SUBCOMMITTEE ON CIVIL SERVICE COMMITTEE ON POST OFFICE AND CIVIL SERVICE

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP89-00066R000100100024-7
• Release Decision: RIFPUB
• Original Classification: K
• Document Page Count: 4
• Document Creation Date: December 22, 2016
• Document Release Date: July 1, 2010
• Sequence Number: 24
• Publication Date: March 20, 1984
• Content Type: MISC

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NATIONAL AERONAUTICS AND SPACE ADMINISTRATION
WASHINGTON, D.C. 20546
FOR RELEASE ON DELIVERY EXPECTED AT
9:30 AM - MARCH 20, 1984
STATE= OF RICHARD G. SMITH
DIRECTOR, JOHN F. MNMY SPACE CENTER
SUBCOMMITTEE ON CIVIL SERVICE
HOUSE CGMIITTEE ON POST OFFICE AND CIVIL SERVICE
Madam Chairwoman and Members of the Ccamittee:
I am pleased to be here today to provide you with my view and
impressions of the Senior Executive Service. When the Civil Service
Reform Act was passed, I was eager to accept the view of many who felt
the SES would be the cornerstone of civil service reform. The basic
philosophy behind the SES was, and still is, sound. The system design
had a lot going for it. Who could fault a service designed to create a
cadre of extraordinarily con4 etent executives who are accountable for
their programs and eligible for additional compensation and benefits
based on their performance? Five years after its inception there is
still much to be said for the SES. However, I am less enthusiastic than
I was in the beginning. As an individual I have certainly been well
treated, but I have not been able to do as well for many equally
deserving people who report to me.
The bonus provision of the SES was a primary inducement to join,
and to excel in performance. For the first time we were to have an
environment that actually provided an incentive for those in the top
levels of management to sit down and discuss performance requirements,
establish challenging goals, and then adjust those goals as the external
environment dictated. The bonus was something tangible to work with,
and the number of bonuses available was important. Those who became
charter members of the SES, as well as those who have since entered the
SES, were, with few exceptions, good to outstanding managers. If
anything, I personally felt that the provision for giving bonuses for up
to 50% of those in the SES was marginally adequate, and that a number in
the 70% - 80% range would have been much more effective. Nonetheless,
the bonus provision was a tremendous step forward, and other benefits,
such as unlimited annual leave accrual, were extremely worthwhile
incentives for people who, by necessity, work far more than 40 hours per
week to carry out their responsibilities.
From my standpoint then, the reaction by Congress and the Office of
Personnel Management at the end of the first performance rating period
was unexpected and deeply disturbing. I understood that Congress really
endorsed bonuses for up to 50% of those in the SES. My agency, NASA,
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was recognized for setting up an effective appraisal program. Then we
were condermed for granting nearly 50% of our people bonuses at the end
of the first rating period. We were disturbed at the criticism. . We
were more disturbed when Congress reduced the limit on bonuses to 25%.
We considered the Congressional reduction in bonus authority to 25% and
the OPM's further reduction to 20% to be unwarranted and a major breach
of faith. I heard many, including some Congressmen, express the view
that bonuses were an unwarranted give away program. That attitude
greatly dampened my enthusiasm for sitting down and doing the kind of
job required to painstakingly set and adjust goals, and maintain the
steady dialogue throughout a performance cycle necessary to give the
system credibility and make it work as intended. I feel the same way
about Merit Pay and all .of the performance rating systems. These
systems simply have not been implemented as they were intended to be,
and people do not feel good about them. The rating process is a lonely
process at best. With extremely small numbers of bonuses available for
those in the SES, and Merit Pay System problems which have not permitted
adequate recognition for GS-13 through GS-15 managers and supervisors, I
not only worry whether I'm doing the right thing when I make my bonus
recommendations, I also worry about whether or not my recommendations
and actions are actually demotivating. The Comptroller General, in his
testimony before you in November, indicated that more than 40 percent of
the career executives who became charter members of the SES in July 1979
have left. I think one need not look too far to find some of the major
reasons for such large turnover.
I understand the Congressional limitation on bonuses has not been
renewed this fiscal year. I also understand that OPM is publishing
guidance which will permit agencies, with OPM's prior approval, to
increase the number of bonuses to 30 to 35 percent of career SES
appointees. This certainly is a step in the right direction. It should
eliminate sore of the negative feelings which exist among those in the
SES today. However, I submit that if Congress meant what it said when
it passed the Civil Service Reform Act, we ought to be permitted to
return to the original 50 percent limit.
Here, I would like to reiterate that bonuses for up to 50% of the
SES population is not an extremely high number. Earlier I expressed the
personal view that a number in the 70 to 80 percent range would have
been much more effective. I suggested this for a number or reasons.
First, such numbers are not without precedent in industry. Rockwell,
and others, regularly grant performance bonuses to about 80 percent of
their executives. Second, if we have done a reasonable job of selection
into the Senior Executive Service, a "satisfactory" performer in the
literal sense should be rare. I know this to be true in NASA, and it is
particularly true at all of the field centers with which I have had
first hand experience. Third, top people, especially top executives not
only think they are good, they know they are good. Morale suffers
tremendously when a system breaks faith with its employees and begins to
treat them as losers rather than winners. Thomas J. Peters and Robert
H. Waterman, Jr., in their fine book, "In Search of Excellence," have
much to say on this point, but their bottom line is very succinct: "The
message that comes through... is that we like to think of ourselves as
winners. ...label a man a loser and he'll start acting like one." Not
only in the SES but throughout the Federal government, we are in great
danger of taking an extremely talented and competent group of people and
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turning them into losers. Constant carping about the quality and
dedication of Federal employees at all levels, the perceived breach of
faith in the SES bonus system and the merit pay system, the effort to
gut the retirement system, and the health benefits fiasco are causing
major morale problems throughout Government at all levels. Bad morale,
low productivity, and an inability to attract competent people is
something we can ill afford.
In my end of the space business, we really haven't had this trouble
in the past. We've been a high visibility agency with a glamour mission
and we've been pushing the frontiers of technology. Now we are
operationally oriented and we're trying to sell fully reimbursable
launch services in the face of stiff competition from Ariane, and
perhaps soon from Russia and the private sector. We are asking people
to stretch to drive down the cost of operations and reduce people,
contractor and civil service alike, to the minimum. If the current
environment continues we cannot expect to attract and retain top
competence in the Federal work force. I can already see the beginnings
of a serious degradation in competence as people become disenchanted and
leave. It becomes more difficult to recruit quality replacements, not
only in the SES but throughout government, and I fear that government
programs which offer second class benefits based on second class
philosophies will soon attract nothing but second class people. In time
that will assure that Federal employees, including those in the SES,
will have becare what some, including some in Congress, have claimed
then to be.
In sunmary, the SES system was good, both in intent and concept. My
assessment is that it hasn't worked nearly as well as it should have, or
could have. My philosophy is, we should do it right--or not do it at
all. This ends my statement. Thank you for inviting me to be here.
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