Posthearing Questions Related to Proposed Department of Homeland Security (DHS) Human Capital Regulations
Gao ID: GAO-04-570R March 22, 2004GAO testified before Congress and answered posthearing questions regarding "The Key to Homeland Security: The New Human Resources System."
We have proposed an initial list of safeguards for the personnel system at the Department of Defense based on our extensive body of work looking at the performance management practices used by leading public sector organizations both in the United States and in other countries, as well as our own experiences at GAO in implementing a modern performance management system. These safeguards include: (1) assuring that the agency's performance management systems link to the agency's strategic plan, related goals, and desired outcomes, and result in meaningful distinctions in individual employee performance; (2) involving employees, their representatives, and other stakeholders in the design of the system, including having employees directly involved in validating any related competencies, as appropriate; (3) assuring that certain predecisional internal safeguards exist to help achieve the consistency, equity, nondiscrimination, and nonpoliticization of the performance management process; and (4) assuring reasonable transparency and appropriate accountability mechanisms in connection with the results of the performance management process. Leading organizations involve employees and unions in major changes such as redesigning work processes, changing work rules, or developing new job descriptions. Such involvement can avoid misunderstandings, speed implementation, and more expeditiously resolve problems that occur. We noted that DHS employees suggested having informal mechanisms in place to resolve issues before escalating them to the formal process. However we do not have a specific percentage to recommend for this provision. We have found that a key practice for successful transformations is to set implementation goals and establish a timeline to build momentum and show progress from day one. A transformation, such as the one being undertaken by DHS, is a substantial commitment that could take years before it is completed, and therefore must be carefully and closely managed. As a result, it is essential to establish and track implementation goals and establish a timeline to pinpoint performance shortfalls and gaps so that midcourse corrections can be made. We raised independence concerns about a separate panel to be created to hear appeals for mandatory removal offenses. Members of that panel are appointed by the DHS Secretary for three-year terms and may be removed by the Secretary "only for inefficiency, neglect of duty, or malfeasance." These appointment and removal procedures are identical to the appointment and removal provisions for the members of the proposed DHS Labor Relations Board.
GAO-04-570R, Posthearing Questions Related to Proposed Department of Homeland Security (DHS) Human Capital Regulations
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March 22, 2004:
The Honorable George V. Voinovich:
Chairman:
The Honorable Richard Durbin:
Ranking Minority Member:
Subcommittee on Oversight of Government Management, the Federal
Workforce, and the District of Columbia:
Committee on Governmental Affairs:
United States Senate:
The Honorable Jo Ann Davis:
Chairwoman:
The Honorable Danny Davis:
Ranking Minority Member:
Subcommittee on Civil Service and Agency Organization:
Committee on Government Reform:
United States House of Representatives:
Subject: Posthearing Questions Related to Proposed Department of
Homeland Security (DHS) Human Capital Regulations:
On February 25, 2004, I testified before your subcommittees at a
hearing entitled "The Key to Homeland Security: The New Human Resources
System."[Footnote 1] This letter responds to your request that I
provide answers to posthearing questions. The questions and responses
follow.
1. In your testimony, you indicated that there were safeguards
recommended for the personnel system at the Department of Defense that
were not included in the Homeland Security Act. What safeguards do you
think should be included in the regulations for the DHS personnel
system that are not included currently?
We have proposed an initial list of safeguards based on our extensive
body of work looking at the performance management practices used by
leading public sector organizations both in the United States and in
other countries, as well as our own experiences at GAO in implementing
a modern performance management system. These safeguards include:
* Assure that the agency's performance management systems (1) link to
the agency's strategic plan, related goals, and desired outcomes, and
(2) result in meaningful distinctions in individual employee
performance. This should include consideration of critical competencies
and achievement of concrete results. As I noted in my testimony, DHS
plans to align individual performance management with organizational
goals.
* Involve employees, their representatives, and other stakeholders in
the design of the system, including having employees directly involved
in validating any related competencies, as appropriate. In September
2003 we reported that DHS's personnel system design effort provided for
collaboration and employee participation.[Footnote 2] Employees were
provided multiple opportunities to be included in the design process,
including participation in the Core Design Team, the Town Hall
meetings, the field team, the focus groups, an e-mail mailbox for
employee comments, and now through the public comment period on the
proposed system.
* Assure that certain predecisional internal safeguards exist to help
achieve the consistency, equity, nondiscrimination, and
nonpoliticization of the performance management process (e.g.,
independent reasonableness reviews by Human Capital Offices and/or
Offices of Opportunity and Inclusiveness or their equivalent in
connection with the establishment and implementation of a performance
appraisal system, as well as reviews of performance rating decisions,
pay determinations, and promotion actions before they are finalized to
ensure that they are merit-based; internal grievance processes to
address employee complaints; and pay panels whose membership is
predominately made up of career officials who would consider the
results of the performance appraisal process and other information in
connection with final pay decisions). DHS is proposing Performance
Review Boards (PRBs) to review ratings in order to promote consistency
and provide general oversight of the performance management system to
ensure it is administered in a fair, credible, and transparent manner.
While much remains to be determined about how the DHS PRBs will
operate, we believe that the effective implementation of such a board
is important to assuring that predecisional internal safeguards exist
to help achieve consistency and equity, and assure nondiscrimination
and nonpolitization of the performance management process.
