CONGRESSIONAL HEARING ON THE SENIOR EXECUTIVE SERVICE

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP86B00338R000400490001-6
• Release Decision: RIPPUB
• Original Classification: K
• Document Page Count: 20
• Document Creation Date: December 21, 2016
• Document Release Date: September 8, 2008
• Sequence Number: 1
• Publication Date: November 7, 1983
• Content Type: MEMO

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OLL 83-1979/2
7 November 1983
MEMORANDUM FOR: Deputy Director of Personnel
FROM: STAT
Liaison Division
Legislative Liaison
SUBJECT: Congressional Hearing on the
Senior Executive Service
REFERENCE: Memorandum for DDA from Clair E. George,
OLL 83-1979/1 dated 26 August 1983,
Subject: Civil Service Reform Act of 1978
SUMMARY: The House Committee on Post Office and Civil
Service, Subcommittee on Civil Service, conducted a hearing
on the Senior Executive Service (SES) on 7 November 1983.
Attached for your information are the Witness List, opening
statement of the Subcommittee Chairwoman--Ms. Patricia
Schroeder (D., CO)--and the statement of the Comptroller
General of the United States, Mr. Charles A. Bowsher. Also
attached for your information is the gist of a fifteen-
minute question-and-answer period between the Chairwoman and
Mr. Bowsher. Actual testimony did not differ from the
attached statements. Ms. Schroeder was the only Subcommit-
tee Member present.
2. As indicated in the Chairwoman's opening statement,
the 7 November 1983 hearing is the first of several that
will be held in the process of reviewing the Civil Service
Reform Act of 1978. This office will continue to monitor
these hearings and report on them as appropriate.
3.. My sense of the give-and-take between Ms. Schroeder
and Mr. Bowsher is that two current SES practices will be
subjected to further and closer scrutiny by this
Subcommittee:
--the unlimited accumulation of annual leave; and
--the statutory limitation of 20% of the SES popula-
tion eligible for bonus payment each year.
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On the first issue, Mr. Bowsher characterized the accumula-
tion.of annual leave as a "ticking time bomb" that will one
day embarrass the Congress. On the second issue, he charac-
terized the 20% bonus limitation as perhaps the weakest
feature or severest limitation of the law. He recommended a
50% limit as originally enacted.
4. I encourage your study of the attached. I will
continue to monitor this issue and report as appropriate.
Attachments
As stated
Distribution:
Original - Addressee w/atts
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1 - DDA w/atts
1 - DD/Pers/SP w/atts STAT
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1 0T. T. Chrono w/o atts
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Subject w/atts STAT
Chrono w/o atts
STAT
LD/OLLJ I(9 November 1983)
STAT
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2 6 AUG ?9'83
OLL 83-1979/1
MEMORANDUM FOR: Deputy Director for Administration
'Director, Office of Legislative Liaison
SUBJECT: Civil Service Reform Act of.1978
REFERENCE: '. Your Memo of 19 August.1983, Same Subject
Clair E.-.George
1.' I couldn't agree more with your suggestion that we.
start looking at the Civil Service Reform Act of 1978.now,
with a view towards changes we want to support. STAT
2. I have charged Iwith getting together
- to start the dialogue
with in his.new position
nd to begin to pu 1 together a formal action plan,. so that.
you and -I can monitor progress and ensure that the Agency
goes.. about this review in a ..sensible and effective manner.
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3.' .I'll get us together when Hank and. Terry are far
enough into this to make our participation meaningful..
Distribution:
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1 - OLL/Admi n
~. OLL Chrono '
'BCD/OLL (23 August 1983)
Retyped.:gg (24 August 1983).:
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NINETY-EIGHTH CONGREaa
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PATRICIA SCHROEDER. COLO.. CHAIRWOMAN
S K. UDALL AR2 CHARLES PASNAYAN, JR_ CALIF
HALL IND FRANK R. WOLF, VA.
SIKORSKI. MINN.
