The Joy of SES

...I’ In some astonishment, Mrs...

...Executives, instead of having a life-long identification with a single agency, with all the attendant petrification, would be moved from agency to agency to suit the needs of the broader government...

...But the real carrot comes in the shape of bonuses ranging up to 20 percent of an executive’s salary...

...These problems have little to do with executive compensation, which has risen dramatically in recent years...

...And that, presumably, is what those supervisors rated least effective by their supervisors would get...

...Ten such goals are listed (“Hire staff at the GS 13/ 15 level a t the rate of 18.5 percent for minorities”, “Allocate 50 percent of paraprofessional vacancies...

...Nor have they to do with laziness: the upper echelons are manned, for the most part, by able, ambitious, and generally hard-working people...

...The more candid of the senior executives openly concede that the bonuses are simply an add-on to raise the general level of salaries...

...Was the popular perception of a bureaucracy obsessed with security an anachronism...

...At NASA where, uniquely, many of its senior executives do not yet have career status, of 540 ratings there was one unsatisfactory rating...

...But although anything is possible since the Rabbi of Rome converted to Catholicism, we can expect the panels to rubberstamp the choices made by agency bureaucracies...

...The senior executives have dealt themselves- for, realistically, not Congress but the upper bureaucracy itself drafts this kind of legislation-a much better hand, and one that helps explain why everybody and his uncle rushed to sign up...

...Unlike the set-up for the lower supervisors, the SES bonus system is not selfcontained...

...In fact, when the Senior Executive Service hung out its shingle in July 1979, it included not 50 percent of the eligibles, not 60 percent-but 98.8 percent...

...The shrewd operator who manages to contract out a half-million dollars in dubious consulting jobsjust before the fiscal year ends gets the kudos, not the little shithead who, failing to block the contracts, drops a line to Jack Anderson...

...it up as the Senior Executive Service...

...The process also serves as an illustration of the classic organizational principle that dung flows downhill...

...Among the first to d o so was the National Aeronautics and Space Agency...

...The government would be able to attract the best outside talent by offering good salaries to all and some wingding bonuses for outstanding achievers...

...Another five percent (our calculator now shows 56 percent of the career SES annually eligible for bonuses) may be knighted “Meritorious Executive” and receive $10,000 bonuses...

...In either case, the broadside distribution of carrots, of itself, in no way promotes- the efficiency of government...

...Although one point made in the selling of SES was the idea of bringing in non-career executives from outside-presumably gung-ho types attracted to a stint in government by the new rewards-only careerists are eligible for the bonuses...

...Allowing for the fact that o n e navigates c a u t i o u s l y on t h e shakedown cruise, the NASA experience is probably indicative of how the money would be spread around...

...A Housing and Urban Development performance appraisal sets out to measure the quality of “judgment” in executives...

...This same protection applies, after a year of probation, to recruits from outside government who are found to be inadequate...

...If he is a political appointee, or a non-careerist, he is subject to removal a t the pleasure of the agency-as has always been the case...

...At HUD, the criteria for awarding SES bonuses include ‘Decisions rarely, if ever, questioned by client groups’ and ‘Decisions consistently praised by affected groups...

...This suspicion is reinforced by the mechanism chosen to select the bonus winners...

...In May 1980 the Virginia Electric and Power Company also announced a carrotand- stick program: it cut the salaries of its top 150 executives between eight and ten percent as an incentive for them to make the utility more efficient...

...The answer to all of the above is none of the above...

...The SES being still a nursling, only a few agencies have completed their 1980 awarding of bonuses...

...What happens is that a dream is born somewhere in the warrens of bureaucracy...

...One might say that the decision to join was virtually unanimous...

...The concept, as billboarded, has a certain appeal: a well-paid, elite corps drawn from the top three ranks of the career civil service-grades 16, 17, and 18-and two subcabinet political ranks...

...About the only element of security a civil servant loses when he joins SES is the right t a hold aparticularjob indefinitely: he can be reassigned to another SES job within his own agency...

...Another senior executive in the same agency learns that 30 percent of his performance appraisal will depend on how well his bureau meets certain Equal Employment Opportunity goals...

...The impression grew-one might say it was assiduously cultivated-that in exchange for the promise of reward for outstanding performance, the- senior executives of government would be giving up the job security that had always been the hallmark of federal service...

...Concern about whether awards are to be made on the basis of real results or bureaucratic casuistry came up in hearings before the House Civil Service Committee in May 1980...

