The Pentagon published regulations Monday to overhaul its civilian personnel system from one based on time served to one that pays and promotes based on performance, according to Department of Defense officials.
The change, which will affect 650,000 employees, is part of a broader plan to transform the way the government manages the federal work force.
This spring, the Bush administration plans to propose legislation that would scrap the government's General Schedule — or GS — personnel system along with its familiar 15 grades. Officials say they will replace it with a system that rewards results.
If approved by Congress, the new system would affect at least 1.5 million federal employees and mark the biggest change in the way the government oversees its civilian workforce in more than half a century.
"It's the end of the civil service system, period," said Paul Light, a scholar at the Brookings Institution, a Washington, D.C., think tank, who has spent two decades studying the public service system.
Administration officials say they must make the changes to improve the performance of the civil service and compete with salaries in the private sector.
"The government needs to be able to recruit, retain and reward quality people for their contributions," an official at the Office of Management and Budget (OMB) said in an interview. "We can't do that under the current, inflexible system."
Unions are already trying to block some of the administration's moves, insisting that changes will strip workers of bargaining rights and leave them vulnerable to political retaliation. The American Federation of Government Employees, which represents at least 100,000 DOD employees, says it will join four other unions this week to sue the Pentagon over the regulations that are to appear Monday.
An attorney for the union says that it was not consulted in drafting the regulations, as required by law. "They've shut us out of virtually all workplace decisions," said Mark Roth, the union's general council.
In addition to the Pentagon, the Department of Homeland Security is moving ahead on similar personnel reforms, which will affect 110,000 of its civil service employees. Congress has given authority to both agencies to make the changes.
On Capitol Hill, some legislators say they want to see what happens with reforms at DHS and the Pentagon before spreading them to the rest of the federal workforce.
"The personnel systems at DOD and DHS are experiments in creating flexible personnel systems," said Sen. Susan Collins (R-ME), who chairs the Governmental Affairs Committee. "I think it is prudent to see how these systems fare before deciding whether to expand the reforms to other federal agencies."
It is not clear exactly what the Bush administration has in mind for the broader federal workforce, but plans for the Department of Defense provide some clues. At a press conference last week, DOD officials said they would dismantle the 15-grade GS system and replace it with a smaller, simpler group of "pay bands" based on occupation. People would move up through a pay band based on how well they did their jobs, rather than the number of years they had served.
"Good performers, average performers, poor performers, for the most part all get the same pay raise," said Dan Blair, acting director of the Office of Personnel Management. "So, what we are trying to do here is change the culture and give incentives to good performers."
Union officials say the new DOD system will gut pay standards and undermine protections for workers.
"DOD will soon get the opportunity to treat their employees as if they were second-class citizens," said John Gage, president of the American Federation of Government Employees. The new system "will put the squeeze on employees by enabling the agency to mess around with pay, work schedules, leave and evaluations without any meaningful appeals rights."
But government officials insist that employees will still have options. For instance, under the new system, workers can still appeal to a Merit System Protection Board to adjudicate cases in which they have been removed or demoted.
Navy Secretary Gordon England said the regulations will go through a public comment period and the department will confer with the unions. The Defense Department will begin implementation this summer.
Paul Light of Brookings thinks the General Schedule desperately needs reform. He says he's surveyed thousands of federal workers in recent years who complain that it takes many months to fill vacancies, and that marginal workers are routinely promoted based on seniority.
"The current system is just awful," said Light. "It's slow and it's confusing and it's rule-bound."
Light says simplifying the 15-grade system is a good idea, but he wonders whether the government will be able to create a fair and efficient way to judge performance. Under the current system, many employees are evaluated on a vague, five-step scale that Light says suffers from grade-inflation.
To make a new system work, the Bush administration will have to develop rigorous measures to evaluate workers, Light said. He also said it would have to spend a lot of money to train managers on how to apply the new standards.
"If you do it on the cheap and say it is revenue neutral, I don't see how it works," Light said.
Ross Eisenbrey, vice president of the Economic Policy Institute, says he worries that a new performance-based system will be used to silence workers who do not toe the White House line.
"There is, in my view, a whole culture in this administration of loyalty," said Eisenbrey, who led the policy department at the Occupational Safety and Health Administration in the Clinton administration. "We're going to have a much less democratic government."
But an official at the OMB insists their workers will still have protections against political reprisals.
"You cannot take action against someone for political reasons," he said. "You cannot take actions against someone who has blown the whistle on you."