U.5. 1ioust of 1Rtprestntatines
COMMITTEE ON POST OFFICE AND CIVIL SERVICE
SUBCOMMITTEE ON CIVIL SERVICE
122 CANNON HOUSE OFFICE BUILDING
ag ington, O.C. 20515
Hearings on the Senior Executive Service
November 7, 1983
Honorable Charles A. Bowsher
Comptroller General of the United States
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OPENING STATEMENT OF REP. PAT SCHROEDER,
CHAIRWOMAN, SUBCOMMITTEE ON CIVIL SERVICE,
COMMITTEE ON POST OFFICE AND CIVIL SERVICE,
AT HEARINGS ON THE SENIOR EXECUTIVE SERVICE,
NOVEMBER 7, 1983
We are honored to have the Comptroller General of the United
States, Charles A. Bowsher, here today to unveil the results of a
year of intensive work by the General Accounting Office (GAO)
reviewing the operations of the Senior Executive Service (SES).
Today's hearing is the first of a series of hearings this
Subcommittee will be holding on the occassion of the fifth
anniversary of the establishment of the Senior Executive Service,
an event to occur next July. Not only is the five year point a
good time to take a look back, but there is also a statutory
five year congressional review requirement contained in the Civil
Service Reform Act of 1978.
This sunset provision was added to the Reform Act at the
behest of our former colleague Gladys Noon Spellman.
Representative Spellman wanted to highlight the experimental
nature of the SES and wanted to insure probing scrutiny of the
program. This Subcommittee is attempting to fulfill the intent of
the Spellman amendment and we have sought the help of the GAO in
doing so.
In October, 1982, I asked GAO for a comprehensive analysis of
the workings of the SES. As you can see from the size of Mr.
Bowsher's detailed statement, GAO took the assignment quite
seriously.
At the conclusion. of today's session, we will print up Mr.
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Bowsher's statement and the questions and answers and will
distribute them to a broad range of individuals and organizations
who are interested in commenting on the SES. At future hearings,
these people can use GAO's findings as a starting point for their
own critiques of the'SES.
Without further comment, I introduce our witness, Comptroller
General Bowsher.
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41
UNITED STATES GENERAL ACCOUNTING OF
FICE
WASHINGTON, D.C. 20548
FOR RELEASE ON DELIVERY
EXPECTED AT 10:00 a.m.
November 7, 1983
SUMMARY STATEMENT OF CHARLES A. BOWSHER
COMPTROLLER GENERAL OF THE UNITED STATES
SUBCOMMITTEE ON CIVIL SERVICE
HOUSE POST OFFICE AND CIVIL SERVICE COMMITTEE
ON
AN ASSESSMENT OF THE IMPACT OF
THE SENIOR EXECUTIVE SERVICE
Madame Chairwoman and Members of the Committee:
I am pleased to be here today to discuss our work in
response to your request for an overall assessment of the Senior
Executive Service (SES). SES, established by the Civil Service
Reform Act, has often been called the cornerstone of civil serv-
ice reform. The act provided for major changes in the manage-:
ment of the government's executive corps designed to achieve
improvements in the efficiency, effectiveness, and responsive-
ness of government operations.
I have a detailed statement which I would like to summarize
for you 'and submit for the record. My testimony today will
provide our general observations on SES and highlight some areas
that warrant your attention.
We focused our work on four areas in. which the act estab-
lished major goals for SES:
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--Executives should be held accountable for government
operations, and decisions related to their compensation,
retention, and tenure should be based on their perfor-
mance.
-Agencies need greater flexibility in using their execu-
tive resources.
-Executives should be protected. from improper political
influence.
--Executives' managerial capabilities should be improved.
Our work indicates progress is being made toward achieving
the act's goals in these areas. Further progress depends
largely on how well the Office of Personnel Management (OPM) and
agencies implement the act. We believe there are some areas
where improvements can be made.
A brief look at how the SES corps has changed since it was
established in July 1979 should provide some perspective for our
observations. The size of the SES corps, which includes nearly
6,900 members, has remained fairly stable. From July 1979 to
March 1983, there has been a slight decrease in the number of
slots allocated to the agencies by OPM, a slight increase in the
number of positions established by agencies, and..a slight de-
crease in the number of positions filled. A closer look, how-
ever, reveals considerable change. Overall, almost 3,500 career-
and noncareer SES members-have left SES and government service
and an additional 200 have retreated to GS-15 positions. More
than 40 percent of the career executives who converted to SES in
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July 1979 have left--roughly 2,500 of the 3,500 departees.
