2009 - Human Resource Man PDF

Transformational Trends in
Governance and Democracy

National Academy of Public Administration
Terry F. Buss, Series Editor
Modernizing Democracy:
Innovations in Citizen Participation
Edited by Terry F. Buss, F. Stevens Redburn, and Kristina Guo
Meeting the Challenge of 9/11:

Blueprints for More Effective Government
Edited by Thomas H. Stanton
Foreign Aid and Foreign Policy:

Lessons for the Next Half-Century
Edited by Louis A. Picard, Robert Groelsema, and Terry F. Buss
Transforming Public Leadership for the 21st Century

Edited by Ricardo S. Morse, Terry F. Buss, and C. Morgan Kinghorn
Performance Management and Budgeting:

How Governments Can Learn from Experience
Edited by F. Stevens Redburn, Robert J. Shea, and Terry F. Buss
Innovations in Public Leadership Development

Edited by Ricardo S. Morse and Terry F. Buss
Reengineering Community Development for the 21st Century

Edited by Donna Fabiani and Terry F. Buss
Innovations in Human Resource Management:

Getting the Public’s Work Done in the 21st Century
Edited by Hannah S. Sistare, Myra Howze Shiplett, and Terry F. Buss
About the Academy
The National Academy of Public Administration is an independent, nonprofit

organization chartered by Congress to identify emerging issues of governance
and to help federal, state, and local governments improve their performance. The
Academy’s mission is to provide “trusted advice”—advice that is objective, timely,
and actionable—on all issues of public service and management. The unique source
of the Academy’s expertise is its membership, including more than 650 current
and former Cabinet officers, members of Congress, governors, mayors, legislators,
jurists, business executives, public managers, and scholars who are elected as fel-
lows because of their distinguished contribution to the field of public administration
through scholarship, civic activism, or government service. Participation in the
Academy’s work is a requisite of membership, and the fellows offer their experi-
ence and knowledge voluntarily.
The Academy is proud to join with M.E. Sharpe, Inc., to bring readers this and
other volumes in a series of edited works addressing current major public manage-
ment and public policy issues.
The opinions expressed in these writings are those of the authors and do not
necessarily reflect the views of the Academy. To access Academy reports, please
visit our website at www.napawash.org.
Innovations in
Human Resource
Management
Getting the Public’s Work Done
in the 21st Century
Edited by Hannah S. Sistare,

Myra Howze Shiplett and Terry F. Buss
T ransformational T rends in
Governance and D emocracy
M.E.Sharpe
Armonk, New York
London, England
Copyright © 2009 by M.E. Sharpe, Inc.
All rights reserved. No part of this book may be reproduced in any form
without written permission from the publisher, M.E. Sharpe, Inc.,
80 Business Park Drive, Armonk, New York 10504.
Library of Congress Cataloging-in-Publication Data
Innovations in human resource management : getting the public’s work done in the 21st
century / edited by Hannah S. Sistare, Myra Howze Shiplett, and Terry F. Buss.
p. cm. — (Transformational trends in governance & democracy)
Includes bibliographical references and index.
ISBN 978-0-7656-2314-0 (cloth : alk. paper)
1. Administrative agencies—United States—Personnel management. 2. Civil service—United
States—Personnel management. 3. Human capital—United States—Management. 4. Personnel
management—United States. I. Sistare, Hannah S. II. Shiplett, Myra Howze, 1944–
III. Buss, Terry F.
JK765.I56 2008
352.60973—dc22 2008028970
Printed in the United States of America
The paper used in this publication meets the minimum requirements of

American National Standard for Information Sciences
Permanence of Paper for Printed Library Materials,
ANSI Z 39.48-1984.
BM (c) 10 9 8 7 6 5 4 3 2 1
Contents
Foreword
Paul A. Volcker ix
Preface and Acknowledgments

Terry F. Buss xi
1. An Overview 3
Myra Howze Shiplett
Part 1. The Challenge Ahead
2. Human Capital: Federal Workforce Challenges in the

Twenty-first Century
J. Christopher Mihm 13
Part 2. Understanding the Twenty-First Century Multisector Workforce
3. Challenges and Effective Practices in Managing the

Multisector Workforce
Alethea Long-Green 25
4. Multisector Workforce Lessons Learned: The National Aeronautics

and Space Administration
Laurie J. May 37
5. Getting the Best from “Most Efficient Organizations”

Bruce D. McDowell 45
6. Building Surge Capacity in the Disaster Workforce: Improving

SBA’s Response to Mega-Disasters in the Future
Terry F. Buss and Joseph Thompson 55
v
vi contents
Part 3. Transforming Organizational Culture
7. The U.S. Government Accountability Office: A Case Study in

Human Capital Reform
David M. Walker 77
8. Strategic Human Capital Management in Federal Government:

Principles, Strategies, and the Case of NASA
Elwood F. Holton III, Sean C. O’Keefe, Vicki A. Novak,
and David M. Walker 86
9. Organizational Transformation: Strategic Succession

Management and Leadership Development
Ruth T. Zaplin and Sydney Smith-Heimbrock 114
10. Four New Models of Networked Leadership Development

Kitty Wooley 131
Part 4. Innovation in Action
11. A New Look at Paybanding and Pay for Performance: The

Views of Those Participating in Federal Demonstration Projects
James R. Thompson and Rob Seidner 147
12. Employee Retention and Engagement

Tim Rutledge 170
13. Building Relationships to Fix the Federal Talent Pipeline:

An Innovative Approach in Chicago Provides a Model for
Recruitment Success
Rob Seidner and James R. Thompson 185
14. Competencies for Success in International Leadership in

Challenging Times
Daniel Spikes and John Stroup 202
15. An Agency-Level Look at Alternative Working Arrangements

in Federal Government
Sharon H. Mastracci and James R. Thompson 214
16. Strategic Workforce Management: Innovation and Improvement

at DTRA
Michael Simpson 234
contents vii
Part 5. Managing the Management of People
17. A Certified Assessment of Human Resources Systems:

An Innovative Pathway to Assurance
NAPA Fellows and Staff 245
18. Using Data-Driven Human Capital Decisions to Improve

Basic Personnel Functions
Edward H. Stephenson Jr. 263
19. Succeeding as a Strategic HR Partner: A Practical Approach

Tom Wimer 271
Part 6. Legislating Reform
20. Legislating Innovation in Human Capital Management:

Lessons from the Department of Homeland Security
Douglas A. Brook and Cynthia L. King 277
21. The Human Capital “Crisis” in the Federal Government:

A Modest Proposal
Alan P. Balutis 292
Part 7. Concluding Thoughts
22. The Path of Reform: Challenges and Opportunities

Hannah S. Sistare 307
About the Editors and Contributors 315

Index 323
Foreword
Paul A. Volcker
In January 2003 the National Commission on the Public Service that I chaired
called for sweeping change in the organization, leadership, and operations of our
national government.1
The Commission worked against a backdrop of rising concern about the need for
reform and renewal of government, and the quality of its leadership and workforce.
Those concerns were sharpened by 9/11 and the recognition that our nation faced
major challenges to our collective security. However, the problems were evident
long before that particular event. Those who had responsibility for carrying out
the work of government came to recognize the need for major change in the way
public servants are recruited, rewarded, resourced, managed, and led.
In the circumstances, the Commission’s recommendations were welcomed by
many—members of Congress, the executive, experts in public administration, and
the “good government” community. To those knowledgeable, the challenges facing
our nation were indeed stark. There are many agencies of government upon which
our well-being—even our survival—is dependent. Yet the competency of govern-
ment to live up to its responsibilities has been called into question. Basic trust in
government—the foundation of an effective democracy—has been low for years,
bumping up only temporarily in the wake of the attacks of 9/11, and falling again
in the months following. Basic reform of administration is never easy. It is not a
thing that seizes public attention—not until scandal, waste, and ineffectiveness is
exposed in crisis. In contrast to historic experience, it has been difficult to convince
our best to enter government service at both the entry and senior levels. This chal-
lenge is sharpened by the fact that competent and experienced civil servants who
entered government decades ago are retiring or leaving early.
The Commission’s report and subsequent efforts have helped encourage some
reforms in public service practices, and even useful legislation. Specifically there
has been progress with respect to more flexible personnel practices within the federal
government. Recruitment efforts are being rationalized. Focus on specific missions
has been enhanced. Exceptional performance of those already in government is
now better recognized. Some of the reforms enacted, due to problems of design or
implementation, have been less successful. Still others remain to be tackled.
So, on the whole, this reform has yet to achieve the scope and intensity that is
ix
x Foreword
required. Problems of design and obstacles to implementation are evident. Plainly,

much remains to be done. The National Academy of Public Administration’s goal
in assembling this volume, Innovations in Human Resource Management: Getting
the Public’s Work Done in the 21st Century, is to stimulate that effort by a flow of
new ideas, best practices, and other potentially useful information among today’s
and tomorrow’s reformers.
The stakes in terms of government that can command the trust and confidence of
the American people have never been higher. Success in meeting that challenge has
to start with the people who will make up the public service today and tomorrow.
They must be educated, skilled, trained, and given the necessary resources to fulfill
their responsibilities. These days, it is critically important that they be able to recruit,
motivate, and deal with the many private parties who today make up the broader
workforce carrying out government’s missions.
One lesson that I have learned over my career is that change in long-established
practices is indeed hard to bring about, and resistance to change is strong. Almost
always, big change, important change, requires a strong catalyst. There has to be
a sense that the existing ways of doing things are no longer adequate, a sense of
foreboding or that crisis is building. Fortunately, in recent years there has been some
greater recognition of the central role played by the people who work at all levels of
our government. Notable failures of government domestically and internationally
have been a catalyst for that recognition. There is growing appreciation that we face
a world of environmental, fiscal, and social challenges beyond the evident need to
protect national security.
A second important lesson that I have learned is that there is no greater sense
of excitement, no greater sense of satisfaction, than public service when one can
participate in a process of reform and renewal. And that is true whether the involve-
ment is in local communities or at the highest levels of the federal government.
Reflection, reform, and renewal will strengthen our institutions, those who lead
them, and our society at large. My hope for those of you reading this volume is
that it will not only add to your knowledge and ideas but also help catalyze your
own participation in this process.
Note
The report is available at National Commission on the Public Service. 2003. Urgent Business
for America: Revitalizing the Federal Government for the 21st Century. Report (January).
Washington, DC: National Commission on the Public Service. Available at http://www.
napawash.org/si/PDFs/VolckerJan03.pdf (accessed 1–15–08).
Preface and Acknowledgments
This volume brings together the latest thinking on human resource manage-
ment in the public service, presented by thought leaders in the field. While it
focuses primarily on federal government policies and practices, the principles,
conclusions, and recommendations reported here translate nicely into state and
local government, and perhaps to the private sector as well. Human resource
management is undergoing profound change, leading to new challenges, ex-
citing accomplishments, and much uncertainty. The public service has moved
substantially away from the old days of “personnel” concerned mostly with
processing employee “personnel actions” paperwork to a system where public
employees are managed as human capital to get the work of the government
done more effectively and efficiently. Many of these changes manifested at the
organizational level, but not all, must be understood in the broader context of
three trends: (1) the aftermath of 9/11, and to some extent Hurricane Katrina,
on public governance—explored in Stanton (2006) (see also Stanton and
Ginsberg 2004); (2) the ascendancy of performance management throughout
government—explored in Redburn, Shea, and Buss (2008); and (3) the evolu-
tion of public management as a discipline—the New Public Management and
the New Governance, especially in the context of public leadership—explored
in Morse, Buss, and Kinghorn (2007) and Morse and Buss (2008) (see also
Abramson, Breul, and Kamensky 2006). This book comes at a propitious time
in that it establishes the groundwork for understanding and taking advantage
of change as it unfolds.
Collectively, the authors of chapters in this book all contribute to our
understanding of the transformational trends enveloping public human
resource management.
Treating Public Sector Workers as Human Capital Rather

