each agency shall be responsible for the prevention of
prohibited personnel practices, for the compliance with and enforcement
of applicable civil service laws, rules and regulations, and other
aspects of personnel management."(3)

The first merit principle deals with recruitment and hiring. The merit
system requires that (1) individuals be qualified; (2) appropriate
sources be identified; (3) all segments of society be represented in
the work force; (4) selection and advancement be determined solely on
the basis of relative ability, knowledge, and skills; and (5) fair and
open competition be afforded to ensure that all receive equal
opportunity.(4)

The Merit Hiring System.

The competitive examining system for external candidates that has
developed around these requirements is controlled by the Office of
Personnel Management (OPM). Although OPM may delegate examining
authority to agencies, by law OPM must conduct examinations for
positions that are common to agencies. With OPM approval, agencies may
directly hire candidates in a limited number of occupations where
recruitment shortages have been identified--that is, where there is
potentially a job for every qualified applicant.

Throughout the year, OPM issues general notices or open announcements
soliciting applications for particular occupations for which it retains
examining authority. Managers wishing to fill vacancies from external
sources must ask the personnel office to submit to OPM a request for a
certificate of eligibles. Using an internal, unpublished rating scale,
OPM rates and ranks candidates, whose names are then forwarded to the
manager in ranked order. The actual list of candidates forwarded to the
manager may not represent the best candidates, as higher-ranking
individuals may have already been referred out to another agency. The
rules surrounding selections are exactly the same for both OPM-generated
certificates of eligibles and certificates issued by agencies with
delegated examining authority.  Although the certificate may contain
many names, the manager is bound by law to select one of the top three
available candidates, and may not pass over a veteran to select a
nonveteran unless a request to pass over the veteran for reasons of
qualifications or suitability is approved. Although authority to approve
requests to pass over veterans is delegated to agencies, OPM must rule
on requests to pass over veterans who are 30 percent or more compensably
disabled.  Managers may choose to interview all, some, or none of the
candidates, but in no case may they subject candidates to further
examination.  Certificates may be returned unused when managers
determine that candidates are unsatisfactory, which can result in
significant time delays in filling positions, as alternative methods
must then be considered. The General Accounting Office found in 1992
that managers returned 57 percent of certificates and chose to use
alternate means.(5)

Merit Promotion.

OPM rules that govern competition among internal candidates, commonly
termed merit promotion, are found in Federal Personnel Manual Chapter
335. Agencies typically construct internal rating and ranking procedures
in order to identify the best qualified.  Candidates are evaluated by
personnelists, a subject matter expert, or a panel of subject matter
experts, then either named to the selecting official as best qualified
or eliminated from further consideration for that vacancy based on a
cutoff score established by the evaluator(s). In most agencies, the
selecting official does not participate in the rating, ranking, and
referral process. Managers are free to select any candidate from among
those referred by the panel.

In 1989, in connection with a study to explore OPM's simplification
initiatives, the Merit Systems Protection Board (MSPB) concluded that:

[T]he OPM initiatives which agencies thought were the most effective
were those which the agencies felt would assist in the hiring of
high-quality employees and those that expedited the hiring process.
Clearly, the provision of prompt recruitment and placement services to
operating officials is a priority in agencies' personnel programs.(6)

Can today's civil service hiring system meet the needs of federal
managers for the 21st century? Most would maintain that the system
cannot even meet current needs, and that reinvention is already long
overdue, for the reasons summarized below.

Need for Change

The need for change is well documented. When describing the federal
hiring system in 1988, OPM Director Constance Horner noted, "The current
system is slow; it is legally trammelled and intellectually confused; it
is impossible to explain to potential candidates. It is almost certainly
not fulfilling the spirit of our mandate to hire the most meritorious
candidates."(7) In that same year, the Hudson Institute's Civil Service
2000 predicted that

. . . hiring and retention [will become] much more competitive in the
years ahead. Because these tight labor markets are likely to develop in
different ways in different states and to shift quickly in response to
economic and population changes, it is essential to decentralize
responsibility and to provide more flexibility in hiring and personnel
management than is characteristic of the current system.(8)

Dwindling resources, shifting markets, and emerging technologies
compound the need to ensure that every single employee becomes a vital
partner in mission attainment and program delivery. Thus, identifying
the impediments to carrying out an effective hiring program and
exploring the extent to which these impediments can be alleviated become
an absolute business necessity to ensure an organization's survival.

