EVALUATION OF THE DRAFT PROPOSAL ON NEW PAY, PERSONNEL MANAGEMENT, AND BENEFITS SYSTEM FOR CIA

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP88-01192R000100220008-2
• Release Decision: RIPPUB
• Original Classification: S
• Document Page Count: 33
• Document Creation Date: December 27, 2016
• Document Release Date: September 13, 2013
• Sequence Number: 8
• Publication Date: September 4, 1987
• Content Type: MEMO

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S RET
MEMORANDUM FOR: Executive Director
DI Representative on the Human Resource
Modernization and Compensation Task
Force (HRMCTF)
FROM: Richard J. Kerr
Deputy Director for Intelligence
SUBJECT:
Evaluation of the Draft Proposal on New
Pay, Personnel Management, and Benefits
System for CIA
1. The response from DI personnel to the subject proposal
indicates there is keen interest in reevaluating the Agency
compensation system. The consensus view--which I share--is that
the proposal offers some advantages and contains some features
that should be adopted. The fundamental break with the current
system embodied in the proposed banding and incentive pay
features may be beneficial for any elements of the Agency with
relatively homogeneous work forces. From the DI perspective,
however, these features are decidedly less attractive and could
well undermine rather than enhance our ability to attract and
retain the high-caliber career force the Agency requires.
2. In evaluating the HRMCTF proposal I solicited views from
all DI employees. The proposal was discussed in detail at the
branch and division level and all employees were encouraged to
avail themselves of the question and answer sessions scheduled in
the auditorium. After full discussion, a report was prepared in
each of the Directorate's Offices summarizing the full spectrum
of employee views. A compilation of those views on each of the
proposal's features is included at Annex A. Annex B summarizes
the results of a poll taken independently by the DI Management
Advisory Group. I will be pleased to provide you copies of all
Office responses if you wish.
3. The details of each of the proposal's 16 features are
well known and need not be revisited in this memorandum.
Instead, I think it would be useful to examine some of the basic
issues involved and tender some recommendations as to how to
proceed.
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4. Personally, I believe that some change is essential if
the Agency is to remain an organization that attracts and keeps
talented people. Our ability to do this will depend on our
creativity and imagination as managers continuously to refine and
implement a system that values its employees rather than on
adoption of a particular compensation or classification system
that emphasizes merely the size of the paycheck. In that vein, I
support in principle those features of the proposal that enhance
career development and provide a more attractive range of
benefits (basically features 6-9 and 11-13). I also support
those features which would enhance management flexibility, ?
especially features 15 and 16 which would institute a new budget
control sstem that would give senior managers more
responsibility for how their programs are structured than does
the current position classification system.
5. I cannot endorse, however, features 1 and 2 on
occupationally defined bands and on incentive pay. There are
several factors that have brought me to that conclusion.
o First, I believe the HRMCTF is correct in observing that
? ? ? employees driven primarily by money do not work
for CIA." Our employees receive non-monetary reward in
knowing that the work they do is vital, and they highly
value the periodic promotions from one GS level to the
next as they learn their craft and apply their talents.
That being the case--and recognizing that in all
likelihood government salaries will never be in a
position to compete with industry--I believe it ill
advised to adopt a system that is preoccupied with pay
and that minimizes the number of opportunities to
demonstrate the value of employee contributions via
promotions. The system proposed by the Task Force might
well limit us to only two or three promotions during a
typical DI employee's career, and it would give us no
tangible way annually to tell the large majority of the
the 50 percent of our employees who had productive years
but did not receive incentive increases that we valued
their efforts.
o Second, the use of market surveys in the multidisci-
plinary environment of the DI troubles me. As a
practical matter, it may be all but impossible to
implement. The HRMCTF report referenced only a single
occupation for most of the DI, that of Intelligence
Officer-Analyst. That classification correctly
recognizes that whatever academic training an employee
received, he or she is hired into the DI to be an
intelligence officer. To make the market survey feature
work in the DI, it would obviously be necessary to
devise further categories that differentiated between
analysts by academic discipline. Such an effort,
however, unduly emphasizes analysts' previous training
and overlooks a more critical measure of the worth,
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notably their activities as intelligence officers. Even
more importantly, market pricing could easily propel the
DI on a course directly counter to the one we set for
ourselves six years ago when we reorganized regionally
and deliberately oriented our work toward multidisci-
plinary analysis. The cohesiveness of this program,
which is central to the Directorate, will be at risk in
an environment where there is a marked difference in
what people are paid based on their academic discipline
rather than on their contributions as intelligence
officers.
o third, it is unclear to me, and apparently unclear to a
large portion of the DI employees as well, that
employees will be significantly better off financially
under the proposed incentive pay. Moreover, the
connotation that we do not now have a "pay for
performance" system is wrong. We do have such a system;
our employees recognize that it works and are proud of
it. The GS provides a framework to reward the high
achievers and penalize non-producers that could easily
be enhanced by more effectively using the tools we now
have.
o Finally, I fear that the proposed system will substan-
tially add to the administrative burdens already placed
on our managers who--in the DI--must also be substantive
leaders. The promised automation of performance plans
and performance evaluations, if achieved, would do
little to reduce this burden in an environment where
there is a great diversity in the types of activities in
which our employees are engaged and in the complexity of
the projects assigned. Equally important, I fear the
burdens and dislocations of the new system on the Office
of Personnel may be very large and disproportionate to
the gains we would realize.
6. The GS pay system--as distinct from the cumbersome
position management and classification system associated with
it--can admittedly be improved. Nevertheless, it provides a
framework that offers many of the features the proposed banding
and incentive pay features lack. The Directorate of Intelligence
is proud of the work force we have now, and its makeup proves we
can attract and hold good employees. I think that the GS
approach is a positive force in our attractiveness and stability
because it maximizes promotion opportunities and the psychic
returns associated with them, does not restrict lateral movement
between different assignments or Directorates within the Agency,
allows us to recruit quality performers more easily from other
Agencies, and finally, gives our personnel a common standard
against which to measure their occupational status and career
growth relative to counterparts elsewhere in government. These
advantages are substantial, and I see much that can potentially
be lost by abandoning the GS.