...The penalties and risks involved for those who took the leap were emphasized by an administration anxious to demonstrate to the public its determination to bring the bureaucracy to heel...

...Critical Clients A case can be made that a system of substantial bonus awards, selective enough to invite public scrutiny, could contribute to more efficient management and bring into government talented outsiders who need the lure of large denominations...

...There is some substance to this reform...

...A task force-composed, as is inevitably the case, of senior members of the bureaucracy to be reformed-looked into the matter, dusted off the dream, and offered...

...Who or what he fills the vacancies with is something else...

...That being the case, one has to wonder about the basis on which the senior executive will be rewarded with a bonus...

...Within that 20 percent, the senior executives, in effect, determine the size of the bonuses they pass around to each other...

...The centerpiece of the act was the establishment of the Senior Executive Service, a system hailed as promoting more efficient and responsive government by rewarding its top executives for good performance and penalizing them for inferior work...

...Carter put it this way: “Top federal workers,” he said, “are ready and willing to respond to the risks and rewards of competitive life...

...a columnist for the Post wrote of the top executives having been “lured” into the new system...

...But dousing the existing executives almost indiscriminately with bonuses does nothing to attack the essential problems of management in government...

...The extent to which the concept of risk has stuck to SES is not a tribute to the astuteness of the press...

...Praise reform and pass the bonuses The JOY of SES by Leonard Reed Nothing was more made-to-order for the Carter administration, coming to office wearing the togs of Honest Outsiders, than the reform of the massive and lethargic bureaucracy that had become the focal point of public discontent with the government...

...We Have A Dream...

...Members of SES may not be involuntarily transferred to another government agency...

...The Post deplored the withholding of bonus money from executives “after they have given up their security...

...So it is taken down, folded neatly, and brought out again when a new crowd comes in looking for “new ideas...

...The second Hoover Commission Report of 1955 proposed a “Senior Civil Service,” a corps of executives qualified for reassignment from one agency to another...

...This seemingly stern measure is not a pristine creation of the Carter administration...

...It is a dream that has practically worn out the flagpole sliding up and down...

...and, roughly speaking, one can assume-at least after an initial period of self-consciousness- that most of the other halfwill get bonuses on the alternate years...

...The government doesn’t operate that way...

...One percent of career senior executives-again, not the outsiders-may be designated a s “Distinguished Executive” and awarded bonuses of $20,000...

...You might even say that this provision had been the crucial feature of the reform, since it alone promised to break the link in the senior bureaucrat’s mind between his own prosperity and the prosperity of his agency and its “client groups...

...Of course, the original SES plan (and all its predecessors) had envisioned a managerial corps that could be transferred between agencies, as the needs of government dictated...

...if, for example, the raise for the federal service is set a t eight percent, these supervisors would be entitled automatically to four percent...

...The man who earns the plaudits of his colleagues is the budget officer who comes up with a fanciful rationale to justify a larger appropriation for his agency, not the little louse who points out that the public interest would be better served if the appropriation were cut in half...

...Not surprisingly, then, the administration gave high priority and heavy publicity to the legislation that came to be known as the Civil Service Reform Act of 1978...

...Prudence dictated downplaying the pay windfall that the federal managers finally had brought about...

...The problem, rather, is how to deal with the rampant bureaucratic imperative, how t o divert the energies and intelligence which agencies now expend on selfinterest- the lobbying with support groups and congressional committees for increased funding and expansion, and the massive internal emphasis on those same ends-back toward public service...

...In Washington itself, where even presidents tread softly on the sensibilities of the bureaucracy, Mr...

...Interesting...

...But the word was out that those officials who didn’t sign up would limit their potential far advancement...

...To exceed the standards, the executive must meet at least five of the ten goals...

...So there would be those who get half the raise, those who get the full raise, and those who get the full raise a la mode...

...Long-suffering government-watchers, meet, once again, Management by Objectives...

...Among the fondest of these dreams cherished by federal managers is a way to escape-at least for themselves-the salary shackles of the civil service...

...Said the NASA official: “One of the specific objectives obviously for the shuttle manager...

...In the eyes of the senior executive, emotionally involved in his “mission,” the two are identical: what’s good for his agency is good for the United States...

...And his removal from SES is required only after he has received two “Unsatisfactory” ratings (within five years), or two “Minimally Satisfactory” ratings (within three years)- extremely unlikely possibilities in the clubby atmosphere of the career service’s top ranks...

