The Pros and Cons of the Five Year Rule

The Inspector General of the Peace Corps has reviewed the unique Five Year Rule and made recommendations to Director Williams.  Sometime in August, Williams will announce policy changes and proposed legislative changes.  I would urge the RPCV community to be knowledgeable about the review.

Here are the Pros and Cons of the Five Year Rule according to the Inspector General of the Peace Corps

PRO:  The Executive Summary listed the advantages of the Five Year Rule (FYR).

The following is quoted from that summary.

• Peace Corps’ staff asserted that the FYR results in a mission-driven, energetic, and optimistic workforce attracted to the Peace Corps in spite of the time-limited appointment.

• The high rate of staff turnover driven by the FYR has allowed the agency to hire extensively from the returned Peace Corps Volunteer (RPCV) population–one of the stated goals behind the establishment of the FYR. Just over 50 percent of all USDHs employed by Peace Corps from 2000 to 2010 were RPCVs and the Peace Corps has hired RPCVs throughout its history.

• The intent of the FYR to prevent Peace Corps’ employees from making life-long careers at the agency has also been met, with rare exceptions. Just one percent of USDH employees worked for Peace Corps from 2000 to 2010 without being subject to the FYR.

CON: The Executive Summary also listed the disadvantages of the Five Year Rule

(FYR).  The following is quoted from that summary.

• _Contributed to an abbreviated average tenure of USDH employees throughout the agency, well short of five years. Average tenure of direct hires over the past 10 years has been just three years. Abbreviated employee tenure and accelerated turnover have compromised the agency’s institutional memory and exacerbated a range of other management challenges.

• _Made it very difficult for the Peace Corps to manage its personnel system in keeping with federal standards for human capital management and merit system principles. Accelerated employee turnover and abbreviated employee tenure have undermined the agency’s ability or weakened its incentives to: retain employees on the basis of their performance; plan for their eventual succession; ensure continuity of needed skills and abilities; provide training and education to improve performance; and deploy its workforce efficiently.

• _Impeded, rather than facilitated, innovation at the Peace Corps. Staff reported that the accelerated pace of employee turnover, short average tenure, and insufficient institutional memory have conspired against the agency’s efforts to identify, develop, test, and successfully implement innovative ideas.

• _Compromised the agency’s ability to attract and retain highly qualified personnel to perform core contracting, financial management, information technology, human resources management, and medical support functions. The rationale for the FYR appears less relevant for offices charged with supporting the agency’s infrastructure, performing compliance-related functions, or ensuring a high quality Volunteer health care program.

• _Exacerbated the already difficult challenge of managing the frequent transitions of overseas USDH personnel. Despite the agency’s efforts to minimize vacancies in key direct hire positions overseas, over the past 10 years there have been more than 180 vacancies lasting at least 30 days. Staff reported that direct hire vacancies overseas had negative impacts on staff workload and morale, Volunteer support, programming and training, and other areas.

• _Weakened the agency’s culture of performance management. Although the 30-month tour has allowed managers to easily separate under-performing employees at their end-of-tour dates, staff reported that the 30-month tour has also allowed supervisors to avoid the unpleasant and time-consuming task of confronting and managing under-performing employees during their service.

• _Not led to RPCVs taking leadership positions throughout the agency to the extent originally envisioned by the architects of the FYR, despite the fact that the agency has hired extensively from the RPCV population. Based on data from 2000 to 2010, only 24 percent of the agency’s senior staff positions have been filled by RPCVs.

• _Created a disincentive for the agency to invest in staff development and undermined the agency’s ability to develop and promote the talent it has.

• _Ironically, led to inflexibility in the agency’s personnel system that has compromised the potential of the original ‘in-up-out’ idea to promote high-achieving staff up through the ranks over a longer period of eight to ten years.

• _Increased costs of managing personnel turnover and contributed to an inefficient use of the agency’s workforce. For the five-year period from 2005 through 2009, we estimated that the FYR contributed between $12.6 million and $15.5 million out of $20.7 million in turnover management costs.

To download the PDF  and read the entire report, here is the text to link to: .Office of the Inspector General’s Evaluation Report on Impacts of the Five Year Rule