223. Briefing Paper Prepared in the Department of State1

Department Organizational and Personnel Issues

In this Department, more than in program-oriented agencies, the fundamental resource is people, and organizational performance depends to an unusual extent on the quality of our personnel and on the way we manage and direct their efforts.

I. Department organization. Purely organizational questions have been treated in numerous external and internal studies. They fall into the following general categories:

A. Organization in the Substantive Area.

The relationship of the Secretary to his six principal assistants, D, P, E, T, M and C, and through them to substantive areas of the Department, varies with his personal managerial approach.

Below the level of the principals, the most important and enduring organizational questions arise from the fact (a) that the Department organizes itself, for understandable reasons, on both geographic and functional lines, and (b) the dynamics of a changing foreign policy agenda force repeated reexamination of our organizational premises. Important new problems therefore often bring with them jurisdictional questions—between the Department and other agencies, between two or more geographic bureaus, between two or more functional bureaus, [Page 750] or between geographic and functional bureaus. At present, there are no such jurisdictional questions requiring urgent solution, but some issues will require top level attention before long. The major examples:

—Should primary responsibility for the management of the Department’s role in all nuclear matters, both peaceful and military, be located in one bureau, or should it remain divided among PM, OES and geographic bureaus? The House International Relations Committee has tentative plans to hold hearings in February on the “Glennan Report”2 which addresses this issue as part of a general consideration of the role of the OES bureau.

—What is the most effective location of primary responsibility for coordinating Law of the Sea activities, presently handled by several offices, including OES, L and the Deputy Secretary’s office? Attention to organizational issues should precede U.S. participation at the 6th session of the current Law of the Sea Conference which will take place in May.

—What is the most effective structure for coherent and responsive policy formulation and decision-making on the arms transfer question? Policy responsibility is now shared by T, which has responsibility for specific decisions on Mutual Security Assistance transfers and P, which has responsibility for broader policy decisions.

—Should overseas information policy be more closely linked to foreign policy objectives by tightening State’s present general control over USIA policy as the Stanton report recommends,3 or should the present, looser arrangement continue?

—Domestic responsibility for cultural programs lies in State, while USIS has responsibility for overseas implementation. Are coordination problems sufficient to warrant combining both functions in one agency?

B. Organization for Management of Department Resources.

The basic issue is how the Department’s resources can be most effectively linked to the achievement of its objectives. Effective linking of resource management to the annual budget process is a key corollary issue.

The present policy-level mechanism for linking resource management to foreign policy goals is the Priorities Policy Group (PPG), estab [Page 751] lished in 1975.4 The PPG is chaired by the Deputy Under Secretary for Management. Its other members are the Inspector General, the Director General, the Assistant Secretary for Administration, the Director of Management Operations and, from the substantive side, the Counselor and the Director of the Policy Planning Staff. The establishment of the PPG system has provided a needed link between policy objectives and resource management, although the techniques employed should continue to evolve. To provide principals with a more systematic means to link resource inputs with policy outputs, the A Bureau, assisted by S/P, has designed a computer-assisted planning and control system called “POD/RAC”. The system is now being tested, and a senior review group will evaluate the results.

The principal procedure for linking policy to the budgetary process is the Policy Analysis and Resource Management (PARM) Cycle, a year-long series of steps which enables the principal Department managers on the PPG to make key determinations on budget priorities. How to strengthen and improve this process is a second basic issue in the management area. Several amendments to the procedure used in connection with the last budget are under consideration.

II. Personnel.

A. Strengthening Domestic and Specialist Personnel Systems.

Current State of Issues

In order to meet the requirements of today’s diplomacy, the Department needs a versatile, responsive professional corps embodying a wide range of skills and talents. This requires the existence of career systems which will strengthen the competence of our headquarters staff and the corps of specialists who serve both at home and abroad, as well as the traditional Foreign Service Officer Corps.

Following extensive studies, the Department is developing a program to rationalize its personnel structure, using currently available authorities, with three major categories: (a) A Foreign Service Officer Corps to perform diplomatic and policy functions at home and abroad, (b) a domestic service, reestablished under the Civil Service system, to take care of Washington-based requirements, and (c) a more coherent Foreign Affairs Specialist Corps to meet our growing needs for special expertise and management support worldwide.