Than Labor
Labor in the public service was, not all that long ago, generally treated as
“fungible, homogenous, and interchangeable” and easily replaceable. This view
tended to discount the fact that workers are educated, knowledgeable, skilled,
xi
xii Preface and Acknowledgments
and capable, and possess values essential to the workplace. Such “qualified”
workers are highly mobile and are likely to accept employment where their
needs will be met. They are not overly abundant in the labor force. As such,
some workers never consider public sector employment, or once in the civil
service, leave for better opportunities. This being the case, organizational mis-
sions and goals may not be achieved at preferred levels, because government
might have the wrong people at the wrong place at the wrong time. Human
capital management requires:
Recognizing and rewarding performance. Because human resource manage-
ment is now heavily grounded in performance, a new emphasis exists on reward-
ing those who meet or exceed expectations. Rewarding those who do not excel
creates problems in the federal service by discounting the accomplishments of
higher achievers.
Making the workplace more worker friendly. Work efficiency and productivity
is expected to increase and workers are likely to stay on the job if management is
willing to accommodate their needs in exchange for performance. Flexible work
hours, job sharing, telecommuting, and part-time work now are commonplace,
making the public sector workplace an increasingly better place to work.
Finding and retaining the best workers to conduct the public’s business. It
stands to reason that if managers are going to be held accountable for perfor-
mance, then they must have access to the best workers, both recruiting them
into the federal service, then keeping them there, and investing in their capa-
bility and growth with an eye to maximizing return on that investment. This
continues to be a challenge in the face of competition from the private sector
and nonprofits. The public sector offers many of the most attractive positions
in the sense that many jobs contribute greatly to the public good, are challeng-
ing and rewarding, and can have high visibility and compensation. At the same
time, many other jobs do not seem to contribute much, and are simple-minded
and obscure. A challenge in managing the public workforce is to find ways
to move people into “better” jobs as they grow and develop and to make less
desirable jobs more rewarding.
Developing and encouraging growth and leadership, especially among younger
workers. Under the old civil service system, workers systematically worked their
way into ever higher positions according to fixed, predictable schedules, and then
retired. There was little concern for systematically developing leadership and man-
agement capacity in younger workers. Now there is wide recognition that there must
be a concerted effort to develop leaders and managers and to systematically replace
them as they retire (Morse, Buss, and Kinghorn 2007; Morse and Buss 2008).
Continually improving worker capacity through training, education, and
personal development opportunities. Although not explicitly dealt with in this
volume, capacity building in the workforce must be continuous. All too often,
though, training, education, and development experiences are improperly targeted
or simply ineffective.
Preface and Acknowledgments xiii
Working smarter through information technology. Not that long ago, the
public workforce lagged far behind its private sector counterparts in the use of
technology to improve efficiency and effectiveness. Now, information technol-
ogy has become firmly imbedded in agencies and programs. And a great deal
of the public’s business is conducted online. Problems do remain, however,
as the public sector has a poor track record in implementing management
information systems.
Achieving social equity. Government has yet to take full advantage of the poten-
tial contributions of qualified minority or disadvantaged workers toward delivering
public services. Social equity is addressed not only in this book, but also in Johnson
and Svara (forthcoming).
Planning for the future in human resource management. Not too long ago, it
occurred to some policymakers that they should not focus just on recruitment and
retention, but also plan for the impending retirement of tens of thousands of “baby
boomer” civil servants who would be leaving en mass—the so-called “retirement
tsunami.” Policymakers may have waited too long.
Requiring Performance and Accountability in Getting the

Public’s Work Done
The public sector has a long tradition of trying to improve the performance of
programs and agencies, and holding managers and workers accountable. Since
1993, with passage of the Government Accountability and Results Act, and with
the Bush administration’s Presidential Management Agenda begun in 2002, the
federal system has become driven by performance and accountability at the high-
est levels ever, with budgets increasingly linked to organizational performance.
At present, performance management is high on the agenda of many agency and
program managers (see Redburn, Shea, and Buss 2008). It remains to be seen
whether it will continue to evolve under future administrations.
Linking individual performance ratings to organizational goal attainment. In the
next wave of innovations in performance, policymakers are likely to increasingly
tie individual performance ratings to organizational goal attainment. Individual
merit raises will be tied directly to accomplishment. At present in the public service,
rewards for individual performance may not be related to how well an organization
achieves. High-level federal managers often get large bonuses for poorly perform-
ing agencies and programs.
Empowering managers with more flexibility in how work is managed. With
increasing concern for achieving performance, policymakers have recognized
the need to afford managers more flexibility to accomplish organizational mis-
sions and attain goals. Managers now have greater flexibility in hiring, firing,
paying, promoting, and classifying workers to enhance performance. They also
have more resources to develop workforce capacity. It is not clear whether this
flexibility will yield the results and return on investments policymakers expected.
xiv Preface and Acknowledgments
The next generation of innovations will likely look at the return on human re-
sources investments.
Understanding the New Public Service Arena
The public service arena has moved away from a hierarchical command-and-control
system based on authority. It is becoming more networked and collaborative in
the following ways:
Working with a multisector workforce. The public’s business is no longer con-
ducted exclusively by civil servants. Government now contracts out services to
nonprofit organizations and private business, it co-produces services with other
public organizations or nonprofits and private sector in partnerships, and it privatizes
service delivery. This trend not surprisingly has precipitated much debate about
which services ought to be delivered by government—“inherently governmental”—
and which can be transferred elsewhere. Regardless, the public sector workforce is
now substantially different from the old civil service model. Effective management
of this “multisector” workforce is only just beginning to be understood. The multi-
sector workforce has major, and not fully understood, implications for acquisition,
procurement, and contracting.
Recognizing the emergence of formal and informal networks. Both the terrorist
attacks of 9/11 and Hurricane Katrina exposed the fact that traditional hierarchi-
cal command-and-control systems fail to meet the needs of the people. But these
disasters also pointed up the rise of governance through networks—formal and
informal—that have evolved to replace hierarchies. Increasingly, the work of
the public sector is being accomplished in a system of networks (Agranoff 2007;
Goldsmith and Eggers 2004). But these are not fully understood.
Recognizing the growth of collaboration and partnership. Public leadership and
management are moving away from strictly hierarchical systems to ones that are
more collaborative, employing partnerships (Dorn 2007; Tapscott and Williams
2007). This movement meshes nicely with the rise of networks.
Working with citizens. The growth of the Internet and of collaborative technolo-
gies that bring people together virtually is leading to an era of increased interaction
between citizens and their government (Buss, Redburn, and Guo 2006; Tapscott
and Williams 2007). Citizens now have unprecedented access to public managers
and performance and budgeting data. Public servants will be increasingly held
accountable as they accomplish the work of government.
Acknowledgments
The editors would like to thank Jenna Dorn, president of the National Academy
for Public Administration, for her support and encouragement in the preparation
of this book and other books in the M.E. Sharpe series, Transformational Trends
in Governance and Democracy. We owe a special debt of gratitude to Academy
Preface and Acknowledgments xv
staff that volunteered to prepare many of the chapters in this book. We would also
like to thank the staff at M.E. Sharpe, especially Harry Briggs, Elizabeth Granda,
and Ana Erlić, for their assistance and encouragement.
Terry F. Buss
St. Petersburg, Russia
References
Abramson, Mark A., Jonathan D. Breul, and John M. Kamensky. 2006. Six Trends Transform-
ing Government. Washington, DC: IBM Center for the Business of Government.
Agranoff, Robert. 2007. Managing within Networks: Adding Value to Public Organizations.
Washington, DC: Georgetown University Press.
Buss, Terry F., F. Stevens Redburn, and Kristina Guo, eds. 2006. Modernizing Democracy:
Innovations in Citizen Participation. Armonk, NY: M.E. Sharpe.
Dorn, Jennifer L. 2007. “Web 2.0: Rebooting the Public Square.” Federal Computer Week,
December 3. Available at www.fcw.com (accessed 1–10–08).
Goldsmith, Stephen, and William D. Eggers. 2004. Governing by Network: The New Shape
of the Public Sector. Washington, DC: Brookings Institution Press.
Johnson, Norman, and James Svara, eds. Forthcoming. Justice for All: Promoting Social
Equity in Public Administration. Armonk, NY: M.E. Sharpe.
Morse, Ricardo, and Terry F. Buss, eds. 2008. Innovations in Public Leadership Develop-
ment. Armonk, NY: M.E. Sharpe.
Morse, Ricardo, Terry F. Buss, and C. Morgan Kinghorn, eds. 2007. Transforming Public
Leadership for the 21st Century. Armonk, NY: M.E. Sharpe.
Redburn, F. Stevens, Robert Shea, and Terry F. Buss, eds. 2008. Performance Management
and Budgeting: How Government Can Learn from Experience. Armonk, NY: M.E.
Sharpe.
Stanton, Thomas, ed. 2006. Managing the Challenge of 9/11: Blueprints for More Effective
Government. Armonk, NY: M.E. Sharpe.
Stanton, Thomas H., and Benjamin Ginsberg, eds. 2004. Making Government Manageable.
Baltimore, MD: John Hopkins University Press.
Tapscott, Don, and Anthony D. Williams. 2007. Wikinomics: How Mass Collaboration
Changes Everything. New York: Penguin.
Innovations in
Human Resource
Management
1
An Overview
Myra Howze Shiplett
Transformation is about creating the future, not perfecting the past.

—David Walker, Comptroller General of the United States, November 2007
Three streams of activity merged in this first decade of the twenty-first century that
support vibrant, effective, and efficient human resources policies and programs,
promoting a culture of performance in public organizations.
When Congress passed, and President Bill Clinton signed, the Government
Performance and Results Act (GPRA) of 1993, a revolution began in the way
citizens and public employees began to think about government functions, prod-
ucts, and services to citizens.1 The sense of Congress in passing GPRA was that
federal managers were unable to improve program efficiency and effectiveness,
because program goals were not articulated and performance information was
inadequate. Because federal managers were inhibited from performing at their
best, Congress was handicapped in making spending decisions and performing
program oversight.
The law directed that every federal agency develop a mission statement and a
strategic plan with goals and outcomes and to “express such goals in an objective,
quantifiable, and measurable form . . . for the major programs and operations of
the agency.” Under the direction of the Office of Management and Budget (OMB),
each agency was also to develop a performance plan articulating how the agency
planned to meet its strategic goals and outcomes, to develop metrics to assess the
degree to which outcomes were achieved, and to report annually to Congress on
what the agency had achieved or failed to achieve. The mission statements were
prepared and the first strategic plans were prepared for fiscal year 1999.
This focus on program effectiveness and efficiency enabled departments and
agencies to question program priorities in a much more structured and analyti-
cal way, which ultimately led these organizations to also question the resource
allocations—money, people, and materiel—associated with program priorities.
The roots of the human resources revolution emerged some fifteen years earlier
when public organizations—and particularly federal departments and agencies—
realized that the rigid civil service structures established with the Civil Service
Reform Act of 1883, which ushered in a merit-based civil service for the United
3
4 Myra Howze Shiplett
States, were no longer adequate to assure that the federal civil service could at-
tract and retain a well-qualified workforce. In response to those needs, a variety of
human resources reform legislation was passed beginning with the Civil Service
Reform Act of 1978. However, these reforms were not as successful as supporters
had hoped because they were designed and implemented somewhat in isolation,
without any particular regard for the substantive programs they were to support
in departments and agencies. Only after the GPRA mandated mission statements
supported by strategic plans with measurable objectives and outcomes was there
a policy foundation with an analytical framework able to ask the needed questions
about resource allocation.
At the same time that the GPRA was passed, the National Academy of Public
Administration (NAPA) established its Center for Human Resources Management
(HRM Center). To support research on human resources issues, the HRM Center
established a consortium of public organizations that contributed funds to enable
research on a wide variety of human resources issues, programs, and problems. At
its height in the early 2000s, the consortium had more than sixty federal, state, local,
and international organizations as members. The consortium’s research touched
every facet of strategic and operational program issues in human resources. It
provided members—particularly the federal agency members—with a forum for
exploring solutions to complex human resources problems and issues. Universi-
ties and professional organizations also began to focus their research attention on
human resources issues.
As a result of all of these activities, there is now a substantial body of knowledge
about how employees act, react, and interact within public organizations and about
the types of human resource policies, programs, and practices needed to enable
public organizations to attract and retain a well-qualified workforce (see www.
napawash.org/pc_human_resources/index2.html).
The chapters of this book share some of the very best of those efforts as well as
providing insight and analysis about perplexing issues that remain to be solved.
In his foreword, Paul Volcker—former chairperson of the National Com-
mission on the Public Service and of the Federal Reserve Board, and NAPA
fellow, lays out the need for change and the hope that it will occur, opining
that progress has been achieved through more innovative and effective federal
human capital policies.
I have laid out, above, a concise description of the evolving field of human
resources and the linkages that must exist between and among the range of human
resources policies, programs, and procedures as well as the linkages that must exit
between human resources programs and the organization’s substantive policies
and programs. The chapters below capture the major issues and trends in human
capital management.
J. Christopher Mihm, a NAPA Fellow and Director of Strategic Issues for the
Government Accountability Office (GAO), describes in Chapter 2 the challenges
that the future holds, arguing that human capital management must be central to any
An Overview 5
anticipated transformation strategy for government. His chapter serves to organize

