Hiring New Employees in a Decentralized Civil Service

Hiring New Employees in a Decentralized

Civil Service

A Report to the President and the Congress of the United Statesby the U.S. Merit Systems Protection Board

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August 1999

The PresidentPresident of the SenateSpeaker of the House of Representatives

Sirs:

In accordance with the requirements of 5 U.S.C. 1204(a)(3), it is my honor to sub-mit this Merit Systems Protection Board (MSPB) report, �The Role of Delegated Examin-ing Units: Hiring New Employees in a Decentralized Civil Service,� which looks at thesystems Federal agencies use in examining applicants for competitive service positions.

In 1996, the Office of Personnel Management delegated to Federal agencies theauthority to examine applicants for positions in the competitive civil service. Today ap-proximately 650 delegated examining units (DEU�s) exercise this authority on behalf of thevarious departments and agencies. The DEU�s handle tasks such as recruiting for vacantpositions, reviewing the qualifications of job applicants, and ranking and referring candi-dates to hiring officials for consideration. This report describes what agencies and theirDEU�s like about delegated examining, as well as what concerns they have about the pro-cess. In addition, the report makes recommendations�such as modifying the Rule ofThree�which MSPB believes are needed to improve the DEUs� ability to ensure the refer-ral of high-quality candidates for Federal jobs.

I hope you will find this report useful in examining important issues surroundingcompetitive recruiting and assessment, and in considering the most effective ways for theGovernment to staff the Federal service with highly-qualified employees.

Respectfully,

Ben L. Erdreich

U.S. MERIT SYSTEMS PROECTION BOARD1120 Vermont Avenue, NW

Washington, DC 20419

THE CHAIRMAN

U. S. Merit Systems Protection Board

Ben L. Erdreich, Chairman

Beth S. Slavet, Vice Chairman

Susanne T. Marshall, Member

Office of Policy and Evaluation

DirectorJohn M. Palguta

Project ManagerBruce Mayor

Executive Summary ........................................................................................................... vii

Introduction to Delegated Examining and Delegated Examining Units ................................. 1

Who Is Being Hired by Agencies............................................................................................. 2

The Procedures Agencies and Their Delegated Examining Units Are Using to HireNew Employees ....................................................................................................................... 4

How They Recruit Candidates ................................................................................................. 4How They Assess Candidates ................................................................................................... 5

How OPM Assists DEU�s ........................................................................................................ 6

What Agency DEU�s and Managers Like About Delegated Examining .................................. 7

The Concerns DEU Officials Have With Delegated Examining ............................................. 8The Quality of Assessment Determinations ............................................................................. 8The Usefulness of Delegated Examining Certificates ................................................................ 9

The Concerns Managers and Supervisors Have About Hiring New Employees ................... 10

What Can Be Done to Address the Concerns of DEU Officials and Agency Managers andSupervisors ............................................................................................................................ 11

Improve Assessment ................................................................................................................ 11Improve the Usefulness of Delegated Examining Certificates ................................................ 13Provide Training to Managers and Supervisors ...................................................................... 15

Overall Findings and Recommendations .............................................................................. 16

The Role of Delegated Examining Units:Hiring New Employees in a Decentralized Civil Service

Contents

vA REPORT BY THE U.S. MERIT SYSTEMS PROTECTION BOARD

vi THE ROLE OF DELEGATED EXAMINING UNITS: HIRING NEW EMPLOYEES IN A DECENTRALIZED CIVIL SERVICE

Executive Summary

Because making good hiring decisions is critical to the efficiency of the Federal civil service, theMerit Systems Protection Board (MSPB or the Board) from time to time examines the FederalGovernment�s hiring procedures and offers suggestions for improvement. In 1996, an impor-tant aspect of the Government�s hiring system was modified when the Office of PersonnelManagement (OPM) delegated to agencies the authority to examine applicants for virtuallyevery position in the competitive civil service. This decentralization of examining authorityreflected an Administration and Congressional desire to make the process for hiring newemployees faster and less bureaucratic. As a result of the decentralization, activities related tothe competitive hiring of new employees are now generally performed by agency personnelemployees working in the Government�s approximately 650 delegated examining units (DEU�s).

This report examines the processes agencies and their DEU�s are using to handle the applicantexamining responsibilities that have been delegated to them. We look at who is being hired anddescribe the tasks DEU�s perform to bring new employees on board. The report also describeswhat agencies like about delegated examining and what concerns they have about the process.Finally, the report discusses what should be done to address agencies� concerns and to improvethe Government�s system for selecting new employees.

In FY 1998, the Federal Government hired over60,000 new full-time permanent employees. Themajority of them were brought on board by only ahandful of the larger agencies, and most of themwork in lower graded entry-level positions in asmall number of the Government�s more than 450white-collar occupations. For example, the De-partments of Justice, the Treasury, and VeteransAffairs, and the military departments accountedfor 68 percent of new hires in FY 1998; more thanhalf of the new white-collar employees that yearwere hired into just 20 occupations, over a third ofwhich were clerical.

In the past, many of the Government�s newemployees were evaluated and referred for jobvacancies through some type of centralized proce-dure administered and controlled by OPM. To-day, with OPM having delegated to agencies theauthority to perform all hiring-related tasks,

individual Federal agencies are in charge of the wayvirtually all new hires are brought into theirorganizations. The work involved in this processis done by agencies� delegated examining units.

What tasks do DEU�s perform?In exercising delegated examining authorities,DEU�s perform two essential tasks. They publi-cize the existence of vacant positions, frequentlythrough newspaper advertisements and almostalways through the Internet. As a result, any-where in the country, applicants with Internetaccess can log on to www.usajobs.opm.gov andfind postings for most Federal job opportunities.

The other critical task of DEU�s is to assess appli-cants to identify the best candidates and determinewhich ones will be referred to selecting officials foremployment consideration. DEU�s use essentially

viiA REPORT BY THE U.S. MERIT SYSTEMS PROTECTION BOARD

two assessment methods�written tests and unas-sembled examinations. In unassembled examina-tions, agencies give applicants numerical scoresbased upon a rating of their education and experi-ence against the evaluation criteria for the position.The process for doing that is called case examining.Unassembled examinations were used to assessapproximately 60 percent of the new hires selectedfrom DEU referral certificates in FY 1998.

What do agencies like about delegatedexamining?We conducted interviews with the heads of 70DEU�s chosen at random and found that, generallyspeaking, they believe that delegated examining haseliminated the major difficulties associated withcentralized hiring�the length of time it took to getcertificates of candidates from OPM and the poorquality or unavailability of the candidates on thosecertificates. With delegated examining authority,agencies can produce certificates more quickly thanOPM was able to do. Further, agencies believethat by doing their own examining, they are ableto identify and refer better candidates to theselecting officials. In fact, over 80 percent of theDEU officials with whom we spoke said thatdelegated examining is enabling them to hire high-quality candidates in a reasonable period of time.And nearly 80 percent said that delegated examin-ing is faster and more effective than centralizedhiring.

What concerns do agencies have aboutdelegated examining?We found that despite these generally positiveviews of decentralized hiring, officials in DEU�swith heavy workloads think there are some seriousproblems. They believe that case examiningfrequently fails to place the best qualified candi-dates on DEU certificates, and that this is unfairboth to the best qualified candidates and to themanagers for whom the certificates are prepared.

DEU officials also cite concerns about the useful-ness of a significant number of their certificates.They say that the DEU certificates frequentlyprovide supervisors with far too few candidates.Supervisors and managers agree with that assess-ment. This is caused, in part, by a law known asthe �Rule of Three� which requires managers to

select from among the top three available candi-dates on a DEU referral certificate. The logic of aRule of Three might be supportable if the assess-ment tools most frequently used to evaluateapplicants were capable of precisely identifying thebest three candidates. But with large numbers ofqualified candidates, such fine distinctions usuallycannot be made on the basis of unassembledexaminations or even on the basis of written tests.