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7. I believe that we are in a position to fashion an
improved compensation system without introducing the upheaval
that would be associated with the banding and incentive pay
features. I therefore recommend:
o That we proceed in identifying and ranking the most
desirable of the enhanced benefits discussed in the
HRMCTF proposals. We should proceed to implement any
priority items that we can without new legislation and
explore the feasibility of seeking legislation as
required for others. Ideally, such legislation would be
broad enough to allow us to introduce new benefit
features as they become relevant to the needs of our
future work force.
o That the HRMCTF refocus its efforts to examine ways to
make the GS more flexible. I believe the GS system
creatively managed can provide most of the features
available under a banding/incentive pay system without
the disruption involved with implementing the latter.
At a minimum we could liberalize policies toward QSI and
monetary awards, make periodic instep increases less
automatic, reduce the bureaucratic hurdles to granting
out-of-cycle promotions, allow our highest achievers to
skip grades, and the like. Even a broader dual track
system can be accommodated under the GS, a concept
recently visited by a DI study group, whose report I
would be happy to share.
o That we develop a Program to reduce the constraints of
the position classification system. A budget control
system such as that described in the HRMCTF proposal
would indeed enhance the options available to program
managers and enable the Agency to be more responsive to
changing priorities.
I believe that full implementation of these recommendations will
fashion a compensation system that retains the best features of
our current system, provides meaningful new benefits to
employees, demonstrates to employees the value we place on their
efforts, and provides a management/compensation environment that
will be attractive and flexible enough to meet the demands we
will face in the 1990s.
Attachments:
A. DI Offices' Views
B. DI MAG Survey
(Richard niKerr
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SUBJECT: Evaluation of the Draft Proposal on New Pay,
, Personnel Management, and Benefits System for CIA
DD/OGI
:29Sep87)
Distribution:
Orig - EXDIR (w/atts)
1 - DI Rep on HRMCTF (w/atts)
1 - DDI (w/atts)
1 - ER (w/atts)
1 - DI Reg. (w/atts)
1 - DD/OGI (w/atts)
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APPENDIX A
Summary of Component and Individual Employee
Reaction within the Directorate of Intelligence
to the BRMCTF Report
Approach
As a key element in identifying potential strengths and
weaknesses of the Human Resource Modernization and Compensation
Task Force proposals, the Directorate of Intelligence actively
solicited ,detailed comments from each of its operating components
as well as from all employees individually. Response to the
request was both heavy and enthusiastic, and most DI personnel
participated in lively discussions within their primary
management units over the merits and demerits of the plan. These
discussions were subsequently distilled into written reports and
forwarded through intermediate management levels to the
respective office and senior staff chiefs, who, in turn, prepared
summary reports for the Deputy Director for Intelligence. (Note:
copies of component responses are available on request.) Some
senior managers and line officers also took the opportunity to
comment in writing directly, either to their own supervisors or
to the DDI.
The following represents a summary of the results of this
process. In no sense, however, does it capture the profusion or
richness of the dialogue or the thoughtfulness of the hundreds of
typically detailed sets of comments from both line components and
individual employees. What it does provide is some sense for the
consensus view within the DI at the grass roots level with regard
to the report as a whole and the various changes it recommends.
This summary is best read in conjunction with the DI Management
Advisory Group survey results provided in Appendix B.
Response to Individual Features
Feature 1: Occupationally Defined Bands
The proposal on banding--together with that on incentive
pay--drew the strongest and generally least favorable reactions
from DI managers and staff employees. Though many felt the
banding idea might have merit in principle, a sizable and very
articulate majority were nevertheless convinced that abandoning
the GS pay scales would be a mistake at this time for analytic
personnel. "Why reinvent the wheel," asked one analyst, "when
only a few spokes are broken?" Most seemed to agree that, while
it makes sense for the Agency to eliminate most of the unwieldy
administrative machinery of the GS system, especially grade
constraints and ceilings, the flexibility inherent in banding is
better achieved by retaining the same pay schedule in use
elsewhere in the government. Both analysts and managers feared
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that dropping GS pay grades in favor of unique occupationally-
defined ones will limit individual mobility between assignments,
directorates, and agencies, resulting in a stale and less well
rounded cadre of intelligence analysts. Almost everyone, and
most notably managers, were concerned that, by reducing
appreciably the number of promotion opportunities, this feature
would undercut morale and the general philosophy of pay for
performance. Many also noted that "an important sense of self-
esteem associated with GS rank" would be lost and, with it, the
status needed for them to deal effectively with counterparts
outside the Agency. The concept of market pricing also elicited
skepticism, not just because many felt it was unworkable in light
of the Executive and Legislative Branch indisposition to increase
Federal pay but, more importantly, because it could work against
unit cohesiveness and cooperative multi-disciplinary analysis.
Our most technically oriented components recognized the need for
pay differentials to attract scientific personnel but argued that
the existing GSE schedule is closer to being adequate than the
one proposed by the report.
Feature 2: Incentive Pay
By and large, the notion of pay for performance received
strong support from both managers and analysts within the DI, but
many questioned the implicit assumption of the report that this
is not provided by our current system. Most respondents seemed
to prefer a liberalization of the present .merit awards and bonus
programs rather than the approach outlined in the Task Force
Report. One office director, noting that "what ? ? ? the report
is missing is recognition of the fact that money is not the thing
that matters most to the majority of Agency employees," suggested
giving component heads more discretionary authority and funds to
make spot awards for special achievement. There was strong
concern--especially among analysts--that creativity and
willingness to take risks under the proposed plan would suffer
and that such annual performance bonuses would "encourage short-
term, high quantity production efforts at the expense of long
term, innovative . . . research." Another office head joined a
number of other DI managers in observing that sentiment against
this feature often seemed to run strongest among those younger,
high-performing analysts who would benefit most from its
implementation. Overall, most feared that this proposal would
generate the wrong kind of competition, could be corrosive to
morale by failing to provide any tangible rewards for the
50 percent of the personnel annually failing to receive a bonus
(but who, on the whole, had made worthwhile contributions), and,
in the long term, would not be financially supportable under
Federal budget realities. Indeed, on this last score, several
impromptu statistical analyses by our analysts suggest that a
majority of the DI would end up no better off under the bonus
system and banding. Finally, many of our managers feared the
annual selection process could easily become a bureaucratic
burden.