Implementation of this program is dependent upon several issues, some of which under Executive Order 116365 are consultable with [Page 752] AFSA and/or AFGE, and some which will require consultation with the Civil Service Commission and the Board of the Foreign Service, depending upon final decisions reached in the Department. The domestic aspects of this program are now under review by senior officials. The nature and scope of the Foreign Affairs Specialist Corps is still under study. Which categories of individuals now in the Staff Corps or the FSO Corps should be included, and whether some slight modification of the Foreign Service Act is required are two major questions requiring resolution.

Brief History of Policy

In the mid 1960s, the Administration initiated legislation, introduced by Representative Hays, to unify the Civil Service and Foreign Service under a single Foreign Service personnel system.6 The main reasons for this proposal were:

—the Department’s desire to administer its personnel system under a single authority related to the foreign affairs field so as to have greater flexibility and efficiency in personnel management; and

—the belief that a single system would provide greater equity to employees and reduce the divisiveness between groups and feelings of second-class citizenship by non-FSOs.

The Hays Bill met strong resistence in the Senate and was defeated. Subsequently an internal task force made a similar recommendation in Diplomacy for the ’70s.7 In 1971 the Department, without benefit of legislative changes, adopted the single service approach, basing its action on a 1968 law whose principal purpose was to strengthen the USIA career service.

Our efforts to implement this program have not been successful. Serious management and legal questions have arisen which prompted reconsideration of the need for a separate domestic system based on the Civil Service. A careful study of the problem concluded:

—Uniformity has not brought equity or management efficiency. The Foreign Service Act,8 designed for a generalist, disciplined, mobile officer corps, serving throughout the world, does not fit the career patterns and needs of individuals hired for specialized and essentially home service jobs in Washington. Non-FSOs and FSOs cannot compete on the same basis for promotion. More basically, however, the rank-in-man FSO promotion system does not fit as well as the rank-in-job Civil Service system where individuals serve for long periods in the [Page 753] same area: The promotion of Foreign Service employees ahead of their nominal superiors has caused problems in offices where transfers to overseas service are rare.

—Serious legal questions emerged. Because the Foreign Service Act: (1) specifically limits the period of service in the U.S., (2) requires a system of selection out and (3) contains generous retirement benefits predicated on the rigors of service abroad, its application to essentially domestic employees leaves us open to legal challenge and employee grievances.

FSR hiring practices have come under attack. In foregoing the Civil Service merit systems, we did not develop a coherent competitive system for selecting individuals for the domestic service. Charges were raised in the Congress concerning our ability to prevent non-merit hires under this system. We do not have the resources and expertise to try to create a domestic Foreign Service category parallel to the Civil Service system.

—The loss of some management flexibility is a reasonable cost for improved standards and accountability under a merit system. Competitive standards are clearly in our interest, by assuring quality and equity. Also, they are required when we are held answerable under the EEO Act and our present bargaining requirements.

—The prospects are poor for obtaining legislation to solve legal questions through amendment of the Foreign Service Act. To the contrary, there are pressures to standardize conditions of service and benefits among all Cabinet agencies which make it difficult to maintain an exceptional claim for the Foreign Service when applied to essentially domestic employees. Moreover, the broadening of the Foreign Service to include essentially domestic personnel will undermine our capability of sustaining a disciplined service.

While these considerations constitute a strong case for reestablishing a domestic system using Civil Service authorities, such a move also has drawbacks, and certain management elements within the Department are opposed to the change. They believe:

—that running two separate systems is inefficient and will increase feeling of second-class station within the domestic service.

—that the ability of the system to achieve its ends is dependent on Civil Service approval of a number of super-grade positions. Although the Civil Service Commission has been forthcoming and supportive it will not make a hard commitment that it will approve such positions.

—that a Civil Service component occupying policy-level domestic positions might reduce Foreign Service opportunities to serve at home and lessen the already declining incentive to overseas service.

—that turning again to the Civil Service will lead to loss of the Department’s control and management flexibility during a period of an [Page 754] ticipated tight personnel resources; the new system would make the rigidities of the Civil Service system a much greater factor in resource management.

—that the current system has not been given a fair chance in terms of the time it has been in operation or sustained effort to make it work.

—that the legal problems are best solved through amendment of the Foreign Service Act.