the topics for the chapters that follow.
Chapters 3 through 6 look at the multisector workforce that has dramatically
altered the traditional model in which civil servants exclusively delivered public
services. Government now produces its products and services through multiple
sources—contracts, grants, volunteer services, nongovernmental organizations
(NGOs). This raises issues of accountability, procurement, or acquisition strategy
and practice, human capital management, governance, and social equity.2 How
can government organizations plan for and manage this more disparate workforce
with its different cultures, motivations, and performance incentives? Alethea
Long-Green, in chapter 3, discusses the intricacies of managing the multisector
workforce in a series of case studies.
Laurie May reviews the realities of multisector workforce planning and man-
agement challenges in chapter 4, reporting on a 2006–2007 study of the National
Aeronautics and Space Administration (NASA) to determine how an agency faced
with a radically changing mission could and should manage its multisector work-
force. May details how NASA handled the issues of accountability, acquisition,
human resources management, social equity, and the legal and governance issues
that resulted from the president’s directive to terminate the space shuttle program
and refocus NASA’s work and workforce on returning to the moon and on human
exploration of Mars and beyond. Holton et al. in chapter 8, describe in detail the
strategic human capital management effort at NASA.
In chapter 5, NAPA Fellow Bruce McDowell writes about another challenge
that emerges from contracting for government goods and services: most efficient
organizations (MEOs). MEOs are new structures created within the U.S. govern-
ment in which federal employees compete against the private sector to keep their
commercial-type jobs. For the human resources community, the primary signifi-
cance of competitive sourcing through MEOs is that the federal government has a
new type of organization and a new type of employee. McDowell points out that a
lot of work was completed on how to create an MEO, but very little thought was
given to how they would work in practice.
The uncertainly of today’s world requires government agencies that deal with
disasters to be particularly nimble in their ability to respond efficiently and ef-
fectively. In chapter 6, Terry Buss and Joseph Thompson describe the experience
of the Small Business Administration (SBA) in dealing with damaged homes and
businesses after Hurricane Katrina. The SBA’s dilemma is how to maintain a work-
force surge capacity to meet victim needs in rare megadisasters without spending
excessive amounts of taxpayer dollars while waiting for something bad to happen.
While the military has always had its surge capacity through the National Guard,
only in more recent times have civilian agencies needed this capability. Given the
uncertainties of the twenty-first-century domestic and international political land-
scapes, a variety of federal, state, and local governments are grappling with this
issue. At the federal level, the FBI and the Department of State are now struggling
with these issues, as is SBA. Buss and Thompson lay out some possible nontradi-
tional solutions to this workforce problem.
In chapters 7 through 10, contributors lay out major transformation initiatives
in two agencies, the GAO and NASA. Then two chapters look at organizational
transformation at the individual level through succession planning and leadership
development, and using networks of young government leaders. In Chapter 7, David
Walker, Comptroller General of the United States and NAPA Fellow, recounts the
effort he led to transform the GAO from an organization designed to audit federal
agency activities to one that would assess federal agency performance. Walker shows
how the GAO transformation relied heavily on innovative human capital management
practices and policy that have now become models in the federal system.
In chapter 8, Elwood F. Holton, Sean C. O’Keefe (former NASA Administrator,
NAPA Fellow), Vicki A. Novak (former NASA Chief Human Capital Officer, NAPA
Fellow), and David M. Walker discuss NASA’s evolutionary development of a strategic
human capital program. One salient observation is: When an organization invests in
human capital, three outcomes occur that cannot be owned by the organization, mak-
ing it different from physical and fiscal capital. For individuals, investment results
in increased knowledge, skills, and abilities, leading to individual development and
growth. For the organization, investment results in better performance and productiv-
ity. And for society, more qualified individuals and highly productive organizations
result in community growth and development.
Ruth Zaplin and Sydney Smith-Heimbrock in chapter 9 discuss succession
planning and the importance of a method for identifying, selecting, and developing
leaders who understand the forces of transition and transformation.3
Kitty Wooley raises two common problems for which uncommon answers have
emerged in chapter 10. The problems are: inadequate or ill-fitting support for in-
experienced new hires, leading to feelings of isolation, and a disconnect between
leadership training and succession planning, fueling employee disappointment
and disengagement. Either outcome makes it difficult for an agency to realize the
intended return on (its human capital) investment. On that basis alone, the emerging
solutions that follow are worthy of study. This chapter reports on new networks that
have been generated by employees of several federal agencies with the potential
to turn these problems into solutions.
Over the past decade, policymakers and managers have implemented numer-
ous innovative human capital solutions to improve effectiveness and efficiency, as
presented in chapters 11 through 16. James R. Thompson and Rob Seidner examine
the issues of paybanding and pay for performance in chapter 11. They note that
“the prevalence of paybanding in federal agencies results from flaws in the General
Schedule (GS), the government’s predominant compensation and classification
system. The authors discuss various paybanding efforts and their results over the
last almost thirty years. Their discussion concludes with a summary of the lessons
learned from these experiences. Among the most important lessons learned is that
with paybanding, managers are more accountable for results.
An Overview 7
Tim Rutledge writes on the power and importance of employee retention and en-
gagement in chapter 12. He describes the changes in demographics and diminution
of labor market growth. His thesis is that “employee loyalty has been replaced by
employee engagement.” Creating and maintaining employee engagement requires
a very different approach to work assignments, supervision, and management of
the workforce. It also requires that both career and political executives have the
courage to address performance issues by rewarding good performance and either
correcting poor performance or finding ways to have the poor performer leave the
organization. The shrinking labor market does not allow organizations to waste
their employee talent.
In chapter 13, Seidner and Thompson describe innovative solutions developed
in Chicago to deal with public agency recruitment needs. There, public service
agencies and local universities partnered to develop a talent pipeline from the
schools to government agencies, with the goal of assisting agencies in recruiting
while educating students and career counselors on why and how to choose public
service internships and careers.
Daniel Spikes and John Stroup turn their attention to the competencies needed
to produce public leaders capable of dealing with the complex international dip-
lomatic issues of the twenty-first century. International leadership competencies
have been too vague to be useful. In chapter 14, the authors define these com-
petencies. They find that skills and knowledge for international work are distinct
from traditional leadership and management competencies. The authors lay out
the international leadership competencies they feel would better serve diplomacy
in an era of globalization.
Chapter 15 examines the issues that emerge from the move to a less permanent
workforce—in the authors’ words, a “contingent workforce”—to carry out federal
legal responsibilities to U.S. citizens. This idea, which NAPA calls the multisec-
tor workforce, generates significant emotion from those who support the idea of
a contingent workforce as well as those who oppose the idea. Sharon Mastracci
and James R. Thompson describe the issues thus: “Recent changes in staffing and
personnel management have evoked passionate responses. . . . Microsoft Corpo-
ration’s ‘permatemps’ symbolized the rough-and-tumble private sector employ-
ment landscape, and Microsoft employees’ lawsuit highlighted employer abuses
of contingent work arrangements. Similar trends in government have provoked
alarm. . . . Who are these people in alternative working arrangements? . . . Amid
all of the reactions to contingent and alternative work arrangements in govern-
ment, sober insight is critical; for, as NAPA observed (1998, 7): ‘Whatever our
personal feelings about all of these changes, it is unlikely that the workplace and
workforce of the past will reappear.’”
In chapter 16, Michael Simpson turns to the workforce planning experience of
the Defense Threat Reduction Agency (DTRA). Much of the theory and literature
of workforce planning underscores the importance of agency executives being
involved in agency workforce planning efforts. In most agencies, the theory never
achieves reality. The DTRA experience was different. Historically, DTRA, which
hires a variety of highly technical scientists, engineers, information technology
professionals, and other technical professionals, had a very stable long-term per-
manent workforce. However, the changing demographics of the U.S. labor pool
are changing this reality. Faced with a significant portion of the workforce eligible
for retirement, the director of DTRA assigned his executive staff the task of devel-
oping a workforce planning system for the agency that would accurately predict
current and prospective workforce needs, taking into consideration permanent,
temporary, contractor, and other sources of workforce acquisition. The project has
the additional effect of helping the executive staff strengthen its ability to work
together as a cohesive team.
Are there additional tools that are needed to manage human resources effec-
tively and efficiently within public organizations? chapters 17 through 19 examine
innovative approaches that are helping to product impressive results. Academy
fellows and staff have developed a creative assessment tool at the request of the
University of California to judge the adequacy of the human resource programs of
public institutions. As the authors state in the introduction to Chapter 17, “[f]ederal
agencies risk mission failure if they are unable to recruit, develop, and sustain the
workforce necessary to meet the evolving complexity and scope of federal missions.
. . . In 2007, [NAPA] unveiled an innovative model for improving, documenting,
and assessing human resource systems regardless of the mode of delivery [of those
services].” The model includes a three-part process of readiness assessment, self-
assessment, and independent peer review of assessment results. The methodology
assures that the human resources leaders and staff will be fully engaged in the
assessment activities, as well as maintaining the assessment integrity through an
independent peer review.
The requirement for public organizations to justify their human resources pro-
gram investments with qualitative and quantitative data led Edward Stephenson to
prepare chapter 18, which explores the importance of data-driven human capital
decisions. GAO noted the importance of data-driven human capital decisions in its
model of strategic human capital management. GAO listed such decisions as one
of eight critical success factors to improved human capital management.
In chapter 19, Tom Wimer, president and CEO of the human resource consult-
ing firm KnowledgeBank, outlines an approach that has proven successful with a
variety of public organizations. According to Wimer, it’s time for HR professionals
to take the steps necessary to become successful strategic partners:
• First, seek to understand

• Build a business case
• Embrace your client as a member of your team
• Lead, but don’t push
• Deliver
• Follow up, and take credit for success, but with humility
An Overview 9
What changes in structure and approach are needed to provide public orga-
nizations with additional tools they need to provide the human resources goods
and services needed to support the successful production of necessary goods and
services for U.S. citizens?
In chapter 20, Douglas A. Brook and Cynthia L. King argue that creation of the
Department of Homeland Security (DHS) was a historic achievement in human
capital management modernization and reform efforts, not seen in the United States
since the reorganization of the War Department into the Department of Defense
following World War II. It will be studied for decades to learn what worked and
what did not.
Alan Balutis, a NAPA Fellow, completes this section, providing his perspective
on changes that will position public institutions to respond to citizens’ need for
government goods and services. His suggestions, in Chapter 21, include the need
for government focus on e-government, transparency, and mobility. Human capital
management make a huge difference in government’s ability to attract the best work-
ers regardless of where these workers live and when they work. Balutis suggests:
• Establish a twenty-first-century Hoover Commission to “rethink government

today.”
• Commission a study on the Government Worker: 2015
• Provide early-out authority across government to encourage the remaining
baby boomers to retire from public service.
We end this journey of examination with observations from NAPA Fellow

Hannah Sistare, who served as executive director of the second National Com-
mission on the Public Service, known as the Volcker Commission. In Chapter 22,
Sistare examines the historic reforms of the U.S. civil service and concludes that
the path of reform going forward must be continuous if government is going to be
able to meet its twenty-first-century challenges. She notes Paul A. Volcker’s call
to action—“there is an excitement in the air”—created by the knowledge that the
tools and means to improve public service are at hand and that the desire to con-
tinue in that great tradition has captured the imagination and energy of academics,
practitioners, and policymakers.
Notes
1. The topic of government performance—past, present, and future—is covered in F.
Stevens Redburn, Robert J. Shea, and Terry F. Buss (eds.) (2008), Performance Management
and Budgeting. Armonk, NY: M.E. Sharpe Publishing.
2. James Svara and Norman Johnson are preparing a book, Justice for All: Social Equity
and Public Management, as part of the series. The book is expected to appear in early 2009.
3. Issues in public leadership were extensively covered in Ricardo Morse, Terry F. Buss,
and C. Morgan Kinghorn (eds.) (2007), Tranforming Public Leadership for the 21st Century
and in Ricardo Morse and Terry F. Buss (eds.) (2008), Innovations in Public Leadership
Development, both published by M.E. Sharpe.
Part 1
The Challenge Ahead