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Feature 3: Performance Plan
Reaction to this feature was mixed. Many line officers and
supervisors liked the idea of having a clearly articulated work
plan done each year but also noted that the current AWP provides
a mechanism for doing just this. To the extent DI personnel
raised concern, it reflected the rigidity of the proposal. Some
noted, for example, that yearly performance plans were both
unnecessary and a nuisance for many experienced officers who were
performing proficiently. One senior staff chief opined that
"some employees would be less willing to accept ad hoc
assignmens or undertake 'risky' initiatives . . . not reflected
in the performance plan."
Feature 4: Performance Evaluation
Not unlike the performance plan, the proposal for
performance evaluation drew mixed responses. By and large, most
of our personnel saw little difference between what was proposed
and the PAR system now in place. Reaction to the notion of fewer
rating categories was split about evenly. Managers, however,
tended to be concerned about the overhead involved in introducing
yet one more new evaluation tool, and many personnel voiced the
opinion that the only thing wrong with the current PAR is not the
form but the inability or unwillingness of managers to comment
frankly on the work of those they supervise.
Feature 5: Occupational Career Handbooks
This feature seemed to be generally well liked, although a
number of DI officers and managers questioned whether it was
really necessary. To the extent concern was raised, it focused
on a general consensus among the bulk of our personnel that
career advancement be keyed to actual performance, not to rigid
or "cookie cutter" prerequisites for education, training, or
experience.
Feature 6: Individual Career Development Plan
Most DI personnel appeared to like this feature. Some
managers raised the fear that this could become just one more
piece of paper in their in-boxes, but the majority argued that
this was something they should be doing anyway. Non-supervisory
personnel tended to be uniformly enthusiastic.
Feature 7: Occupation-Specific Training
Feature 8: Improved Availability of Training
Responses to both of these proposed features--which are
logically linked--were very positive. As one office director
observed, "Why is this not being done already?" Both managers
and line officers expressed deep concern that, in spite of recent
improvements, OTE is still not able to provide a sufficient
quantity and mix of high quality training courses. Virtually all
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seemed to feel that outside training was worthwhile and deserved
strong management support. The only negative reactions came in
the form of the caveat that training be geared to individual
needs and not to uniform profiles or pre-set quotas to fill
courses.
?
Feature : Dual Track
This was one of the best liked proposals. Most managers and
analysts believed that this would give the DI a boost in its
ongoing efforts to create a body of substantively qualified
experts rather than seeing these people lost to management
positions solely because they seek advancement. Many, however,
noted that the bare bones for such a dual track manager/expert
system already exists in the Directorate and is well on the way
to being strengthened in light of the recommendations of the
recent "Layton Study." Nevertheless, there was manifestly strong
and broad support among our employees for the expansion and
strengthening of a non-managerial "expert track," however this
might be accomplished. The only cautions raised revolved around
the need to ensure that managers remain substantively expert and
maintain clear lines of control over their programs and analysis,
that "expert" positions not be used to harbor poor performers
with high grades, and that individuals willing to take on the
riskier and more onerous duties of the manager not be discouraged
by the absence of additional rewards in the form of pay and
prerequisites.
Feature 10: Promotion-
Reaction to this proposal was rather light, possibly because
many find it vague and rather imprecise. On the whole, most of
our personnel tended to like the current DI career panel system
and those who commented were thus inclined to view this feature
favorably. Some of our managers, however, noted that the
procedures and criteria suggested seem more appropriate than
those outlined in the DI occupational panel report.
Nevertheless, there was concern that performance--and not
training, assignments, time in grade, or position--must be the
determining factor in career advancement. In line with the
reaction to features 1 and 2, senior managers--and office heads
in particular--underscored the need for more, not less,
flexibility in making promotions.
Feature 11: Flexible Benefits Program
Feature 12: Leave Conversion
Response to these two proposals was overwhelmingly strong
and favorable. Without question, virtually all of our employees
regarded them as long overdue. As one of our senior staff chiefs
put it, "Even if no other part of the proposed HRMCTF Report is
accepted, the Agency should press ahead with this feature."
Concerns were few and largely related to financial and political
feasibility and to the necessary lack of precision in the report
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as to exactly what kinds of options might be available. One
issue, however, was raised frequently and appeared to reflect a
consensus of both our managers and line officers: that leave
conversion and buy-back not be so unrestricted as to permit or
encourage employees to take no vacation time in a given year.
Feature 13: Educational Assistance for Dependents
Reaction to this feature was mixed and characterized by
either strong support or strong opposition. Many personnel
welcomed such assistance, but others argued that it discriminated
strongly against employees without dependents. This said, there
was at least broad support for the spirit of the recommendation
and many suggested that the solution is to permit loans but not
link them solely to educational purposes.
Feature 14: Staffing Management Tools
Generally speaking, reaction to early and involuntary
retirement was favorable, especially--and not surprisingly--from
senior managers. As one office director noted, "my own feeling
is that any system that gives office level managers more
flexibility in structuring their organizations to meet changing
conditions and requirements is a worthwhile one." Of interest,
relatively few non-supervisory personnel expressed particular
(2) concern that management might abuse these options. A number of
managers and line officers, however, questioned why only
"experts" and SIS-level personnel would get the early-out
option. In contrast, the nation of retention bonuses found few
supporters, with many arguing that they are inconsistent with the
early retirement option, subject to abuse, and a possible source
of discontent (citing recent examples of the US military).
Feature 15: System Controls
Feature 16: Projection Tools
Most rank and file DI personnel and first line manages had
little comment on these two features, which are only treated
briefly and in very general terms in the report. More senior DI
managers were inclined to welcome better tools for keeping track
of their programs and making more efficient use of their
resources. Concern, however, was widespread that these not add
additional reporting burdens on already hard-pressed line
units. Other respondents cautioned that "substantial care is
necessary to ensure that appropriate administrative and data
processing support is in place before implementation of any
changes."
