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News Release

Friday, August 15, 2003
Contact: Michael Orenstein
Tel: 202-606-2402

OPM Official Promotes HR Flexibilities from 2002 Homeland Security Legislation

Director Kay Coles James issued regulations now in use

Washington, D.C. -- A top official representing U.S. Office of Personnel Management Director Kay Coles James spoke yesterday to federal human resource professionals to promote the Bush Administration's performance-based pay plan and personnel flexibilities under the Homeland Security Acts of 2002. The initiatives are designed to attract top people to government.

Ron Sanders, Associate Director of OPM's Division for Strategic Human Resources Policy, touted President Bush's proposed Human Capital Performance Fund -- a pay-for-performance tool -- and several authorities recently approved by OPM Director Kay Coles James that will help agencies ensure the quality of new hires and allow managers the flexibility to offer early retirements to employees as a way to correct skills imbalances.

Speaking to attendees at the 18th Annual Federal Dispute Resolution Conference in Orlando, Sanders said the performance-based pay approach of President Bush's proposed Human Capital Performance Fund will let agencies financially reward their top performers and, in so doing, help build a performance culture and loyalty among key staff in an increasingly transient workforce. Through the fund, the top 15 percent of each agency's employees could be rewarded with significant annual pay increases. Each pay hike could total as much as 10 percent of the employee's base pay and would count in the computation of retirement benefits.

Sanders also educated guests on new hiring flexibilities that will facilitate the hire of the best qualified person and improve the representation of minorities in the federal work place.

"There is an intense competition in the labor market for the men and women who possess the mix of contemporary skills needed by today's employers," said Sanders. "To help federal managers meet their staffing challenges, Director James has made several tools available that give federal mangers the ability to move quickly, to get the right person into the right job, and to do it now."

Direct Hire Authority lets agencies move expeditiously to hire qualified individuals when emergencies, environmental disasters or other unanticipated events create a critical hiring need. This authority also may be used to fill positions when a severe shortage of candidates exists.

A second flexibility, called Category Rating, gives managers the freedom to consider the whole person and various intangibles that make one candidate more qualified than another for a particular job. A numerical scoring system is not used with this flexibility.

However, Sanders reminded the audience that Category Rating is voluntary, and agencies are free to use the Rule-of-Three scoring procedure for new hires. This procedure generally requires that only the three highest scoring individuals be considered to fill advertised positions.

With either Category Rating or the Rule-of-Three, Veterans' Preference is fully recognized for employment with the federal government.

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Our mission is to Recruit, Retain and Honor a World-Class Workforce to Serve the American People. OPM 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.

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