Although we could not identify where all new SES members came
from since the inception of SES, we did find that in fiscal year
1983 about 92 percent of all new career SES members came from
within the federal government.
I would like to discuss our observations on the-four areas
in which we focused our work.
EXECUTIVE ACCOUNTABILITY
The act required agencies to implement performance ap-
praisal systems to hold executives accountable for individual
and organizational performance and provide a basis for reward
and retention decisions. We found that agencies have imple-
mented performance appraisal systems. The systems are used
primarily to assess individual performance, but there is no
explicit link to organizational performance. Reasons cited' by
agency officials for the lack of emphasis on linking individual
to organizational performance were (1) the lack of performance
measurement data and (2) the difficulty in identifying individ-
ual contributions to the accomplishment of organizational
objectives.
Our review of 1,100 randomly selected performance appraisal
plans shows that a majority of the plans (1) did not address the
act's appraisal criteria for focusing attention on organiza-
tional performance improvement goals, (2) lacked specific state-
ments of expected performance, and (3) were prepared after the
beginning of the appraisal cycle and were not updated or revised
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when executives' responsibilities changed. In addition, plans
were not prepared for a majority of noncareerists. Such short-
comings in performance planning inhibit the effectiveness of SES
appraisal systems as tools for managing and improving individual
and organizational performance.
Although 71 to 88 percent of senior executives we surveyed
generally gave positive responses about their own performance
plans and appraisals, over half of the executives believed their
agency's SES performance appraisal system (1) had minimal effect
on performance, (2) had not improved communication between
superiors and subordinates, and (3) was not worth its cost.
To encourage excellence in senior executives' performance,
the act provided that career executives could receive bonuses.
The act limited the number of bonuses to 50 percent of the total
positions allocated to each agency. Because of concerns that
agencies were awarding too many bonuses in the first year, the
Congress reduced the number of SES members who could receive
bonuses from 50 to 25 percent. In July 1980, OPM further
limited bonuses to 20 percent. The 20-percent limitation was
subsequently included in appropriation bills for fiscal years
1982 and 1983.
Agency officials told us that performance appraisals are
used in deciding who receives bonuses and awards. Similarly, a
majority. of senior executives surveyed during our review of SES
performance appraisal systems believe their ratings were used at
least to some extent, in bonus and award decisions. However,
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the personnel officials and senior executives both believe that
because of the restriction on the number of senior executives
who can receive bonuses, the act's motivational goal is not
being achieved. Both groups are also concerned with the fair-
ness of bonus and award systems because they believe that
factors other than performance are considered in making awards.
We reported on this perception in September 1981 and found it
still exists during our recent work.
The limit on bonuses contained in appropriation bills has
not been renewed for fiscal year 1984. OPM, however, is issuing
guidance which will restrict the number of bonuses to between 30
and 35 percent of an agency's career appointees. While the in-
crease in the number of SES members who can receive bonuses will
alleviate, to some degree, the concerns expressed with bonuses,
some of the negative feelings directed at the limitation con-
tained in appropriation bills may continue because OPM's pro-
posal-is still below the number allowed in the act. We received
many comments from SES members that such bonus limitations
represent a "breach of contract."
The act provided that poor performers identified through
the appraisal process would be reassigned, transferred, or
removed from SES. We found, however, that very few senior exec-
utives have received less than fully successful ratings since
the creation of SES. Further, we found very few actions taken
to'deal with individuals identified as performing poorly.
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Agency personnel officials told us that SES members may be
reassigned to positions which agency officials believe are more
suited to their talents--a remedy called for in the act--even
though they may not be given unsuccessful ratings. Early
retirement--another option for individuals removed from SES for
poor performance-also seems to be used. Between July 13, 1979,
and June 30, 1983, 20.4 SES members retired early. Two retired
early under the poor performance provision, 135 retired early
because of an agency-initiated action such as their position was
abolished or they refused to accept a geographic reassignment.
We found that while the 135 were generally rated fully success-
ful, they were rated lower as a group than SES members as a
- whole.
