OPM Director Kay James Makes Case for Managerial Flexibility Before Volcker Commission

Washington, D.C. -- The U.S. Office of Personnel Management is working vigorously with top Administration officials in 22 agencies to have flexible and effective personnel, payroll and other priority human resources systems in place when the Department of Homeland Security opens its doors for business, said the Bush Administration's Kay Coles James during a public hearing today in Washington.

James, Director of the U.S. Office of Personnel Management, participated in the Volcker Commission's National Commission on the Public Service: A Time of Crisis and Opportunity. Appearing on the day's second panel, James focused her comments on compensation issues to attract and retain quality employees throughout government, including the proposed Department of Homeland Security. The Volcker Commission is a program of the Brookings Institution.

The hearing's first panel included Chief Justice of the United States William H. Rehnquist and Associate Justice Stephen G. Breyer in a discussion on improving pay for federal judges.

"We have a pressing and urgent need to accelerate beyond conceptual discussion of human capital management and focus our discussion on the existing and increased flexibilities needed to stand-up a new cabinet department with a critical security mission," said James.

During a question and answer session, James provided justification for adopting pay-for-performance systems, which, when used effectively, can propel employee productivity and create a climate conducive to accomplishment. She added that the use of broadbanding -- an alternative pay system that rewards top performers -- and other existing pay flexibilities can help government attract top-flight employees.

James, President Bush's chief advisor on federal human resources issues,will play a key role in establishing pay and personnel systems at the Department of Homeland Security that are contemporary, flexible, and competitive with systems used to compensate and manage employees in the private sector.

"It is absolutely imperative that the new Department of Homeland Security have a modern and effective personnel system so we can get the right people to the right jobs in time to make a difference," said James. "Since those who threaten our country are relentless, the systems we develop to run the agency must be flexible enough to anticipate and meet threats one, two or five years into the future."

Creation of the Department of Homeland Security involves enormous challenges, including:

• transferring 170,00 employees from 22 cabinet agency or small agency components, each governed by varying personnel system
• coordinating employee pay and benefits that are now managed by seven different pay systems
• establishing effective working relationships with the 17 unions that represent nearly 50,000 employees being transferred to the new department

In recognizing the numerous parties having an interest in the Department's development, James has said that unions and other stakeholder groups must be part of the deliberative process involved in designing the new personnel system. She added that the unionized workers are as patriotic as any in the federal work force and will play an important role in the Department's success.

OPM oversees the federal work force and provides the American public with up-to-date employment information. OPM also supports U.S. agencies with personnel services and policy leadership including staffing tools, guidance on labor-management relations and programs to improve work force performance.