We have weighed the costs and benefits of adjusting the Department’s personnel system to conform to the realities of managing current needs within current legislation and authorities, and have decided we have no viable alternative but to resolve our current problems by recognizing the need for a domestic component based on the Civil Service system. The compelling factors in reaching this conclusion were: (1) the real legal question whether we have authority under the Foreign Service Act to run a domestic system and the difficulty, if not impossibility, of a basic modification in the Foreign Service Act in the near future; (2) the perverse effect on people and organizational effectiveness, of trying unsuccessfully to force domestic personnel into the present Foreign Service system; and (3) our conviction that with professional management we, as any other Cabinet agency, can work within the Civil Service system, that it has evolved significantly and that we can manage effectively personnel mechanisms built around clear and rational categories.

Unlike some earlier studies which foundered on broad structural conclusions based on ideal solutions, we have concentrated on determining our actual requirements and on identifying structural flaws which prevent us from meeting them. In this process, we are operating on four principles:

1. We must improve and clarify the definition of the Department’s staffing needs.

2. We must utilize career systems which support those needs.

3. We must insure equity for all people in the Department’s service, and mobility among career categories.

4. We must maintain our goal of an integrated service.

Congressional Perspective

Congress, particularly Senator Pell, has questioned our use of the current personnel system, and has called on the Department to submit a comprehensive plan for improvement and simplification by January 7, 1977.9

[Page 755]

Outside Studies

Personnel system structure has been a major concern of most recent studies of the Department of State and the Foreign Service. Three of six major studies between 1949 and 1975 proposed an all Foreign Service system. The Wriston committee and two of the three most recent, including the 1968 AFSA study and the 1975 Murphy Commission report, proposed a mixed Foreign Service/Civil Service system, an approach which is consistent with that now under consideration.10

B. Professional Development.

Current State of Issue

As part of a thorough examination of its personnel management concepts and systems, the Department determined in May 1975 that improved means were needed to identify its professional requirements and develop policies governing the careers of its professionals to meet those requirements. A Board of Professional Development consisting of the Deputy Under Secretary for Management (M), the Director General of the Foreign Service (M/DG), the Director of Management Operations (M/MO), the Director of the Policy Planning Staff (S/P), the Inspector General (S/IG), the Assistant Secretary for Administration (A), the Director of the Foreign Service Institute (M/FSI), and representatives of two geographic and two functional bureaus, was formed in August 1975 to serve these functions.

Early this year the Board established a working group of inside professionals and outside experts to examine three central questions affecting professional development. The group’s report has since been received by the Board and, at the Board’s behest, considered by the Bureau of Personnel. The three subjects, and the status of the issues raised are:

1. How to improve the Department’s manpower planning so that we can project and track our human resource needs.

Substantial work is now underway both to strengthen systems for identifying professional needs and to predict changing needs. These efforts will require continuing, if modest, budgetary support and, more important, the participation of the policy leadership of the Department.

2. How to meet the Department’s need for specialized functional competence.

Attacking this question involves judgments as to the design and structure of our professional corps, as well as improved definition of [Page 756] our professional needs (Item 1 above). Thus, it can be better addressed when information-gathering has progressed further and when we are better able to grapple with some underlying questions.

3. How to build an effective means of developing top career executives for the Department and the Foreign Service.

As in any organization with professionals who serve in a career system, the Department needs mechanisms to identify, train and develop those who have the capacity to provide policy and managerial leadership. To accomplish this, we need better means of evaluation, better supervision and training, and a better design for selecting and assigning potential executives. The process raises issues of equity as well as of management’s commitment to the development process. However, a basic analysis of the qualities required in senior positions is underway as a means of enabling us to refine our evaluation, development and assignment systems. In addition a number of other proposals for first-phase actions are now before the Board of Professional Development.

Congressional Perspective

At the instance of the House International Relations Committee, the Congressional Research Service has done an intensive study of Science, Technology, and Diplomacy. It faults the Department for inattentiveness to developing personnel to meet these new demands in diplomacy, and it is anticipated that hearings may be held on this and related reports in the new year.

Outside Studies

Many foreign affairs personnel studies devote major attention to this question. The Murphy Commission Report proposed a program similar to the one we are considering: open to all categories of personnel, based on positions identified as key to executive development, utilizing a professional development staff and engaging senior officials. The Murphy approach, however, envisaged creation of a government-wide Foreign Affairs Executive Service.