AGENCY FLEXIBILITY IN-
MANAGING EXECUTIVE RESOURCES
The Civil Service Reform Act made two changes that gave
agencies greater flexibility.in managing executive resources:
(1) the authority to establish and fill executive positions and
(2) the rank-in-person system which increased agency flexibility
to reassign executives.
The act established a biennial allocation process under
which agencies request slots for 2 fiscal years.` OPM then allo-
cates slots within the 10,778 limit set by the Congress. Each
agency establishes and fills positions it believes appropriate.
OPM has oversight responsibility to assure that positions in-
cluded in SES are justified. OPM's oversight mechanisms include
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(1) the review of agency justifications for the number of SES
slots, (2) the Qualification Review Board's review, and (3)
onsite evaluations conducted by OPM program officials.
We found that OPM's oversight mechanisms may not be ade-
quate. The review of.agency justifications for requested slots
has limited effectiveness because once OPM allocates an SES
slot, the agency has the-authority to use the slot for a posi-
tion other than the one used for the justification. OPM's
Qualification Review Board process is limited because it only
takes place when a position is being filled by a new SES
appointee--positions filled by reassignment are not reviewed.
OPM's onsite evaluations are limited by staff availability and
the short time the staff spends onsite--usually 2 weeks or less.
Of all SES provisions, perhaps none has created more con-
troversy than the increased flexibility to reassign. Agency
managers are pleased with the SES reassignment provision and the
number of reassignments is increasing. Senior executives, how-
.ever, feel that they are not protected from arbitrary actions to
the same extent they were under the pre-Civil Service Reform Act
system and would like a greater voice in their reassignments.
They are also concerned about geographic relocations, which can
involve large out-of-pocket expenses. Legislation has recently
been introduced (H.R. 3852) which would increase the amounts
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paid by the government for geographic relocation. If this bill
is enacted, we believe senior executives would be more ade-
quately compensated for the costs of relocations.
SES POLITICIZATION SAFEGUARDS
In terms of the act's goal of providing an SES free from
improper political interference, congressional concerns when the
act was being considered were two-fold: first, that too many
noncareer executives might change the overall nonpartisan nature
of the civil service; and, second, that new agency administra-
tors would not take time to properly assess career senior execu-
tives before making decisions on their performance or
reassigning them to new or different duties. We found that the
safeguards specified in the act have been adhered to:
--The number of noncareer senior executives has not ex-
ceeded 10 percent of all SES positions or the restriction
set for each agency.
--The number of limited term and emergency appointments has
never exceeded 1 percent of SES positions--well below the
5-percent limit.
--There were no indications of widespread abuse of the 120-
day get acquainted period during which actions that new
administration officials can take with SES members are
limited.
MANAGERIAL COMPETENCY
To improve managerial competence, the act provided for the
establishment of executive development programs. We found that
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executive development programs have generally received high
marks from personnel officials, SES incumbents, and SES candi-
dates. SES candidates told us that the development programs
have better prepared them to take on SES level responsibil-
ities. SES incumbents told us that agencies' incumbent develop-
ment activities have helped them perform their jobs better.
Personnel officials did point out, however, that, although
recruitment from among the ranks of GS-15s is not a problem, SES
pay and benefits are not adequate to attract and retain top
quality managers from the private sector. A related problem
personnel officials pointed out was the difficulty they have
recruiting individuals in the technical/scientific fields.
Agencies frequently offer SES positions to attract these indi-
viduals, however, since SES is comprised of managers, it is
sometimes difficult to justify the managerial qualifications of
scientists.
Let me conclude by expressing the view that, in general,
progress is being made in achieving the Congress' objectives in
establishing SES. Agencies.have greater flexibility in using
their executive resources; management processes are being
rationalized and improved as executives establish their individ-
ual performance goals; it is easier to deal with ineffective
managers; and greater emphasis is being placed on executive
development. Some SES members, however, are concerned with how
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agencies are using their enhanced management abilities. Undeni-
ably, there are problems that require attention. It is diffi-
cult to say how widespread these problems are.
