In 1923, Congress established the Classification Board to review and advise on efficiency matters, and that Board took over the efficiency rating system. Something has been in effect almost continuously since that time.

The work of the Bureau of Efficiency was transferred to the Classi→ fication Board in 1932. In 1933, Congress abolished the Bureau of Efficiency, and the Classification Board work was turned over to the Civil Service Commission and, of course, has been there ever since.> Shortly after it was turned over to the Civil Service Commission, I came in as Commissioner, and one of the first complaints heard was about the efficiency rating system. Everybody was dissatisfied with it. Shortly after that, we made a study of it and established a new system, which did not work.

We have changed that system several times since, during the time I have been on the Commission, always trying to get something that would be more satisfactory to the people, but every effort has failed, and there have always been complaints about the efficiency rating systems, largely because they were used as a means of demoting or discharging employees, and the contention has been made that there was prejudice, and so forth, involved.

Our suggestion now, in the report on the bill that was submitted, does away with applying efficiency ratings. We have changed it to what we call "performance evaluation." That will not be used for demotion or discharge of an employee.

The theory back of our proposal is that in case an agency desires to demote a man or to dismiss him, the agency shall file charges, and the charges shall be the basis for the discharge or demotion, as the case may be.

The CHAIRMAN. What purpose would your performance evaluation serve?

President MITCHELL. It would be used for the guidance of the supervisors in the particular agency, or for the head of the agency, as the case may be, in order to determine whether this particular employee is a competent employee or not, or whether his faults require his transfer to some other position.

The CHAIRMAN. You say your proposed legislation would not affect the reduction or promotion?

President MITCHELL. Not in itself. That would probably be considered along with it, but they would have to file a charge as to the particular failings involved.

The CHAIRMAN. What system would be used for the promotion of an employee, that is, for the raising of an employee from one grade to a higher grade?

President MITCHELL. That would be on the judgment of the supervisor, or the head of the agency, as the case might be. All the matters in relation to the performance of the work of this employee would be taken into account.

The CHAIRMAN. I might say that I have heard this complaint, and I am sure it is prevalent:

Let us take several employees doing exactly the same work, who have the same status or classified grade. As I understand it, it is left to the superior to decide which of those employees he wants to promote later on to a higher grade.

I have heard criticisms to the effect that many supervisors and heads of agencies use their personal whims and caprices and favoritism in promoting one employee, who may not be as efficient as another employee, to a higher grade. How can such abuse or favoritism be stopped?

President MITCHELL. The complaint against the efficiency rating system is generally that it is used for a competitive purpose, but the complaint is made that the supervisor is prejudiced against a particular employee, and therefore, grades him down for the purpose of getting rid of him, because he does not like him, or something else. The CHAIRMAN. Does the Commission have to approve the promotion of an employee to a higher grade?

President MITCHELL. Of course, we are working out a new plan of promotion. The efficiency rating would have a bearing, but it is not controlling.

The CHAIRMAN. I have received, as chairman of the committee, quite a few complaints about both your system of promotion and your system for reduction or demotion. The complaints are to the effect that too often the supervising official in authority is inclined to use favoritism rather than the actual performance of meritorious service of an employee, in promoting the employee.

President MITCHELL. The supervisor of any particular employee is inclined to do that. It is pretty hard to avoid it, but we are trying to avoid it. Of course, if a man is rated unsatisfactory, he is supposed to be discharged, and some of the agencies use that means of trying to get rid of an employee that they want to get rid of, rather than making definite charges against him from which he can appeal.

The CHAIRMAN. I have not given very careful study to the proposed legislation, but frankly, as I see it, it does not have very much force or effect. In the first place, this bill would not direct any agency to install your system. It just says "it is authorized." It does not say the agency is directed to do so. Suppose an agency does not choose to put into effect your plan? There is nothing mandatory, as I see it, in this bill, to force the agency to do so.

President MITCHELL. I might say that was talked about a good deal, and I think the final conclusion was that it would be better to submit it as it is proposed now, and, of course, if the Congress sees fit to make that change compulsory, it can do so.