Overall Sense of the Directorate
Viewed as a whole, there were several common threads that
seem to run throughout the reactions of most DI personnel to the
HRMCTF report and its proposals.
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Although most employees recognized that the proposal for
banding and merit pay are the "centerpiece" of the plan
and were inclined to favor both notions in theory, they
were strongly skeptical of the need for or advisability
of eliminating the GS pay system.
In contrast, reaction to most other aspects of the
report, especially those proposals recommending enhanced
and more flexible benefits and training, was extremely
positive.
Cynicism ran highest with regard to the financial and
political feasibility of the proposals and to the ability
of the already overburdened management/support system to
implement them.
Perhaps the most common negative reaction came in
response to what many DI personnel perceived as the
"monetary emphasis" of the principal features.
There appeared, in particular, to be an emerging consensus
in the DI that change should focus on improving the current pay
and evaluation system rather than substituting a radically
different and untested one in its place. A frequent observation
of many was that most of the benefits that adoption of the Task
Force's proposal in its entirety might yield could be obtained at
much less expense--especially in terms of morale--by simply
,Iodifying current procedures and dropping those that no longer
make sense. These sentiments were expressed well in the words of
one DI office's comments on the proposals:
The current system is flexible enough to accommodate the
positive features of the proposed new regime. We can
have a two-track progression, a flexible benefits plan,
bonuses, and a change in the rule that leaves people
losing leave.
-- Morale in the Agency is high under the present system,
which works to protect the Agency from politics and to
preserve expertise.
-- The wider span of promotion possibilities in the GS
structure is better for morale.
-- The current system pays for performance.
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STAT
STAT
Directorate of Intelligence
Results of the Survey To Evaluate the
Preliminary Report of the Human Resources
Modernization and Compensation Task Force
To All Directorate of Intelligence Employees
During August 1987, copies of the survey were distributed to all employees in the DI, and s-
able forms were returned. The distribution of respondents by occupation, grade, age, and tenure sug-
gests they are representative of the Directorate at large. Unknown bias could have affected the re-
sults, however, and the generalization of the findings to the entire DI should be done cautiously.
Who Answered the Survey
The number of persons in each occupational group answering the survey is as follows:
Manager
Secretary
Intelligence Assistant
Analyst
ADP personnel
Information resource,
librarian, document analyst
Methodologist, econometrician
Editorial, publications
Specialists
Administrative support
Others
Knowledge Base
Half of the respondents spent more than three hours learning about the proposed system; the other
half spent less than three hours. Two-thirds felt they had been given enough information about the
proposals to make an informed decision on its conceptualization, while only one-fourth felt they had
been given enough information to make an informed decision on its implementation.
Summary Judgment
When asked the "bottom line" question of whether to adopt the proposals or not, 59 percent rejected
the system as presented in the report; only 15 percent approved.
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Need for Change
Two-thirds of the respondents agreed there is a need to consider changes in the current GS system,
yet a majority also felt they would prefer to make the needed adjustments within the GS system.
Pay and Classification Structure
Half of the respondents favored establishing occupationally defined pay bands for all occupations
while 29 percent were opposed. Overall, 55 percent approved of an incentive pay system, 30 percent
disapproved, and 15 percent were undecided. Two-thirds favored CIA-controlled market-price
adjustments to basic pay structure.
Performance Evaluation System
Three-quarters of those answering the survey favored having a performance plan developed annually
with each employee, and 70 percent agreed to have performance evaluated against the performance
plan. Two-thirds approved of PARs having a significant impact on incentive pay, while 18 percent
were against.
Other Features
There was substantial approval of many of the remaining features. The career development features
were favored by about 70 percent of the respondents, while 85 percent favored most of the proposed
benefits. About one-half of the people favored early retirement for SIS managers, early retirement
for experts, and bonuses for key individuals.
Attitudes Toward Proposals
Opinion was evenly split as to whether the proposed incentive pay system would enhance motivation
of employees-37 percent agreeing and 36 percent disagreeing. However, a majority believed the
proposed system would increase competition while decreasing teamwork and collegiality in the DI.
and nearly half saw the proposed system as giving the firstline supervisor too much control over in-
centive pay. Only 36 percent expected the proposed system to improve the salary potential for most
employees. A similar percent expected to be better off financially.
As for potential benefits of the proposed system, only 31 percent believed the system would result in
more effective appraisal of employee performance and only 35 percent believed the promotion process
would become more consistent across offices.
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(2) Contrasting Employee Groups
In general, employees with fewer than six years of Agency service and those in the lower GS grades
saw a greater need to change the GS system, were more favorable toward banding and pay for per-
formance, and saw fewer flaws in the proposed system. Those groups, though, did not see any greater
salary potential for most employees nor did they differ from other employees in their expectations of
being any better off financially.
Analysts and managers were slightly more negative toward the proposed system than the rest of the
employees combined. The SIS-level employees were distinctly less approving of banding and pay for
performance while greatly more approving of delegating funding and classification control to the
Directorates.
Reading the Following Table
The responses to selected items are given on the following page. In each case "Favorable" is the com-
bined total of the responses "Approve, agree" and "Tend to approve, agree"; while "Unfavorable" is
the combined total of the responses "Tend to disapprove, disagree" and "Disapprove, disagree."
-Neutral" represents the remainder of the responses.
In Closing
More than 100 written responses were received by the DI MAG through the survey process. They
have been read and summarized for the DDI. That report will be available shortly.
We felt it to be very important to report the results of the DI survey to you as quickly as possible. In
doing so we may have erred on the side of brevity. If you would like to look at the raw data, please
contact
Thank you all for your prompt responses and thoughtful comments.
