STATEMENT OF DR. THOMAS E. MALONE, DEPUTY DIRECTOR, NATIONAL INSTITUTES OF HEALTH ON THE SENIOR EXECUTIVE SERVICE

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP89-00066R000100090015-9
• Release Decision: RIFPUB
• Original Classification: K
• Document Page Count: 9
• Document Creation Date: December 22, 2016
• Document Release Date: May 18, 2010
• Sequence Number: 15
• Publication Date: March 20, 1984
• Content Type: OPEN SOURCE

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STATEMENT OF DR. THOMAS E. MALONE
DEPUTY DIRECTOR,
NATIONAL INSTITUTES OF HEALTH
on
THE SENIOR EXECUTIVE SERVICE
before the
SUBCOMMITTEE ON CIVIL SERVICE
COMMITTEE ON POST OFFICE AND CIVIL SERVICE
U.S. HOUSE OF REPRESENTATIVES
March 20, 1984
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Madam Chairwoman and Members of the Subcommittee:
I am pleased to have the opportunity to testify before this Subcommittee
and to present my views on the implementation and the effectiveness of the
Senior Executive Service (SES) at the National Institutes of Health (NIH).
As Deputy Director, I was responsible for the implementation of the SES
system at NIH, and I continue to exercise oversight of the operation of the
system. The NIH presents many challenges to implementing new and compre-
hensive systems such as the SES. In order to adequately express my views
on the effectiveness of this system, I believe it would be helpful to
briefly describe the unique nature of NIH, as well as some of our
experiences with the SES.
The NIH has developed a national and international reputation as a center
for biomedical research excellence. Our mission is to fund, support, and
conduct innovative research in the biomedical sciences. The NIH has an SES
staff of approximately 165 individuals with highly diverse responsibilities
ranging from the direction of medical research institutes, such as the
National Heart, Lung, and Blood Institute, to the program leadership of
major research grants and contracts programs, to the management of basic
scientific and clinical research programs. Over half of our SES staff are
noted researchers within their scientific disciplines, including several
recipients of the Nobel Prize. The NIH is an environment within which
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creative science and research flourish. It is essential that our admin-
istrative and personnel systems be designed to support such a system. Our
task was to implement the SES system in a manner consistent with this
administrative philosophy.
At the time the Civil Service Reform Act was enacted, the NIH was fortunate
to have most of its senior staff members serving under a special appoint-
ment mechanism authorized by Section 208(g) of the Public Health Service
Act. That appointment mechanism had been given to the Public Health
Service in recognition of the limitations of the Civil Service System in
the recruitment and retention of specially qualified professionals and
scientists. This authority was based on a "rank-in-the-person" concept,
including the principle of compensating top-level scientists for their
scientific accomplishments and achievements rather than managerial qualifi-
cations. This mechanism offered considerable flexibility in initial ap-
pointments, reassignments, and pay-setting. Even then, the Government was
at a constant disadvantage in being able to compete for the most promising
scientific leaders since most universities were capable of offering more
attractive compensation packages and perquisites. Nonetheless, the flex-
ibilities of the 208(g) authority offset some of these disadvantages and
this appointment mechanism served NIH well for many years. However, this
mechanism did not provide for monetary awards, and as the disparity between
the compensation packages of the private sector and the NIH increased, we
reached the limitations of this authority. By the late seventies it had
become ineffective for recruitment and retention purposes.
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Consequently, when the SES was created, expectations were high. The SES
was also based on the "rank-in-the-person" concept and contained many of
the same features as the 208(g) authority NIH had been using. However, the
SES promised substantial improvements in terms of additional flexibilities,
and more importantly, the ability to provide monetary rewards that had
never been available to the NIH in the past. Not only did we view the SES
as a system that would increase our prospects for successfully competing
for the top caliber scientists so essential to the mission of the NIH, but
also as a means of finally being able to adequately recognize and reward
their outstanding achievements. Therefore, we were committed to implement-
ing the system in the most effective and efficient way possible. We were
active participants in the implementation planning sessions conducted by
the Office of Personnel Management at Ocean City, Maryland, in October 1978,
and at Cherry Hill, New Jersey, in February 1980. We also worked extensively
and cooperatively with the administrative staffs of the Department of Health
and Human Services and the Public Health Service to design the best and most
appropriate system.
Our first task was to determine how to implement this system within the
environment I previously described, and in a manner that would enhance
rather than intrude upon the scientific mission of this organization.
Chief among our problems was to design and implement a performance apprais-
al system conducted on an annual basis that would adequately assess both
managerial and scientific performance. Performance appraisal systems are
poorly suited to judgments of performance in a scientifically oriented
institution. This is particularly true for assessing the value and con-
tributions of the individuals involved in the direction and conduct of
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basic and clinical research programs and investigations. It is very
difficult to predict the results of basic science, and therefore establish
performance standards and expectations. Research projects are usually of
long duration, frequently lasting 3 years or more, and the results cannot
be adequately judged until they have undergone a thorough and rigorous
scientific scrutiny by the worldwide scientific community.