C. Lateral Entry Into the FSO Corps.

Current State of Issue

Any career personnel system needs the capability to meet new demands, to correct unanticipated shortages, to renew itself, and to upgrade itself qualitatively. Lateral entry into the FSO Corps, both from other parts of the Department and from outside, traditionally has been used for this purpose. With the exception of a special five year program [Page 757] begun in 1975 for women and minority group members,11 however, lateral entry from outside the Foreign Affairs agencies has been suspended since 1971.

PER is currently reviewing a proposal for resumption of outside lateral entry, under rigorous quality controls. Primary issues involved are how to bring lateral entrants into the system without unduly distorting career opportunities of those already members; how to insure that those admitted under such a program are fully qualified; and how to determine exactly what kinds of individuals should be sought and admitted. Answers to these questions depend in part upon other current projects. For example, under the proposed three-part officer personnel structure suggested above individuals with certain kinds of skills who formerly might have been recruited into the FSO Corps via lateral entry may more appropriately be brought into the Department as Foreign Affairs Specialists or as domestic employees in the Civil Service System. Similarly, the development of standards and desired qualifications for lateral entrants is partially dependent upon firmer delineation, through our Job Analysis study, of the qualitive traits and experiences which are most germane for senior FSO responsibilities. A final issue is whether this proposed program should be operated separately from the existing mid-level EEO program, whether the two should be merged while retaining an explicit EEO hiring target, or whether they should be completely merged with affirmative action in recruitment but no explicit EEO hiring target.

Outside Studies

Virtually all recent personnel studies have recommended a form of lateral entry. Diplomacy for the ’70s recommended this as “an affirmative recruiting instrument to bring in a selected number of highly qualified persons.” The Murphy Commission Report recommended the active recruitment of lateral transfers, particularly those with needed skills such as economics.

D. Interagency Relationships.

Current State of Issue

The central issue is the most effective organizational relationship between State and other agencies in the conduct of foreign relations. As domestic and foreign policy considerations increasingly intertwine, the claims of other agencies for influence on policy questions increase and are reflected in inter-departmental organizational issues. These are approached through several structures, the most important being the [Page 758] NSC system which is discussed in another paper.12 Specifically personnel issues are addressed through several arrangements noted below. Generally speaking, there has been an ebb and flow in the acceptance of the concept that all foreign activities should be conducted within the Foreign Service system under centralized direction.

The Department’s Foreign Service performs functions overseas on behalf of some departments such as Labor and Commerce. These departments are intensely interested in looking over the Department’s shoulders on personnel and management practices which, to a large extent, include personnel assignments. Some 22 other departments and agencies, including Treasury, Agriculture and Defense, have personnel in U.S. diplomatic missions who function under the Ambassador’s direction, but who do not come within the Department’s personnel management system. However, ambassadors are consulted prior to appointment of senior officers. Recent developments have included a vigorous attack on State’s personnel jurisdiction overseas which was mounted by the Department of Commerce in 1970–73 when Commerce attempted to take over the commercial function abroad.13 In another recent case, we have proposed to Treasury a new approach to joint staffing for an international financial corps.

The primary institutional mechanism for considering other agency views on overseas personnel matters is the Board of the Foreign Service, a senior non-statutory advisory body on personnel policy and related matters, chaired by the Deputy Secretary of State with representation from Commerce, Labor, USIS, AID, OMB and the Civil Service Commission. Historically, the Board has not been a broad-gauged deliberative body. The reasons may be inherent in the present structure or may be due to the parochial attitudes of the parties.

Interagency control of staff levels (i.e. positions) for all agencies operating under ambassadors abroad rests with the NSC Under Secretaries Committee, chaired by the Department’s Deputy Secretary and staffed by the MODE (Monitoring Overseas Direct Employment) office under M. This system provides ambassadors and State regional bureaus with considerable control over mission personnel/position management, although this is sometimes circumvented by other agencies or neglected by the ambassador himself. A year-long series of special review efforts during 1976 which focused on overseas staffs resulted in the elimination of a number of positions and helped clarify and [Page 759] strengthen the voice of the ambassadors with respect to other agency personnel.14

A related issue is the degree of control which State should have over substantive reporting by overseas representatives of other agencies. As in the case of personnel management, the question is less one of legal authority than of actual practice. State is attempting to increase the managerial role in substantive reporting played by Chiefs of Mission and their deputies, and to fill its own role more effectively in Washington. We are doing so through a Foreign Service Reporting System under the Office of the Reports Coordinator in M. Development of the concept is well under way. State’s leverage rests both on the significance of its own Foreign Service reporting for the needs of end-user agencies in Washington and on the direct personnel mechanisms cited above.