DEU officials said that the usefulness of theircertificates is further limited by the widespreadpractice of allowing significant numbers of currentFederal employees to apply for the same job undertwo separate sets of procedures. These employeesfile applications both under DEU postings that areopen to members of the public and under meritpromotion postings that are essentially limited tocurrent Federal employees. Frequently, thesecurrent employees are included on DEU referralcertificates, creating a situation that inhibits theeffectiveness of the DEU process as a tool forbringing new people into the Government.

In addition, we learned that even though agencymanagers and supervisors believe delegated examin-ing is better than centralized hiring, they feel thatmany of the problems that make it difficult forthem to hire competent candidates from outsidethe Government remain. In the opinion of themanagers and supervisors in focus groups weconducted, one of those unsolved problems is thatmanagers and supervisors do not have a sufficientunderstanding of sound human resources prin-ciples and practices in general, nor of the Govern-ment�s hiring rules and processes in particular.

RecommendationsSeveral steps should be taken to make delegatedexamining work better and improve the processfor hiring new employees from outside Govern-ment:

1. Congress and OPM should take action tomake written tests readily available to agenciesthat hire significant numbers of new employeesthrough competitive procedures.In light of the Government�s strong interest inmaking good hiring decisions and in light of theimportance of good assessment tools to the perfor-mance of that task, Congress should provide funds

viii THE ROLE OF DELEGATED EXAMINING UNITS: HIRING NEW EMPLOYEES IN A DECENTRALIZED CIVIL SERVICE

to cover the costs for creating and validatingwritten tests (which frequently run between$100,000 and $150,000, and can be substantiallygreater). Until that occurs, OPM should considerhow much of its budget it can afford to dedicate tothe creation and validation of written tests forpositions into which agencies hire in significantnumbers. OPM should also consider ending itspractice of charging for the test-based certificates itcurrently prepares for agencies.

2. As long as unassembled examinations con-tinue to be used to evaluate candidates forpositions into which many applicants are hired,agencies need to commit sufficient resources toDEU�s to ensure high-quality assessments.The Government�s interest in hiring high-qualitycandidates and the entitlement of those candidatesto fair treatment in the competitive process is notwell-served when DEU�s lack the resources of staff,money, time, and expertise to make high-qualitycase examining determinations.

3. Congress, OPM, and agencies should addressthe problems identified by DEU�s with regardto the usefulness of their certificates.a. The Rule of Three should be modified to allowsupervisors to consider a greater number of qualifiedcandidates.Consistent with the other flexibilities associatedwith delegated examining, agencies should beallowed to determine whether it is appropriate tolimit their supervisors to choosing from just thethree top-ranked, available candidates. Wherethere are many applicants, agencies should be free

to conclude that a greater number of qualifiedapplicants, or perhaps a percentage of these, wouldbe a more appropriate limitation.

b. Agencies need to look at whether the practice ofallowing double applications by current employeesaffects the ability of their supervisors to consideroutside candidates.If the presence of current employees on DEUreferral certificates restricts supervisors� consider-ation of outside candidates, agency managementshould take steps to correct the situation. Onemethod for doing this is for agency managementand OPM to amend their delegated examiningagreements to allow agencies to preclude employ-ees who are eligible for consideration under a meritpromotion posting from being able to apply forthe same job under delegated examining procedures.

4. Agencies should address managers� andsupervisors� lack of knowledge about soundhuman resources practices and about hiringrules and processes, particularly with respect tohiring from outside the Government.Agencies need to provide selecting officials withinformation on best human resources practices andwith more training related to the Government�shiring rules and processes, as well as with easilyaccessible reference tools that they can use whenhiring. In a large organization, many factors canadversely affect the ability of managers and super-visors to bring high-quality candidates on board ina reasonable period of time. Lack of knowledgeabout the rules and procedures governing theGovernment�s hiring process should not be one ofthem.

1A REPORT BY THE U.S. MERIT SYSTEMS PROTECTION BOARD

This is a report about how the Governmentcurrently hires most new employees into thecompetitive civil service. The merit system prin-ciples call for open competition for these positions,with selections based upon merit considerations.1

Because of the connection between making goodhiring decisions and the efficiency of the civilservice, the Merit Systems Protection Board has onseveral occasions examined the Government�scompetitive hiring procedures and made sugges-tions for improvement.

In 1994, MSPB issued a report titled �EnteringProfessional Positions in the Federal Government�that traced the history of Federal hiring practices.Our report noted that while agency officials havealways made the actual hiring decisions, theauthority to recruit, evaluate, and refer candidatesfor selection has frequently been placed in theGovernment�s central personnel agency. Origi-nally that agency was the Civil Service Commis-sion, and since 1978 it has been the Office ofPersonnel Management. When the Government�scentral personnel agency holds the authority toevaluate and refer a list of candidates for agenciesto choose from, the hiring system is described as�centralized.� Since the establishment of the meritsystem in the 1880�s, there have been periods whenthe Government�s hiring system has been central-ized and periods when it has been decentralized.When it is decentralized, agencies not only makethe hiring decisions but also recruit and evaluatethe candidates who apply, and there is no need foragencies to obtain a list of eligible candidates,commonly called a �certificate,� from the central

personnel authority. Historically, a centralizedsystem has been seen as more expert and incorrupt-ible, while a decentralized system has been seen asless bureaucratic and more conducive to expediteddecisionmaking.

Our 1994 report observed that the Government�shiring process for two categories of jobs, profes-sional and administrative positions, was actually farmore decentralized than was generally thought. Inthe 1980�s, a variety of factors had led OPM todelegate so many of its recruitment and examiningauthorities to agencies that by the mid-1990�s onlyone out of every five professional and administra-tive entrants into the competitive civil service wasstill being selected from an OPM certificate.Agencies, with OPM�s permission, were makingnearly as many selections for professional andadministrative jobs from certificates they them-selves had prepared without any OPM involve-ment as they were making from OPM certificates.Many other entrants into those positions werebeing hired under special authorities that OPMgranted to agencies to allow them to hire candi-dates without going through traditional competi-tive procedures.

Since the issuance of our 1994 report whichdescribes these disparate methods for selecting newhires into professional and administrative posi-tions, the Administration and Congress signifi-cantly restructured the Government�s competitivecivil service hiring practices to create a morecoherent decentralized system for hiring into allcategories of positions. Heeding objections about

Introduction to Delegated Examiningand Delegated Examining Units

1 Specifically, 5 U.S.C. 2301 provides that selection �should be determined solely on the basis of relative ability, knowledge and skills, afterfair and open competition . . . .�

2 THE ROLE OF DELEGATED EXAMINING UNITS: HIRING NEW EMPLOYEES IN A DECENTRALIZED CIVIL SERVICE

how slow and bureaucratic the centralized processhad become, Congress effectively required OPM todelegate nearly all of its hiring-related authoritiesto agencies; and at the same time the Administra-tion repositioned OPM so that it could assist theagencies in the performance of their new duties.2

As a result of these changes, today Federal agenciesdo almost all Government competitive hiringeither directly or through contracts that arefrequently with OPM and that typically take theform of agreements for reimbursable services.Within the agencies, most competitive hiring ofnew employees is handled or coordinated byentities known as �delegated examining units.�

The DEU�s are staffed by agency personnel offi-cials who have been trained by OPM in how tooperate a fair and lawful competitive process.They oversee the recruitment and evaluation ofcandidates for competitive service positions.Acting primarily through these DEU�s, agencies

