152. Briefing Memorandum From the Deputy Under Secretary of State for Management (Read) to Secretary of State Vance and the Deputy Secretary of State (Christopher)1


  • Personnel Management Reorganization

Scotty Campbell, Civil Service Commission Chairman, briefed Deputy and Under Secretary level representatives of all Cabinet Departments and major agencies today on personnel management reorganization plans.2

The proposals which have been developed for submission to the President and Congress in a reorganization plan and a major legislative submission early in 1978 are outlined in an attachment (Tab 1). The principal recommendations are designed:

—to give Cabinet Members and their top managers substantially enlarged authority over agency personnel;

—to replace the Civil Service Commission with an Office of Personnel Management to set personnel policy and a Merit Systems Protection Board to handle appeals and enforcement.

—to decentralize to the departments and agencies many of the regulatory responsibilities acquired by the Civil Service Commission; and

—to place new emphasis (through incentive bonus payments) on productivity.

The impact of the proposals on the Department of State would be limited, of course, to our 3100 Civil Service employees (1900 officers and 1200 staff). The other two-thirds of our work force which operates [Page 599] under the Foreign Service Act3 is expected to be exempted by the President as will other “excepted services.”

The changes to be recommended are constructive and much needed, and we have only minor amendments to suggest. Campbell and his colleagues have offered to brief either or both of you next week directly if you wish, and there may also be an early Cabinet meeting discussion of the package, which gets to the President late this month.4

Tab 1

Paper Prepared in the Department of State5

Reorganization of the Federal Personnel Systems

1. Creating A Senior Executive Service

—Establish a Senior Executive Service of about 9000 persons whose duties are managerial in nature, and would include not more than 1570 persons appointed on a non-career basis.

—The Senior Executive Service would replace GS–16, 17, and 18 and Executive Level V (except for Presidential appointees)

—Establish a parallel Career Senior Professional Service for non-managerial personnel. (scientists, engineers, attorneys and individual specialists.)

—Authorize agency heads to transfer senior executives among positions; set their salaries within a range established by law; pay annual incentive bonuses not to exceed 20% of salary) and provide education and training, including sabbaticals.

—Authorize agency heads to remove individuals from the Senior Executive Service without rights of appeal.

—Authorize the central personnel agency, in consultation with OMB, to allocate the number of senior executive positions and to establish the proportion which may be filled on a non-career basis.

—Expected benefits from these proposals include a highly competent, responsive managerial leadership with limited tenure rights and high rewards.

[Page 600]

2. Restoring Managerial Authority

—Authorize annual bonuses of up to 15% of salary for unusually productive employees GS–9 to GS–15. Bonuses to be financed by reducing the amount and frequency of automatic step increases.

—Authorize removal of non-performing employees through a 90-day simplified system. Appeals would be limited to grounds of substantial procedural error.

—Repeal present performance rating system and require agencies to install their own systems.

—Grant preference in Reduction in Force to those who have received bonuses or incentive awards.

OMB and CSC to develop alternative measures to the multiple staffing controls now in use.

—Expected benefits from these proposals include strengthening of managers capacity to motivate and direct employees, and reduction in burden and expense of multiple control systems.

3. Choosing and Developing Career Employees

—Amend Veterans Preference Act6 to:

—retain preference for veterans with 30% disability (rather than the current 10%)

—remove “Rule of Three” which limits selecting officer to three names.

—allow veterans to be passed over.

—limit use of veterans preference to 10 years

—eliminate veterans preference in reduction-in-force

—eliminate preference for those who have retired from the military services.

—Authorize delegation of examining authority to agency heads under performance contracts.

CSC to repeal current detailed promotion plan requirements and allow agencies to design their own systems under general standards.

—Expected benefits of these proposals include improving the quality of the examining process and quality of new hires and reducing the adverse impact of the present system on women.

4. Redesigning Compensation Systems

—Convert about 740,000 clerical and administrative positions to a wage system based on local rates.

—Redefine Federal salary comparability on a total compensation basis to include the value of fringe benefits.

[Page 601]

—Reduce the frequency and amount of periodic step increases for middle level (GS–9 through GS–15) employees. Use these savings to provide funds for incentive bonuses and advanced training.

Expected benefits from these proposals include rewarding performance rather than length of service; making government more competitive in high cost areas and reducing criticism of excessive Federal salaries in certain geographic areas.

5. Ensuring Affirmative Action

—Transfer EEO complaints to a Merit Systems Protection Board. Authorize EEOC to issue orders against Civil Service regulations and selection procedures.

—Define aged and handicapped as protected classes underTitle VII.7

—Conform the EEO complaint process to general appeal and arbitration system.

Expected benefits from these proposals include more rapid discrimination complaint decisions, increase employees confidence and assure linkage between public and private sector policies.

6. Replacing the Civil Service Commission with an Office of Personnel Management

—Abolish the Civil Service Commission

—Create an Office of Personnel Management

Expected benefits from these proposals include an increase in public confidence, employee confidence that their rights are fairly protected, and a positive personnel program with emphasis on productivity and responsiveness.

7. Decentralizing Personnel Management

—Central personnel agency to delegate up to 63 of 78 present authorities to agencies.

—Central personnel agency to contract with agencies specifying the expected standard of performance.

Expected benefits from these proposals include elimination of unnecessary paperwork; reduction in time required to obtain decisions; personal [personnel] decisions made by manager close to the issue.

8. Protecting Merit Systems and Employee Rights

—Transfer adjudicatory functions of Civil Service Commission, Federal Employee Appeals Authority and Appeals Review Board to an independent Merit Systems Protection Board.

[Page 602]

—Have Merit Systems Protection Board handle all types of employee appeals except Fair Labor Standards and Classification appeals.

—Permit use of arbitration instead of a hearing at request of employee.

—Direct Merit Systems Protection Board to investigate violations of merit in agencies.

Expected benefits would be a consolidated, single level appeal system which is speedy, economical to operate, and fair to both managers and employees.

9. Establishing a Permanent Framework for Federal Labor Relations

—Establish a neutral Federal Labor Relations Board

—Create a Joint Consultation Council including both union and agency representatives.

—Recommend no bargaining on economic issues, no right to strike and no expansion of scope of grievance procedures.

Expected benefits are a permanent system for Labor relations; a neutral board overseeing this area, and allows Office of Personnel Management to concentrate on management efforts.

10. Improving Intergovernmental Programs

—Consolidate the various merit system requirements applicable to state and local governments into a single set of standards.

—Provide for an experimental 3 year program of general management improvements grants.

Expected benefits include simplifying problems of state and local governments, avoiding policy conflicts among Federal agencies, and leading to better personnel administration.

  1. Source: National Archives, RG 59, Records of the Under Secretary for Management (M), 1977–1978, Box 6, Chron November 1977. No classification marking.
  2. Carter signed the Reorganization Act, P.L. 95–17, on April 6, 1977. The legislation permitted the administration to submit reorganization plans for executive branch agencies to Congress. In his signing statement, Carter noted, “I do plan to give my personal attention and support to the entire reorganization program.” For his remarks at the signing ceremony and the signing statement, see Public Papers: Carter, 1977, Book II, pp. 571–573.
  3. Reference to the Foreign Service Act of 1946 (P.L. 79–724).
  4. See Carter’s message to Congress transmitting his program for Civil Service reform, March 2, 1978, in Public Papers: Carter, 1978, Book I, pp. 444–449. S. 2640, Civil Service Reform Act of 1978, was introduced in the Senate the next day.
  5. No classification marking.
  6. P.L. 78–359.
  7. Reference to Title VII of P.L. 88–352, Civil Rights Act of 1964.