The Office of Personnel Management (OPM) is essentially the “HR Department” of the federal government. An independent federal agency, OPM manages the civil service workforce and makes sure it remains “vital and healthy.” The agency ensures that all federal agencies comply with civil service laws and regulations in hiring or firing employees or managing its workforce. The office also manages all benefits programs, including health insurance, available to federal employees. Civil service rules have long been the subject of debate and proposed reforms, some of which have been implemented. Others, like those pushed by the Bush administration in creating the new Department of Homeland Security, have not been as successful.
The U.S. Civil Service Commission was founded in 1883, when the Pendleton Civil Service Reform Act was passed. This law placed most federal employees on the merit system and forced some government jobs to be filled on the basis of competitive exams. The Pendleton Civil Service Reform Act was drafted during the administration of President Chester A. Arthur and was passed partially in response to the recent assassination of President James A. Garfield by one of his own speechwriters, Julius Guiteau. (The law also prohibits the solicitation of campaign donations on federal government property.)
The law applied only to federal jobs, not the state and local jobs that were bartered for political influence. This meant that few jobs were actually covered at the outset. But as outgoing presidents nominated their own appointees, these jobs could be converted to civil service jobs. By the beginning of the 20th century, most federal jobs were under civil service. This led to greater expertise in civil service positions.
On January 1, 1979, when the Civil Service Reform Act of 1978 was enacted, the Office of Personnel Management (OPM) was founded. This law allowed for agency heads to move career senior executives into any position for which they are qualified. As the old U.S. Civil Service Commission was abolished, the Federal Labor Relations Authority (FLRA) and the U.S. Merit Systems Protection Board (MPSB) were also created.
Under the new agency, all aspects of the federal government’s workforce, including benefits information, hiring practices, human resources information and more, were stored in one central location. This information is also available to federal workers and the general public through the Internet.
In May 2010, the OPM launched a Hiring Reform Initiative, by which the office supported federal agencies with 351 training sessions in 66 cities for 17,300 people involved in the hiring process. That same year, the OPM established the Health Claims Data Warehouse, a database of personal information generated from employees' healthcare claims. In July 2011 the agency reconfigured the database, making improvements particularly in the area of privacy. The OPM also created a 2010-2015 Strategic Plan that details annual activities and ongoing performance review.
In August 2011, the OPM—along with three other federal agencies—received an executive order signed by President Barack Obama directing them to design a strategy for increasing workplace diversity in the federal government. In May, the OPM released new guidelines for federal transgender employees, including a non-discrimination policy that makes allowance for an employee’s transition from one gender to another.
In July 2011, an analysis of statistics in the OPM database revealed that job security in the federal government is extremely high (0.55% workers fired in the prior year) compared to that in the private sector (3% fired during the same period). The conclusion reached was that employees of many federal agencies are more likely to die of natural causes than to get fired. Another OPM data analysis showed that the number of U.S. government employees earning $150,000 or more a year jumped tenfold in the past five years, and that the highest paid federal employees are male doctors and attorneys over the age of 40.
Responding to an executive order, the OPM announced in August 2011 its plan for a redesigned internship and entry-level federal hiring system called the Pathways Programs, which would streamline the former Federal Career Intern Program, among others, and offer improved transparency.
Biography of an Ideal: A History of the Federal Civil Service
The Office of Personnel Management (OPM) is responsible for overseeing all aspects of the federal government’s workforce. The agency promotes civil services and advocates for the members of the federal workforce. It provides management guidance to the various areas of the federal government’s executive branch and issues regulations controlling federal human resources. Its work sometimes brings it into contact with the Federal Labor Relationship Authority, which oversees the collective bargaining rights of federal employees, and the Merit Systems Protection Board, which is responsible for conducting studies of the federal civil service and hearing appeals from federal employees who have been disciplined or fired.
