The new Department of Homeland Security will be faced with the challenge of implementing and further improving the human resources (HR) system agreed upon by the President and Congress. To help meet the challenge, this Issue Paper draws from management and economics studies to identify the characteristics that make the HR system in any organization effective. It finds that existing civil service flexibility-related tools, if used, can be highly effective. For example, retention allowances, buyouts, and early retirement incentives can induce federal workers to change their retention, separation, and retirement decisions. For these policies to have their maximum effect, however, the barriers to their use--such as inadequate funding and overly cumbersome administrative procedures--must be addressed. While expanded use of flexibility-related policies will help, their use alone will not address possible problems such as excessive or insufficient oversight, hiring inadequacies, and poorly conceived management and employee performance incentives. Policymakers must be prepared to develop, implement, and monitor the HR system to ensure that it is meeting all of its objectives and to aggressively address any shortcomings that are identified.