This column was originally published on Jeff Neal’s blog, ChiefHRO.com, and was republished here with permission from the author.

My last post addressed how the VA Accountability First and Appeals Modernization Act of 2016 (passed the House of Representatives on Sep. 14, 2016, but not yet approved by the Senate) would affect most employees. This post addresses how the bill would affect senior executives and some ways the bill could be improved by the Senate.

The major provisions that affect executives are:

• Reduction of annuity for removed employees. This provision allows the Secretary to reduce the annuity of an executive who is removed because of misconduct or performance if the executive is convicted of “a felony that influenced the individual’s performance while employed in the senior executive position.”

• Reduction of annuity for retired employee. This differs from the first provision in that it covers executives who retire before action is taken to remove them. It also requires that the executive be convicted of a crime before the reduction can take place.

• Decisions regarding whether an annuity will be reduced are final and not subject to review by any department or agency or any court.

• No right to appeal removals and downgrades to the Merit Systems Protection Board.

• Creation of a Senior Executive Disciplinary Appeals Board. The Board would be three VA employees selected by the secretary. It would have 21 days to render a decision or the removal would become permanent. If the secretary does not agree with the board’s decision, he/she could overrule it. The burden of proof for the agency is reduced to “substantial evidence” and the bill requires that the decision be upheld if it is “within the tolerable bounds of reasonableness.”

• Limitation on awards and bonuses. The bill provides that “during each of fiscal years 2017 through 2021, no award or bonus may be paid to any employee of the Department of Veterans Affairs who is a member of the Senior Executive Service.

The first provisions regarding retirement and convictions for felonies are similar in some respects to the way military officer retirement is handled. Officers who retire above the rank of warrant officer retire “in the highest grade satisfactorily served, not necessarily the grade held the day before placement on the retired list.”

For example, a major general who retires after engaging in misconduct may be retired at the rank of brigadier general (or an even lower rank) if the service determines the officer did not serve satisfactorily in the higher ranks.

The provision for SES retirement in this bill is far more limited and requires that the executive be convicted of a felony. It is difficult to make a good case that an executive with a felony conviction during his/her service should receive retirement credit for it. The lack of access to the courts for review of the decision is more troubling, but the number of cases where these provisions will apply are minuscule.

The next provisions do away with access to MSPB and require appeals to go to an internal Senior Executive Disciplinary Appeals Board. There are several troubling aspects of these provisions.

First, the Board is internal to the agency and appointed by the secretary. Second, there does not appear to be any restriction on the board being made up entirely of political appointees. Third, the secretary who decides to take the action and appoints the Board would have the authority to overrule the Board’s decision if he/she does not agree with it. It is hard to imagine how a review board of political appointees who are at-will employees and appointed by the Secretary will come to a decision to overrule the secretary. It is even harder to imagine how they would reach that conclusion when they know the Secretary can overrule their decision anyway.

If the intent is to use a board other than MSPB that has more in-depth knowledge of the department, I would be far more comfortable with a board appointed by and serving at the pleasure of the President. If there is a need for the secretary to be able to overrule decisions in cases where the board’s decision is egregiously wrong (and I could imagine that happening), there should be standards in the law that the secretary would need to meet to overturn the board decision.

It is clear from observing recent VA secretaries that they, like the vast majority of VA employees, are interested in doing what is right for veterans. The type of circular process this bill envisions, where the secretary makes the decision to remove someone, the secretary appoints the board that hears their appeal, and the secretary can overturn the board’s decision, puts the secretary in a position where the focus moves away from the executive accused of misconduct or poor performance and toward the secretary. I agree that senior executives should be held to the highest standards of conduct and performance and should suffer the consequences when they do not. I do not believe this appeal process is a good way to make that happen.

I agree that senior executives should be held to the highest standards of conduct and performance and should suffer the consequences when they do not. I do not believe this appeal process is a good way to make that happen.

The last provision of the bill that is critically important is the five-year ban on awards and bonuses for VA senior executives. The ban does not apply just to executives who are failing due to performance or misconduct. It applies to every SES member in the entire department. I know from discussions with people who work at VA that there are a lot of people in the department who care deeply about serving our veterans. They are doing everything they can to improve services. Banning bonuses for senior executives can harm the department and the veterans it serves in two ways.

First, it may drive the best executives away. The SES pay and bonus process was designed to make a portion of executive pay at-risk, based on the executive’s performance. That is the reason bonuses can be large (by government standards) and the reason for Presidential Rank Awards. Telling those executives that, even if they do outstanding work and lead superb teams that meet every objective, they cannot get a bonus for five years is likely to demoralize them and cause them to go elsewhere. It may also drive high performing GS-15s who want to be SES away from the VA.

Second, it will make it much harder for the department to recruit new executives whether from outside or from within the ranks of the tens of thousands of high performing employees of the department. Other agencies are already experiencing difficulties on recruiting senior executives. The pay difference between an SES and a GS-15 is not enough for many folks to want to take the risk of moving into the SES. Add to that a provision that bonuses and awards are forbidden regardless of how well you do the job, and it makes getting top talent almost impossible.

If the intent is to improve services to veterans, I would prefer to see changes to the bill to recognize high performance. I understand that some people view internal performance review boards as being too lenient on senior executives. OK, why not use an external citizen board, appointed by the secretary, that reviews and approves bonuses and awards based on demonstrated excellence? A similar process is used by OPM to review Presidential Rank Award nominations. Having served on several of those boards, I can attest to the fact that they are not pushovers and do not hesitate to reject weak nominations. We could also allow the board to review standards for awards and reject the standards if they are too lenient.

We should also put some money behind bonuses for VA high performers (not just senior executives), to increase performance. Federal executives (and every federal worker) should be held to high standards. We should expect good performance and not allow substandard performance or misconduct.

So this bill and many others provide the sticks that might help the VA and other agencies deal with problem employees. But where are the carrots? A carrot-and-stick approach works only when we reward the people who are making things happen. As I said in my last post, there are 368,000 people working in the Department of Veterans Affairs. Most of them do good work. Many of them do great work, and some do lousy work. By all means, deal with the people who do lousy work. Our Veterans deserve a VA that is outstanding and those folks are not helping us get there. But remember that excellence is delivered by the excellent and good employees and those folks deserve some attention too.

Jeff Neal is a senior vice president for ICF and founder of the blog, ChiefHRO.com. Before coming to ICF, Neal was the chief human capital officer at the Homeland Security Department and the chief human resources officer at the Defense Logistics Agency.

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