2
Human Capital
Federal Workforce Challenges in the
Twenty-first Century
J. Christopher Mihm
Driven by long-term fiscal constraints, changing demographics, evolving gover-

nance models, and other factors, the federal government is facing new and more
complex challenges in the twenty-first century and federal agencies must transform
their organizations to meet these challenges. Strategic human capital management
must be the centerpiece of any serious change in management strategy. In 2001,
the U.S. Government Accountability Office (GAO) identified human capital man-
agement as a government-wide high-risk area because federal agencies lacked a
strategic approach to human capital management that integrated human capital
efforts with their missions and program goals (GAO 2001). Although important
progress has been made, the area remains on GAO’s most recent high-risk list be-
cause there is still the need for a government-wide framework to advance human
capital reform. This framework is essential to avoid further fragmentation within
the civil service, ensure management flexibility as appropriate, allow a reasonable
degree of consistency, provide adequate safeguards, and maintain a level playing
field among agencies competing for talent (GAO 2007a).
Federal agencies do not always have the right people in the right jobs at the
right time to meet the current and emerging challenges they face. For example, the
federal government is confronting a retirement wave and with it the loss of leader-
ship and institutional knowledge at all levels. Not only are agencies facing a fiercely
competitive market for talent, but hiring is also affected by uncompetitive salaries
in some critical occupations and lengthy hiring processes. Federal employees also
operate in cultures that often lack a clear “line of sight” between individual effort
and organization results. Of particular concern, federal agencies do not consistently
have the modern human capital programs, policies, and procedures in place that
are needed to succeed in their transformation efforts.
More specifically, based on a large body of GAO work over many years, it has
become clear that agencies continue to face strategic human capital management
challenges in four key areas:
13
14 J. Christopher Mihm
1. Leadership. Top leadership in the agencies must provide the committed and
inspired attention needed to address human capital and related organization trans-
formation issues. As the government’s human capital leader, the Office of Personnel
Management (OPM) has a key role in helping executive branch agencies build the
needed infrastructure to support their transformation efforts. OPM, therefore, must
have the internal capacity to lead agencies’ efforts.
2. Strategic Human Capital Planning. Agencies’ human capital planning efforts
need to be fully integrated with mission and critical program goals. Too often,
agencies do not have the essential components of strategic human capital planning
needed to address their current and emerging challenges.
3. Acquiring, Developing, and Retaining Talent. Augmented efforts are needed to
improve recruiting, hiring, professional development, and retention strategies. Agen-
cies need to ensure that they are using flexibilities available to them to recruit and hire
top talent and to address the demographic challenges facing the government.
4. Results-oriented Organizational Cultures. Organizational cultures need to
promote high performance and accountability and empower and include employ-
ees in setting and accomplishing programmatic goals. In many cases, the federal
government has not transformed how it classifies, compensates, develops, and
motivates its employees to achieve maximum results within available resources and
existing authorities. Congress has recently taken important steps in this direction
by providing the Departments of Defense (DOD) and Homeland Security (DHS)
with authorities intended to help them manage their people more strategically, but
a government-wide framework is needed.
Agencies not only face these challenges in moving forward but do so during a
period of likely sustained budget constraints. However, budget constraints should
not be viewed as an insurmountable obstacle to needed human capital reform.
Rather, tighter budgets will require agencies to plan their transformations more
strategically, prioritize their needs, evaluate results, allocate their resources more
carefully, and react to workforce challenges more expeditiously in order to achieve
their missions economically, efficiently, and effectively. Although human capital
reforms often require an investment of budgetary resources, many of these costs
are one-time in nature that can pay future dividends through more efficient agency
operations. In the current fiscal environment, Congress will need to scrutinize agen-
cies’ transformation plans, capabilities, and measurable results to make informed
funding decisions.
The following sections provide additional details on each of these four key
challenges as identified by GAO’s work.
Sustained Leadership
Leadership in agencies across the federal government is essential to providing the

accountable, committed, consistent, and sustained attention needed to address hu-
man capital and related organization transformation issues. Leaders must not only
Federal Workforce Challenges in the Twenty-first Century 15
embrace reform, they must integrate the human capital function into their agencies’
core planning activities and programs. Yet, OPM’s 2006 Federal Human Capital
Survey (FHCS) results showed that the government needs to establish a more effec-
tive leadership corps (OPM 2007). For example, slightly less than half of employees
responding to the survey reported a high level of respect for their senior leaders or
are satisfied with the information they receive from management on what is going
on in the organization. Similarly, only 38 percent of respondents agreed or strongly
agreed with the statement that leaders in their organization generate high levels of
motivation and commitment in the workforce. This represents little change from
the 2004 survey, in which 37 percent of respondents had positive responses to
this question. However, a majority of respondents, 58 percent, agreed or strongly
agreed that managers communicate the goals and priorities of the organization.
This level of response is essentially the same as the 2004 survey, when 59 percent
of respondents provided a positive response to this item.
OPM plays a key role in fostering and guiding improvements in all areas of
strategic human capital management in the executive branch. As part of its key
leadership role, OPM can assist—and as appropriate, require—the building of the
infrastructures within agencies needed to successfully implement and sustain hu-
man capital reforms and related initiatives. OPM can do this in part by encouraging
continuous improvement and providing appropriate assistance to support agencies’
efforts. For example, OPM has exerted human capital leadership through its Federal
Human Capital Scorecard (FHCS) of the President’s Management Agenda (PMA)
to assist agencies in improving strategic management of their human capital. Also,
OPM has developed the government-wide FHCS to assist agencies and OPM in
better understanding specific and government-wide agency workforce management
conditions and practices in the areas of leadership, performance culture, and talent.
Most recently, OPM began a television campaign to promote federal employment
and has undertaken a greater focus on succession planning to respond to the forth-
coming federal retirement wave.
However, in leading government-wide human capital reform, OPM has itself
faced challenges in its capacity to assist, guide, and certify agencies’ readiness to
implement reforms. GAO recently reported that OPM has made commendable
efforts in transforming itself into less of a rulemaker, enforcer, and independent
agent to more a consultant, toolmaker, and strategic partner in leading and support-
ing executive agencies’ human capital management systems (GAO 2007b). GAO
also reported on OPM’s leadership of government-wide human capital initiatives.
Using the new senior executive performance-based pay system and other recent
human capital reform initiatives as a model for understanding OPM’s capacity to
lead and implement future human capital reforms, we identified seven key lessons
learned, which are:
1. ensure internal OPM capacity to lead and implement reform,

2. ensure that executive branch agency infrastructures support reform,
3. collaborate with the Chief Human Capital Officer (CHCO) council,

4. develop clear and timely guidance,
5. share best practices,
6. solicit and incorporate feedback, and
7. track progress to ensure accountability.
In addition to the lessons learned that can be applied to future human capital
reforms, GAO recommended, among other things, that OPM (1) improve its capac-
ity for future reforms by reexamining its own agency-wide skills, and (2) address
issues specific to senior executive pay systems, such as sharing best practices and
tracking progress toward goals. OPM has said that it has made progress toward
achieving its operational and strategic goals (GAO 2007b).
Equally important is OPM’s leadership in federal workforce diversity and
oversight of merit system principles. In GAO’s review of how OPM and the Equal
Employment Opportunity Commission (EEOC) carry out their mutually shared
responsibilities for helping to assure a fair, inclusive, and nondiscriminatory federal
workplace, GAO found limited coordination between the two agencies in policy
and oversight matters (GAO 2006a). The lack of a strategic partnership between
the two agencies and an insufficient understanding of their mutual roles, authority,
and responsibilities can result in a lost opportunity to realize consistency, efficiency,
and public value in federal equal employment opportunity and workplace diversity
human capital management practices. GAO recommended that OPM and EEOC
regularly coordinate in carrying out their responsibilities under the equal employ-
ment opportunity policy framework. Both agencies acknowledged that their col-
laborative efforts could be strengthened and have begun efforts toward that end.
Improved collaboration should help ensure a more thorough and consistent approach
to workforce diversity issues across the federal government.
Strategic Human Capital Planning
Strategic human capital planning is a central element of federal agencies’ efforts

to transform their organizations to meet the governance challenges of the twenty-
first century. Generally, strategic workforce planning addresses two critical needs:
(1) aligning an organization’s human capital program with its current and emerg-
ing mission and programmatic goals, and (2) developing long-term strategies for
acquiring, developing, motivating, and retaining staff to achieve programmatic
goals. The long-term fiscal outlook and challenges to governance in the twenty-first
century are prompting fundamental reexaminations of what government does, how
it does it, and who does it. Strategic human capital planning that is integrated with
broader organizational strategic planning is critical to ensuring agencies have the
talent they need for future challenges.
An agency’s strategic human capital plan should address the demographic
trends that the agency faces with its workforce, especially pending retirements.
In 2006, OPM reported that approximately 60 percent of the government’s 1.6

million white-collar employees and 90 percent of about 6,000 federal execu-
tives will be eligible for retirement over the next ten years. GAO has found that
leading organizations go beyond a succession planning approach that focuses on
simply replacing individuals and engage in broad, integrated succession plan-
ning and management efforts that focus on strengthening both current and future
organizational capacity to obtain or develop the knowledge, skills, and abilities
they need to meet their missions (GAO 2003a). For example, about one-third of
the Nuclear Regulatory Commission’s (NRC) workforce with mission-critical
skills will be eligible to retire by 2010 (GAO 2007c). At the same time, NRC’s
workforce needs to expand because NRC expects to receive applications for new
nuclear power reactors beginning in October 2007. GAO reported that NRC’s
human capital planning framework is generally aligned with its strategic goals
and coherently identifies the activities needed to achieve a diverse, skilled work-
force and an infrastructure that fully supports the agency’s mission and goals.
The agency’s framework included using its human capital authorities, develop-
ing a critical skills and gaps inventory tool, and using targets and measures to
monitor the composition of its hires and separations. NRC has been effective in
recruiting, developing, and retaining a critically skilled workforce, though it is
unclear if this trend will continue in the next few years.
GAO also has reported in recent years on a number of human capital issues that
have hampered the Department of State’s ability to carry out U.S. foreign policy
priorities and objectives, particularly at posts central to the war on terror (GAO
2006b). For example, the department initiated a number of efforts to improve its
foreign-language capabilities. However, it has not systematically evaluated the
effectiveness of these efforts, and it continues to experience difficulties filling its
language-designated positions with language-proficient staff. GAO found that
these gaps in language proficiency can adversely affect the department’s ability to
communicate with foreign audiences and execute critical duties.
Another example of the government’s strategic human capital planning chal-
lenges involves its acquisition workforce. The government increasingly relies on
contractors for roles and missions previously performed by government employees.
Acquisition of products and services from contractors consumes about a quarter
of discretionary spending government-wide and is a key function in many federal
agencies. GAO reported in 2003 that because of a more sophisticated business
environment, most acquisition professionals would need to acquire a new set of
skills focusing on business management (GAO 2003b). In a forum hosted by the
comptroller general in July 2006, acquisition experts reported that agency leaders
have not recognized or elevated the importance of the acquisition profession within
their organizations, and a strategic approach has not been taken across government
or within agencies to focus on workforce challenges, such as creating a positive
image essential to successfully recruiting and retaining a new generation of talented
acquisition professionals (GAO 2006c).
Acquiring, Developing, and Retaining Talent
Faced with a workforce that is becoming more retirement-eligible and finding

gaps in talent because of changes in the knowledge, skills, and competencies
in occupations needed to meet their missions, agencies need to strengthen their
efforts and their use of available flexibilities to acquire, develop, motivate, and
retain talent.
The federal hiring process, with its lengthy procedures, often puts the federal
government at a competitive disadvantage. In recent years, Congress, OPM, and
agencies have taken significant steps to streamline federal hiring. For example,
Congress has provided agencies with flexibilities such as the use of categorical
rating and exemptions from the pay and classification restrictions of the General
Schedule. OPM’s efforts included improvements to the USAJOBS website as well
as other measures, such as job fairs and television commercials, to make the public
more aware of the work federal employees do. OPM has also established a model
forty-five-day hiring program—limiting the time-to-hire period from the date a
vacancy announcement closes to the date a job offer is extended. In addition, OPM
has developed a Hiring Tool Kit on its website to help agencies improve their hir-
ing processes. Moreover, OPM assists agencies on the use of student employment
program flexibilities, which can expedite the hiring process and lead to noncom-
petitive conversion to permanent employment. Our work, however, has found that
agencies’ use of the tools and flexibilities provided by Congress has been uneven
(GAO 2004a). OPM has made some progress in assessing how agencies are us-
ing their hiring flexibilities and authorities. For example, in January 2007, GAO
reported that OPM had begun working with a contractor in 2005 to review hiring
flexibilities and authorities to determine which ones are used and not used, who is
using them, and when and how they are being used (GAO 2007b). As a result of
its work with the contractor, OPM plans to survey eight CHCO Council agencies
to evaluate the use and effectiveness of hiring authorities and flexibilities and use
the results to improve policies in these areas.
Developing and maintaining workforces that reflect all segments of society
and our nation’s diversity is a key part of agencies’ recruitment challenge. For
example, the National Aeronautics and Space Administration (NASA) said it must
compete with the private sector for the pool of Hispanics qualified for aerospace
engineering positions, which is often attracted by more lucrative employment
opportunities in the private sector in more preferable locations (GAO 2006d). To
address the situation, part of NASA’s strategy in recruiting Hispanics focuses on
increasing educational attainment, beginning in kindergarten and continuing into
college and graduate school, with the goal of attracting students into the NASA
workforce and aerospace community. NASA centers sponsor, and its employees
participate in, mentoring, tutoring, and other programs to encourage Hispanic and
other students to pursue careers in science, engineering, technology, and math.
NASA also developed a scholarship program designed to stimulate a continued
interest in science, technology, engineering, and mathematics. Another example