Finally, I would like to share with you a personal view of
SES, based on my private sector experience. In the private
sector, I was able to hire and retain quality people by paying
adequate salaries. I recognize that the degree of flexibility
in paying salaries and bonuses that exists in the private sector
is not feasible in the federal government. However, the act
provided for positive changes in these areas which have not come
to pass. Limitations have been placed on salaries that can be
paid to executives. These limitations have adversely affected
the government's ability to hire and keep top quality execu-
tives. Agency managers have been hamstrung in their ability to
reward deserving individuals because of the limitations that
have been placed on the number of executives that can receive
bonuses. In my view, such salary and bonus limitations may
adversely affect the act's goal of developing a highly competent
executive corps.
I endorse raising the number of bonuses that can be awarded
as OPM suggests in its guidelines. which would provide for a 30
to 35 percent limit. I recognize that the current limit of 20
percent was set because of the perception that too many bonuses
were being awarded'during the first year. I expect that the
agencies have learned a lesson and will be more prudent in the
future. I would also like to point out that it would not be
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costly to give more bonuses. For example, based on the average
bonus award in fiscal year 1982, increasing the number of
bonuses to 40 percent of the career SES members would cost $14
million. Increasing the number to 50 percent would cost $18
million. Such increases are small in relation to the federal
payroll but could do much to alleviate SES members' negative
views on the bonus program and help achieve the act's goals.
Accordingly, I believe it would be prudent to'increase the
number of positions eligible for bonuses by 5 to 10 percent each
year for the next few years until they reach the 50-percent
limit envisioned by the act. If OPM declines to take this step,
which in my view would increase the probability of maintaining a
highly competent executive corps, the Congress may wish to act
to do so. I would offer the services of our office to provide
.the Congress continuing assurance that the agencies are
administering the bonus program fairly and equitably in the
future.
This concludes my prepared remarks; I will be happy to
answer any questions you may have.
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HEARING
CIVIL SERVICE SUBCOMMITTEE
COMMITTEE ON POST OFFICE AND CIVIL SERVICE
U.S. HOUSE OF REPRESENTATIVES
STAT
summary of questions asked by Congresswoman
Patricia Schroeder (D., CO), and answered by Mr. Charles A.
Bowsher, Comptroller General of'the United States.
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Q. SES annual leave provision of Act O.K.?
A. SES incumbents love it--data so far indicates +/- 105
hours a year being added on average--from Congressional
viewpoint, it is a ticking time bomb'because of very
large terminal leave payments that are being accumulated.
Q. SES Performance Appraisal System O.K.?
A. Not the best, but system now in place and every year gets
a little better, so I am not totally negative on it--in
industry, a good system takes +/- 10 years from inception
to really pay off.
Q. What % of SES incumbents are dissatisfied?
A. While lots of dissatisfaction, Government Accounting
Office (GAO) reviewers who worked on study did not find
much support--probably reflects "vocal minority" to
large degree.
Q. Improper use of SES reassignments?
A. Very limited and narrow dissatisfaction--on balance, we
found no substantial evidence to support concern:
1,100 SES reassignments in FY 1983, only
170 geographical relocations.
Q. Number of early retirements O.K.?
A. No hard evidence--very few poor performance early-outs
cited. Of more concern is the 79-83 number of young SES
officer resignations (non-political).
Q. All Reagan Administration policy-making jobs above SES
level?
A. Probably, and it is a problem. Too many campaign
employees input as Schedule."C" employees, although
total % as part of SES has never gone above the 10%
Congressional threshold.
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Q. How good an oversight job is Office of Personnel
Management (OPM) doing?
A. Two areas where trouble, but need more staff.
Q. Re bonuses, what is problem?
A. Basically, change down from 50% participation to 20%
had largest negative impact on incumbents.
Q. How does 20% limitation affect the other 80%?
A. Over 3-5 year period. may be security blanket for non-
performers. Top performers always do well. If 50%
eligible, the non-performers will become more visible.
Q. Will Act help SES risk-taking and productivity?
A. Awful hard to tell. At 20% the answer not clear.
System at 50% would motivate the remaining 80% move to
gain share of larger pool.
Q. Do you believe this 50% issue is a very important and
fundamental issue?
Q. More important than annual leave accumulation provision?
A. Yes--a good trade-off if one necessary--more bonus oppor-
tunity will probably reduce migration of SES corps (non-
political).
Q. Why retreat of +/- 250 SES's to GS-15?
A. Lack of security, if anything, but not at all clear.
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