The Government hires tens of thousands of newfull-time permanent civil service employees eachyear. And it does so despite the fact that the sizeof the full-time permanent nonpostal Federalcivilian workforce has in the past few years shrunkby several hundred thousand people. It was atabout 1.75 million in 1994 and had declined toabout 1.55 million employees by the end of FY1998. But even during this period of downsizing,the Government was doing a great deal of hiring toreplace employees who resigned or retired as wellas to staff new initiatives ordered by Congress such

2 In 1993, Vice President Gore headed a review of the Federal Government that led to the publication by the National Performance Reviewof a report titled �From Red Tape to Results: Creating a Government That Works Better and Costs Less.� It recommended that agencies beprovided with the authority to conduct their own recruiting and examining, and that all central registers be abolished. In furtherance of thatsuggestion, the Administration�s budget proposal for FY 1996 significantly reduced the amount of money earmarked for the OPM division thathandled competitive examining. The FY 1996 appropriation, which decreased OPM�s budget by approximately $40 million, reflected thatreduction. Congress also amended 5 U.S.C. 1104 to remove most restrictions on OPM�s ability to delegate examining authority to agencies and toauthorize OPM to provide staffing assistance on a reimbursable basis through the revolving fund to agencies exercising delegated examiningauthorities.

determine how a job will be advertised, how thecandidates will be assessed, and who among thecandidates will be referred for the vacant positions.Agencies also determine or have their DEU�sdetermine whether each or all of those functionswill be done internally or contracted out. Agen-cies and their DEU�s have thus become the keyplayers in a significantly revised Federal process forbringing new hires into the competitive service.

This report describes who is being hired and theprocedures agencies and their DEU�s are using tobring new employees into the Government, andhow agency activities are being assisted by OPM.It also looks at what agencies, and their managersand supervisors, like about the arrangement, andwhat concerns they have. Finally, the reportexamines what can be done to address thoseconcerns and improve the operation of the del-egated examining process.

Who Is Being Hired by Agenciesas increasing the number of border patrol agents.Figure 1 contrasts the declining number of full-time Federal employees in recent years with thetotal number of white-collar and blue-collar newhires into such positions over the same period. Itshows that while the size of the full-time work-force averaged a decline of 40,000 employees peryear, the number of new full-time hires each yearrose from just over 40,000 in FY 1994 to morethan 60,000 in FY 1998. Delegated examiningaccounts for approximately 60 percent of thesenew hires. The rest are being hired through


authorities, like excepted service hiring authorities,that do not require traditional competitivepostings.

Most new hires are white-collar employees andmany of those new hires work in a small numberof the Government�s nearly 450 white-collaroccupations. Approximately 15 percent (aboutone out of seven) work as data transcribers or taxexamining assistants in the Internal RevenueService. Others are employed as miscellaneousclerks and assistants and as secretaries in a varietyof agencies, and as correctional officers hired bythe Bureau of Prisons, border patrol agents in theImmigration and Naturalization Service or contactrepresentatives in the Social Security Administra-tion. The occupations into which the largestnumbers of full-time white collar workers werehired in FY 1998 are listed in table 1. It shows thatmore than half of the new white-collar hires in FY1998 worked in just 20 occupational series.

Most of these new white-collar hires work inlower-graded entry-level positions in a handful ofagencies. As figure 2 shows (page 4), more thantwo-thirds of the new full-time, permanent, white-collar employees in FY 98 were hired at the GS-8level or below. And, as figure 3 indicates (page 4),nearly two-thirds of the total number of full-timewhite-collar and blue-collar permanent hires went

Table 1. Top 20 White-Collar Occupa-tions for Full-Time New Hires, FY 1998

Data transcriber, GS-0356

Misc clerk/assistant, GS-0303

Tax examining, GS-0592

Border patrol, GS-1896

Secretary, GS-0318

Correctional officer, GS-0007

Computer specialist, GS-0334

General attorney, GS-0905

Mail and file clerk, GS-0305

Misc administration andprogram, GS-0301

Air traffic control, GS-2192

Contact representative, GS-0962

Criminal investigation, GS-1811

Police, GS-0083

Medical clerk, GS-0679

Immigration inspection, GS-1816

Nurse, GS-0610

Office automation clerkand assistant, GS-0326

Patent examining, GS-1225

Nursing assistance, GS-0621

Total

Percent of New Hires

Occupations Number ofNew Hires

Source: Central Personnel Data File

53

29,363

670

724

737

828

864

876

880

884

901

1,004

1,056

1,069

1,104

1,442

1,578

1,785

1,881

3,067

3,685

4,328

to work in seven of the Government�s largestdepartments�Agriculture, the Army, Health andHuman Services, Justice, the Navy, the Treasuryand Veterans Affairs.


Either on their own or through the use of con-tracts that are frequently with OPM, they eachhave to recruit in order for there to be an opencompetition, and they each have to assess appli-cants in order to determine who are the �best�candidates.

How They Recruit CandidatesA great deal of Federal recruitment today is donethrough the Internet. Other methods are oftenused as well, but the technology of the �net�resulted in a revamping of the way the Govern-ment recruits for outside hires. While it wasdifficult in the past to find out about Federal jobopportunities, today, at least for applicants withaccess to the Internet, finding out about them canbe relatively simple. Job seekers can sit at acomputer anywhere in the world, log onto theweb, go to www.usajobs.opm.gov and in minutesfind out, with some exceptions, about everyFederal job opening for which members of thepublic can apply. Generally they can find the textof the actual posting on line as well. The text willdescribe in detail the duties of the position, state

The Procedures Agencies and Their Delegated Examining UnitsAre Using to Hire New Employees

No two agencies accomplish their DEU hiring inexactly the same way. Decentralization allows forand, in fact, has resulted in the use of a great manyapproaches. For example, the number of DEU�sper agency and the size of the populations theyservice vary widely. The Air Force, with hundredsof thousands of employees, is planning to have asingle DEU handle all of its outside competitivehiring. The Department of the Interior has scoresof DEU�s, some of which, like the Death ValleyNational Park DEU, serve a population of just afew hundred employees. There are also significantdifferences in the range of tasks that DEU employ-ees perform. The DEU staff in some agencies, likethe Smithsonian Institution, handle only tasksrelated to outside competitive hiring, while at theCommodities Futures Trading Commission, theDEU staff handles the full range of staffing func-tions, not just those relating to delegated examin-ing.

Still, despite the variation that exists from DEU toDEU, there are important similarities in what theGovernment�s approximately 650 DEU�s do.


the qualifications required, and explain the stan-dards the agency will use to evaluate the competingapplicants.3

These agency positions were originally posted onthe net to make it possible for Federal employeeswho had lost or were about to lose their jobs tolearn about openings in other agencies.4 ButUSAJOBS is rapidly evolving into the majorrecruitment feature of the Government�s newhiring processes. Through it, individual agenciesoperating in a decentralized environment are ableto publicize the availability of their positionsthroughout the world.

Still, at the moment, agencies need to be concernedabout relying too heavily on the Internet to maketheir jobs known to potential applicants. MSPBwill be publishing a report later this year on thejob search experiences of recently hired Federalemployees. A survey of those employees revealedthat only about half of them had access to theInternet or knew that Federal jobs were postedthere.

How They Assess CandidatesDeciding who are the best applicants for a job is atthe heart of any competitive, merit-based process.Federal agencies� DEU�s use primarily two assess-ment methods to evaluate outside candidates�written tests and unassembled examinations.Written tests are used in about 40 percent of theDEU hirings, and most of the written tests areused for hiring into two groups of positions: (1)

GS-2, 3, and 4 entry-level clerical and technicalpositions because OPM�s qualification standardsrequire the use of written tests to assess candidatescompeting for these positions; and (2) GS-5 and 7positions covered by the terms of a nearly 20-year-old consent decree entered in a discriminationlawsuit, Luevano v. OPM.5 That decree has beeninterpreted to require that only approved proce-dures be used to fill a wide variety of professionaland administrative positions at those entry-levelgrades; and two OPM-created written tests areamong the approved methods.6 A few agencies,like the Immigration and Naturalization Service,also use written tests to fill some positions intowhich they do a great deal of hiring.

