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Weekly Column

License to Pay: Management Changes are Coming to U.S. Intelligence and the Spooks Don't Like It

Status: [CLOSED]
By Robert X. Cringely

How was James Bond paid? I mean not just how much was he paid, but how did he actually receive payment? Was it by direct deposit or through the acceptance of a Gucci belt laced with gold sovereigns? Or would M even authorize a Gucci purchase, demanding instead a good British belt from Savile Row? And how about American spies, how are they paid? If you read Tom Clancy, it looks like America's spy agencies are run pretty much like any other Civil Service agencies, though that can't be verified because spy budgets are secret budgets and regular folks like you and me aren't supposed to know any details. The reason I mention this is because America's intelligence agencies ARE run pretty much along Civil Service lines, but that is about to change, and our spies, quite frankly, don't like it.

Pay issues at U.S. intelligence agencies come under my gaze for a couple reasons. First, these outfits are in the data business. And second, they use some of the highest of high tech. And if there is a third reason, well, it is because this particular bit of information fell in my lap and I just felt it was too juicy not to use.

And the news this week is that the National Security Agency — the very folks who listened to you making goo-goo sounds on the phone last night to your baby ("Listen to this, Becker — did that baby just say 'Osama?") is moving from fixed pay grades to something called "pay banding" in fiscal year 2004. The Central Intelligence Agency is going to pay banding even sooner, for the 2003 fiscal year.

Pay banding, if I understand it correctly, eliminates pay grades, eliminates levels within grades, and annual within-grade increases. Heck, it even eliminates promotions. The pay bands will be core job functions, which will require an exact amount of pay to the employee for that service. Your pay band is determined by what you do (run the Agency, analyze satellite photos, interrogate Afghan prisoners, etc.), and within that band all pay is supposed to be merit-based. In short, our intelligence agencies are moving to piecework. The guy who analyzes more satellite photos finding more hidden nuclear reactors gets more money than the guy analyzing satellite photos looking for nude sunbathers. The only apparent limit on this concept of merit-based pay is that locality pay won't be touched. If the intelligence workers are stationed in an expensive or dangerous place, their pay will continue to be adjusted up to reflect that reality.

From a Silicon Valley perspective, there looks to be nothing wrong with this change. Hard work is rewarded and laziness is punished. This makes perfect sense coming from the first U.S. President to have an MBA. But the troops at Langley and other places don't like it, and wanted you and me to know that.

From their perspective, this is a flawed solution to the very real morale, recruiting, and management problems in the U.S. intelligence agencies.

We have had very public instances at both the FBI and CIA of employees selling U.S. secrets for money. Pay banding theoretically deals with this problem by offering agents legitimate ways of increasing their incomes simply by working harder. Now that there is effectively no upper limit on pay, if you want a ski boat, just work late rather than sell secrets to the Russkies — simple as that. People who don't work hard (or at all) will earn less and will eventually leave. People who work hard will earn more and will want to stay.

If only it were that simple. It's just a guess on my part, but I think that in most cases of selling U.S. secrets to foreign powers, there is more involved than just money. There could be defiance of authority, thrill-seeking, sex, who knows? Pay banding doesn't address any of these things.

And from the perspective of the intelligence grunts, pay banding puts far too much power in the hands of upper management who, after all, are the folks who will determine what behavior is considered meritorious and what behavior is not. This potentially makes every job a political job, and that is what Civil Service was intended to protect against.

"Management is unable to stem the tide of poor practices by their own ranks, and need a lever against themselves, as well as the rest of civilian population at NSA," said a source at NSA. "Morale is at an all time low, leave and pay are the only factors keeping existing employees from leaving the ranks to accept more lucrative contracted positions. I have seen three third-party reviews on (NSA) manpower in 10 years, in which they looked at ways to improve efficiency and processes, and the problems always point to excessive layers in top-heavy upper management, ineffective leadership, and usually the blame rests solely on mismanagement of existing resources."

The very fact that I am even hearing about this subject shows how contentious it is, and how isolated and vulnerable the civilian intelligence workers have come to feel.

From the perspective of a PBS audience, maybe this doesn't make any difference, or maybe it does. Another source in the intelligence community cites waves of retirements just at a time when we are supposed to be working that much harder against terrorism. Maybe it is just time to pass the torch now that Communism has fallen and the traditional foe has changed. Or maybe it has more to do with what the spooks, themselves, are starting to call "Homeland Inc." — the giant Department of Homeland Security now being created in Washington.

Read the news stories about this new department and you'll see that the only remaining issue has to do with personnel matters, which is to say, pay banding. The Bush Administration says it wants to be able to pay what it has to for good talent. But pay banding does more than that. It isolates workers and makes it more difficult for internal checks and balances to work. It takes away worker protections even as it encourages more productivity. So pay banding is a mixed bag. Under enlightened management, it works great, but is there a recent history of enlightened management in these agencies? Not to my knowledge.

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