The problems with the hiring system fall into the following major
categories:

Lack of Accountability.

The single greatest failing of the hiring system is lack of managerial
involvement in the front-end recruitment and evaluation of candidates
for employment--in other words, lack of accountability.  Managers who do
attempt to participate in the external recruitment process in most cases
must send potential applicants to OPM or to delegated examining units to
be examined, in striking contrast with the ability of private industry
recruiters to make immediate offers of employment to qualified
candidates and to establish closer ties to professional and community
recruitment sources. Managers must wait to receive candidates who have
been rated and ranked by OPM or delegated examining units, and are
required by law to choose from among the top three available candidates.
When considering internal candidates, they make selections from among
candidates who have been determined by others to be the best qualified.
Managers are then able to blame the system for undesirable outcomes,
such as perceived inequity or underrepresentation, if they have followed
all of the rules.

Failure to Meet Customer Needs.

In 1989, the National Commission on the Public Service observed that,
"Even when the public sector finds outstanding candidates, the
complexity of the hiring process often drives all but the most dedicated
away."(9) In 1990, MSPB observed that, "Potential applicants are
frequently discouraged by the confusion they experience when trying to
get a job with the federal government."(10) The system is time consuming
and unresponsive; despite improvements in the automated delivery of
examining services, the best candidates frequently go elsewhere before
federal managers are able to make firm offers of employment. The fact
that managers are forced to send some potential applicants to OPM to be
examined is of particular concern at remote field locations where access
to OPM services is necessarily limited.  The issue is not merely
convenience; more importantly, the public's perception of the federal
government as a responsive employer suffers tremendously when agency
managers are forced to send applicants to OPM for examination, with no
guarantee they will ever be within reach for positions at that agency on
a centralized register. In 1989, the National Commission on the Public
Service found that:

Government faces an enormous challenge in recruiting America's top
college graduates. On the one hand, outstanding graduates doubt that the
public sector can fulfill their dreams of meaningful, challenging
careers. On the other hand, they find that the complexity of entry makes
public sector jobs among the toughest to get.(11)

Restricted Competition.

Qualified candidates are automatically eliminated from managers'
consideration based on narrow point score distinctions reflecting only
some of the attributes of individual candidates. The system undermines
recruitment initiatives as managers recruit candidates who may not be
within reach on certificates of eligibles, and are therefore unavailable
for selection. Overly restrictive qualification standards and
time-in-grade requirements can eliminate candidates who are in fact able
to perform the duties of the position. When centralized OPM registers
are filled and examinations are closed, candidates are prevented from
applying for position vacancies.  Temporary employees as a rule may not
apply to be considered for vacancies being filled under internal (merit
promotion) procedures.  Thus, the open competition required by the merit
system principles becomes subject to arbitrary limitations. Obtaining
excellence is more a matter of luck and persistence than design.

Complexity.

The system is so complex and rule-bound that managers are unable to
explain to applicants how to get a federal job. Staffing law,
regulations, and Federal Personnel Manual guidance comprise hundreds of
pages, to which departments and agencies add their own interpretive
guidance and implementing directives. The system is overly constrained
by statute and regulation; over 300 appointing authorities provide
little useful management information and require interpretation by
personnel specialists.

This complexity has evolved over time as particular statutes,
regulations, and related guidance were developed and implemented to
address specific situations or perceptions of mismanagement.  For
example, the law requires that temporary assignments to other positions
(details) be made in 120-day increments(12) as a means to control the
internal movement of employees. However, the centralized and highly
controlled systems designed to ensure the equitable delivery of
examining services in fact serve to prevent managers and applicants from
either understanding or making full use of available options. In 1993,
the National Research Council concluded, "The federal civil service
system, with its strong emphasis on internal equity, has long hampered
the government's abilities to compete for scarce talent in the labor
market and to reward exceptional individual performance."(13)

The Ideal System.