The CHAIRMAN. Is your legislation to be used only within step increases within the particular grades? Is that the purpose of it? President MITCHELL. Theoretically, if the employee is doing poor or unsatisfactory work, the supervisor will try to inform him and try to get him along better lines, rather than discharge him. That is a matter that helps the supervisor to judge the value of the employee. The CHAIRMAN. In fact, your bill narrows down the performance rating into two categories-satisfactory and nonsatisfactory—is that correct?

Commissioner PERKINS. It permits it.

The CHAIRMAN. I say, it looks like it narrows down the performance evaluation to "satisfactory" and "nonsatisfactory"-it does not say that in specific words, I agree.

President MITCHELL. I think it is satisfactory, unsatisfactory, and outstanding.

Commissioner PERKINS. We do not require that. "might" be done.

We say it

The CHAIRMAN. Now, section 5 amends section 701 of the Classification Act of 1949 to provide that each officer or employee compensated on a per annum basis and occupying a permanent position within the scope of the compensation schedule of this act, who has not attained the maximum schedule rate of compensation for the grade in which his position is placed, shall, upon the issuance of a certificate of satisfactory service and conduct by the appropriate administrative officer, be advanced in compensation successively to the next higher rate within the grade.

Commissioner PERKINS. That is exactly what we do today. That is the way it is done, anyhow. We have to get the certificate of satisfactory work and conduct. You see, a man of high efficiency rating sometimes has a bad-conduct record, and you do not want to give him the provided inside-the-grade increase in salary. He should not have it, certainly, in the very period in which his conduct is bad. So we always get the certificate of satisfactory performance in both work and conduct, and this merely says that is what we rely on. It is a very simple way of doing it.

The CHAIRMAN. How does this bill change any of your existing authority and power?

President MITCHELL. It does not require the discharge of an employee simply on his efficiency rating. Our proposal does away with the present Board's reviews, which are rather expensive, and the results do not seem to justify that expenditure.

Commissioner PERKINS. Mr. Chairman, may I make one point

clear?

The CHAIRMAN. Yes, ma'am.

Commissioner PERKINS. We do respect the conception that was back of the mind of Congress in having this requirement for efficiency rating systems, but our experience has been that we do not get any improved efficiency out of it. We think that the emphasis ought to be put on the performance of the individual and the performance of his unit, and that it ought to be used as a tool for improving the performance rather than as a tool for pushing people up and down.

The CHAIRMAN. I wish one of the members of the Commission would explain the exact differences between your present efficiency ratings, and this bill, which is proposed by the Commission.

Commissioner PERKINS. The Chairman suggested I say to you what the real situation is.

In the present plan there are certain requirements and the reference to the efficiency rating is woven all through various sections of the law, so much so, that in order to make a manual under which the agencies could operate and take advantage of the requirements of the law, we have to make a manual as big and as thick and as detailed as that [indicating].

It has become so complicated that it is a job in itself just to run the efficiency rating situation in an agency, as well as run it in the Civil Service Commission.

The CHAIRMAN. What are your standards for efficiency ratings now? Commissioner PERKINS. They are all written out in here [indicating].

The CHAIRMAN. You have "outstanding" and "very good" and "good" and such as that?

Commissioner PERKINS. No. There are a series of marks, beginning with "excellent," "very good," "good," "fair," and "unsatisfactory." The CHAIRMAN. You have five, then?

Commissioner PERKINS. Yes. Now, these are what are called "summary marks." In order to reach those summary marks, under the system in operation, they have to check on a complicated schedule of items, which have been in somebody's opinion the items to be considered in giving these various ratings.

The CHAIRMAN. That is the report of efficiency rating on the desk of each member?

Commissioner PERKINS. Yes, that is all there. And I brought with me, if you care to see it, a section out of our manual, as to how to do it. That has become a very complicated system, and not only employees, but agency administrators, have complained about it enormously. It causes a great deal of jealousy and impaired morale.

