October 2, 2008

The Homeland Security Department on Wednesday announced it would put an end to its new personnel system because of a provision signed into law this week that eliminates funding for the plan.

In a memo issued to DHS employees, Tom Cairns, the department's chief human capital officer, said a provision in the fiscal 2009 Consolidated Security, Disaster Assistance and Continuing Appropriations Act (H.R. 2638) signed into law Tuesday by President Bush "prohibits spending funds to operate our new DHS human resources management system."

The personnel system, formerly known as MaxHR, was authorized by Congress in 2002 when it created DHS. The system included new rules governing performance management, labor relations, adverse actions and appeals. It also would have featured a market- and performance-based pay approach to replace the decades-old General Schedule system under which most civil servants work.

But a series of court rulings in 2006 prohibited DHS' from moving forward with labor relations. The department went ahead with the performance management, appeals and adverse actions portions of the system, but in early 2007 decided to hold off on implementing a pay-for-performance system. The department also announced a broader strategic plan initiative -- the Human Capital Operational Plan -- to promote hiring and retention, learning and development, and a DHS-wide integrated leadership system.

The new law repeals rules governing labor relations and adverse actions and appeals -- returning employees to Title 5 regulations that have managed civil servants for decades. The law also eliminates pay for performance at DHS, except at the Transportation Security Administration. TSA's personnel system was established under a different statute.

"Pay for performance was so far on the back burner that it probably got cold," DHS Spokesman Larry Orluskie said on Thursday. "It takes it off the plate for now. I don't think any DHS employees were expecting a pay system to roll out anytime soon."

Orluskie added that the main goals of HCOP -- hiring, training and performance management -- will continue remain. "We will continue to work with our employees and OPM [Office of Personnel Management] to provide the best human resource system possible, the best way we can," he said. "Our employees need that, and they've told us that time and time again through their surveys."

Orluskie said about 35,000 nonbargaining employees had converted to the program. DHS requested $5 million from Congress to continue the system in fiscal 2009.

Repeal of the program drew praise from federal labor unions, which have long charged that it would encourage cronyism and result in salary cuts in the long term.

"DHS now has an opportunity to work with employees and their representatives to improve morale that is at or near the bottom among major federal agencies," said Colleen Kelley, president of the National Treasury Employees Union.

"We couldn't be more thrilled that this is a wooden stake in the heart of [Bush administration] attempts to curtail collective bargaining, due process and civil service rights," said Mark Roth, general counsel for the American Federation of Government Employees. "It's a nice goodbye kiss to this administration."