* Assure reasonable transparency and appropriate accountability
mechanisms in connection with the results of the performance management
process. This can include reporting periodically on internal
assessments and employee survey results relating to the performance
management system and publishing overall results of performance
management and individual pay decisions while protecting individual
confidentiality. Publishing the results in a manner that protects
individual confidentiality can provide employees with the information
they need to better understand the performance management system. As we
recently reported, several of OPM's personnel demonstration projects
publish information for employees on internal Web sites about the
results of performance appraisal and pay decisions, such as the average
performance rating, the average pay increase, and the average award for
the organization and for each individual unit.[Footnote 3]
There are also important safeguards in areas other than performance
management. For example, I noted in my testimony that, as an additional
safeguard, DHS should consider identifying mandatory removal offenses
in regulations as a means to ensure appropriate due process. I also
believe that the independence of the panel to hear appeals of
violations of the mandatory removal offenses could be strengthened. As
we note in the response to question 4 below, the independence of the
DHS labor relations board deserves serious consideration.
2. The regulations don't allow collective bargaining on matters that do
not "significantly affect a substantial portion of the bargaining
unit." What do you think would be a reasonable percentage or number to
be considered a "substantial portion?":
As I noted in my testimony, leading organizations involve employees and
unions in major changes such as redesigning work processes, changing
work rules, or developing new job descriptions. Such involvement can
avoid misunderstandings, speed implementation, and more expeditiously
resolve problems that occur. I also noted that DHS employees suggested
having informal mechanisms in place to resolve issues before escalating
them to the formal process. However we do not have a specific
percentage to recommend for this provision.
3. In your testimony you stated concern for the Department of Defense's
intention to implement a personnel system by the Fall of 2004. What do
you believe would be an appropriate implementation timetable for the
Department of Homeland Security?
We have found that a key practice for successful transformations is to
set implementation goals and establish a timeline to build momentum and
show progress from day one.[Footnote 4] A transformation, such as the
one being undertaken by DHS, is a substantial commitment that could
take years before it is completed, and therefore must be carefully and
closely managed. As a result, it is essential to establish and track
implementation goals and establish a timeline to pinpoint performance
shortfalls and gaps so that midcourse corrections can be made.
According to DHS's proposed regulations, the labor relations, adverse
actions, and appeals provisions will be effective 30 days after
issuance of the interim final regulations later this year. DHS plans to
implement the job evaluation, pay, and performance management system in
phases to allow time for final design, training, and careful
implementation. Although we do not recommend a specific implementation
timetable for DHS, we strongly support a phased approach to
implementing major management reforms. A phased implementation approach
recognizes that different organizations will have different levels of
readiness and different capabilities to implement new authorities.
Moreover, a phased approach allows for learning so that appropriate
adjustments and midcourse corrections can be made before the
regulations are fully implemented organizationwide. However, it is
important to note that the proposed regulations do not apply to nearly
half of all DHS civilian employees, including more than 50,000
screeners in the Transportation Security Administration (TSA). Based on
the department's progress in implementing the system and any
appropriate modifications made based on their experience, DHS should
consider moving all of its employees under the new human capital
system.
4. Would you characterize the proposed Labor Relations Board in these
regulations as "independent"?
I did not directly comment on this matter in my statement. However, in
my statement I did raise independence concerns about a separate panel
to be created to hear appeals for mandatory removal offenses. Members
of that panel are appointed by the DHS Secretary for three-year terms
and may be removed by the Secretary "only for inefficiency, neglect of
duty, or malfeasance." These appointment and removal procedures are
identical to the appointment and removal provisions for the members of
the proposed DHS Labor Relations Board. As I noted in my statement with
regard to the mandatory removal offense panel, removal of the panel
members by the Secretary may potentially compromise the real or
perceived independence of the panel's decisions. We suggested, as an
alternative, that the Department should consider having members of the
panel removed only by a majority decision of the panel. We also said
that DHS might wish to consider staggering the terms of the members to
ensure a degree of continuity on the board. Such changes might also
strengthen the independence of the Labor Relations Board.
We are sending copies of this report to the Chair and Ranking Minority
Member, Senate Committee on Governmental Affairs; the Chairman and
Ranking Minority Member, House Committee on Government Reform; the
Chairman and Ranking Minority Member, House Select Committee on
Homeland Security; and other interested congressional parties. We will
also send copies to the Secretary of the Department of Homeland
Security and the Director of the Office of Personnel Management. Copies
will be made available at no charge on the GAO Web site at http://
www.gao.gov. For additional information on our work on federal agency
transformation efforts and strategic human capital management, please
contact me on (202) 512-5500 or J. Christopher Mihm, Managing Director,
Strategic Issues, on (202) 512-6806 or at mihmj@gao.gov.
Sincerely,
Signed by:
David M. Walker:
Comptroller General:
of the United States:
(450312):
FOOTNOTES
[1] U.S. General Accounting Office, Human Capital: Preliminary
Observations on Proposed DHS Human Capital Regulations, GAO-04-479T
(Washington, D.C.: Feb, 25, 2004).
[2] U.S. General Accounting Office, Human Capital: DHS Personnel System
Design Effort Provides for Collaboration and Employee Participation,
GAO-03-1099 (Washington, D.C.: Sept. 30, 2003).
[3] U.S. General Accounting Office, Human Capital: Implementing Pay for
Performance at Selected Personnel Demonstration Projects, GAO-04-83
(Washington, D.C.: Jan. 23, 2004).
[4] U.S. General Accounting Office, Results-Oriented Cultures:
Implementation Steps to Assist Mergers and Organizational
Transformations, GAO-03-669 (Washington, D.C.: July 2, 2003).
