The proposals which have been developed for submission to the President
and Congress in a reorganization plan and a major legislative submission
early in 1978 are outlined in an attachment (Tab 1). The principal
recommendations are designed:
—to give Cabinet Members and their top managers substantially enlarged
authority over agency personnel;
—to replace the Civil Service Commission with an Office of Personnel
Management to set personnel policy and a Merit Systems Protection Board
to handle appeals and enforcement.
—to decentralize to the departments and agencies many of the regulatory
responsibilities acquired by the Civil Service Commission; and
—to place new emphasis (through incentive bonus payments) on
productivity.
The impact of the proposals on the Department of State would be limited,
of course, to our 3100 Civil Service employees (1900 officers and 1200
staff). The other two-thirds of our work force which operates
[Page 599]
under the Foreign Service
Act3 is
expected to be exempted by the President as will other “excepted
services.”
The changes to be recommended are constructive and much needed, and we
have only minor amendments to suggest. Campbell and his colleagues have offered to brief either
or both of you next week directly if you wish, and there may also be an
early Cabinet meeting discussion of the package, which gets to the
President late this month.4
Tab 1
Paper Prepared in the Department of State5
Washington, undated
Reorganization of the Federal Personnel
Systems
1. Creating A Senior Executive Service
—Establish a Senior Executive Service of about 9000 persons whose
duties are managerial in nature, and would include not more than
1570 persons appointed on a non-career basis.
—The Senior Executive Service would replace GS–16, 17, and 18 and Executive Level V (except for
Presidential appointees)
—Establish a parallel Career Senior Professional Service for
non-managerial personnel. (scientists, engineers, attorneys and
individual specialists.)
—Authorize agency heads to transfer senior executives among
positions; set their salaries within a range established by law; pay
annual incentive bonuses not to exceed 20% of salary) and provide
education and training, including sabbaticals.
—Authorize agency heads to remove individuals from the Senior
Executive Service without rights of appeal.
—Authorize the central personnel agency, in consultation with OMB, to allocate the number of senior
executive positions and to establish the proportion which may be
filled on a non-career basis.
—Expected benefits from these proposals include a highly competent,
responsive managerial leadership with limited tenure rights and high
rewards.
[Page 600]
2. Restoring Managerial Authority
—Authorize annual bonuses of up to 15% of salary for unusually
productive employees GS–9 to GS–15. Bonuses to be financed by
reducing the amount and frequency of automatic step increases.
—Authorize removal of non-performing employees through a 90-day
simplified system. Appeals would be limited to grounds of
substantial procedural error.
—Repeal present performance rating system and require agencies to
install their own systems.
—Grant preference in Reduction in Force to those who have received
bonuses or incentive awards.
—OMB and CSC to develop alternative measures to the multiple
staffing controls now in use.
—Expected benefits from these proposals include strengthening of
managers capacity to motivate and direct employees, and reduction in
burden and expense of multiple control systems.
3. Choosing and Developing Career
Employees
—Amend Veterans Preference Act6 to:
—retain preference for veterans with 30% disability (rather than
the current 10%)
—remove “Rule of Three” which limits selecting officer to three
names.
—allow veterans to be passed over.
—limit use of veterans preference to 10 years
—eliminate veterans preference in reduction-in-force
—eliminate preference for those who have retired from the
military services.
—Authorize delegation of examining authority to agency heads under
performance contracts.
—CSC to repeal current detailed
promotion plan requirements and allow agencies to design their own
systems under general standards.
—Expected benefits of these proposals include improving the quality
of the examining process and quality of new hires and reducing the
adverse impact of the present system on women.
4. Redesigning Compensation Systems
—Convert about 740,000 clerical and administrative positions to a
wage system based on local rates.
—Redefine Federal salary comparability on a total compensation basis
to include the value of fringe benefits.
[Page 601]
—Reduce the frequency and amount of periodic step increases for
middle level (GS–9 through GS–15) employees. Use these savings to
provide funds for incentive bonuses and advanced training.
Expected benefits from these proposals include rewarding performance
rather than length of service; making government more competitive in
high cost areas and reducing criticism of excessive Federal salaries
in certain geographic areas.
5. Ensuring Affirmative Action
—Transfer EEO complaints to a Merit
Systems Protection Board. Authorize EEOC to issue orders against Civil Service regulations
and selection procedures.
—Define aged and handicapped as protected classes underTitle
VII.7
—Conform the EEO complaint process
to general appeal and arbitration system.
Expected benefits from these proposals include more rapid
discrimination complaint decisions, increase employees confidence
and assure linkage between public and private sector policies.
6. Replacing the Civil Service Commission with
an Office of Personnel Management
—Abolish the Civil Service Commission
—Create an Office of Personnel Management
Expected benefits from these proposals include an increase in public
confidence, employee confidence that their rights are fairly
protected, and a positive personnel program with emphasis on
productivity and responsiveness.
7. Decentralizing Personnel Management
—Central personnel agency to delegate up to 63 of 78 present
authorities to agencies.
—Central personnel agency to contract with agencies specifying the
expected standard of performance.
Expected benefits from these proposals include elimination of
unnecessary paperwork; reduction in time required to obtain
decisions; personal [personnel] decisions
made by manager close to the issue.
8. Protecting Merit Systems and Employee
Rights
—Transfer adjudicatory functions of Civil Service Commission, Federal
Employee Appeals Authority and Appeals Review Board to an
independent Merit Systems Protection Board.
[Page 602]
—Have Merit Systems Protection Board handle all types of employee
appeals except Fair Labor Standards and Classification appeals.
—Permit use of arbitration instead of a hearing at request of
employee.
—Direct Merit Systems Protection Board to investigate violations of
merit in agencies.
Expected benefits would be a consolidated, single level appeal system
which is speedy, economical to operate, and fair to both managers
and employees.
9. Establishing a Permanent Framework for
Federal Labor Relations
—Establish a neutral Federal Labor Relations Board
—Create a Joint Consultation Council including both union and agency
representatives.
—Recommend no bargaining on economic issues, no right to strike and
no expansion of scope of grievance procedures.
Expected benefits are a permanent system for Labor relations; a
neutral board overseeing this area, and allows Office of Personnel
Management to concentrate on management efforts.
10. Improving Intergovernmental Programs
—Consolidate the various merit system requirements applicable to
state and local governments into a single set of standards.
—Provide for an experimental 3 year program of general management
improvements grants.
Expected benefits include simplifying problems of state and local
governments, avoiding policy conflicts among Federal agencies, and
leading to better personnel administration.
