DOD presses for new personnel system

DOD's legislative proposal

Defense Department officials are pushing ahead with their proposal to overhaul the department's civilian personnel system — a proposal that has garnered praise and concern.

As part of a legislative package sent to Capitol Hill April 11, DOD proposed to transform how its civilian employees are hired, paid and managed. The existing system was "organized for a world that no longer exists," said David Chu, undersecretary of defense for personnel and readiness.

DOD plans to use the Homeland Security Department (DHS) as a template in creating a new National Security Personnel System, which will consolidate several pay and personnel systems, he said. DHS was granted broad personnel flexibilities but has only just begun to develop its departmentwide human resources system.

DOD, however, is off to a good start, Chu said. It wants to expand some programs it has successfully tested, such as pay banding, which gives managers more flexibility to set salaries, and alternative personnel systems.

DOD officials want to link pay to performance to ensure that top performers receive the bulk of the bonuses and that employees who don't perform do not receive an annual increase. They also want to make recruitment easier by, for example, hiring someone for a new duty without competition if an employee will receive the same salary.

DOD also wants to turn over jobs that are being performed by about 300,000 military personnel to its civilian workforce.

Managers cannot get the flexibility they need from the existing personnel system, Chu said April 22 at an event hosted by the IBM Corp. Endowment for the Business of Government. It's unclear how many of those jobs might be outsourced to a contractor.

Ultimately, DOD's goal is to have a single personnel system. Ginger Groeber, deputy undersecretary for civilian personnel policy at DOD, said that eventually the existing Defense Civilian Personnel Data System and the Defense Integrated Military Human Resources System, which is under development, "will meet as a single system."

It's clear that the existing civil service system is inflexible and outdated and needs to be changed, said John Palguta, vice president for policy and research at the Partnership for Public Service.

Would it be wise for DOD to first wait for governmentwide civil service reform to take hold? "I think given the number of exceptions that have already been granted to individual agencies, that's a moot question," Palguta said in an e-mail message. "More than half of all federal employees are currently exempt from some or all of the provisions of Title 5."

Still, a DOD employee thinks the department should work with the flexibilities it has under the Civil Service Reform Act of 1978 and learn how to use them properly. "That is, managers can assign, reassign, withhold step increases, take disciplinary action, rewrite position descriptions," DOD employee Robert Benson said in an e-mail message. "Only trouble is, it is not convenient. They need to document problems, consult with personnel specialists, follow a procedure and generally know about the tools they have."

"Although the plan looks good on paper, it plays poorly in reality," said another DOD employee who is participating in a pay demonstration project. It's too easy for local commands to abuse the system, said the employee who asked not to be named.

Ultimately, it is important to preserve "a common set of merit principles," Palguta said.

"Transformation of an organization like DOD takes an awful lot of pieces working together," said William Phillips, a partner responsible for IBM's Business Consulting Services Defense practice. "Good human capital solutions and good incentives," which the department is trying to address through this legislative package, are an essential piece, he said.

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What's in store

Highlights of the Defense Department's "Defense Transformation for the 21st Century Act" include:

* Establish minimum qualification requirements and standards for acquisition, technology and logistics positions, and designate career paths for them.

* Establish universal pay banding for five career groups and abolish the General Schedule.

* Bargain with employee unions at the national level instead of the local level.

* Offer voluntary separation incentive pay and early retirement.

* Hire Americans older than 55, who would maintain their retirement benefits.

* Hire experts for up to five years.

* Offer overseas pay and benefits for certain civilian employees working outside the country.

* Hire someone on the spot for hard-to-fill positions.

* Hire someone without competition if he or she is moving to another job that pays the same.