is the U.S. Air Force’s “Grow Your Own” aircraft maintenance program at three
of its Texas bases. In partnership with vocational-technical schools, the program
includes both on-the-job training and classroom education to provide a pool of
trained candidates, including Hispanics, to replace retiring federal civilian aircraft
maintenance workers.
In addition to hiring, agencies need to have effective training and development
programs to address gaps in the skills and competencies that they have identified in
their workforces. GAO has issued guidance that introduces a framework, consist-
ing of a set of principles and key questions that federal agencies can use to ensure
that their training and development investments are targeted strategically and are
not wasted on efforts that are irrelevant, duplicative, or ineffective (GAO 2004b).
Training and developing new and current staff to fill new and different roles will
play a crucial part in the federal government’s endeavors to meet its transforma-
tion challenges. Of some concern, however, is the 2006 FHCS, which showed
that about half, or 54 percent, of respondents were very satisfied or satisfied with
the training they receive on their current jobs, little change from the 2004 survey,
which showed 55 percent had positive responses to this question.
Results-Oriented Organizational Cultures
High-performing organizations have found that to successfully transform them-

selves they must often fundamentally change their cultures so that they are more
results-oriented, customer-focused, and collaborative in nature. An effective
performance management system is critical to achieving this vital cultural trans-
formation. Effective performance management systems are not merely used for
once- or twice-yearly individual expectation setting and rating processes, but are
tools to help the organization manage on a day-to-day basis. These systems are
used to achieve results, accelerate change, and facilitate two-way communication
throughout the year so that discussions about individual and organizational perfor-
mance are integrated and ongoing. Moreover, leading public sector organizations
both in the United States and abroad create a clear linkage, commonly known as
a “line of sight,” between individual performance and organizational success and,
thus, transform their cultures to be more results-oriented, customer-focused, and
collaborative in nature (GAO 2003c).
The government’s senior executives need to lead the way in transforming their
agencies’ cultures. Credible performance management systems that align individual,
team, and unit performance with organizational results can help manage and direct
this process. The performance-based pay system that Congress established in No-
vember 2003 for members of the senior executive service (SES) seeks to provide
a clear and direct linkage between performance and pay for the government’s
senior executives and is an important step toward government-wide transforma-
tion (Pub. L. No. 108–136, § 1125, 117 Stat. 1392, 1638, Nov. 24, 2003). Under
this performance-based pay system, senior executives no longer receive annual

across-the-board pay increases or locality-pay adjustments. Executive branch
agencies are to now base pay adjustments for senior executives on individual
performance and contributions to agency performance through an evaluation of
their skills, qualifications, or competencies as well their current responsibilities
(GAO 2006e; 2007d).
Just as it has for senior executives, the federal government needs to funda-
mentally rethink its current approach to paying nonexecutive employees by better
linking their pay to individual and organizational performance. Today’s jobs in
knowledge-based organizations require a much broader array of tasks that may
cross the narrow and rigid boundaries of job classifications of the General Schedule
system. Since being exempted from the General Schedule system, DOD and DHS
have been moving toward occupational clusters and pay bands that better define
occupations and facilitate movement toward performance management systems
that create a line of sight between performance and organizational results, make
meaningful differences in performance, and appropriately reward those who per-
form at the highest levels.
The results of the 2006 FHCS underscore the need for serious attention to
the way federal employees are assessed and compensated. About one-third, or
34 percent, of the respondents strongly agreed or agreed with the statement that
promotions in their work units are based on merit. When respondents were asked
if pay raises in their work units depend on how well employees perform their jobs,
only 22 percent responded positively. These responses are consistent with past
survey results. Further, somewhat less than a third of the survey respondents had a
positive response to the question about whether their leadership and management
recognized differences in performance in a meaningful way. High-performing
organizations have found that actively involving employees and key stakehold-
ers, such as unions and other employee associations, helps gain ownership of
new performance management systems and improves employees’ confidence and
belief in the fairness of the systems. In addition, adequate safeguards need to be
built into the performance management system to ensure fairness and to guard
against abuse. Using safeguards, such as having an independent entity conduct
reasonableness reviews of performance management decisions, can help allay
concerns and build a fair, credible, and transparent system. In summary, we
need to continue to move forward with appropriate human capital reforms. But
how reform is done, when it is done, and the basis on which it is done can make
all the difference in whether such efforts are successful. Before implementing
significant human capital reforms, especially reforms that make stronger links
between employee pay and performance, executive branch agencies should fol-
low a phased approach that meets a “show me” test. That is, each agency should
be authorized to implement reform only after it has shown that it has met certain
conditions, including having the institutional infrastructure to effectively and
fairly implement any new authorities.
Note
Most of the material in this chapter is drawn directly from issued GAO work, particu-
larly GAO, Human Capital: Federal Workforce Challenges in the 21st Century, GAO 07
556T (Washington, DC: March 6, 2007). Anthony P. Lofaro, Ami J. Ballenger, Thomas M.
Beall, Crystal M. Bernard, William Doherty, Karin K. Fangman, and Anthony R. Patterson
were the major contributors to that GAO testimony. The material here has been changed
to the degree that the views expressed should be considered those of the author and do not
necessarily express the views of the GAO.
References
Government Accountability Office. 2001. High-Risk Series: An Update. GAO-01-263

January.
———. 2003a. Human Capital: Succession Planning and Management Is Critical Driver
of Organizational Transformation. GAO-04-127T October.
———. 2003b. Acquisition Workforce: Status of Agency Efforts to Address Future Needs.
GAO-03-55 January.
———. 2003c. Results-Oriented Cultures: Creating a Clear Linkage between Individual
Performance and Organizational Success. GAO-03-488 March.
———. 2004a. Human Capital: Increasing Agencies’ Use of New Hiring Flexibilities.
GAO-04-959T July.
———. 2004b. Human Capital: A Guide for Assessing Strategic Training and Development
Efforts in the Federal Government. GAO-04-546G March.
———. 2006a. Equal Employment Opportunity: Improved Coordination Needed Between
EEOC and OPM in Leading Federal Workplace EEO. GAO-06-214 June.
———. 2006b. Department of State: Staffing and Foreign Language Shortfalls Persist
Despite Initiatives to Address Gaps. GAO-06-894 August.
———. 2006c. Highlights of a GAO Forum: Federal Acquisition Challenges and Oppor-
tunities in the 21st Century. GAO-07-45SP October.
———. 2006d. The Federal Workforce: Additional Insights Could Enhance Agency Efforts
Related to Hispanic Representation. GAO-06-832 August.
———. 2006e. Human Capital: Aligning Senior Executives’ Performance with Organiza-
tional Results Is an Important Step Toward Government-wide Transformation. GAO-
06-1125T September.
———. 2007a. High-Risk Series: An Update. GAO-07-310 January.
———. 2007b. Office of Personnel Management: Key Lessons Learned to Date for Strength-
ening Capacity to Lead and Implement Human Capital Reforms. GAO-07-90 January.
———. 2007c. Human Capital: Retirements and Anticipated New Reactor Applications
Will Challenge NRC’s Workforce. GAO-07-105 January.
———. 2007d. Human Capital: Bonuses to Senior Executives at the Department of Veterans
Affairs. GAO-07-985T June.
Office of Personnel Management (OPM). 2007. 2006 Federal Human Capital Survey: Results
from the 2006 Federal Human Capital Survey. Washington: OPM.
Part 2
Understanding the 21st Century

Multisector Workforce
3
Challenges and Effective Practices in Managing
the Multisector Workforce
Alethea Long-Green
As federal agency executives cope with evolving missions, insufficient budgets, and
burgeoning service demands, they are increasingly turning to alternative workforce
solutions and flexible staffing strategies to accomplish their work. Federal manag-
ers are no longer relying solely, or even primarily, on civil servants to carry out
agency programs. Emerging instead is a “multisector” workforce consisting of a
combination of civil servants (full- and part-time, permanent and temporary), active
duty military, reservists and other uniformed personnel, state and local workers,
private contractors, grantees, nonprofit partnerships, and even volunteers. These
vastly different components of the workforce carry out agency programs, often side
by side, but under substantially different governing laws, compensation systems,
appointment, termination, and discipline provisions, and ethical standards.
The trend toward using workers who are not part of the federal civil service
has escalated greatly in recent years. Many motives have been associated with the
change. Federal managers are seeking more flexible ways to acquire needed skills,
save money, counter the knowledge drain, augment capacity on an emergency basis,
and reduce the size of government, to name often-cited reasons. At this time, ac-
curate figures on the size of the various components of the multisector workforce
do not exist, nor is there agreement on the definition of these components. There
is, however, a growing consensus that managing this vast and sometimes discon-
nected web of service providers is a huge challenge.
In 2004, the National Academy of Public Administration (NAPA) formed a
working group of NAPA fellows to examine the multisector workforce phenomenon
(NAPA 2005). NAPA was concerned that the blurring of roles, responsibilities,
and lines of authority could potentially lead to accountability failures and service
disasters. NAPA focused its review on “how to manage and govern the third party
workforce in a period where the capacity of the official workforce is dwindling
and the rules which govern it are undergoing basic reform.” Its research covered
three areas: (1) gathering basic data on the size, scope, and nature of the third-party
workforce; (2) identifying the means by which a limited federal workforce could
perform its technical oversight and accountability responsibilities; and (3) explor-
25
26 Alethea Long-Green
ing the question of inherently governmental functions. The overall focus was on
management challenges presented by the multisector workforce. As a complement
to its research, in 2006, the Academy sponsored a study team of eight participants1
in the U.S. Department of Agriculture (USDA) Executive Potential Program to
conduct mini–case studies examining multisector workforce issues at three federal
agencies—the U.S. Coast Guard, the Department of Education’s (DOE) Office of
Federal Student Aid (FSA), and the National Park Service (NPS).
Following an overview of the multisector workforce challenges identified by the
Academy, this chapter describes the multisector workforce at each of these agencies,
the approaches that the agencies are using to manage this workforce, and lessons
learned and emerging best practices based on their experience to date.
Multisector Workforce Challenges
According to NAPA’s initial research, the multisector workforce presents significant

management challenges in six key areas: accountability, acquisition, human capital,
legal and governance, social equity and values, and organizational culture. These
challenges play out in a variety of ways and are often interdependent.
Accountability
Federal managers are primarily responsible for ensuring accountability for govern-
ment services by exercising control and preventing abuse of power. At the heart of
the accountability issue is this: The federal manager is responsible for spending
public funds, exercising public authority, protecting the public’s trust, and delivering
results to citizens as part of the mission of each individual agency. Increasingly,
the federal manager is relying less on traditional civil servants and instead using
multisector workforces to accomplish agency missions and achieve results. Using
multisector workforces requires a dispersion of administrative authority and reduces
the level of control that the federal manager has over the process. Yet this does not
reduce the managers’ oversight responsibilities or their obligation to deliver results.
Accountability for multisector workforce performance requires clearer articulation
of managers’ roles and responsibilities as well as training and tools to help them
direct and oversee various kinds of workers.
Acquisition
Acquisition, as defined by the Federal Acquisition Regulations (FAR), involves

