Federal Manager's Daily Report

While the federal personnel system has become more decentralized since the last major reform in the 1978 Civil Service Reform Act, there are limits to how far that trend should go, the MSPB has said.

An MSPB publication noted that the trend has been to erode OPM’s main role of setting policies across government and to shift authority to individual agencies, in the name of meeting their specific needs. It cited as examples the Clinton administration’s abolition of the central Federal Personnel Manual, creation of the (since-repealed) alternative personnel systems for DHS and DoD in the early 2000s, and the recent enactment of separate disciplinary and appeals procedures for VA employees. Also, hiring has largely shifted from OPM’s hands to those of agencies.

Said the MSPB: “The question of the extent to which personnel flexibilities or variations should be granted to departments and agencies has been high on policy makers’ radar. However, the value of the second role of a central personnel authority–offering economies of scale and expertise for the administration of personnel management functions–should not be overlooked.

“The usefulness of this second role may seem so obvious that it does not get a second thought. Does anyone believe, for example, that each agency should establish and administer a retirement system for its employees, or that each agency should go into the marketplace and broker a health insurance program for its employees? Yet, in at least one important area–hiring–agencies are largely left to fend for themselves.”

It cited one of its studies concluding that agencies with less in-house expertise in hiring and lacking the funds to obtain that expertise from contractors are at a “distinct disadvantage” in hiring.

“However the role of OPM as policy maker evolves under this administration, OPM’s new leadership should strive to maintain, if not expand, those personnel programs that OPM can administer more effectively and at a lower cost than individual agencies. Such a course would be in keeping with the recent emphasis on shared services and on avoiding attempting to solve the same problem over and over again, agency by agency,” it said.