Working in a highly cooperative and collaborative effort with our
colleagues in the Department of Health and Human Services and the Public
Health Service, NIH developed a subservice of the SES that we call the
Senior Scientific Service. The hallmark of this system is the evaluation
of the performance of scientific managers within the Department on the
basis of their scientific excellence, as well as their leadership qual-
ities. Additionally, their performance is evaluated separately by Perfor-
mance Review Boards composed of distinguished representatives of the sci-
entific community to assure a knowledgeable and impartial peer evaluation.
By recognizing the special needs of our basic and clinical research sci-
entists, we have successfully overcome many of the limitations of the SES
performance appraisal system as it applies to scientists. However, despite
our best efforts, it is still not a completely satisfactory solution to the
meaningful evaluation and compensation of our senior scientists, and I will
have more to say on this point later.
The second issue that we faced was how to develop an equitable review pro-
cess for the valuable and talented scientific administrators and managers
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who are not directly engaged in basic research. We wanted to design an
appraisal system that also provided for a fair and equitable peer review
and was as simple and results-oriented as possible. To do so, NIH sought
and received the input of all of its senior members. With their sugges-
.
tions and the collaboration of our personnel community, we devised a system
that successfully met these goals.
Even with this degree of cooperation, we found that the implementation of
the SES system at NIH was very time consuming and difficult. However, the
potential benefits of the SES were sufficiently high to keep everyone
actively involved in seeking even better means of making the SES, and par-
ticularly the annual performance appraisal and bonus process, work more
smoothly. Each year we review the manner in which the system is operating,
try to identify deficiencies and problems that still exist, and by con-
sensus, develop even better ways of assessing performance and conducting
our bonus reviews. As we have gained more experience, our proficiency has
increased. I am convinced that we have one of the most thoroughly reviewed
systems now in operation, and that our willingness to collectively reeval-
uate and modify our system has led to a highly effective and equitable
performance evaluation process.
In my opinion, the SES system has not fulfilled all of our expectations;
nonetheless, it has been beneficial to the NIH in the following ways:
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1. It has allowed us to recognize and monetarily reward at least
some of our many outstanding scientists and managers.
2. Since the SES is based on a "rank-in-the-person" rather than a
"rank-in-the-position" concept, it is particularly well suited to
an organization such as the NIH, and allows us to recognize merit
and achievement regardless of where it occurs in the organiza-
tion.
3. The system does allow for greater ease in reassigning staff
members; and, it also provides some flexibility for making
adjustments in their basic salary levels.
4. One of the greatest benefits of the SES came from the process of
designing and implementing the system in a manner that would en-
able us to meet the special needs of NIH. From this effort, we
learned how to better integrate management systems into a sci-
entifically oriented agency, and achieve positive and productive
results.
Despite these benefits, we found that regardless of the amount of modifi-
cations to the system, the SES is not well adapted or suited to our senior
scientific staff. The annual performance appraisal system, with its
emphasis on management responsibilities, is inappropriate for scientists.
The compensation of senior scientists is not sufficiently competitive to
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meet our recruitment and retention needs. The mechanisms for hiring and
promoting scientists are cumbersome and do not allow for adequate recog-
nition of scientific performance alone. We have concluded, as did the
White House Science Council's Federal Laboratory Review Panel, chaired by
David Packard, that a comprehensive and flexible pay and personnel system
is needed for Government research scientists. We are currently working in
collaboration with the Public Health Service and the Department of Health
and Human Services to develop a suitable outline for just such a system.
You also asked for my views on the findings of the GAO in their report on
the SES. I find that I am in basic agreement with the Comptroller Gen-
eral. Unlike his general observation on the point, I think that NIH has
done a very good job of linking individual performance to organizational
goals and objectives. Otherwise, I would agree with the Comptroller Gen-
eral that the full extent and potential of the SES has never been fully
realized because of the limitations that have been placed on the system
either administratively or by legislation. While the relaxation of the
bonus limitations that occurred this year is a positive step, I still find
myself in full accord with the Comptroller General's views on increasing
the number of SES bonuses awarded. In my opinion, he has offered a very
practical solution to restoring the SES to its full potential, and I en-
dorse his concept of gradually increasing the percentage of bonuses awarded
to the 50 percent limit envisioned in the Civil Service Reform Act. I
would further suggest increasing the amount of the bonuses that can be
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awarded to SES staff in any given year to more closely approximate the 20
percent of base pay provided for in the legislation. I believe that in
order to truly assess the effectiveness of the SES system, it should be
given the opportunity to be implemented within the full context of the
original law. Only then can we discover its true benefit as a flexible
management system.
I would like to conclude by saying that I am very proud of my association
with an organization as successful as NIH. We are at a time when the
Nation, and indeed the world, is in the midst of a revolution in the bio-
medical sciences. Exciting scientific research breakthroughs are now being
made into the nature and treatment of the diseases that have beset mankind,
and further scientific advances can be expected in the near future. NIH
has been a leader in this revolution, either conducting or stimulating and
supporting much of this valuable research. I feel we have an obligation to
continue this effort. The Senior Executive Service system can be a major
factor in providing us with the ability to attract and retain the caliber
of scientists and managers necessary to maintain and further the leadership
role we have established. Consequently, I ask you to consider restoring to
the SES the full potential and flexibility envisioned in the initial
legislation.
Thank you very much, Madam Chairwoman, for the opportunity to present my
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