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The cost of ignoring reform

Apr. 10, 2014 - 06:00AM   |  
By HOWARD RISHER   |   Comments
Howard Risher is a consultant and writer on federal pay and performance issues. He was the managing consultant for the studies leading to the 1990 Federal Employees Pay Comparability Act and is the author of 'Planning Wage and Salary Programs.'
Howard Risher is a consultant and writer on federal pay and performance issues. He was the managing consultant for the studies leading to the 1990 Federal Employees Pay Comparability Act and is the author of 'Planning Wage and Salary Programs.' (File)

The report, The New Civil Service Framework, developed jointly by the Partnership for Public Service and Booz Allen Hamilton, focuses on “helping our federal government recruit, hire, develop, retain and reward our nation’s top talent.” That would lead readers to see the report and recommendations as human capital concerns. What is not emphasized is that if the civil service system remains sacrosanct, the capabilities of the workforce can be expected to deteriorate and government performance will decline.

The report mentions the demographics of the workforce only in passing, but the ability of government to replace lost talent is fundamentally important to the future. The brand of government as an employer has been badly damaged by sequestration and political infighting. Noncompetitive starting pay is a core issue, but employee surveys show the work experience is less and less satisfactory. That raises serious questions about government’s ability to recruit, hire and retain young, top talent.

On a related point, the report does not say this, but all the evidence points to an important fact – the civil service system, as it currently operates, is antithetical to the creation of a high performance work environment. It was not designed or intended to operate that way, but it has devolved into that over time. Simply stated, the typical agency does not have the flexibility to redefine the way work is organized and managed. The system is the problem. All of my experience convinces me that government will be unable to raise performance levels as long as current system governs the way workers are managed.

From that perspective, the logical conclusion is that agencies will not simply find it difficult to sustain performance levels, they will be unable to prevent performance from declining. Consequently the performance of government will decline over time.

The recommended changes are consistent with the ‘best practices’ highlighted in numerous books and articles. As at least one or two critics have commented, the recommendations are not new. All of the ideas have been proven in other work settings. Nothing is radical or even leading edge.

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Actually allowing the civil service system to continue unchanged is the most costly alternative. There is extensive research confirming a key point – an employee’s emotional commitment or engagement is an important determinant of his or her work efforts. Research by Gallup and many others shows that the way work and workers are managed contributes to significant differences in their performance.

Employee surveys show a steady decline in morale. All of the statements and actions over the past few months suggest employee work experience is unlikely to improve in the foreseeable future. Consequently dissatisfaction levels will remain high, resulting in the diminished commitment of employees and their performance.

Yes, rethinking the civil service system will require an upfront investment, but it should actually save money over time through increased productivity and reduced administrative costs.

It will also be unsettling for employees; they will not know for sure for more than a year how it will affect their jobs and careers. However, the true high performers should see the changes as far more attractive. There will be some who decide to retire or resign. Yes, there will be consulting opportunities but the scope of the assistance should not be even close to the ‘hundreds of millions’ in one critic’s statement. The ‘numbers crunching’ for a new pay system can be accomplished at minimal cost – far less than the millions the current BLS surveys cost.

Yes, some salaries will be adjusted upward to market levels. Actually, it seems no one is opposed to paying market salaries. The conservative think tanks have thus far not commented on the recommendations but they argued for a market-based system months ago.

The report argues for ‘investing in leadership’ but is essentially silent on the political reality of raising SES pay levels. As long as there is a ceiling on senior executive salaries, there will not be a reallocation of “salary dollars from rank-and-file, frontline employees to managers.” That is not necessary to implement the recommendations.

As it is, with below-market salaries for key occupations, the current system necessitates continued reliance on contract personnel – sometimes at significantly higher compensation levels. As long as the civil service system is unchanged, that added cost is unavoidable. At this point there is no way to determine the added cost but it no doubt could be in the ‘hundreds of millions’. Selectively raising the salaries for high demand occupations could actually save money by reducing reliance on contractors.

In the end, ignoring the problems attributable to the civil service system is not a viable long term answer. The changes are not a Booz Allen or a Partnership solution. The ideas have been tested and proven in numerous organizations. The mistakes made in planning and implementing the National Security Personnel System can be avoided. At some point government is going to be forced to move in a different direction.

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