The OPM was originally divided into 13 individual subcomponents, but was restructured in January 2010 to include the following divisions:
Office of the Director includes the Executive Secretariat & Ombudsman, Internal Oversight and Compliance, Equal Employment Opportunity, Chief Human Capital Officers Council, and the following three offices:
- Office of Communications and Public Liaison deals with the press and with requests from media and the general public for information about the agency.
- Office of Congressional Relations communicates information and advocates for the OPM’s initiatives to Congress, including oversight and appropriations committees.
- Office of the General Counsel provides legal services to OPM’s director, deputy
director, and divisions. It advises government agencies in understanding and carrying out civil service responsibilities and meeting the merit system principles. The office also provides civil service-related legal assistance to members of the public.
Office of the Chief Financial Officer is responsible for implementing the
President’s Management Agenda within the agency and providing OPM offices with the full range of financial management, strategic planning and budget services. It also performs OPM’s oversight of internal controls and risk assessments.
Federal Investigative Services is used by federal security offices that submit investigation requests to OPM, or follow OPM guidance on security and suitability programs.
Employee Services leads the design, development and implementation of HR policies.
Office of the Inspector General conducts independent audits, investigations, and evaluations relating to OPM programs and operations. It is responsible for administrative actions against health care providers that commit sanctionable offenses with respect to the Federal Employees Health Benefits Program (FEHBP) or other federal programs. The OIG keeps the director and Congress informed about problems and deficiencies in the administration of agency programs and operations and the necessity for corrective action.
Federal Prevailing Rate Advisory Committee helps to determine the prevailing federal rates for minimum wage.
Retirement Services is responsible for administering the Civil Service Retirement System (CSRS) and the Federal Employees Retirement System (FERS).
Merit System Audit & Compliance oversees federal agency human resource programs to ensure they are operating effectively and meeting merit system principles, veterans’ preference, and other critical civil service requirements.
Human Resources Solutions partners with agencies to transform them into high performing organizations. It recovers costs of operations by managing tens of thousands of dollars in agency reimbursable agreements from over 150 federal customers, which is achieved by providing competitively priced programs and services.
Office of Planning and Policy Analysis examines policy options, legislative changes, government-wide data trends and employee survey findings that affect the OPM’s management of human resource policy, including insurance and employee health and wellness benefits for federal employees.
Healthcare and Insurance consolidates all of the agency’s healthcare and insurance responsibilities into a single organization that is comprised of three components: Healthcare Program Development and Implementation, National Healthcare Operations, and Federal Employee Insurance Operations.
Office of Diversity and Inclusion develops comprehensive strategies to help build a diverse and inclusive workforce, respecting individual and organizational cultures, while complying with merit principles and applicable federal laws.
Facilities, Security, and Contracting is responsible for a variety of services such as acquiring goods and services for the OPM central office, facilities management, leasing and new construction oversight, providing contracting policy oversight and guidance to OPM field locations, conducting suitability and national security clearance determinations for its personnel, Personal Identity Verification card issuance and management, emergency management and continuity activities, physical security oversight, and countermeasure installation and maintenance.
Office of the Chief Information Officer provides strategic information technology and maintains OPM’s IT infrastructure.
Executive Services provides executive direction and leadership, legal advice and representation, public affairs, legislative liaison, equal employment opportunity management, contracting and administrative management, security and emergency services, planning and policy analysis, and rent and centrally funded items.
The President’s Commission on White House Fellowships program is responsible for providing selected Americans with firsthand experience in the process of governing the nation.
From the OPM Web Site
The Office of Personnel Management (OPM) spent more than $8.012 billion on 71,143 contractor transactions this decade. According to USASpending.gov, OPM’s top contracts were for miscellaneous professional services ($2,572,688,783), training lectures ($2,368,564,626), data collection ($524,286,480), custodial/janitorial services ($417,432,815), and automatic data processing and telecommunications ($410,128,780 ).