Mr. MILLER. Has it not caused to be set up in the Federal service a sort of a group of guardhouse lawyers among the employees, who pay more attention to studying the details of this manual, in order to come in and show how they can improve by taking advantage of a legal technicality, than actually doing the work of their job?

Commissioner PERKINS. I think you put it very well, indeed, sir— and that has been our experience. Therefore, we began studying on this 2 years ago, as to how we could modify the system to make performance improvement a reality rather than just a lot of marks, which might or might not result in something.

What we have provided in this new system is, first, that there should not be a requirement for a particular kind of system, but that every agency should be authorized to establish a performance evaluation system, and that that should be subject to approval by the Civil Service Commission.

The CHAIRMAN. But, Miss Perkins, this proposal does not require the exercise of the authorization to establish efficiency systems.

Commissioner PERKINS. We have thought that over. We think that is desirable. We think some agencies will do better without one. I do not know whether you are familiar with the administration of the Archives, but the Archives is an agency, an independent office, but the problem of efficiency and performance evaluation in there is very simple indeed. You can compare the Archives with the Department of Agriculture, and you have the two extremes.

In the Department of Agriculture you have a farflung organization with many small units. It is sometimes ridiculous today in the Department of Agriculture to mark in this summary way of "excellent," "very good," "good," "fair," and "unsatisfactory" many who are out on some of the outposts as fire watchers, and so forth. In that case, the men relieve each other about once a week, or so, and they mark each other.

Mr. MILLER. If there is no fire, you do not know whether they have done a good job or a poor job?

Commissioner PERKINS. If they were there when the man came around to relieve them, you assume it has been all right. I mean, it has no real significance.

Now the Department of Agriculture or any other department have a peculiar situation which might not want to have an elaborate system for the marking of these people. In other cases, you have a close organization with a production problem, like the Government Printing Office, or some of the other big units. Almost every agency has within itself some unit that is a production unit. You can measure the amount of work they do and you can set up a standard of performance that you think is desirable, it is what everybody ought to meet, and you can point out to people, "You are falling so many points below this measurement of production that we have all agreed upon." The CHAIRMAN. Let me ask you this question, Miss Perkins:

Let us suppose that a particular agency does not desire to operate under the provisions of this proposed legislation, and does not set up a performance evaluation plan approved by the Civil Service Commission. That would just give the agency complete and arbitrary power to do as it pleases about its ratings, would it not?

Commissioner PERKINS. Taken in an extreme form, one could answer that it could be done. That is not our intention. The Civil Service Commission is delegated the duty of exercising leadership in all these fields, and it would be our intention to find some method of conference with them about why they do not, and if there is any real reason why they do not, we would take that into consideration. But, in general we would expect and anticipate and persuade them to establish a practical form of evaluating the performance of all of the individuals and of the units and groups in their outfit in a way that is practical and simple and satisfactory to them.

Now, it is our hope, you see, that we can persuade every agency to do it. Most of them have no trouble, they want to do it, only, they want to do it in a practical way and they want to do it in a way that is effective for their particular operation. We do expect to approve their systems, and to set up a series of simple standards, by which they can plan them. We have enumerated in our recommendations what at this moment we would anticipate would be among the standards that we would emphasize with the agencies.

The CHAIRMAN. Section 4 of the bill provides that upon request of the employee concerned each agency shall provide one impartial review of his performance evaluation.

Commissioner PERKINS. Yes.

The CHAIRMAN. Now, as I understand the present procedure, each agency has an appeal board of 3 members; 1 of the board represents the Civil Service Commission, 1 member represents the employee group, the third member represents the agency itself; is that correct? Commissioner PERKINS. That is correct.

The CHAIRMAN. And any employee can appeal his efficiency rating to this appeal board?

Commissioner PERKINS. That is correct.

The CHAIRMAN. Now, if the appeal board within any agency upon which the Civil Service has jurisdiction, rejects the employee's appeal, then, under the present procedure, this employee can then appeal to the Board of Review within the Civil Service Commission, can he not?

Commissioner PERKINS. No. I think you blend the two together in a very interesting way.