Most DEU�s use unassembled examinations whenfilling other jobs. Despite that name, unassembledexaminations are not tests in the ordinary sense ofthat word. The term �unassembled examination�refers to a process, which is sometimes automated,through which DEU�s arrive at a numerical scorefor each applicant by rating the education andexperience described in the information submittedby the applicant against the evaluation criteria forthe position. These numerical scores enableDEU�s to determine who the top candidates are.That is important because, in making competitivehiring decisions for positions open to candidatesfrom outside the Government, a law (known as theRule of Three) requires that the selection be madefrom among the top three candidates still inter-ested in the position.7 The use of numerical scoresalso enables DEU�s to make the legally requirednumerical adjustments for applicants eligible forveterans� preference.

4 In 1997, OPM required each Federal agency, as part of its Interagency Career Transition Assistance Plan (ICTAP) for displaced employ-ees, to provide OPM with an electronic file of the vacancy announcement for positions open to candidates from outside the agency�s ownworkforce (5 CFR 330.707). OPM had decided that the most effective way to publicize these openings would be to post them on its web site. TheICTAP requirements expire on September 30, 1999, although they probably will be extended. If they do expire, OPM intends to continuedisseminating agency postings over the Internet in order to fulfill the statutory requirement contained in 5 U.S.C. 3330 that it maintain and makeavailable to the public a comprehensive listing of all vacancy announcements in the competitive service for which applications will be acceptedfrom outside Government.

5 The Luevano lawsuit sought to enjoin the use of a written test, called the PACE, on the ground that it had a significant adverse impact onminority hiring. The PACE was used to examine for entry-level positions in over 100 of the Government�s white-collar professional andadministrative occupations. The consent decree, entered into in 1981, required that use of the PACE be discontinued by 1984. MSPB will beissuing a report this year on agency hiring into the former PACE positions since the entry of that decree.

6 The two tests are ACWA (Administrative Careers With America), which is a cognitive ability examination, and the more-frequently usedACWA II which OPM describes as a case-examining-based rating schedule.

7 5 U.S.C. 3318 governs selection from certificates into the competitive service. It provides that the �appointing authority shall select forappointment to each vacancy from the highest three eligibles available for appointment on the certificate . . . .�

3 OPM has reported in �Opportunity Lost: Openness in the Employment Process� (April 1999), that Federal agencies are failing to place asignificant portion of their vacancies on USAJOBS. Some of those omissions, however, relate to postings for which members of the public cannotapply.


How OPM Assists DEU�s

OPM assists DEU�s by providing training, advice,and services. Agency employees are trained andcertified by OPM before they can begin workingin DEU�s, and OPM periodically retrains andrecertifies DEU staffs. The training includesinstruction in how to comply with competitivehiring�s stringent legal requirements, such as theRule of Three and veterans� preference lawsmentioned above, and how to document theagency�s compliance.

OPM�s advice to DEU�s takes several forms. It hascreated and revised a detailed Delegated ExaminingManual that is used by DEU�s as a reference work.In addition, OPM�s Service Centers respond to

questions relating to the exercise of delegatedexamining authorities. Also, OPM often evaluatesthe operation of DEU�s when it conducts periodicoversight reviews to assess how agencies arehandling their personnel authorities.

In addition, OPM is able to provide agencies andtheir DEU�s with a wide array of services. OPM,for example, recruits and assesses candidates foragencies that want someone else to do that workfor them; it details OPM employees to agencies toassist their DEU�s; it prepares and/or administerswritten tests for agencies; and it operates auto-mated systems for scoring agencies� unassembledexaminations. OPM does not, however, provide

these services free of charge. Charging for theseservices was authorized by Congress. At the sametime that Congress effectively required OPM todelegate examining authority to agencies, itchanged the civil service laws to provide that, tothe extent that the director of OPM thought itappropriate, OPM�s staffing assistance to agenciesand their DEU�s could be made available on areimbursable basis (5 U.S.C. 1104(b)(4)). OPM haselected to make almost all the staffing services itprovides, beyond what it sees as training andadvice, available on that basis.

In general, these staffing services are thereforepurchased by agencies that can afford them andthat believe the services are worth what OPM ischarging. In FY 1998, agencies purchased morethan $5 million worth of these staffing servicesfrom OPM. The Social Security Administration(SSA) Chicago Center for Human Resources wasone of those purchasers, contracting for more than$30,000 worth of OPM�s staffing services in thatyear. Under its contract, the Center regularlyreceived test-based certificates for GS-5 socialinsurance specialists, a position covered by theLuevano consent decree mentioned earlier; and caseexamining-based certificates for GS-5 contactrepresentatives. The SSA�s Chicago Center hasbeen satisfied with how quickly OPM has pro-duced these certificates and with the quality of thecandidates referred. The Center is not alone.Many agencies contract with OPM to producecertificates and are satisfied with the services theyreceive. Still, a great deal of examining is beingdone directly by agency DEU�s. For example,even though the SSA�s Chicago Center decidedthat it was less expensive and easier to have OPMprepare its certificates, eight of the other nine SSAregional centers have chosen to do most of thatwork themselves.

Staffing services are purchasedby agencies that can afford

them and believe the servicesare worth what OPM is charging.


What Agency DEU�s and Managers LikeAbout Delegated Examining

Table 2. Responses of DEU Officials to QuestionsAbout Delegated Examining

The existence of blanket delegatedexamining authority is enablingour agency to hire quality candi-dates in a reasonable period oftime.The hiring process in our agency isfaster and more effective now thatwe have blanket delegated examin-ing authority.

The support we receive fromOPM enables our DEU to do abetter job.

Agree Disagree Neither

4

1 16

19

364

83

60

77

In August and September 1998, we conductedinterviews with the heads of 70 DEU�s chosen atrandom from the approximately 650 DEU�s in theFederal Government. We asked how they exercisetheir examining authorities and how that processcompares with what they had been doing immedi-ately prior to the blanket delegation of examiningauthorities to agencies in 1996. We also askedwhat they and the managers in their agencies thinkabout delegated examining, and particularlywhether they think it helps to recruit bettercandidates more quickly. We also asked what theythink of the help and services provided by OPM.

There were differences, some significant, in howthe DEU�s felt about their delegated examiningexperiences, but as table 2 shows, in general theyshared highly positive views. Over 80 percentthink delegated examining enables them to hirehigh-quality candidates in a reasonable period oftime. Nearly 80 percent think that delegatedexamining is faster and more effective than central-ized hiring. And 60 percent think OPM�s supportservices are helpful to them.

Of the 70 DEU officials, only one thinks central-ized hiring should be reinstituted. The others areopposed to that idea. They think that obtainingOPM certificates took too long and that thequality of the candidates on those certificatesfrequently was not particularly good.

DEU�s said that they can produce certificates morerapidly because, unlike OPM, they do not need toprioritize requests from many agencies and becausethey are simply more responsive to their ownmanagers� requests than OPM had been. They alsosaid that their certificates produce better candidatesbecause they are familiar with the agency�s missionand can therefore make more accurate judgmentsabout how well an applicant�s training and experi-ence correlate with the evaluative criteria for theposted jobs. In addition, they said it is easier forDEU�s to draw upon their agency�s subject matterexperts to help in preparing the evaluation criteriafor posted jobs, and to help in rating applicantsagainst those criteria. DEU�s also said they cancoordinate special recruitment efforts such as news-paper advertisements with their job postings inorder to attract applicants who are currentlyinterested in and available for the job. OPMcertificates had often included applicants who hadalready accepted other jobs or who, despite havingindicated otherwise on their applications, wereunwilling to relocate to the job�s duty station.