The top five contractors are as follows:
1. US Investigations Services $1,694,913,107
2. Altegrity Inc. $891,004,330
3. Booz Allen Hamilton Inc. $447,226,525
4. Teltara Inc. $385,276,383
5. SRA International Inc. $292,176,996
The OPM’s largest contractor, US Investigations Services, is the nation’s leading security and information services provider. The company offers employment screening services, government security solutions, and risk management strategies to companies, federal agencies, and national security markets. The agency’s second-largest contractor is Altegrity, a global security and law enforcement training company that provides its clients with investigative services, specialized training, contextualized data mining, and software
Faith-Based Healthcare Program Provokes Controversy
In 2004, the Office of Personnel Management (OPM) announced the launch of a faith-based insurance program for federal workers in Illinois. The program, run by OSF Health, prohibited payment for contraceptives, abortions, sterilization, or artificial insemination. Although the OPM tried to characterize the healthcare program as one option among many, both pro-life and pro-choice groups protested the move, saying it blurred the line between church and state.
Faith-based health insurance plan generates controversy (by David McGlinchey, Government Executive)
Federal Employees Unsatisfied by Management’s Handling of Poor Performers
In 2000, a white paper released by the President’s Management Council suggested several ways to address the problem of management in top federal agencies. In a recent survey, federal employees unexpectedly said they were very unsatisfied by how managers dealt with poor performers. This added to a long-running controversy between employees and managers at several federal agencies. The Office of Personnel Management placed the paper on display at its Senior Management Conference in Springfield, Virginia, and planned to review suggestions for possible inclusion in future initiatives.
Agencies endorse performance management principles (by Katy Saldarini, Governmnet Executive)
Performance-Based Pay
In June 2005, The Washington Post reported that Linda M. Springer, nominated to be the next director of the OPM, admitted that federal employees were anxious about the Bush administration’s plans to overhaul civil service pay policies. The administration planned to abolish the General Schedule which features predictable pay raises and replace it with broad salary ranges known as “pay bands.” Many federal workers worried that agencies would not impose performance-based pay fairly. Under the Obama administration, OPM Director John Berry called for a reform of the pay system and received some support from unions, which had previously opposed pay-for-performance plans but felt confident that Berry was not modeling his reforms on “ill-conceived Bush-era pay schemes.” While the General Schedule was not abolished, pay bands were instituted in 2009 for some federal employees. Many Democratic lawmakers have asked the Obama administration to rescind that policy, while conservative groups continue to call for the full-scale replacement of the General Schedule with pay bands. In November 2010, President Obama ordered a two-year pay freeze for all employees of the federal government’s Executive Branch, effective January 2011. The deficit-cutting measure is expected to save $28 billion over the next five years.
OPM Nominee Reassures Senators About Pay and Personnel Changes (by Stephen Barr, Washington Post)
OPM chief proposes bold reform to federal hiring (by Karen Sachs, OhMyGov!)
Federal Pay Debate Centers On Incentives (by Alex M. Parker, Californiafirefighter.com)
Amid Deficit Fears, Obama Freezes Pay (by Peter Baker and Jackie Calmes, New York Times)
Obama Proposes Pay Reform
Three years into his administration, President Barack Obama was still trying to overhaul the pay system for federal workers through changes proposed by the Office of Personnel Management (OPM).
A few months after the administration took over in 2009, OPM discussed plans to create a performance-based pay system designed to shrink the wage gap between public- and private-sector employees. The changes also sought to establish mandatory spending levels for employee training and revamp performance appraisals.
The original goal called for having the reforms adopted by Congress before the November 2010 elections. This failed to happen.
As of early 2012, the OPM continued to discuss moving forward with its reforms, insisting federal managers and employees needed “a modernized personnel system that reflects the reality of the 21st Century.”
Getting the changes adopted proved difficult, not only because of partisan opposition from Republicans in Congress, but also due to budget cuts in OPM operations. Under the administration’s fiscal 2013 budget request, funding for the agency would decrease by almost 9%.
OPM Expected To Push Reform Efforts, Funding Doesn't Correspond (by Molly Bernhart Walker, Fierce Government)
OPM: Pay Reform by 2011 (by Tim Kauffman, Federal Times)
Director Proposes Reforms
John Berry, director of the OPM, joined with the Office and Management and Budget in February 2011 to offer a series of reforms impacting senior managers in the federal government.
