As the Bush administration readies the nation for a long war against international terrorism, it must soon decide how to
build a federal workforce that can wage that war effectively
abroad and maintain essential programs at home. Virtually
every federal agency is having trouble recruiting and holding
talent, and almost all face a huge number of retirements over
the next few years. Despite this vulnerability, the
administration is divided between two visions of reform.
One vision of the future comes from Office of Management and Budget Director
Mitch Daniels, the former Reagan White House aide who sees a future in which
private contractors might replace hundreds of thousands of federal employees.
Daniels has already ordered agencies to put as many as 100,000 jobs up for
competition between federal workers and the private sector over the next two
years. And that is just the start. Daniels is said to favor competition of almost
half of the federal government’s 1.8 million nonmilitary jobs. If a federal job can
be found in the Yellow Pages, says Daniels, it should be competed.
Secretary of Defense Donald Rumsfeld sees a very different future. Rumsfeld believes that the answer to
the coming retirement wave is to create the kind of
jobs that will pull talented Americans toward
government careers. Convinced that it no longer
makes sense to move military officers every two years
and force them to retire just when they are hitting their
stride in their 40s or 50s, Rumsfeld and his
undersecretary for personnel and readiness, David
Chu, are ready to question the “up or out” system that
was invented after World War II to clear the armed services of its excess
generals and admirals. And convinced that the civilian personnel system does
more to protect poor performers than reward excellence, they are ready to
embrace radical reform of the civil service’s rules.
Rumsfeld has one advantage over Daniels in pursuing his vision of a 21st century workforce. Unlike the rest of government, his department has invested millions
studying what makes its employees tick. Drawing upon decades of research by
RAND, a nonpartisan think tank based in Santa Monica, Calif., and Washington,
the department has the data to support a new personnel system that would hire,
fire and promote based on what it would take to maintain the world’s strongest
defense. That investment is starting to pay off as the department prepares itself
for what will be a very long war.
Rumsfeld believes that the problem at the Defense Department is that good people are trapped in bad systems. Having split his career between the private
and public sectors, Rumsfeld also understands that both sectors have plenty of
poor performance. The secret to high performance is not scaring employees with
talk about the loss of jobs, but in building a personnel system that recruits,
promotes and rewards people on the basis of performance, not longevity.
Rumsfeld is not the only Cabinet officer who who believes in a strong career civil service and the need for deep reform in how government manages its human capital. Two of Rumsfeld’s Cabinet colleagues, Treasury Secretary Paul O’Neill and Secretary of State Colin Powell, are no more likely to contract out jobs based on a ready-fire-aim approach than is Rumsfeld. Like Rumsfeld, they are taking a critical look at reforms that will make government careers more
attractive to talented Americans, including the kind of radical flattening that the
President clearly favors. The Internal Revenue Service, which is part of the
Treasury Department, is already doing the tough planning required to reshape
the federal hierarchy, and Powell has made rebuilding the Foreign Service a top
Daniels and his colleagues at OMB have shown little interest in acknowledging
the poor performance of contractors in a host of recent government failures, most
notably in the airport security breakdowns of Sept. 11. Daniels would do well to
talk with Rumsfeld, O’Neill and Powell about what really needs to be done to
make federal jobs attractive to the best candidates.
The first step is to stop the random contracting out under way across
government. The second is to admit that government needs the kind of radical
reform that the new Office of Personnel Management director, Kay Coles James,
appears to be moving toward when she talks about doing away with the
antiquated classification system. “The work has changed and the worker has
changed,” she recently argued, “and we can’t continue paying people in
essentially the same way we did when the system was created in the 1940s.”
Government must also take aggressive action against its poor performers,
remove needless layers of both political and career management, address the
persistent pay gap between public and private jobs, and rethink the very nature
of government careers. It is time for this kind of comprehensive reform.