In addition to talking to DEU officials, we con-ducted focus groups with supervisors and managerswho had recently hired candidates from outside theGovernment under competitive procedures to seewhat they thought of delegated examining. Wedrew participants for these groups from a standingpanel of managers and supervisors who had previ-

ously agreed to assist the Board in its re-search activities. A few of the focus groupmembers were not aware that agencieshad been delegated the authority torecruit and evaluate applicants, nor hadthey consciously noticed any change inthe nature or quality of their agency�sexternal hiring process. Most of the focusgroup members, however, were aware ofthe new, primarily DEU-based, proce-dures and think that they improved hiringfrom outside Government. These manag-ers said they receive certificates faster nowand that the certificates contain morehighly qualified candidates and more can-didates actually interested in the jobsbeing filled.

percent responding


The Concerns DEU Officials Have With Delegated Examining

Despite their positive opinions about delegatedexamining, some DEU officials, managers, andsupervisors do see problems with the currentprocess for hiring applicants from outside theGovernment. In this section, we look at theconcerns voiced by DEU officials and in the nextsection we look at the issues raised by our focusgroups of managers and supervisors.

The Quality Of Assessment Determina-tionsIn DEU�s with heavy workloads, officials worry agreat deal about the quality of their case examiningdeterminations�the assessments of qualificationsthey make on the basis of unassembled examina-tions. Under case examining, the information inapplications is reviewed in order to match it withthe job�s selection criteria, known as knowledges,skills, and abilities (KSA�s). Applications are alsoscored against the evaluative criteria to determinewho among the qualified candidates are best-qualified for the position. In addition, applicationsare checked to see if the applicants are citizens orotherwise meet special age requirements, or to seeif they qualify for veterans� preference.

The case examining determinations that theseofficials are concerned about include those assess-ments done by automated programs as well asthose done manually by agency personnel employ-ees, possibly with the assistance of subject matterexperts. The assessments also include both thosemade in the course of creating a certificate for asingle position and those made in the course ofpreparing a standing inventory or register ofcandidates. In all those situations, officials inDEU�s with heavy workloads believe that, al-though they do case examining better than OPM,they do not do it particularly well because theysimply do not have the time to make, in anythinglike a well-reasoned fashion, all the judgment callsrequired by case examining. These officials saytheir case examining procedures, therefore, fre-quently fail to place the best qualified candidateson certificates and that this is unfair, both to the

best qualified candidates and to the managers forwhom the certificates are prepared.

It is not easy for a personnel official to make somecase-examining judgments. For example, indeciding whether an applicant�s work experiencesatisfies a requirement calling for a history ofrelevant work at specified levels of difficulty, thespecialist has to decide whether the work done bythe applicant was similar and difficult enough, andwhether it was done for a long enough period oftime. The specialist may not know enough aboutthe work the applicant did or about the job forwhich the applicant is applying to answer thosequestions, or the applicant may not have providedenough information in the submission for thespecialist to make that determination. In a DEUwith a light workload, specialists can and fre-

quently do take the time to contact applicants toget more details, or they seek additional helpanalyzing the application from agency subjectmatter experts. But in DEU�s that receive hun-dreds of applications and are under pressure toproduce certificates expeditiously, specialists donot have time to seek more information or expertassistance, and they must therefore make less-informed judgments.

Several factors make it even harder to makeinformed judgments. DEU officials say that thelevel of expertise that staffing specialists bring totheir jobs is not nearly as high as it was before therecent period of Government downsizing. Thosedownsizing efforts targeted human resources staffsdisproportionately, and led to the retirements orbuy-outs of many older and more experiencedpersonnel employees.

In DEU�s with heavy workloads, case examining procedures

frequently fail to place the bestqualified candidates on certifi-cates.


The fact that a lot of candidates no longer use theGovernment�s old application form, StandardForm 171 (SF-171), also makes informed judgmentsmore difficult. Without exception, officials ofDEU�s with heavy workloads said that case exam-ining was easier, and that applicants got fairerconsideration, when applicants had to submit SF-171�s. The requirement for that form was droppedby OPM as part of an effort to make the Federaljob application process less forbidding to prospec-tive candidates. DEU officials do recognize thateliminating the need to file a complicated anddaunting form does encourage more people toapply for Federal jobs. Still, many staffing special-ists miss the SF-171. It instructed applicants toinclude, in specific areas where personnel employ-ees were used to looking for them, the very typesof detailed information that personnel officialsconsider in matching an application against theGovernment�s selection criteria.

Without the SF-171, DEU officials say, applicantsoften fail to submit enough detailed informationand, therefore, do not get as much credit as theydeserve for their training and experience. DEUofficials say that this is particularly true for appli-cants who do not currently work for the FederalGovernment because they have no idea howagencies evaluate applications. Therefore appli-cants from outside the Government often act uponthe conventional wisdom that an interesting coverletter accompanied by an abbreviated resume is anappropriate way to apply for a job. That fre-quently is not true for Federal jobs: DEU officialsall agreed that well-qualified applicants who do notsubmit SF-171�s, or comparably detailed applica-tions, often placed themselves at a competitivedisadvantage. Further, in DEU�s with heavyworkloads, the extra time it takes for overworkedstaffing specialists to look for necessary informa-tion in non-SF-171 applications is time that theycannot devote to the judgment calls that need to bemade about candidates� qualifications.

The Usefulness of Delegated ExaminingCertificatesMost DEU officials say that placing agencies incharge of the competitive hiring process forpositions open to candidates from outside theGovernment has allowed agencies to hire goodcandidates in a reasonable period of time. Still, inpart because DEU certificates take a great deal ofwork to produce when case examining is used toevaluate large numbers of applications, officials inDEU�s with heavy workloads say they are frus-trated by the fact that they often produce certifi-cates that add little, if anything, to the hiringprocess.

To understand this, it helps to know that managersdo not have to consider most non-Federal employ-ees when they are conducting a formal search tofill vacancies. With limited exceptions, there is norequirement that posted vacancies be open tomembers of the public.8 When managers decide toconduct a search that is not open to most membersof the public but that is limited essentially tocurrent Government employees (or limited, asthey often are, to current employees within theiragency or a specific unit in their agency), thoseopenings are posted under merit promotionprocedures.

Like DEU procedures, merit promotion proce-dures are competitive. However, they are signifi-cantly less complicated than DEU proceduresbecause neither the Rule of Three that limitsselections to the top three interested candidates norveterans� preference rules apply to merit promo-tion postings. Applicants are not ranked on thebasis of their numerical scores. Instead, meritpromotion certificates contain the names of allcandidates (usually listed alphabetically) deter-mined to be among the best qualified, and themanagers are free to select any of those candidatesfor the job.

8 As a result of the Veterans Employment Opportunities Act of 1998 (5 U.S.C. 3304), any preference-eligible as well as any veteran who hasbeen honorably discharged from the armed forces after 3 or more years of active service can apply for vacant positions posted under meritpromotion procedures whenever the hiring agency is accepting applications from individuals outside its own workforce.


Because of that, managers tend to use merit promo-tion procedures when they think there will bequalified internal applicants for their vacancies. Inaddition, in most agencies managers can, whenhiring from outside is not barred for budgetaryreasons, also request a DEU certificate. In theinterest of enlarging the pool of candidates whocan be considered for the job, they frequently do.