An ideal hiring system would enable managers to hire, develop, and
retain a quality, diverse, productive, and ethical workforce in
constantly changing labor markets; empower managers to balance the
competing demands of multiple stakeholders; and hold managers
accountable for adherence to principles of merit and equal opportunity
through a performance-based assessment of staffing outcomes. The ideal
system would be decentralized to create a link between an agency's
recruitment efforts and those candidates who are actually hired.

A decentralized system would permit agencies to establish their own
priorities for agency-based recruitment initiatives.  Tailored
approaches designed to tap into local labor markets could provide
managers with expanded opportunities to increase the diversity of the
candidate pool. Flexible and responsive agency-based systems would
permit managers to adapt to fluctuations in the labor market. Federal
recruiters would be empowered to compete with private sector recruiters.
A significantly enhanced, automated employment information system could
immediately link candidates with nationwide, or communitywide, job
opportunities by occupational specialization.  Freed from constraining
layers of mind-numbing regulations, personnel specialists would be able
to become partners with management in the development of staffing
initiatives to support overall strategic planning objectives.

Experience has shown that such a system can be successful. In July 1990,
a formal demonstration project to test an alternative staffing system
was implemented within the Department of Agriculture (USDA) at
approximately 140 experimental and 80 comparison locations nationwide
within the Forest Service and the Agricultural Research Service. The
project's key initiatives include a streamlined, agency-based
recruitment and hiring system that completely replaces the OPM register
process; recruitment incentives; and an extended probationary period for
research scientists. In connection with its ongoing responsibility to
conduct a formal evaluation of project impact and implementation, the
Pennsylvania State University reported that "the demonstration
initiatives are widely seen as providing a flexible and responsive set
of recruitment and selection procedures that are preferable to
pre-existing procedures (e.g., central registers). The reported benefits
from the demonstration project include increased access to the local
labor market, greater control over the hiring process, and increased
likelihood of quality candidates in the candidate pool, among
others."(14) The evaluators proceed to describe "a possible
unanticipated benefit associated with increased recruitment of labor
from local labor markets . . . the sense that public perceptions of the
agency as an employer and community member have [improved]."(15)

The emphasis on merit that characterizes the actions that follow is
designed to ensure that the professional career service remains free
from political influence and that human resource management is based on
and embodies the merit system principles.


Cross References to Other NPR Accompanying Reports

Department of Justice, DOJ12: Streamline Background Investigations for
Federal Employees.

Department of the Treasury/Resolution Trust Corporation, TRE13:
Streamline Background Investigations for Federal Employees.

Improving Financial Management, FM06: "Franchise" Internal Services.

Endnotes

1. Title 5, United States Code, Government Organization and Employees
(April 1993), sec. 2301.

2. Title 5, United States Code, sec. 2302.

3. Title 5, United States Code, sec. 2302(c).

4. Title 5, United States Code, sec. 2301(b)(1).

5. U.S. General Accounting Office, Does Veterans' Preference Need
Updating?, GAO/GGD-92-52 (Washington, D.C.: U.S. General Accounting
Office, March 1992), p. 27.

6. U.S. Merit Systems Protection Board, Delegation and Decentralization:
Personnel Management Simplification Efforts in the Federal Government
(Washington, D.C., October 1989), p. 18.

7. Horner, Constance, quoted in Leadership for America (Washington,
D.C.: National Commission on the Public Service, 1989), p. 29.

8. Hudson Institute, Civil Service 2000 (Washington, D.C., June 1988),
p. 27.

9. Leadership for America, p. 28.

10. U.S. Merit Systems Protection Board, Attracting and Selecting
Quality Applicants for Federal Employment (Washington, D.C., April
1990), p. 1.

11. Leadership for America, p. 26.

12. Title 5, United States Code, sec. 3341.

13. National Research Council, Improving the Recruitment, Retention, and
Utilization of Federal Scientists and Engineers (Washington, D.C.:
National Academy Press, 1993), p. 37.

14. The Pennsylvania State University, U.S. Department of Agriculture
Personnel Management Demonstration Project Second Annual Evaluation
Report (The Pennsylvania State University, April 1993), p. vii.

15. Ibid., p. 12.