Chairman, DI MAG
3
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STAT
STAT
STAT
tin:ctr.tkp-IntArnal I 'CP nnt,
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Distribution of Responses to Selected Survey Items
Percent
Favorable
Percent
Unfavorable
Percent
Neutral
I. Establish occupationally defined pay bands
49
29
22
2. Establish an incentive pay system
55
30
15
3. Annual performance plan
74
15
11
4. Performance evaluated against plan
70
16
14
5. PARs have significant impact on incentive pay
64
18
18
6. Promotions explicitly tied to skills, training, experience
69
15
16
7. Flexible benefits program
85
4
12
8. There's a need to consider changes in the GS system
68
18
14
9. Make adjustments by retaining most of the GS system
56
19
25
10. Proposed incentive pay system would enhance motivation
37
36
27
11. Managers would do a better job under proposed system
27
42
31
12. Proposed system would increase competition at expense of
teamwork and collegiality
54
19
27
13. Proposed system would result in improved salary potential
36
32
32
14.1 would be better off financially under the proposed system
36
25
39
15. Adopt it as it stands
15
59
26
4
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Individual DI Office Responses to the Human Resource
Modernization and Compensation Task Force Proposal
Table of Contents
A. Office of African and Latin American Analysis,
B. Office of European Analysis
C. Office of Near Eastern and South Asian Analysis
D. Office of Information Resources ,
E. Office of East Asian Analysis.
F. Office of Current Production and Analytical Support.
G. Office of Imagery Analysis
H. Office of Global Issues -
I. Office of Scientific and Weapons Research
J. Office of Soviet Analysis
K. Office of Leadership Analysis
L. Management, Planning and Services Staff
M. Collection Requirements and Evaluation Staff,,
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' STAT
4 September 1987
MEMORANDUM FOR: Deputy Director for Intelligence
FROM:
Deputy Director of Arican and Latin American
Analysis
SUBJECT: Reaction to the Human Resources Task Force Report
1. This memo responds to your request for feedback on the July
1987 preliminary report of the Human Resources Modernization and
Compensation Task Force. Paragraphs 2-5 respond to DI Notice 20-
102, 30 June 1987, while paragraph 6 responds to your subsequent
request for an Office-level statement of "druthers" regarding the
stance the Directorate should take on major aspects of the Human
Resources Task Force proposal.
2. ALA utilized two devices to elicit feedback from our cadre
on the HRTF report: we held straw votes in branch meetings on the
specific questions posed by-the Executive Director in his prefatory
memorandum to the HRTF report, and we held more traditional .
"feedback sessions" at the branch, division, and office level. The
results of the straw vote were as follows:
"Do you agree with the Task Force that the
Agency can develop a compensation system of its
own?"
41 yes* 34 no 12 uncertain
(*17 caveated their vote with "but this is
not it" sentiments")
"Do you think we should do what we can to
improve things within the confines of the
present pay system?"
69 yes 21 no 20 uncertain
"Do you believe the Agency would be improved by
a system in which annual performance awards to
some degree replaced promotions as a tangible
expression of Agency recognition of exceptional
employee performance?"
22 yes 71 no 11 uncertain
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3. The more traditional feedback sessions showed strong
support in the trenches for the flexible benefits program (Feature
11), the leave conversion scheme (Feature 12), the notion of
educational assistance for dependents (Feature 13), and dual-track
career development (Feature 9). The reaction to the other features
was fairly negative, however. The backlash to the proposal for
occupationally-defined bands (Feature 1) clearly reflected the
problems encountered in secretarial banding.
4. The atmospherics of the feedback sessions were revealing.
One division chief's description was that the meetings in her
division were "unruly, irreverent, and marked by lewd commentary On
the document's cover design." Another division chief noted that
his troops had begun "holding meetings on this issue on 6 March
1987 and that everyone is tired of it," and there appeared to be a
widespread "what kind of fools do they think we are" reaction to
the line about the new system not costing more than the current one
even though nobody loses pay and half the people take home more
money.
5. The "flip-side" to the disturbingly strong undercurrent of
cynicism and skepticism in the reaction to the HRTF report was a
somewhat surprising "rallying around" the current system. In the
latter regard, the following excerpts from one of our division
chief's notes are noteworthy:
o The current system is flexible enough to
accommodate the positive features of the
proposed new regime. We can have a two-track
progression, a flexible benefits plan, bonuses,
and a change in the rule that leaves people
losing leave.
o Morale in the Agency is high under the present
system, which works to protect the Agency from
politics and to preserve expertise.
o The wider span of promotion possibilities in
the GS structure is better for morale.
o The current system does pay for performance and
it is insulting to suggest otherwise:
6. Here in the ALA Front Office, Rick and I had similar
reactions to the HRTF report. We both saw considerable merit in
some V the features but felt that the overall program was a case
of going too far too fast. While sharing some of the sentiments
expressed above about the existing system, we are also proceeding
on the assumption that the Agency should indeed have its own pay,
personnel management, and benefits system--if only to protect
against the deleterious effects of any wholesale tinkering with the
GS system the future may hold. Consequently, if ALA had its
"druthers," it would like to see the Agency move to a new system
that includes the following:
2
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A1)M1N16TKATIVE INTLKNAL. Ubt, VDM,X
o The flexible benefits program outlined in the
HRTF.
o A revitalized two-track expert-manager career
system along the general lines of the Layton
study (SIAP).
o A simplified banding system which would operate
just like the GS system and would not entail
elaborate incentive pay or awards. The
relationship between GS grades and the new
bands might be as follows:
GS Band
1-3, 4 A
5,6
7,8
9,10
11, 12
13, 14
15
SIS 1,2,3,4
o Retention of the current performance evaluation
system vice the plan contained in the HRTF.
CC: Deputy Director, OGI
Chief, MPSS
N.%
3
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45
"I've been in public service thirty years, at
great personal sacrifice to my family."
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MEMORANDUM FOR:
FROM:
SUBJECT:
4 September 1987
Deputy Director for Intelligence
John E. McLaughlin
Deputy Director, Office of European Analysis-
EURA Reaction to the Human Resource Task
Force Report
1. "Why reinvent the wheel just to fix a few broken spokes
on the old one?" That quote from a EURA analyst captures the
message I've heard most frequently going down the home stretch on
this exercise. Looking back over the last six months of
discussion in EURA on the "banding" concept (our two previous
memos attached), I am driven to two broad conclusions that are
generally in line with the above quotation:
Analysts may not think the present personnel system
is perfect, but (being good analysts) they know that
nothing is, and (being hard-headed realists) they
think that what they've got works pretty well.