It is this practice that causes DEU officials to haveconcerns about the usefulness of their DEUcertificates. They say that because of the Rule ofThree, DEU certificates at best provide managers,when merit promotion certificates are also pre-pared for the same position, with a maximum ofonly three additional candidates from which toselect. Several factors combine to make it likelythat the DEU certificate will not even produce thatmany. Federal employees eligible to apply for ajob under a merit promotion posting are alsoallowed to apply for that job under the DEUposting. Because current employees understandhow applications are judged, and because theyoften have relevant and easily evaluated experience,they have a good chance of being among the bestqualified candidates and being referred on theDEU certificate. When they are, they usually also

The Concerns Managers and Supervisors Have About HiringNew Employees

Under the cumbersome centralized hiring process,managers and supervisors often experiencedsignificant difficulty bringing new employees intothe Government. Our focus group members withexperience hiring from DEU certificates said,however, that decentralizing the process hadeliminated only some of the reasons why it isdifficult in a large bureaucracy to hire competentapplicants from outside in a reasonable period oftime. Focus group members said, for example,they still lose good candidates because of the timeit takes to obtain security clearances for those jobswhere preemployment clearances are required.They also said they are still frustrated wheneverbudget freezes prevent hiring. And they said thereare still quality problems. Sometimes that is

because managers opt to hire without conducting athorough search to find the best candidate. Manag-ers use this tactic to avoid hiring freezes that wouldprevent them from hiring anyone at all. On theother hand, sometimes the staffing specialists doingthe assessments don�t understand enough about thejob being filled or have not adequately involvedagency subject matter experts in the process. Thefocus group members said that managers andsupervisors would be less dissatisfied with theprocess if the certificates gave them more candi-dates to consider and if their agencies helped themto both understand the hiring process better and toacquire the skills necessary to determine whichapplicants on the certificates were likely to makethe best employees.

appear on the categorical listing of best qualifiedcandidates on the merit promotion certificate�if,as is frequently the case, they have applied underthose procedures.

Therefore, DEU officials say that the practice ofallowing current Federal employees to apply forjob vacancies under both procedures decreases theeffectiveness of the DEU certificate as a tool forbringing in people from outside the Government.For example, one DEU official at the Departmentof Veterans Affairs told us that in her agencycurrent Federal employees with veterans� prefer-ence rights are applying for jobs under bothprocedures because these employees expect thattheir job-related experience and veterans� prefer-ence status will help them make the DEU certifi-cate and simultaneously keep others from doing so.She noted that nearly half of the applicants for jobsannounced by her DEU were current agencyemployees with veterans� preference status. Shesaid that these applicants almost invariably werereferred on both the merit promotion and theDEU certificates, virtually preventing the DEUcertificates from including any applicants whowere not already on the merit promotion certifi-cates.


What Can Be Done to Address the Concerns of DEU Officialsand Agency Managers and Supervisors

Just about everyone we contacted believes thatdelegated examining has improved the process forhiring employees from outside the Government.Still there are DEU officials, supervisors, andmanagers who are worried that delegated examin-ing is not working as well as it should. Thissection examines what can be done to address theirconcerns.

Improve AssessmentThe merit system principles call for hiring deci-sions to be made on the basis of merit consider-ations. Unfortunately, many DEU officials believethat this standard is not being met when largenumbers of applications are evaluated through theuse of case examining. These officials do not havethe same concerns when applicants are screened onthe basis of written exams, as they are about 40percent of the time. Nor do they have the sameconcerns when DEU�s are assessing a manageablenumber of applicants using case examining. How-ever, when they are using case examining toevaluate hundreds of applicants, as is frequentlythe case for DEU�s with heavy workloads, manyDEU officials say that the best qualified candidatesoften fail to make the certificates because it is toohard for the staffing specialists to expeditiouslyhandle that volume of applications and still makegood case examining determinations. There are,however, alternatives that can help in some ofthese situations. These are, for example:

A Greater Use Of Automated Case Examin-ingThere is a belief among DEU officials that technol-ogy may offer a solution to the workload problem.That is why a number of DEU�s with heavyworkloads have turned to or continue to useautomated systems, like OPM�s MARS (Micro-computer Assisted Rating System), that rely uponcomputers to help assess the information submit-ted by applicants.

However, these automated case examining pro-grams cannot rate and rank the candidates based on

the information contained in their applications.They can be used to evaluate discrete portions ofthe applications, such as those dealing with veter-ans� preference eligibility or supplemental applica-tion questionnaires. These questionnaires, whichare essentially simplified application forms, askabout the applicant�s prior work experience (e.g.�Have you ever operated a forklift?�) as well as theapplicant�s opinion about the extent of that experi-ence (e.g., �Have you operated a forklift frequentlyenough to be able train others in how to use thatequipment?�).

Using these automated procedures, certificates canbe quickly produced even for a large number ofapplications. Many agency officials are satisfiedwith the quality of these automated case examiningcertificates. That is particularly true for agenciesthat have these certificates prepared by OPM�sRaleigh Service Center, which produces severalthousand MARS-based certificates each year. Thedirector of that center strongly believes thatautomated evaluation, when done as Raleigh doesit, assesses candidates� qualifications better than thecase examining performed by staffing specialists.The Raleigh Center staff begins by working closelywith agency clients to identify the appropriateKSA�s. The staff then prepares clusters of ques-tions to be asked about each KSA. Before prepar-ing the certificate, whenever possible they checkthe top scoring candidates against narrative submis-sions detailing their experience that all applicantshave been encouraged to submit with their applica-tions�and then eliminate those candidates whosescores are inconsistent with their narrative submis-sions.

Artificial Intelligence ProgramsWhile the automated procedures are popular withmany agencies, some DEU officials still believethat automated case examining programs assesscandidates so poorly that they should never beused to produce certificates. These officials worryabout the frequency of obvious errors made bythese programs�such as not giving veterans�preference to candidates who deserve it or giving it


to candidates who don�t. They worry that theprograms unduly encourage applicants to exagger-ate their experience since applicants know theywill improve their chances by claiming a lot ofexperience in the handful of skills addressed by thequestionnaires. DEU officials say they see a lot ofcertificates with candidates whose underlyingapplications fail to support the experience claimedin their questionnaire answers. These concernedDEU officials wonder�even if they could correctfor the obvious mistakes in these certificates, andeven if they could also remove those candidateswho probably exaggerated their experience�whether it is reasonable to believe that the candi-dates remaining on the certificates would actuallybe the most qualified people who applied. Becauseof doubts like these, and because OPM nowcharges significant fees for providing these services,

some DEU�s have discontinued using MARS andMARS-type programs, and others have decidedagainst trying them.

Instead, they hope that some other technologymight solve their problem. The most popularalternatives are artificial intelligence programswhich incorporate word search techniques intotheir programs, and which are used with somefrequency in private industry. At the moment, noagency is actually preparing DEU certificates usingan artificial intelligence program because theseprograms cannot yet rank applicants in numericalorder. Instead, they are capable only of dividingapplicants into broad categories. Still there is abelief that, with sufficient refinement, artificialintelligence programs will be made sophisticatedenough to be used for DEU certificates. TheDepartment of Defense has purchased the right forall the military services to work with softwaredeveloper Resumix, Inc., to try to create usableartificial intelligence programs. Moreover, theDepartment of the Air Force has based its decisionto create a single worldwide DEU on the expecta-

tion that such programs will be in use within thenext few years. While this may occur, the experi-ence of an Army civilian personnel operationscenter currently using Resumix to prepare meritpromotion certificates indicates that there maywell be qualitative problems with artificial intelli-gence programs making case examining determina-tions. That center says that its system works wellfor categorical certificates only because theyaugment it with a great deal of hands-on interven-tion at every stage to eliminate candidates whoshould not be included on the certificates. Inaddition, they regularly modify the program�sgrammar base to increase the chances that appli-cants who should have been referred but were not,will be referred in the future.