A different type of issue has been posed by the enactment of the 1976 Arms Export Control Act.15 One of the Congressional motivations behind the act was reinforcement of the already existing policy that the Secretary of State coordinate U.S. arms transfer policy. One Defense reaction to the act was a recent proposal that State handle all incoming traffic on specific arms transfer requests. The proposed arrangement would require significant personnel additions and would involve State in issues with little or no policy content to the detriment of our consideration of major arms issues. The proposal has not been accepted; instead, discussions have begun with Defense on ways to improve existing procedures which will strengthen policy control over arms transfers but not involve State in routine administrative details.

Congressional Perspective

Congressional interest in the question of control of personnel overseas is not high at the moment. There is still some support within the Senate Commerce Committee for a separate commercial service under Commerce. The Foreign Relations Committee and the House In [Page 760] ternational Relations Committee support continuation of a central direction of the Foreign Service by State.

Outside Studies

The Murphy Commission recommended that overseas representation of domestic departments continue in selected areas so long as their representatives are under the control of the ambassador. It also recommended that the role and function of the Board of the Foreign Service be carefully reviewed. There have been several studies of the economic/commercial function abroad. The most recent, by OMB, recommended that it continue under State; most specific OMB recommendations for improving performance in the economic/commercial area have been implemented.

  1. Source: National Archives, RG 59, Transition Records of the Executive Secretariat, 1959–1977, Entry 5338, Box 1, Transition Material to S/CL—Mr. Lake from Bureaus. No classification marking. Ortiz forwarded the paper to Lake under a December 27 covering memorandum. Ortiz’ memorandum, sent through Eagleburger, indicates that the paper was to be included in the transition books being prepared for the incoming Carter administration. (Ibid.) The paper was among those requested by Lake on November 24. See Document 221.
  2. A reference to a report on the use of science in foreign policy operations, produced by a special committee appointed by the House International Relations Committee chaired by former NASA Administrator and U.S. Representative to the International Energy Agency, Ambassador T. Keith Glennan.
  3. See Documents 102, 103, and 106.
  4. See footnote 7, Document 144.
  5. Issued on December 17, 1971, E.O. 11636 aimed to reform employee-management relations in the Foreign Service. The full text was published in a special supplement of the Department of State Newsletter, January 1972, pp. 1–10.
  6. See footnote 2, Document 156.
  7. See footnote 4, Document 154.
  8. See footnote 4, Document 143.
  9. The Foreign Relations Authorization Act for FY 1977 (S. 3168; P.L. 94–350), Section 117, required the Secretary to address the ongoing problem of reconciling the Civil and Foreign Services of the Department of State and USIA. For the Department’s final report, January 10, see Document 158.
  10. For the Wriston Committee report and the AFSA study, see footnote 6, Document 154. For the recommendations of the Murphy Commission on the State Department organization, see Document 147.
  11. See footnote 2, Document 148.
  12. Not further identified.
  13. The institutional rivalry between the Departments of State and Commerce is detailed at length in Foreign Relations, 1969–1976, vol. II, Organization and Management of U.S. Foreign Policy, 1969–1972, Documents 348381.
  14. See Document 150.
  15. On April 28, Congress approved a bill (S. 2662) that extended its veto rights to military equipment sales and established, among other things, a $9 billion per annum limit on total arms sales. Moreover, the measure gave Congress the right to terminate military aid to countries in violation of internationally recognized human rights standards. The bill was vetoed by President Ford who argued the legislation made Congress a “virtual co-administrator” of U.S. foreign policy. In May, a revised bill dropped the $9 billion ceiling. Signed into law on June 30, the Arms Export Control Act (H.R. 13680; P.L. 94–329) specified that no security assistance would be given to countries which violated human rights and created the position of Coordinator of Human Rights and Humanitarian Affairs within the Department of State. (Congress and the Nation, Vol. IV, 1973–1976, p. 874–877)