The joint proposal focused on four areas involving the Senior Executive Service: better engagement, career development, personnel performance management, and recruitment.
The proposed changes followed other reforms Berry discussed shortly after President Barack Obama took office in 2009. Then, the OPM head talked about reviving a “broken civil service system.” He said it was time to revive the principle of merit among federal workers and to revive the existing pay scale that had been in effect for 60 years.
Federal Executive Ranks Get Ready for Reform (by Jitinder Kohli, Center for American Progress)
OPM Chief Proposes Bold Reform To Federal Hiring (by Caren Sachs, OhMyGov)
Civil Service Reform in the Name of National Security
When the Bush administration created the Department of Homeland Security (DHS), it tried to use the new agency as a test ground for implementing new civil service reforms. In early 2008, after a protracted political and legal battle over the proposed changes, the administration signaled in a court filing that it was caving on its plans to implement the controversial changes.
Background:
DHS abandons efforts to implement new labor relations rules (by Richard W. Walker, Federal Computer Week)
DOD, DHS progress with personnel reforms (by Richard W. Walker, Federal Computer Week)
Smoke, Mirrors and Changes to the Federal Civil Service Structure (by Richard Smith, FedSmith.com)
Appropriators block funding for DHS personnel reforms (by Brittany Ballenstedt, Government Executive)
Homeland Security workers criticize personnel reforms (by David McGlinchey, Government Executive)
Civil Service Reform Under George W. Bush: Ideology, Politics, and Public Personnel Administration [abstract] (by J. Edward Kellough, Lloyd G. Nigro and Gene A Brewer, Sage Journals)
Pro:
Administration officials argued it was critical to alter federal regulations pertaining to employee raises and other personnel rules in order to make the new Homeland Security operation run efficiently. The plan was backed by DHS leaders and Republicans on Capitol Hill, and it got an unexpected boost from the Government Accountability Office, which gave a positive review of the proposed changes.
The Department of Homeland Security Challenges the Federal Civil Service System (by Richard W. Ryan) (pdf)
GAO Report: DHS Personnel System Design Effort Provides for Collaboration and Employee Participation (pdf)
Con:
Initially, federal employee labor unions discussed the changes with administration officials in an attempt to help craft reforms that could be acceptable to both sides. The effort failed, however, after union leaders concluded that the administration was determined to destroy the collective bargaining power of DHS and other federal employees. Over the past several years, the American Federation of Government Employees and the National Treasury Employees Union, among other unions, have publicly opposed the new personnel system designed for the DHS. They also filed suit to stop the implementation of the changes. Congressional Democrats joined the unions in opposing the administration’s effort.
A Dangerous Experiment in Civil Service Reform (by Joseph Dassaro, FederalTimes.com) (pdf)
Kathie Ann Whipple (Acting Director), 2009
Michael Hager (Acting Director), 2008–2009
Linda Springer
Linda M. Springer served as the eighth director of the OPM from June 2005 until August 2008. Springer received her Bachelor of Science degree, cum laude, from Pennsylvania’s Ursinus College in 1977 and attended the executive program in managing the enterprise at Columbia University Business School.
Before her career in public service, Springer spent more than 25 years in the financial services industry, first at Coopers and Lybrand, then in executive roles responsible for general and financial management and strategic and operational planning. She held positions of senior vice president and controller at Provident Mutual and vice president and product manager at Penn Mutual Life Insurance Company.
Her positions in the federal government have included controller of the White House Office of Management and Budget and head of the Office of Federal Financial Management.
An accomplished cellist, Springer was not a favorite among employee unions. She announced her resignation in July 2008 to return to the private sector as executive director of Ernst & Young’s public sector advisory services.
- Table of Contents
- Overview
- History
- What it Does
- Where Does the Money Go
- Controversies
- Suggested Reforms
- Comments
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