“acquiring supplies or services with appropriated funds through purchase or lease.”
Contracting is the tool that the government uses to determine and implement the
agreed-upon business arrangement (identifying products and/or services to be
provided, costs, performance period, and so forth). Key multisector workforce
acquisition challenges include: (1) providing oversight and accountability for out-
Managing the Multisector Workforce 27
sourced functions, given the increasing federal workloads and limited workforce
capacity, (2) identifying and communicating clear contract requirements, and (3)
streamlining and improving the use of regulations to ensure accountability.
Human Capital
The multisector workforce presents many challenges affecting a range of human

capital standards including: aligning human capital resources with the mission,
conducting workforce analysis and planning, developing leadership and knowledge,
recruiting and retaining talent, fostering a results-oriented performance culture,
establishing accountability mechanisms, and providing oversight for merit system
principles. Given the growing use of multisector workforces, agencies must find
ways to apply these standards to all components of the workforce—not just the
civil servants. For example, currently, agencies struggle to perform comprehensive
workforce planning and analysis, which includes all components of the multisector
workforce. As another example, managers must understand both the regulations/
rules that govern performance management of contractors and those that apply to
civil service employees.
Legal and Governance
This issue focuses on the traditions and institutions by which authority is exercised,
including developing statutes and regulations, formulating policy, and discharging
duties. Public administration experts have identified the laws and rules as the glue
that holds the federal architecture and workforce together, but they readily admit that
many of these rules were developed to govern a very different kind of workforce
composed mostly of federal employees. The emergence of the multisector work-
force has changed the legal and governance landscape. The overarching questions
concern what administrative laws need to be revised, amended, or eliminated to
facilitate the effectiveness and efficiency of the multisector workforce, and how
we can determine the best alternatives for establishing a governance structure for
the multisector workforce.
Social Equity and Values
NAPA defines social equity as the fair and equitable management of all institutions
serving the public directly or by contract; the fair, just, and equitability distribution
of public services and implementation of public policy; and the commitment to
provide fairness, justice, and equity in the formation of public policy. Values, on the
other hand, form the framework surrounding all the interactions of people within a
system and are used to interpret events and give meaning to communications. For
the civil service, social equity and values are articulated in public laws, policies,
and regulations. As federal missions are increasingly performed by contractors
and other non–civil service workforce components, federal managers need to pay
attention to issues of social equity and values—due process, procedural fairness
and consistency, and equal access. Questions related to the multisector workforce
phenomenon include: Is there fair and open competition? What is the impact of
contracting out on the actual delivery of services (i.e., who is served, who is not
served)? What impact does contracting out have on the values and goals inherent
in the treatment of civil servants? Does it make a difference that federal employees
take an oath of office, but other components of the multisector workforce, such as
contractor employees, do not?
Organizational Culture
An agency’s mission and culture, of course, provide the organizational framework

for recruitment, retention, and effective management of the agency. The emergence
of the multisector workforce creates a more complex operating environment, with
a mixture of diverse perspectives and norms. Differences between the federal
workforce and other components are seen in areas such as professional credibility,
visibility, work space, promotions, and awards. Academy research found that dis-
parate treatment of individuals depending on their workforce status (for example,
civil servant versus contractor) can directly affect workforce dynamics and hinder
performance. As a result, successful management of multisector workforces will
increasingly strive to create a culture of inclusion for all workers.
Managing the Multisector Workforce
To better understand the multisector workforce, the study team researched the ex-
perience of three agencies: the U.S. Coast Guard, FSA, and NPS. At each agency,
the team gathered data through in-depth interviews with senior executives and
program managers, human capital and acquisition personnel, and focus groups of
program specialists, using questions developed by the Academy. They reviewed
agency workforce statistics and related planning documents and surveyed publicly
available information such as agency websites, external evaluations, agency human
capital reports, and government manuals.
The study team found that these three agencies demonstrate the diversity of
the multisector workforce and the different ways the agencies are managing and
supervising their workforces. All three agencies currently rely, to varying degrees,
on a multisector workforce to accomplish their missions. The mix of components
is different at each agency: the U.S. Coast Guard is using military, civil service,
contractors, and volunteers; FSA relies on civil servants backed by a larger number
of contractors; and NPS is working with a mix of federal employees, contractors,
concessionaires, volunteers, and partnerships participants. As shown in Table 3.1,
the three agencies approach the management of the multisector workforce differ-
ently, thus demonstrating distinct models for others to consider.
Table 3.1
Multisector Workforce Management Models
Agency Model Description

U.S. Coast Guard Multisector Alignment of roles and responsibilities
command, control, with the mission across various
and coordination components of the multisector
workforce
Department of Targeted contract Focused contract management,

Education, Office of management extensive training of managers and
Federal Student Aid acquisition workforce, extended use of
performance based contracts, outcome
measures
National Park Service Collaborative Collaboration and alignment of

partnerships all components of the multisector
workforce
U.S. Coast Guard
The U.S. Coast Guard, the smallest of the five armed services, performs multiple
national defense, maritime safety and security, commercial mobility, and natural
resource protection functions. Housed within the Department of Homeland Se-
curity, the Coast Guard has a multisector workforce of about 94,000, including
volunteers.
Chief components of the Coast Guard’s multisector workforce are the active
duty military (39,854), the career civil servants (7,299), and civilian employees of
nonappropriated fund activities such as the Coast Guard Exchange System (1,450).
The remainder of the multisector workforce is split between reservists subject
to recall to active duty (8,447) and a sizable number of volunteers in the Coast
Guard Auxiliary (33,353) and the Ombudsman program (252). The Auxiliary are
uniformed civilians who help the Coast Guard perform some civil responsibilities—
public education and vessel safety checks. Ombudsmen volunteers are spouses of
active duty military personnel who provide assistance and information to support
Coast Guard families.
The study team was not able to determine the number of contract employees
working at Coast Guard facilities because it does not track this number. In the future,
all personnel who regularly enter Coast Guard facilities will require an official ac-
cess pass. This should provide a proxy for the number of contract employees who
work on-site with Coast Guard employees.
To manage its multisector workforce, the Coast Guard applies a command, con-
trol, and coordination approach, in keeping with its military status. This aligns roles
and responsibilities with missions across the major components of the workforce
(military, civil service, reservists, and volunteers). At the same time, the Coast Guard
has created communications mechanisms to ensure that all workforce participants
have an avenue for expressing their concerns. Researchers were told that inclusion
of all components of the multisector workforce is helped by a strong sense of the
“Coast Guard Family” and commitment to mission.
Federal Student Aid (FSA)
FSA’s mission is to ensure that all eligible individuals benefit from federal financial
assistance—grants, loans, and work-study programs—for education beyond high
school. FSA programs are the nation’s largest source of student aid. During the
2005–2006 school year alone, FSA provided approximately $78 billion in new
aid to nearly 10 million postsecondary students and their families. Key services
of FSA include: developing, distributing, and processing approximately 14 million
Free Application for Federal Student Aid applications each year; making students
and their families aware of available financial aid opportunities; and overseeing
FSA partners in the student aid community to ensure fair, honest, and efficient
operations.
In carrying out its responsibilities, FSA relies heavily on a contractor workforce.
FSA has 1,037 civil servants (both career and excepted service) employed in its
Washington headquarters and ten regional offices. Over three times that number
(3,500) contract employees perform a variety of FSA services, including manag-
ing application processing, staffing call centers, providing systems support, and
producing software. FSA uses no volunteers.
As a performance-based organization, FSA endeavors to standardize accountabil-
ity and performance expectations of its contractor workforce. Its contract manage-
ment approach involves extensive training of managers and acquisition workforce,
and extensive use of performance-based contracts and outcome measures.
National Park Service (NPS)
Since its inception in 1916, NPS has served as the steward of America’s most
precious natural and cultural resources. NPS manages much of the vast lands and
resources for which the Department of Interior is responsible—protecting the na-
tion’s resources, providing recreational access to park lands, promoting educational
information, and performing environmental and scientific research, among other
activities. The 391 units in the national park system receive nearly 300 million
visits annually.
To carry out its responsibilities, NPS relies on a varied workforce—collectively
the internal and external workforces. Federal employees are the internal workforce
and comprise 45 percent of the total workforce, including rangers, law enforcement
specialists, concessions specialists, professional science and engineering specialists,
interpreters, administrative staff, and others. The remaining 55 percent represents the
external workforce, comprised of contractors, volunteers, concession employees,

student hires, and various nonprofit partners/cooperators such as cooperating associa-
tions, foundations, “friends groups,” and Cooperative Environmental Study Units. As
described below, the NPS external workforce has several unusual components, which
are highly dependent on collaboration and partnerships, as opposed to contracts.
• NPS contracts out over $1 billion for supplies and services annually and
employs approximately 12,000–15,000 contract workers. The contracting
decisions are based on competitive sourcing studies, which are linked to NPS
workforce plans to ensure that resources are deployed appropriately.
• Concession employees (24,000 strong) work under a contractual agreement
between the park and the concessions company and operate restaurants, lodg-
ing facilities, gift shops, and other visitor convenience outlets found within
national parks.
• Cooperating associations are private nonprofit partner organizations that
operate under an agreement with national park areas. These associations
manage the bookstores found in national parks. Their “profits” get returned
to the parks in the form of financial aid to support educational programs in
the parks.
• Foundations engage in fundraising activities for parks.
• “Friends groups” also raise funds and provide support for parks on a vol-
unteer basis.
• Cooperative Environmental Study Units (CESUs) are formal relationships
between universities and national parks to provide university expertise on a
reimbursable basis.
Because internal workforce hiring authorities are expected to be limited in the

future, NPS is seeking to expand its collaborations with its external workforce.
Often, concessions and visitor center workers, contractors, volunteers, and other
members of the external workforce are the NPS’s public face to visitors. If NPS
is to satisfactorily meet national park customers’ demands, NPS believes it must
expand partnerships, strengthen collaboration, and ensure continuity with its large
external workforce.
Three Agency Experiences: Lessons Learned and Best Practices
As the three agencies gain experience with their multisector workforces, they are
beginning to identify and address numerous issues raised by this relatively new
way of doing business. The following are the most often cited themes and issues
found in the case studies.
• Federal managers need more training and better tools to help them effectively
manage the multisector workforce.
• Having skilled acquisition staff is key to successful implementation of multi

sector workforce strategies.
• The role of the human capital management in meeting the numerous “people”
issues associated with the multisector workforce must be better defined and
strengthened.
• The multisector workforce requires comprehensive communications strategies.
The Coast Guard, FSA, and NPS are taking steps to address these issues and are
developing approaches that could be adopted elsewhere in government.
More Training and Better Tools for Federal Managers
The three agencies amply illustrate the challenging world in which today’s fed-
eral manager operates—one that was largely unknown until recent times. How
does a manager maintain accountability when contracting out is on the increase
at the same time that the number of federal employees available to manage those
contracts is on the decline? How does a manager direct a workforce where many
of the employees are not under the manager’s direct supervision? How can a
manager leverage dollars from nonfederal partners without violating procurement
and ethics rules? Can a federal manager exercise oversight over the multisector
workforce? Clearly federal managers need training and tools to help them cope in
this environment. For example:
• Coast Guard active duty officers may go for most of their career without any
assignment requiring supervision of civilians or volunteer Auxiliary mem-
bers. Then, they could be assigned to manage thirty civilians or coordinate
the mission efforts with an Auxiliary Flotilla with no formal training about
the rules and intricacies governing the work of these entities.
• NPS managers confront a stove-piped operation where federal employees
supervise federal employees, contractors oversee their own employees, and
concessionaires manage concession employees. Managing in this environment
requires special skills and techniques.
• In FSA, there is one civil servant for every three-plus contractors. Getting the
job done requires managers to understand rules and regulations governing
contracted out operations. It is important that managers understand the rules
and regulations governing the performance of contract employees versus those
governing performance management of federal employees.
Examples of the steps agencies are taking to help managers cope with the mul-
tisector workforce environment include:
• Given the growing importance of partnerships in its operations, NPS is

