Intel employees first to test performance pay system at Homeland Security

Homeland Security’s latest revision of its personnel system, expected to be formally announced Feb. 27, represents a significant shrinking of the Bush administration’s ambitions to reorganize the federal civil service as a work force where promotions and raises are based on performance instead of regular step and grade increases.
Pay for performance is a major part of Homeland Security’s proposed new personnel system, originally called MaxHR. Besides making it easier to promote and reward good workers, MaxHR was meant to give managers more power to punish poor performers and bypass union negotiations to introduce new technology or move employees around to meet urgent needs.

Homeland Security originally planned to move the first wave of employees - from the department’s headquarters, Federal Law Enforcement Training Center, and the information analysis and infrastructure protection, science and technology, and emergency preparedness and response directorates — to pay for performance in early 2006. Secret Service and Coast Guard employees were scheduled to follow in early 2007; and Customs and Border Protection, Immigration and Customs Enforcement and Citizenship and Immigration Services were to transfer in early 2008. Employees at the Transportation Security Administration and Federal Emergency Management Agency have always been exempted from MaxHR.
But court challenges of the personnel reform plans waged by unions resulted in a major defeat for Homeland Security. A federal judge ruled in August 2005 that the department must rewrite parts of MaxHR in order to protect employees’ collective bargaining rights, delaying deployment of the system. And Congress has systematically stripped funding from the program over the years.
Now, only 14,000 non-bargaining unit employees, supervisors and managers out of the 110,000 employees originally intended for MaxHR are under the new performance management system, which the department considers the foundation of pay for performance.
Some or all of Homeland Security’s 475 intelligence employees will start operating under pay for performance sometime in fiscal 2008, spokesman Larry Orluskie said. Homeland Security wants to transition more employees if the pilot program proves successful, he said. Eventually, the department aims to bring all of its employees under pay for performance.
Unions hailed news of the rollback. National Treasury Employees Union president Colleen Kelley said Feb. 26 she is glad it is limited to a pilot program. Kelley said Homeland Security instead should focus on correcting problems such as inadequate training, staffing and resources that have left the department with some of the worst morale problems in government.
Kelley said that chief human capital officer Marta Brito Perez’s decision to abandon the personnel system’s name is "recognition that everyone associates MaxHR with failure."
Orluskie said Perez plans to add more goals to the personnel reform plan that will address the department’s morale problems, as revealed by the Office of Personnel Management’s latest federal employee satisfaction survey. Perez wants the department to focus on:

• Hiring and retaining a talented and diverse work force.
• Creating a departmentwide culture of performance.
• Creating high-quality learning and development programs.
• Creating a system to develop new leaders.
• Becoming a model of human capital excellence.

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