...Now, while it is the function of a bureaucracy to serve the public, it is not its function to yield to every demand by every “client group”-a euphemism for pressure group...

...Each agency works up its own criteria for bonus awards (with a cursory check by OPM to assure compliance with the legislation...

...For all practical purposes this means that half the career executives will get bonuses each year...

...He could cut his department’s budget in half, if he saw fit, collect his bonus, and then be assigned to do the same a t another agency...

...After the 7,000-man SES had been in operation for a full year, the Office of Personnel Management knew of not one case of a career senior executive receiving an unsatisfactory performance rating...

...Few ideas in government are new...

...This past summer, for example, when the House of Representatives (with an eye to its voting constituents) was considering keeping a lid on the total pay of executives, 7he Washington Post (perhaps with an eye to its constituents-the civil servants who make up the largest chunk of its subscribers) wrote, in an editorial titled “Doing Wrong by Civil Servants,” of the “increased risk of penalties for inadequate work” that federal managers now incur...

...And invariably recommendations for achieving that end have been packaged in some form of a new “e1ite”executive corps...

...Client groups are the heart of a bureaucracy’s lobby, its partner in a mutual backscratching society...

...If, as is true of the great bulk of SES, he is a career servant, his risks are absolutely zilch...

...Enlistment in SES was voluntary...

...The bonuses are not likely to go to the Ernie Fitzgeralds of this world...

...SES itself is gradeless-that is, salary and career status are personal, not affected by the position one occupies...

...He will be judged to have exceeded the standards if he fills the jobs before that date...

...In 1949 the Hoover Commission called for establishing “Career Business Managers” with prestige awards...

...Or,bperhaps, had the administration bullwhipped the federal executives into accepting the new order or else...

...Tirelessly, senior civil servants have suggested to the blue ribbon commissions which periodically study the federal structure that better pay would revitalize the bureaucracy’s leadership...

...Leonard Reed is a contributing editor of The Washington Monthly...

...Now banish any vagrant thought that the unearned half of the raise would revert to the Treasury...

...and Carry a Big Carrot Which brings us, finally, to the question of “risk,” and to the winnowing out of the less competent executives-one of the premises on which SES was sold to the Congress as a reform...

...Patricia Schroeder, using the space shuttle as an example, asked a NASA official, “Who is responsible for the adhesive that holds the tiles onto planes that keep falling off...

...of an agency executive who hopes to get a bonus by resisting the pressures of these groups is indeed questionable...

...The money becomes part of a pool within each agency, and is used to fatten the raises-beyond the eight percent-of those supervisory people whose efficiency has been rated more favorably...

...they are to get back the pay cuts plus a bonus next year if they manage to improve the company’s earnings...

...The idea is-or as it turns out, was-to give the government maximum flexibility...

...What security has he abandoned...

...It is up to the executive position manager of that person to declare that it is a critical element...

...Whatever its weaknesses, the arrangement does have real carrots and sticks and it does have the merit of being, in a manner of speaking, financially self-contained...

...So the official line went, and the newspapers dutifully hailed the new era of “high risk, high reward,” as the SES plan is customarily captioned, Indeed, the early predictions were that, since joining SES was voluntary, fewer than half of those eligible would be induced to volunteer for what The Washington Post’s civil service reporter Mike Causey dubbed “potentially hazardous duty...

...The government’s top bureaucrats, it appeared, were being put between the rock and the hard place...

...NASA has 520 senior executives, not all of whom are careerists, and it awarded bonuses to 240, or 46 percent of them (thereby rattling the cage of an election-jittery Congress, which promptly lowered to 25 percent-at least for this year-the number of SESers who may get bonuses...

...But, early on, the element of inter-agency mobility was dropped from the SES program out of deference to the qualms of the career servants...

...The bonuses are paid out of the agency’s operating funds, which is to say that the budget requests are simply expanded to pay the bonuses...

...for minorities and women”, “Hire staff at the GS 13/ 15 level at the rate of 29 percent for women”, etc...

...would be to fly the shuttle by such and such date or to fly the shuttle successfully, to have the tiles stay on, whatever is required by such and such a date...

...In the SES, the dung not only doesn’t flow downhill, it has virtually been eliminated...

...Under the circumstances it made sense to the administration to present the plan to the public as putting the bureaucracy on notice that it must shape up or ship out...