working with other agencies to identify competencies that will foster greater
use of partnerships in carrying out federal programs. NPS also has identified
collaboration, communication, and conflict resolution as fundamental com-
petencies for current and future leaders of NPS.
• FSA recognizes that continuity of contractor operations is critical to suc-
cessful mission accomplishment. To retain the right people, FSA managers
are encouraged to create and maintain a positive work environment for job
content, appreciation, rewards, and recognition.
• The Coast Guard promotes the “Coast Guard Family” as a way to bridge
differences between the various components of the multisector workforce.
• NPS’s Denver Service Center, which oversees many large construction proj-
ects, is moving toward professional certification of its project managers. Part
of the rationale is that professional certification will help project managers
stay abreast of industry practices and thus will help them better understand the
contractors with whom they will work. NPS officials told the study team that
promoting training in business practices and business management will help
educate federal employees about the multisector workforce environment.
Skilled Acquisition Staff Are Needed
The research team found convincing evidence that contracting out to deliver fed-
eral services is increasing and that this trend will likely continue. Although in any
contract arrangement the federal agency is presumed to be the managing partner,
federal managers do not always have the necessary tools to oversee the daily activi-
ties of contractors. And very importantly, agency acquisition staffs have often not
been made knowledgeable enough to protect the federal interest.
Like the rest of the federal government, each of the three agencies extensively
uses contract employees. Among the agencies studied, FSA relied most heavily on
contractors to accomplish its work, with contractors outnumbering civil servants
by more than three to one. Both the Coast Guard and NPS also used contractors to
carry out their program responsibilities. The three agencies shared common concerns
about the adequacy of the numbers and skill levels of their acquisition personnel.
They generally agreed that more numerous and better-trained contracting officers are
needed. Among the acquisition community’s biggest challenges are clearly articulating
contract requirements and helping managers understand how contracting rules can
help them oversee contract operations. The study team noted the following examples
of efforts to strengthen the capacity of the acquisition workforce.
• The Coast Guard has come to realize that all acquisition professionals should
be certified. Consequently, the Coast Guard is sending the acquisition com-
munity to the Defense Acquisition University to receive the same professional
certification provided Department of Defense participants.
• For FSA, the biggest challenge for the acquisition workforce is clearly
communicating the requirements of the contract. FSA envisions linking the
acquisition office with human capital planning to help the acquisition staff
better understand agency requirements.
• NPS is working to familiarize potential contractors with NPS culture and
environment. Its Denver Service Center conducts a three-day training session
for architectural and engineering contractors to better prepare them to become
integral partners in achieving NPS goals.
• NPS also places a high priority on contracting officer training, devoting ad-
ditional funding to this need. NPS recognizes that training must go beyond
federal procurement rules and regulations and address issues such as better
utilization of the multisector workforce.
Human Capital Management Role Needs to Be Defined
Traditionally the focus of most agency human capital operations has been almost
exclusively on the federal civil service workforce, with little interaction with other
components of the multisector workforce, such as contractors. Yet civil servants and
contractors often work side by side and have similar needs. Human capital offices have
an important role to play in helping agencies adapt to the new workforce structure.
For example, workforce planning—a key strategic human capital function—is incom-
plete when it includes only the federal workforce and not the often larger contracting
and volunteer components. Human capital offices have expertise to help agencies in
additional ways including: developing training programs on multisector workforce
issues; helping managers decide whether it is best to fill a position with a federal
employee, a contractor, or other type of worker; building skills inventories on the total
workforce; and helping resolve conflicts among various workforce components.
The study team found that agencies may not be effectively using their resident
human capital expertise to address multisector issues. For example, NPS’s chief
human capital officer, responsible for developing strategies for managing the total
workforce, does not sit on the National Leadership Council with other top leader-
ship. Thus, there has not been an HR voice represented at the senior policy-making
body where key decisions affecting the composition of the workforce are made.
However, at lower levels in NPS, there is movement in the direction of involving
HR early in the decision process. At the Golden Gate National Recreation Area, a
Human Resources Executive Board consisting of the park’s top leadership including
the director of human resources meets weekly to decide whether vacant positions
should be filled by federal employees or other third-party hires.
The study team concluded that a formal strategic human capital plan would help
make the case for a greater human capital role in the strategic management of an agency.
A strategic plan should set forth the agency’s human capital goals, objectives, and
strategies, and link them to the overall agency planning documents. It should address
strengths and weaknesses of each part of the multisector workforce and communicate
how the human capital office can help managers best use the different workforce com-
ponents. Such a plan would also give direction and vision to human capital staffs.
The study team recognizes that the human capital function in some agencies
is evolving. For example, FSA only recently was delegated human resources au-
thorities. Much of FSA’s HR staff has been acquired through contract, providing
flexibility to adjust staffing quickly.
The Multisector Workforce Requires a Comprehensive

Communications Strategy
Communicating clear and consistent messages to all segments of the multisector

workforce is a major challenge. This is most important with respect to communicat-
ing agency mission, objectives, goals, values, and norms. Without good communica-
tions in these areas, different components of the workforce could find themselves
at cross-purposes or in conflict. Thus, when developing communications strategies
within organizations that use multisector workforces, it is imperative that messages
be crafted and delivered so as to reach all segments of the workforce.
Within the multisector workforce, stove piping is a significant communications
barrier, particularly in the Coast Guard and NPS. Put simply, federal employees
supervise other federal employees, contractors supervise contract employees, con-
cessionaires supervise concession workers, and so forth. For example, at a Coast
Guard project, the study team found that federal and contractor staff reported sepa-
rately to different supervisory chains. Their primary interface occurred in integrated
product teams, where it was sometimes difficult to hold individuals accountable.
The problem was mitigated by the development of team incentive awards.
The study team believes that good communications requires a two-way street.
The Coast Guard has established Civilian Advisory Boards to facilitate the com-
munication of unique needs of different parts of the workforce to the highest levels
in the organization. This is particularly helpful in a military organization where the
vast majority of senior management is comprised of senior active duty officers.
Interviewees identified several circumstances wherein the only avenue open to an
employee embedded deep in the organization was to raise the issue outside the chain
of command through the advisory board system. The Coast Guard has extended this
practice to other parts of the multisector workforce through use of a Coast Guard
Training and Education Advisory Council, Coast Guard Professional and Military
Training Advisory Committee, Coast Guard Non-Rate Advisory Committee, and
the traditional senior enlisted network or Command Master Chief program. This
practice is strengthening the chain of command by fostering a better understanding
of the needs and viewpoints of all members of the Coast Guard’s family.
Conclusion
The experiences of the Coast Guard, FSA, and NPS provide insights into the chal-
lenges inherent in managing a multisector workforce. They also illustrate areas in
need of more emphasis—training federal managers and supervisors, bolstering
agency acquisitions skills, involving human capital professionals in developing

solutions to address multisector workforce issues, and creating communications
strategies that reach all components of the workforce. NAPA intends to include
the examination of multisector issues in its human capital studies, as appropriate.
Specific findings will be culled and shared within the community of human capital
practitioners.
Note
1. Case studies were conducted by USDA Graduate School, Executive Potential Program,
High Synergy Team 2007. Credited for research and contributing authors: Christine Bowman,
Education; Kimberly DeFazio, Federal Railroad Administration; Morgan Geiger, Homeland
Security; Carolyn Gethers, Agriculture; Bruce Noble, Interior; David Panzer, Interior; Jewel
Pearson, Federal Deposit Insurance Corp; Karen Willis, General Services Administration
research associate; Elan Martin, NAPA.
Reference
National Academy of Public Administration. 2005. Managing Federal Missions with a Mul-
tisector Workforce: A 21st Century Leadership Challenge. Washington, DC: NAPA.
4
Multisector Workforce Lessons Learned
The National Aeronautics and Space Administration
Laurie J. May
The multisector workforce is that combination of civil servants, state and local
workers, private contractors, and nonprofits and others who do the work of the
federal government today. While debate continues as to whether use of non–civil
servants to accomplish federal missions has gone too far—or not far enough—the
multisector workforce has become a central component of modern governance in
the United States.
Recognizing that this phenomenon had been little studied, the National Academy
of Public Administration (NAPA) initiated a project in 2005 to examine how the
multisector workforce was impacting public governance. The long-term goal of
the project was, first, to understand the impact of the multisector workforce on the
federal government, including any challenges it presents to the accomplishment
of program goals, the health of the civil service, accountability, compliance with
legal requirements, and maintenance of key values, culture, and ethical norms.
The second goal was to develop recommendations for adjusting current public
management practices to successfully meet these challenges.
This chapter is based on a study that NAPA undertook for the National Aero-
nautics and Space Administration (NASA) in 2006 and 2007 (NAPA 2007). In
that study, the Academy addressed how NASA could lead the public sector in
demonstrating how agencies with significant multisector workforces can respond
effectively to changing mission requirements. (Holton et al. in chapter 8 discuss
the reorganization effort at NASA, and Long-Green in chapter 3 presents general
conclusions about the multisector workforce.)
NASA’s Classic Multisector Management Challenges
As noted in the NAPA 2005 report, Managing Federal Missions with a Multisec-
tor Workforce: Leadership for the 21st Century, the public sector reform agenda
has focused primarily on organizations using human capital strategies to become
more mission-driven and results-oriented. Striving to improve what they do and
how they work within budgetary and civil service constraints, managers and lead-
37
38 Laurie J. May
ers of these organizations must explore alternative workforce solutions to deliver

improved government services.
With a historical reliance upon contractors (currently numbering about 40,000)
and approximately 18,000 civil servants, other types of loaned workforce members,
and grantees, NASA may well be the archetype for federal entities finding them-
selves with legacy structures, limited budgets, changing missions, and the need to
redefine how they accomplish their work within challenging deadlines. The agency,
which has long had a field structure of ten major centers (some research-focused,
others more operational, one a federally funded research and development center), is
experiencing a fundamental mission shift. With the retirement of the Space Shuttle
Program in 2010 and a new, ambitious agenda to expand its role in exploration,
establish a permanent lunar outpost on the moon, and travel to Mars and beyond,
the agency needs an optimally sized, appropriately skilled workforce that is flex-
ible and scalable. Perhaps, above all, it needs to embrace the change necessary to
strategically achieve and maintain a healthy workforce balance.
What other factors impacted the agency’s agility in dealing with its multisector
workforce? In addition to this dramatic mission shift and a minimally increasing
budget, NASA faced:
• A congressionally imposed ban on reduction-in-force (RIF) through at least

March 2007.
• Civil service as well as internal barriers to workforce restructuring.
• Contemporaneous implementation of full cost accounting, which requires
agencies to tie all direct and indirect costs (including civil service personnel
costs) to major activities.
• The revelation that, at one point following the announcement of the new
exploration programs, as many as 2,673 civil service full-time equivalent
(FTE) employees were without funded work.
• A commitment by the administrator that each of the ten field centers would
have a critical role in the new exploration program and a fully funded civil
service.
• Civil service workforce misalignments and skill mismatches.
• A legacy of hiring freezes, leading to such unhealthy demographics as an
aging workforce and too few workers in their twenties and thirties.
• A workforce strategy with a primary emphasis on civil servants and a heavy
reliance on an essentially passive and voluntary strategy of buyouts, attrition,
and retraining to align the workforce to the new mission.
Recognizing the need for expert guidance and practical tools to help determine
how to balance its total workforce, the Senate Appropriations Subcommittee and
NASA commissioned a 2007 NAPA study, NASA: Balancing a Multisector Work-
force to Achieve a Healthy Organization, to help the agency address three main
questions:
The National Aeronautics and Space Administration 39
• How should NASA decide whether to obtain the services/deliverables from

a contractor or hire a civil servant?
• If NASA decides to hire a civil servant, what kind of appointment should it
use (tenured permanent or multiyear term)?
• What is a healthy center? How should NASA measure it?
The NAPA (2007) report provides insights into NASA’s challenges as well as
recommendations for possible paths to managing the multisector workforce of the
future. While the lessons learned are organization-specific, the report notes the op-
portunity for broader application and stated in its opening report message: “Together,
Congress and NASA have the opportunity to break new ground by demonstrating the
government’s agility in responding to change” (p. 1). The authors further noted, “If
NASA successfully adopts a more knowledge-based management decision model
. . . NASA will then be at the forefront of 21st century governance—pointing the
way for other federal agencies facing similar challenges” (p. 2).
Lessons Learned
Using the NASA project’s initial identification of six critical areas for multisector
data collection and analysis, the Academy has identified some potentially transfer-
able lessons learned from the NAPA 2007 study.
Accountability
• Accountability flows from knowledge and transparency. A fundamental theme

is that the healthiest organizations are knowledge-based and data-driven.
Organizations that rigorously collect and analyze work and workforce data,
share the evaluation of that information in a transparent manner, and make
decisions based on these analyses are better able to identify trends and de-
velop timely and appropriate responses. They are also able to generate useful
information for stakeholders and garner support for budgetary resources and
statutory authorizations. This openness and willingness to share data and
ensure evaluation must start at the top.
• Full cost accounting, while challenging to implement, was intended to engender
increased accountability for the cost implications of management decisions. It
created a new awareness on the part of managers as to real program cost.
• The full range of program managers should be included in the results of pro-
curement evaluations to encourage their participation in resolving identified
problems.
• All civil servants should be held accountable, via performance evaluation
and award mechanisms, for compliance with contract management require-
ments.
40 Laurie J. May
• Agencies should empower employees to plan their own careers by providing

factual and analytic information about the direction and health of the agency
and its organizational components. Agencies should also encourage employ-
ees to keep their skills updated, adapt those skills to the evolving mission,
and seek developmental experiences consistent with the agency’s evolving
needs.
Acquisition
• The era of separate acquisition and human capital planning is outmoded.