To the extent that analysts have complaints, they
believe the problems can be addressed within the
? existing structure or by adopting parts of the
proposed new system.
In other words, the DI does not have a big problem here. People
are generally satisfrid and would prefer minor tinkering rather
than major change. In an imperfect world, this is a rather
admirable state of affairs. Given all of the other challenges
facing us as intelligence professionals, why open this can of
worms? Now let me explain how we arrived at this conclusion.
2. Methodology. In assessing EURA reaction, we used the
same procedure as in the previous exercise on the DI Analyst
Occupational Panel report. We made the Task Force report
available to all employees and asked each of our 15 branch chiefs
to lead a discussion and provide memos summarizing branch views
on the three subsections of the report.
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3. Range of Views. My intention is to express the
prevailing sentiment on major issues, leaving it to the MAG
survey to catch some of the finer distinctions and nuances in
analyst opinion. To give you some idea, though, for the range
of opinion in EURA, only one of our 15 branches took a basically
positive view of the report. Among the remaining branches, the
majority view fell into the negative to skeptical range with a
sizeable minority of people expressing views that I would
describe as mixed to indifferent. Most of the critical comment ?
focused on the Proposed Pay and Classification Structure or on
some of the broader philosophical questions involved in banding.
4. Background Noise. Before getting into specifics, it
might be worth noting some atmospherics that I believe have
strongly influenced the banding discussion from the beginning:
--First, it would be hard, in my view, to underestimate the
demonstration effect of.the new secretarial system as a
visible example of banding in the "real world" versus the
idealized version that comes across in all the paperwork.
Analysts are taught to be skeptical of what they see on
paper, and it has not been lost on anyone that the
secretarial system in practice has been plagued with
problems. 'Nuff said.
--Second, most people are uncomfortable making such a formal
distinction between analytical and managerial skills. They
generally support a reinforced and upgraded senior analyst
track because it would offer increased opportunities. But
they do not believe it is possible -- or desirable -- in
the DI to have a managerial track that is divorced from
substance.
--Finally, the conviction persists that banding will take
place no matter what. Supposed question/answer sessions on
? the system have too often looked like sales pitches, and
our repeated taking of the analytical "pulse" has created
the impression among some analysts that "they'll just keep
asking us till we get it right or until we say 'oh, go
ahead.'" Nevertheless, here we go one more time
5. Pay and Classification Structure. Most people like "pay
for performance" as a concept, but as with arms control, the
"devil is in the details." The bottom line is that the majority
of analysts are not convinced that they or the DI would be better
off under this system than under the present one.
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--The most basic question that analysts raise has to do with
the math. Most people who've taken a calculator to the
problem, including some of our best economists, are highly
skeptical that 50% of our employees could do better and
nearly all the others do as well without adding more than
2-3% to the personal services budget. It simply doesn't
add up unless the pay increases given to "up to 50%" are
trivial in size or unless you are "robbing Peter to pay ?
Paul." In other words, most people are convinced that
someone is going to lose, but they're not sure who or how
they'll be chosen.
--There are also severe doubts about the market pricing
concept and a suspicion that the funds for pay raises will
come from downgrading some categories of analysts.
Political analysts are most forceful in arguing that they
have no real equivalents in the private sector; ideally,
they would like to be priced as Rand employees but fear
that the fate of assistant professors is what awaits them.
Economists have less anxiety about this feature, but it
takes little imagination to see from this discussion what a
corrosive and unworkable idea this would be in the DI if
you start refining it much beyond "Intelligence
Officer-General."
--Many analysts also like the identity and sense of provess
that goes with the GS system. As one branch chief said,
"my people like the ego" boost from GS promotions and can't
quite figure out how they will get the same charge from the
bonus/pay increase system...two or three promotions in a
whole career don't stack up to making it from GS-09 to
GS-15."
--Beyond these considerations, all of the points that we made
in our previous memos were reiterated in this latest go
round: putting so much emphasis on pay could work against
team spirit, underline "careerist" as opposed to
"mission-oriented" values, and make people less willing to
take analytical risks. Once again,it just doesn't work in
the DI culture.
6. Performance Evaluation and Career Development Systems.
As the Task Force report notes on p. 6, "the importance of
performance evaluation would be further accentuated if
performance pay is adopted." But in my view, anyone who believes
that features like " automated performance plans" will make the
3
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evaluation process "less complicated" in these circumstances
(p.6) also believes in the tooth fairy. In the view of mostiEuRA
managers, administering a "pay for performance" system equitably
would add an enormous administrative burden and push our job
profiles more and more in the direction of personnel work versus
substance.
--In this connection, it is worth remembering that DI
managers as part of their regular duties probably devote
more time to personnel management than any other group of
foreign policy professionals in the US government
(including the DO and the Foreign Service because of their
reliance on panel systems versus our in-house career
boards). Perhaps there is nothing wrong with this.
Indeed, the time and energy that DI managers devote
personally to carefully hiring, assessing, training,
ranking, and promoting employees may explain why there are
so few serious complaints. But enough is enough.
--If there is a high cost .to managing such a system well,
there is an even higher cost to failure. One of our
division chiefs who has done some research on merit pay in
other federal agencies reports that the difficulty of
administering such systems often leads to something like a
rotational quota system (i.e. you got yours last year, it's
Joe's turn this year). This clearly would be a giant step
backward from where we are today in terms of rewarding our
analysts for strong performance.
--In summarizing the views of our analysts on these sections
of the report, I can only say that they do not see much
here that is new or cannot be easily implemented in the
present system. And many of the ideas floated under these
headings strike them as "eyewash" or simply lack
credibility.
7. Benefits Program. In contrast to the rest of the report,
most analysts generally liked the "cafeteria style" approach to
benefits. By far the most widely applauded ideas were those
offering greater flexibility in handling annual and sick leave.
The only really critical comments heard on this section were in
the "too good to be true" vein, i.e, has someone done enough
homework on this to be sure it's financially feasible and is
there a good chance we can get the necessary approvals?
4
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C,
8. Recommendations. If any one message comes through loud
and clear in all of these discussions, it is: Go ahead and fine
tune the old system but don't replace it lock, stock, and barrel.