Greater Use of Written Tests. Written testsoffer another way for DEU�s to make heavyworkloads more manageable; and since goodwritten tests lead to good assessment determina-tions�and therefore to better hires�they shouldbe used more often than they are. As we notedearlier, while written tests are frequently used,they tend to be used in only a handful of situa-tions. The qualification standards are such thatwritten tests must be used to evaluate candidatesfor positions at the GS-2, 3, and 4 levels. Andsome agencies use the OPM-created ACWA andACWA-II tests when filling the GS-5 and GS-7professional and administrative positions coveredby the consent decree in the Luevano discrimina-tion lawsuit. In addition, a few agencies havecreated or purchased written tests for positionsinto which they do a great deal of hiring.

The Immigration and Naturalization Service (INS)and the Internal Revenue Service (IRS) are twosuch agencies. INS uses its own written tests toassess entry-level applicants for GS-5 and GS-7border patrol agent and immigration officerpositions. In FY 1998, INS hired more than 2,000employees into these positions. Its evaluationstudies of these test instruments, which measureverbal, math, and/or analytical skills, have con-cluded that there is an extremely high correlationbetween applicants who score well on the examsand those who do well on the job. The IRS ispilot-testing, at several locations, a test instrumentit purchased for GS-5 tax examiner assistants, aposition into which it hired approximately 750

Since good written tests lead togood asssessment determina-

tions�and therefore to betterhires�they should be used moreoften than they are.


employees in FY 1998. The instrument wascreated by a contractor who previously haddetermined the job competencies for the taxexaminer assistant series for the agency�s corporatetraining center. The human resources office wasable to obtain the 232-item test instrument at agreatly reduced cost since the contractor wasbuilding upon the job competency assessment italready had performed under that earlier contract.

Unlike the INS which has an in-house professionalstaff capable of creating and validating writtentests, or the IRS which was able to purchase anexamination, most agencies have not prepared orpurchased written tests for positions into whichthey do a great deal of hiring. They have not beenwilling or able to pay the substantial sums theywould be charged, even by OPM, for these writtentests. (Charges for developing tests frequently runfrom $100,000 to $150,000 and can be substantiallygreater.)

There is a strong governmental interest in havingagencies use good assessment tools to help themmake hiring decisions. It is inconsistent with thatinterest for written tests capable of improving thequality of those decisions to be priced beyondwhat agencies are prepared to pay for them. Inthis regard, it is important to note that whileCongress gave OPM the authority to make itsstaffing services available on a reimbursable basis, itdid not require OPM to do so, and it certainlywould be in the best interests of the Governmentfor agencies to have access to written examinationswithout having to bear the high cost of develop-ment. This makes particularly good sense whenone considers that a single test or portions thereof,once developed and validated, can be used by manyagencies.

Lower Fees or No Fees. There is another test-related area in which the costs for OPM�s servicesmay not serve the best interests of the Govern-ment. OPM charges approximately $600 toprepare most certificates. The certificates for GS-2,3, and 4 clerical and technical positions and for GS-5 and 7 professional and administrative positionscovered by the Luevano consent decree, as we

noted earlier, are based upon test scores. Gener-ally, agencies cannot give these tests themselvesand they must contract with OPM for certificatesfor these jobs. Many DEU officials told us thatthey do not ask for these test-based certificates andfill their clerical and technical positions at the GS-5level and their professional and administrative jobsat the GS-9 level�grade levels at which the certifi-cates do not need to be based upon test scores.

There are several reasons why DEU�s elect to fillthese positions that way. A few DEU officials saidthey avoid OPM-created certificates because theyhave had bad experiences with past OPM certifi-cates. And a few said that they, and their agencies�managers, believe that the needs of their agenciesare better served by filling these jobs with moreexperienced people. But almost all of the DEUofficials who filled these positions at the highergrades also told us that the cost of the certificates isa significant factor in their decision not to fill thesepositions at the lower grades. Frequently theseDEU officials work in small DEU�s, and they toldus that they lack the funds or the ability to commitfunds for those certificates. Therefore, eliminatingor significantly reducing the charges for thesecertificates would enable those DEU�s both to usebetter assessment tools and to fill the positions atperhaps more appropriate grades in a less costlymanner.

Improve the Usefulness of DelegatedExamining Certificates

Eliminate the Rule of Three. As we haveobserved, DEU certificates can take a great deal ofwork to produce and there can be situations inwhich they do not add much to the hiring process.Some of the major reasons for that are the Rule ofThree and the fact that current employees canapply for the same job under both DEU and meritpromotion postings.

The Board has previously called for the repeal ofthe statutory Rule of Three, or at the very least thecreation of a more workable substitute.9 Underthe Rule of Three, hiring from DEU certificates,

9 In its 1994 report, �Entering Professional Positions in the Federal Government,� MSPB recommended that OPM �propose legislation leadingto creation of an alternative to, or abolishment of, the statutory �rule of three.��


with certain limited exceptions, must be fromamong the three applicants who receive the highestnumerical scores and who are still interested in theposition. The rule limits supervisors� choices,obviously; and DEU officials say that manysupervisors believe that it limits them to an arbi-trarily small pool of referrals, even when there areapplications from a large number of qualifiedcandidates.

The logic of the Rule could be supported, perhaps,if the assessment tools most frequently used toevaluate applicants were actually capable of identi-fying the best three candidates. But DEU officialsin DEU�s with heavy workloads believe that thebest candidates frequently fail to make certificateswhen assessment is based upon case examining; andmany officials are particularly concerned about the

qualitative determinations made by automated caseexamining systems. While written tests are betterpredictors of future job success, they are notusually capable, especially when there is a largepool of applicants, of making fine enough distinc-tions among qualified candidates to justify limitingconsideration to the three highest scoring appli-cants.

An aspect of the Rule�s arbitrariness is seen in thetreatment of tied scores which occur with greatfrequency. Supervisors are allowed to choose froma total of only three interested candidates. Towinnow the certificate down to that number,staffing specialists follow detailed tie-breakingrules, one of the most common of which is ran-dom selection based upon social security numbers.

Such techniques contribute nothing to merit-basedselection. In our view, it would benefit bothselecting officials and job seekers if agencies werefree to decide whether more than three qualified

applicants should be considered. Decentralizationallows agencies to adopt different approaches forrecruiting and assessing candidates for positionsthat are open to applicants from outside theGovernment. The Government�s interest in goodhiring decisions would be better served if the sameflexibility were extended to deciding upon thenumber of applicants from whom selections can bemade. On occasion, agencies might decide to keepthat number at three. But where there are manyapplicants, and their qualifications are similar, itmight be more reasonable to let selecting officialsconsider larger numbers of candidates. A numberbased on the total number of applicants, forexample, might be a more appropriate limit.

Because the legal provisions containing the Rule ofThree also set forth veterans� preference rights inthe area of competitive selections, there might be aconcern that changing the Rule could have anegative impact on veterans� rights. However, thatis not the case. Allowing agencies to increase thenumber of eligible candidates who can be consid-ered for selection would not diminish the existingright of those covered by veterans� preferenceprovisions generally to be selected before othercandidates with the same or lower scores. In fact,this change would have the potential of enhancingveterans� preference rights by providing additionalselection opportunities to veterans whose scoreswere not high enough to place them among thetop three candidates interested in the position.

Eliminate Dual Consideration. Another way toincrease the utility of DEU certificates is to nolonger allow current employees to be consideredunder a DEU posting if they are eligible to applyfor the same job under a merit promotion posting.Supervisors seeking a DEU certificate in additionto a merit promotion certificate do so because theywant to see if, in addition to the names on themerit promotion certificate, there are any otherqualified candidates worth considering. Thesupervisors may ultimately decide to hire a meritpromotion candidate, but they want the opportu-nity to consider individuals outside the agency.DEU officials say that supervisors frequently donot get that chance because agencies routinelyallow at least some current Federal employees toapply under both postings.