...In that light, the judgment...

...Or, to put the question differently, whose idea was SES anyway...

...How do you crank that in [to the performance appraisal...

...Of 6,836 eligibles in grades 16, 17, and 18, only 81 declined, and most of those were people about to retire...

...In the event that he is bounced out of SES, he lands not on his ear or rear, but-according to the statute-back in the regular civil service, “guaranteed a suitable position at his most recent SES salary or above...

...The Carter administration came in needing something to propose after campaigning on reform of the bureaucracy...

...The Office of Personnel Management struck a more optimistic note: Sally Greenberg, head of the SES program, predicted in speeches that as many as 60 percent of the eligibles might eventually sign into SES...

...For starters, salaries in SES begin a t about $50,000 and will, when current federal pay ceilings are lifted, range up to about $70,000...

...Beyond the bonuses are the superbonuses, awards called “Presidential Ranks...

...The most common formula consists of a column on the left listing the goals of Senior Executive Bledsoe, and a column on the right indicating the extent to which he has flubbed, met, or exceeded those goals...

...Now, since the grade 15s write the performance appraisals of the 14s, who in turn rate the 13s-and since the pool of bonus money can be augmented only by increasing the number of those who receive only the half-raise-the higher grades have some motivation to judge their subordinates with a measure of righteous severity...

...The Civil Service Reform Act provides that no more than 50 percent of the career executives in each agency can get bonuses in a given year...

...Had the civil service, on the contrary, nurtured a breed of officials supercharged with a derring-do that impelled them to throw caution to the winds and go for broke...

...They would be laying their jobs on the line and, like business executives, standing or falling on the basis of their scorecards...

...Supervisors in those grades have a guaranteed right to only half the annual “comparability- with-industry” raise...

...It is run up the flagpole, but nobody salutes...

...There is little motivation on the part of the topmost executives to limit the largess going to the other members of this most exclusive club...

...Of the three standards it establishes as a yardstick, two are “Decisions rarely, if ever, questioned by client groups,” and “Decisions consistently praised by affected groups...

...Will it be because his hard work has contributed to the public welfare or to the welfare of the agency...

...Before looking a t that phenomenon, it’s worth a sidelong glance at the reward and penalty pay arrangement worked out for the supervisors at the levels just below the senior executives, a t grades 13, 14, and 15...

...The paperwork basis on which all SES awards are dispensed is a system of “performance appraisals...

...These ranks, each of which may be awarded only every fifth year to any given person, are awarded by an outside panel...

...What risks, precisely, does a Senior Executive run...

...But clearly the executive who okays the grant, whatever its validity, or lets the contract, however questionable, is less likely to draw static from his clients...

...All in all, it’s not hard to see why, in the face of the risks and hardships implied in the official pronouncements, the senior careerists flocked en masse into carrotful but stickless SES...

...The Department of Health and Human Services, for example, sets as a “critical element” in the fulfillment of one senior executive’s goal the filling of three vacant senior level positions (which are identified) by a specific date...

...How, then, to explain the mad dash into SES...

...Clearly, some federal managersalthough they are probably in a minoritycould better their $5O,OOO-plus salaries outside of government, and they feel that a bonus ranging from two to twenty thousand dollars helps balance things out...

...Any astonishment should have been directed at the apparently lost capacity of the President and Congress to resist the self-interested pressures of the bureaucracy-and at the gullibility, or just plain laziness, of the nation’s press, which became part of the scam by which this long-nurtured dream of the senior civil service was sold to the people who will pay for it...

...This may or may not be a critical element [of the performance appraisal...

...A Civil Service Commission proposal for a “Federal Executive Service” was taken up by the Nixon administration and might have made it through Congress had it not been overtaken by the Watergate chaos...

...Conversely, the system would provide for weeding out the clods...

...Well, the odds are pretty good that our man is going to fill those vacancies before or by his deadline and put himself in line for a bonus...

...Schroeder asked rhetorically, “So somebody could get a bonus even if it does not fly...

...Just as clearly, a sizable number of unexceptional federal executives, so long as they play the role of good company men, will share in the shower of bonuses...

...Again, we can expect Bledsoe to come through, to subordinate his judgment of the competence of individual candidates to the desirability of climbing on the bonus train...

...To insure against the new flexibility being used for political hanky-panky, political (or “non-career”) appointments were limited to ten percent of the SES total...