In that spirit, I offer the following suggestions:
--Everyone likes the goal of improving our ability to link
rewards to performance. Let's build on that. The DI
already has an excellent system for assessing performance;
all we need is a bit more flexibility in rewarding above'
average performance. With the cash award system, we
already have some powerful tools but we could improve the
situation markedly within the GS system by making it easier
for managers to grant QSIs and by revising TIG guidelines
in order to make it easier to reward outstanding
performers.
--Just as an Office Director can currently grant cash awards
up to $500 on his/her own authority (this could be raised
to $750 or $1000), an O/D could be given a small pool of
QSIs to award. And by revising TIG guidelines, we could
create the possibility of a genuine "fast track" for truly
outstanding analysts, something lacking in the Directorate
today. (I would argue that we do not now make enough of a
distinction between top performers and others; the current
situation encourages the Directorate to promote people in
two major clumps -- outstanding performers somewhere around
minimum and most of the rest about 12-18 months later. And
career boards are constantly wrestling with a promotion
cycle that almost always puts people just under or over
minimum TIG.)
? --Needless to say, implementing these changes would require
some study and some safeguards against lowering of
standards. Obviously, we don't want to go so far in the
opposite direction that promotions become meaningless.
--We can also build on another point of consensus that has
emerged from all of these discussions: the strong support
for increasing the numbers of and opportunities for senior
analysts. There is everything to be gained from this and
nothing to be lost,provided we don't fall into the trap of
thinking that a dual track system implies two mutually
exclusive lines of work. The Layton Committee has already
laid the foundation for progress on this score.
--Building on the responsive chord the Benefits package
struck with our analysts, let's push ahead to see what
5
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improvements can realistically be achieved in that area.
There seems to be no reason why that part of the Task Force
report cannot be pursued independently.
cc: C/MPSS
DD/OGI
//John E. Mctaughlizift
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?
?
MEMORANDUM FOR:
FROM:
SUBJECT:
27 March 1987
Chief, Management, Planning and Services Staff
John E. McLaughlin
Deputy Director, European Analysis
Reactions to the "Banding" Concept and Report
of the Analyst Occupational Panel
1. Because movement away from the GS system toward a new
personnel management structure would be a fundamental change for
the DI, EURA has devoted considerable time and energy to
publicizing and discussing the proposal among its analysts and
managers. As the basis for these discussions, we have used the
report of the Human Resource Task Force, the Task Force's
videotape, and the draft report of the Intelligence Analyst
Occupational Panel. At branch, division, and Office level, EURA
managers have organized a number of informal meetings to solicit
employee views.
2. As the Office's Career Development Officer, I thought you
might be interested in the conclusions that emerged from all of
this effort. As you might have guessed, the-following comments
are critical in tone, so I want to add one prefatory note: I am
convinced that concerns surfacing in EURA are not just the
garden-variety grumbling that accompanies change in the Agency.
In other words, people here aren't "fighting the problem"; they
simply have a strong intuitive conviction that this system won't
work in the DI and that it has the potential to cause great
turmoil for little apparent gain.
3. First, some general comments on the notion of banding
itself:
--The overriding reaction is puzzlement about what the new
system would achieve that cannot be done within the current
system (or by revising it at the margins). We wonder if
anyone has ever drawn up a list of improvements that would
be possible only through "banding" and then asked whether
the disruption would be worth the gain.
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--There is a belief that Agency leadership is not open to
questioning from below on the basic concept of banding, even
though it might be receptive to comments on some of the
details of implementation. In short, the "we welcome your
views" tone of much of the task force material has not
eroded the impression that a new personnel system is being
imposed from the top..
--There is a nearly universal perception in the Office that
this process is proceeding too rapidly without adequate
deliberation and reflection at each stage. None of the
material from the Task Force goes beyond asking us to take
on faith that a new system will be better. To focus
discussion, we recommend that OP draw up a notional pay and
benefits schedule under banding that would include specific
salary levels that could be compared to those in the GS
system.
?
--Even if we were to move to a banding system, the heart of
pay-for-performance remains pay. An infusion of additional
funding will be necessari, to make such a system work, unless
the money to pay high performers is found by reducing
benefits or eliminating longevity increases for the majority
of employees. Budgetary realities do not seem to permit the
former. And reducing the pay/benefits of some employees to
pay others more would seriously degrade the morale of most
of the workforce (and make it difficult for some employees
to engage in responsible financial planning). Why not some
simpler steps such as a loosening of QSI guidelines to make
it easier for managers to link pay more closely and
immediately to performance?
--Even if a solution is found to the dilemma of money, we see
two other adverse consequences that could result from the
competition for pay bonuses. One would be an unhealthy
rivalry among analysts rather than the interdisciplinary
cooperation and team spirit we have all been working for
since 1981. Another would be a deterioration of the product
as analysts vie for more active accounts or seek to work on
flashier topics while neglecting other essential work.
--As has happened in other agencies under Merit Pay systems,
there is potential for banding to turn into a quota system
rather than function as a tool for motivating better
performance. (For example, if three awards are available
each year to a branch of 12 persons, the strong temptation
would be to rotate them so that each person would get an
award every four years.)
2
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--Banding almost certainly will bring more centralization in
personnel administration. 'A new panel evaluation structure
would probably emerge to evaluate larger groups ("bands") of
analysts in a more time-consuming and far less
understandable way. This runs counter to the Agency's
efforts to devolve responsibility, over the past several
years under the "Search for Excellence" campaign.
4. On the work of the Analyst Occupational Panel itself: We.
endorse strongly portions of the report, especially the stress on
an equitabke performance appraisal system as the foundation of any
new structure. However, we also see a number of problems:
--It simply seems unrealistic in the DI to carry a two-track
career system (analyst/manager) to the extreme suggested in
the report. Management and substance are so interwoven in
our work (from first line manager right up to the DDI1)
that the concept of a manager whose job focuses primarily on
administrative matters is simply alien to the culture. The
typical DI manager, especially when dealing with
counterparts from policy agencies, is obliged to have a
sophisticated substantive grasp or risk being ignored. We
are convinced that trying *to separate the analytical and
managerial tasks as neatly as the report suggests would be
bad for the DI, bad for career development, and bad for the
Agency.