Allowing agencies to increasethe number of candidates

who can be considered for selec-tion would have the potential ofenhancing veterans preferencerights.


But current employees eligible to apply under amerit promotion posting already have the right tobe considered for the position. And if they canalso apply under the DEU posting, their presenceon a DEU certificate generally will not increase thenumber of candidates referred to the supervisor.This is so because those current employees willprobably also be included in the categorical listingof best qualified candidates on the merit promo-tion certificate. Management should take a look atwhether allowing some employees to apply underboth sets of procedures is having a negative impactin their agencies on the ability of supervisors toconsider candidates who are not eligible to applyunder the merit promotion posting. If it is, theyshould consider eliminating the practice.10 More-over, except for keeping others from being consid-ered, the value to current employees of makingboth certificates is not significant since currentemployees prefer not to be selected from DEUcertificates. Such a selection offers no advantageover selection from a merit promotion certificate,and unlike the latter type of selection, selectionfrom a DEU certificate is considered to be a newappointment that, with some exceptions, can besummarily terminated during the probationaryperiod.

Provide Training to Managers and Su-pervisorsWhile our focus group members believe thatdecentralization improves the hiring process, theysaid that problems remain. One of the mostserious in their opinion is that many supervisorsand managers simply do not know enough abouthiring rules and practices. Our focus group

members said that because of that lack of knowl-edge, supervisors tend to be reluctant to becomeinvolved in hiring activities. Moreover, they said,managers and supervisors have questions evenabout such seemingly straightforward matters asinterviews. They don�t know what to ask, andwonder whether there are questions that wouldmake it easier for them to compare the abilities ofcandidates. They do not know if they are requiredto ask all the candidates the same questions; and, ifnot, whether it is a good idea to do so anyway.They do not know if they may ask for writingsamples. And, if they chose to interview oneapplicant, they do not know whether they have tointerview them all.

Some problems identified by our focus groups,such as the negative impact on the hiring processof real or anticipated hiring freezes, would bevirtually impossible for agencies to eliminate. Buttraining to enable managers and supervisors tointelligently participate in the hiring process issomething that is well within the agencies� power.Agencies should consider creating reference toolsthat selecting officials can use on an as needed basisto learn about staffing matters. That would be amore effective method than classroom instructionfor delivering this information since many select-ing officials hire new employees only occasionally.To provide selecting officials with the assistancewhen needed, agencies could prepare straightfor-ward question-and-answer pamphlets addressingthe areas selecting officials are unsure about. Oragencies could use as a model OPM�s well-receivedCD-ROM for supervisors with problem employeesto create similar easy to access, easy to use, com-puter-based �just in time� tools related to hiring.

10 Agencies have broad authority to structure their delegated examining as they see fit, and there is no law that specifically forbids adopting arule curtailing the practice of allowing employees who can apply under a merit promotion posting from being able to apply under a DEU posting.But neither is there any law that specifically allows for the adoption of such a rule. Therefore, it would be clearer that agencies had this right ifdelegated examining agreements were amended to specifically allow agencies to preclude current employees eligible to apply for a job under meritpromotion procedures from being able to apply for that same job under DEU procedures.


Overall Findings and Recommendationsapply for the same job under both DEU and meritpromotion procedures.

We also found that managers and supervisors,despite their good opinion of delegated examining,think that it has not solved all of the problems thatmake it difficult to hire competent candidates fromoutside the Government. In the opinion of themanagers and supervisors in our focus groups, oneof those problems is that managers and supervisorsneed to have a greater understanding of the Gov-ernment�s hiring rules and processes.

To improve the Government�s ability to makegood hiring decisions, the Board recommends that:

1. Congress and OPM should take action tomake written tests readily available to agenciesthat hire significant numbers of new employeesthrough competitive procedures.

In light of the strong governmental interest inmaking good hiring decisions and in light of theimportance of good assessment tools to the perfor-mance of that task, Congress should fund the costsfor creating and validating written tests. Until thatoccurs, OPM should consider how much of itsbudget it can afford to dedicate to the creation andvalidation of written tests for positions into whichagencies hire in significant numbers. OPM shouldalso consider ending its practice of charging for thetest-based certificates it currently prepares foragencies for GS-2, 3, and 4 clerical and technicalpositions and for GS-5 and 7 professional andadministrative positions.

2. As long as unassembled examinations con-tinue to be used to evaluate candidates forpositions into which many applicants are hired,agencies need to commit sufficient resources toDEU�s to ensure high-quality assessments.

The Government�s interest in hiring high-qualitycandidates, and the entitlement of those candidatesto fair treatment in the competitive process, arepoorly served when DEU�s lack the resources, interms of staff, money, time, and expertise, to makehigh-quality case examining determinations.

Responding to criticism that the Government�scentralized hiring was too slow and bureaucratic,Congress required OPM to delegate nearly all of itshiring-related authorities to agencies. As a result,almost all competitive hiring of new Federalemployees is now handled by agencies eitherdirectly or through contracts, usually with OPM.Most agency hiring activity is coordinated byDEU�s consisting of certified agency personnelspecialists who have been trained by OPM in howto operate a fair and lawful competitive process.This report has examined the operation of thoseDEU�s and the Government�s newly decentralizedhiring system.

We found that our randomly selected agency DEUofficials have extremely positive opinions regardingthe success of delegated examining. Over 80percent said that delegated examining enables themto hire high-quality candidates in a reasonableperiod of time. Nearly 80 percent said that del-egated examining was faster and more effectivethan centralized hiring.

We also conducted focus groups with managersand supervisors who had recent experience hiringnew employees and found that they held similarlypositive views regarding the effectiveness ofdelegated examining.

We found, however, despite these generally posi-tive views of decentralized hiring, that officials inDEU�s with heavy workloads say that case examin-ing, a commonly used assessment procedure,frequently fails to place the best qualified candi-dates on DEU certificates; and that this is unfairboth to the best qualified candidates and to themanagers for whom the certificates are prepared.

We found that DEU officials, and managers andsupervisors as well, believe that that DEU certifi-cates frequently provide too few qualified candi-dates. The utility of DEU certificates is adverselyaffected by the Rule of Three that limits thenumber of candidates a manager can considerwhen filling a job from a DEU certificate, and bythe practice of allowing current employees to


3. Congress, OPM, and agencies should addressthe problems identified by DEU�s with regardto the usefulness of their certificates.

The Rule of Three should be modified to allowsupervisors to consider a greater number of quali-fied candidates. Consistent with the other flexi-bilities associated with delegated examining,agencies should be allowed to determine whether itis appropriate to limit their supervisors to choosingfrom just the three top-ranked candidates who arestill interested in the position. Where there aremany applicants, agencies should be free to con-clude that a greater number, or perhaps a percent-age of the total number, of qualified applicantswould be a more appropriate limitation. Inaddition, in order to provide supervisors withmore qualified candidates to consider, OPM andagencies should amend their delegated examiningagreements to specifically allow agencies to pre-clude those current employees eligible to be

considered under a merit promotion posting fromalso being able to apply under delegated examiningprocedures for the same job. And,

4. Agencies should address managers� andsupervisors� lack of knowledge about soundhuman resources practices and about hiringrules and processes, particularly with respect tohiring from outside the Government.

Agencies should provide selecting officials withmore training on the Government�s hiring rulesand processes and with aids such as easily accessiblereference tools the officials can use when hiring.In a large organization, many factors adverselyaffect the ability of managers and supervisors tobring high-quality candidates on board in a reason-able period of time, but lack of knowledge aboutthe rules and procedures governing the Govern-ment�s hiring process should not be one of them.

Hiring New Employees in a Decentralized Civil Service

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