--The Panel proposes significant curbs to the authority and
role of managers (who would become much less "substantrii
experts" than "administrators," while a branch senior
analyst would take on the burden of quality control and
review of the product). This would set up two competing
lines of authority within the branch. Carried to its worst,
this could result in an additional unwanted layer of
editorial review.
--We certainly agree that the DI needs more senior analysts,
but we suggest that it would be worth trying to breathe some
life into the existing Senior Intelligence Analyst Program
before going to a whole new system. The GS-15 slots in the
SIAP have never been fully subscribed. It would probably be
possible to remedy this situation by taking some steps to
enhance the status of the program and encourage greater
participation in it.
--The Panel's proposed safeguard against expected managerial
abuse--evaluation of managers by their subordinates--is
almost certainly unworkable in practice. (As you would
expect, there are differences within EURA on this idea. It
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4,5
seems attractive to some junior analysts with relatively
little experience. But most senior analysts, and all
managers, believe this could lead to confusion and, at
worst, confrontation.)
--A number of the "perks for performers" are unrealistic,
mostly because they nvolve potentially subirinTal cash
outlays. But some smack of paternalism--for example, an .?
Agency resort.
5. Ih sum, we think it is necessary to step back a few paces
and try to gain perspective on the need for moving to a new
system. Based on what's been described to us, we believe the DI
would quickly come to regret the establishment of a new system
that had as its point of departure the report of the Human
Resource Task Force.
Distribution:
Orig - Addressee
1 - D/EURA
1 - EURA/WED
1 - EURA/EED
1 - EURA/SID
1 - EURA/IAD
1 - C/EURA Admin
1 - EURA Admin/PO
1 - DD/EURA chrono
DD/EURA/McLAUGHLIN/lp/27MAR87
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MEMORANDUM FOR:
15 July 1987
Chief, Management, Planning and Services
Staff
FROM: John McLaughlin
Deputy Director, Office of European Analysis
SUBJECT: EURA Reaction to the Report of the DI Analyst
Occupational Panel
1. EURA's guard is still up. After two weeks of concentrated
discussion on the Panel's report, some positive impressions have emerged,
but the prevailing reaction is skepticism and a concern that more trouble
than good could come out of the exercise. And apart from the clear pro and
con impressions, there is lingering confusion, detailed below, on some
aspects of the report.
2. Methodology. The reactions I summarize in this memo were gathered
in the following manner. We circulated the Panel's report to all EURA
personnel and sent a note to our 15 Branch Chiefs requesting a memo from
each of them on the reaction within their branches. I also asked anyone
who wanted to comment separately to send me a note. In pulling together
the observations that follow, I am giving you a thematic summary rather
than trying to capture every shade and nuance of opinion expressed in EURA.
I am not attaching the memos I received from within the Office but would be
glad to send them to you if you would find that useful.
3. On a Positive Note. In general the Panel's report was seen as
closer to the mark than the initial effort. To most people, five analyst
levels (entry through expert) make more sense than the three levels
proposed in the first report. Most analysts also thought the Panel had
correctly defined the seven key dimensions of the occupation. Finally,
there is general receptivity to the idea of making more senior analyst
positions available and encouraging more people to move in that direction.
But even on these positive notes, we would register two strong
reservations:
o First, while everyone favors added emphasis on senior
analysts, there is broad concern about a two-track system
that makes such a formal distinction between analytical
and managerial skills. In short, we believe that DI
managers must remain strongly substantive in order to
operate effectively here and interact credibly with
counterparts from other agencies. Most managers agree
that it is already increasingly difficult to isolate time
for necessary substantive work and believe that this trend
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would only be reinforced by the proposed new system.
o Second, we have yet to see a convincing argument that the
objectives we like in the Panel's report cannot be achieved
through minor modification of the current GS system. Levels
1 through 5, for example, do not seem all that different
from GS 11 through 15. Moreover, we already have a senior
analyst program that historically has been undersubscribed.
On balance, the current DI effort (the Layton Committee) to
assess and reinvigorate the existing program seems a more
sensible approach than a wholesale change in the system.
4. The Down Side. In characterizing the overall reaction to the report
among their people, our Branch Chiefs used terms ranging from "skeptical"
to "seriously flawed" to "overwhelmingly negative". Many specific points
were mentioned, but I believe most would fit under three broad headings:
o Promotion Policy. The concept of probationary promotions
was roundly abused in all branches. Analysts and managers
?qpestioned not only .the wisdom but even the legality of the
idea. In general this was viewed as a Pandora's Box that,
once opened, would raise all sorts of morale problems, not
to mention elementary questions such as how employees would
be able to engage in sound financial planning. One analyst
dreaded what he called "an overbearing need to continually
prove oneself to a management that will promote only if there
is an escape clause to reverse the decision." Beyond such
reactions there were-also numerous questions about how it
would work: Is the payincrease withheld during the
probationary period? Or is it awarded subject to withdrawal
if the employee does not achieve/maintain satisfactory
performance? As with arms control, the "devil is in the
details."
o Senior Analysts -vs- Managers. Although there was broad
support for increasing senior analyst opportunities and for
the idea of freer movement between analytical and managerial
ranks, most people had trouble envisioning how this would
work in practice, and particularly how senior analysts would
relate to managers. Many thought that the "fuzzy" nature
of the relationship (Who does the senior analyst work for?
Who reviews his/her work? What does it mean for a senior
analyst to "coordinate" work with a supervisor?) could lead
to an adversarial relationship and to "disruptive stress and
conflict". Others thought the real question was whether
there would be equality between the two tracks (Would senior
analysts have private offices and other "percs" that usually
go to managers.). Bottom line: People like the concept but
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?
system would distract us from this mission for a prolonged period.
Especially during the transition phase, we would tend to become very
"inner-directed" -- a dangerous tendency in an organization that is already
physically remote from the rest of the foreign policy community and, in my
view, overly prone to study itself anyway. At minimum, it is clear that
for a considerable period of time, senior managers would be even more
distracted than at present from the core issues of our profession.
Something to think about.
John McLaughlin
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