Agencies must establish, align, and achieve a high level of integration in
acquisition and workforce planning processes. Agency human capital and
acquisition are the key internal support capabilities; both functions must be
at peak performance level, sufficiently expert, work creatively to surmount
the planning challenges presented by a multisector workforce, and go beyond
the traditional, stove-piped approach that has been the unfortunate hallmark
of traditional workforce planning strategies.
• Consistent with the idea that robust organizations collect and analyze data
to spot trends before ill effects take hold, procurement offices, which are
overburdened and understaffed government-wide, are a good place to apply
metrics. Metrics have helped organizations make decisions, reduce processing
times, set priorities, and readjust workloads.
• Evaluations of the procurement function need to probe deeply to determine
how consistently or effectively staff manage contractors. Functional compli-
ance reviews are too limited in scope and do not deal with real-world contract
management problems.
• Agencies need to get a better handle on their total acquisition workforce,
including the usually dispersed yet critical contracting officer technical
representatives (COTR), who are the agency’s technical link to ensure that
contractors deliver quality products within agency-prescribed specifications,
schedules, and costs.
• With regard to the management of contracts, organizations need to establish
consistent, work-based, and quantifiable hire-or-buy criteria.
• As part of sound contract management, contractors need to be located in
separate office space rather than with civil servants whenever possible.
• Agencies need to limit vulnerability to prohibited personal service relation-
ships with contractors by training managers, as well as COTR, in the legal
requirements.
• At the management level, agencies should reach out and bridge the divide
between federal civil servants and contractor organizations; senior leaders
should establish venues for the early and open two-way collaborative exchange
of concerns and discussions of solutions to common challenges.
Human Capital and Management
• Human capital must be a full participant in all agency processes that have sig-
nificant impact on the total workforce; human capital must be at the table with
top agency leadership when decisions are made about work requirements and
how to balance the workforce. Human capital officials must provide agency
leadership with analytical expertise and support for an integrated acquisition
and human capital planning process.
• Data-driven organizations are able to quantify core competency needs and
project overlapping program requirements over time. They also use innova-
tive tools to quantify core competencies required for project completion and
the minimum number of staff (civil service and contractor) that should be
retained for competencies that are likely to be needed in the future, but not a
current priority. Such organizations are able to quantify skill mismatches and
take action to remedy these imbalances.
• It is critical for an agency to develop formal processes to ensure that it has
the right people, with the right skills, at the right time, in the right place.
• Because the federal workforce is far more than the sum of its civil servants,
comprehensive workforce planning must consider all the elements and resources
the government leverages to accomplish its tasks. These resources include
contractors, grantees, intergovernmental and interagency partnerships, as well
as private and nonprofit organizations, and universities. Agencies must seek not
only to bring resources into the agency, but to partner with other organizations in
outplacement for developmental purposes or when agency mission shift leaves
temporary or permanent skill mismatches or unfunded work.
• Agencies need to consider the full menu of flexibilities available to them and
not just the ones that have historically proven to be productive. For example,
agencies are typically more effective over the long term if they diversify their
recruitment strategy rather than rely, as has NASA, on the co-op program as
the major source of new talent.
Social Equity and Values
• Healthy organizations collect and analyze information, share the results broadly,
and take corrective actions based on thoughtful evaluation. They share effective
practices in the hope of helping struggling components succeed and improving
the overall health of the total institution. Organizations that do not measure against
an established framework fail to attach importance to the values they espouse
and send a negative message of insincerity or lack of commitment to stated pri-
orities. In a knowledge-based organization, employees may not agree with the
ultimate decision, but they have the opportunity to examine the underlying data
and analysis and appreciate attempts to achieve consistency and equity.
42 Laurie J. May
• Highly insular organizations can stifle employee growth and personal devel-
opment.
• Organizations that lack a steady influx of new hires can become imbalanced
both demographically and in the area of skills. Such organizations typically do
not have a normal age distribution and can even become monogenerational.
This can impede effective succession planning by limiting the number of
individuals available to be mentored, those placed in first-line supervisory
positions, and those given experience in critical decision making and multisec-
tor/contract management. This hinders the agency’s effectiveness by creating
significant gaps in the management structure.
Legal and Governance Issues
• When agencies have significantly evolving missions, the government’s civil

service system does not facilitate or encourage sufficient flexibility in the civil
service workforce. Agencies must seek new flexibilities to overcome specific
challenges. If the agency is data-driven and knowledge-based and shares its
analysis, it will be in an enhanced position to work with Congress and other
federal partners to obtain the flexibilities it requires.
• As agencies adapt to the twenty-first-century need for multisector workforce
flexibility and governmental agility, they may need to consider tools that will
help in the reshaping of the workforce, including modified RIF rules, blanket
buyout authority with a higher dollar value incentive, and, in cases such as
NASA’s, limited statutory authority for emergency retirement reform.
• Agencies also need to evaluate the appropriateness and efficiency of their
organizational configuration. Some may find that they need to explore alter-
native organizational models, including closure of components, as did the
military in the Base Realignment and Closure (BRAC) exercise.
• In a multisector work environment, contractors and civil servants must work
together with significant communication and interdependence. This situation
poses challenges that are not always readily resolved through physical sepa-
ration or relaying instructions through the contractor’s chain of command.
Under these circumstances, it is particularly important to include contractors
in mandatory annual ethics training.
• Inconsistency between an agency’s procedural requirements and its daily
management practices is frequently an indicator of organizational tension and
legal or regulatory compliance concerns. In a multisector workforce, governed
by different and sometimes conflicting regulations, it is particularly important
that managers and staff who interface between the systems understand laws
and regulations and comply with them. Dual systems of governance (one on
the agency’s books, the other an informal system actually used by managers)
create serious vulnerability.
In a multisector world, agency policies and procedures must be multidimen-

sional. Agencies must reexamine current policies and procedures to make sure that
they accurately reflect the interrelationships between the workforce elements. For
example, NASA issued a workforce strategy in 2006 that did not take into account
its sizable contractor workforce or its Jet Propulsion Laboratory, which, while a
Federally Funded Research and Development Center, is nonetheless counted among
the agency’s ten field centers.
Organizational Culture
• Organizations that deviate from a data-driven decision mode to protect their

existing workforce can end up mortgaging their future by making tactical
rather than strategic decisions. In many organizations, such decisions are
delegated to line managers who see only pieces of a much larger puzzle.
Healthy organizations value their employees and workforce partners but
focus analysis on the nature and duration of the work required and how best
to balance the overall workforce. In the end, the result is a more successful
organization and a better place to work.
• Organizations that adopt passive workforce strategies do not encourage
employees to take ownership of their careers. Proactive and creative
workforce management looks at multiple options for all members of the
leveraged workforce. It encourages employees to adapt through open com-
munication and the sharing of information about the organization’s health
and direction.
Recommended Multisector Solutions for NASA
Among the NAPA study’s recommendations was advice to adopt a knowledge-

based, data-driven workforce management strategy. The panel emphasized that
this was essential to ensure a flexible, optimally sized, and appropriately skilled
multisector workforce. Specifically, NASA should:
• Broaden its workforce planning methods and processes to incorporate, as

appropriate, both civil servants and contractor organizations.
• Use innovative planning methods to position the agency for any sudden
changes in future program direction, as well as to quantify the core workforce
required for maintaining critical aeronautics and scientific competencies.
• Integrate acquisition and human capital management at the highest levels of
the agency.
• Use a formal decision-making process and metrics to determine the appropri-
ate distribution of work between civil servants and contractors throughout the
agency.
44 Laurie J. May
• Use a formal decision-making process and metrics to determine the most ap-
propriate type of appointment for civil service hires (permanent tenured or
time-limited term).
• Make maximum use of existing authorities for recruiting and retaining the
best and brightest employees, as well as strategically sharing talent with other
federal agencies and levels of government.
• Seek statutory and regulatory authorization for modified reduction-in-force
rules, buyout changes, and limited emergency retirement reform to remedy
agency-acknowledged skill imbalances.
• Adopt a comprehensive approach to assessing center health, including correc-
tive actions based on annual evaluations and consideration of organizational
configuration changes where corrective actions are not effective or sufficient
to meet changing mission needs.
Note
For those seeking additional information regarding the findings and recommendations, as
well as the practical decision tools and healthy center framework, see www.napawash.org/
NASA_Report_2–26–07.pdf; and for the supplementary materials, see www.napawash.org/
FINAL_Supplemental_Volume2_2–22–07.pdf (accessed 10/24/07).
For additional information on the Academy Multisector Workforce project, see www.
napawash.org/about_academy/MultisectorWorkforce12–13–05.pdf (accessed 10/24/07).
Reference
National Academy of Public Administration. (2007). NASA: Balancing a Multisector Work-

force to Achieve a Healthy Organization. Washington, DC: NAPA.
5
Getting the Best from “Most Efficient
Organizations”
Bruce D. McDowell
MEOs Are Coming
Most efficient organizations (MEOs) are separate, new structures created within
the U.S. government executive branch in which federal employees (1) decide to
compete against the private sector to keep their commercial-type jobs, and (2)
win the competition. The federal jobs required to be proposed for commercial
competition are identified under U.S. Office of Management and Budget (OMB)
Circular A-76 as those that could be performed by private contractors. Under
A-76, all federal jobs are classified as either inherently governmental, meaning
that they must be performed by federal employees, or as commercial-type. More
than half of all employees in most agencies are working in commercial-type jobs
under these definitions, but each agency has the option of determining which of its
commercial-type employees will be made subject to competition and which ones
will be exempted—for a variety of reasons.
The Federal Activities Inventory Reform (FAIR) Act of 1998, which modified
the foundation on which the long-standing Circular A-76 is based, requires most
federal agencies to classify all of their employees into one of these two groups. All
commercial-type (exemptions excepted) are subject to a competition within five
years, and the jobs that remain federal under the terms of a winning proposal put
forward by the agency will have to be offered for private competition again in the
future—typically after five years if those jobs are being performed successfully
during the five-year performance period. The purpose of these competitions is to
bring the federal government’s costs down and keep them down.
Over 80 percent of agency proposals have won in the first round of competitions,
which is now nearing completion. So, a significant number of new MEOs have
been created, and their nature is becoming clearer. Until now, there has been very
little post-competition (post-award) guidance. However, enough experience with
MEOs has begun to accumulate for various agencies and OMB to begin drafting
post-award accountability guidance.
For the human resources community, the primary significance of competitive
sourcing is not just that the federal government has a new type of organization
45
46 Bruce D. McDowell
within its agencies, but that it also has a new type of federal employee. For manag-
ers, MEOs create a new form of tripartite management for getting management’s
work done—consisting of the continuing agency leadership responsible for the
function, MEO leadership responsible for producing the promised performance
of activities for a set price, and the contracting officer (CO) in the agency’s acqui-
sition office responsible for signing, overseeing, and amending the contract-like
letter of obligation (LOO) that establishes and governs MEO activities. And, for
acquisition people, there is a substantially new type of contracting to administer
internally within the agency; essentially, the agency is contracting with itself. For
all three groups, the MEOs create major new workloads outside the MEOs to serve
MEO needs. The way this process is set up, most large agencies are likely to find
themselves hosting several MEOs in the foreseeable future.
Some of the experience with early MEOs was gathered through a one-day sym-
posium conducted by the National Academy of Public Administration (NAPA) as
part of a project to advise the U.S. Forest Service during its first year of operating a
large MEO responsible for all the agency’s information technology (IT) equipment
and services (NAPA 2006b). The symposium attracted thirteen agencies interested
in sharing their experiences with MEOs and learning from others (NAPA 2006a).
Although the February 2006 symposium raised more questions than it answered, it
began the necessary process of finding practical answers to several new challenges.
Much of what follows in this chapter had its beginnings in the Academy symposium
and NAPA’s work with the Forest Service in 2005–2006. The Academy also gained
valuable insights about two MEOs at the National Institutes of Health (NIH)—for
facilities management and grants management—where it assisted that agency with
a variety of administrative restructuring initiatives in 2003–2005 (NAPA 2005).
Four Challenges in Getting the Best from MEOs
Looking at this new MEO phenomenon broadly, four challenges stand out in trying
to get the best results for federal agencies:
• Setting up MEOs to be most effective.

• Establishing MEO accountability for performance and cost savings.
• Taking good care of MEO employees.
• Modifying the agency to be optimally supportive of MEOs.
These key challenges are examined in turn.
Setting Up an Effective MEO
The first thing to recognize is that the MEO will be designed, established, and
operated under both OMB Circular A-76 and the Federal Acquisition Regulations
(FAR). The FAR sets some fairly unbending ground rules that need to be followed
Getting the Best from “Most Efficient Organizations” 47
throughout the life of the MEO. So, winning the award is likely to be the easy part.
Setting up the new MEO to do the work is likely to be much harder for several
reasons.
To begin with, the MEO may be a largely new organization unlike any that
existed before in the agency; the pre-set organizational design and cost estimates
set in the acquisition documents may prove to be unrealistic in actual practice; the
automated systems relied on in the proposal may not work as planned; the assumed
personnel complement may not materialize as expected; unexpected delays may
cause transition problems; and the transition period for creating this completely
new organization may not be long enough to get everything right at the beginning.
These potential challenges should not be underestimated. They might be minimized
if the request for proposals (RFP) and government’s winning proposal are well
crafted, but that is not always the case.
Because of the competition with private contractors, a level playing field must
be established and honored throughout the process of preparing and submitting the
government’s proposal, as well as in judging its merits against all competing private
contractors. Thus, the government team that prepares the agency’s proposal must
be completely separate and insulated from the agency team that prepared RFPs, as
well as from the other agency team that will compare the proposals from all parties
and recommend the organization that promises the best deal for the government
in terms of price and performance. Since the agency head will make the ultimate
decision to award the work, he or she must also be isolated from the government
team preparing the agency proposal.
Whoever wins the work—whether it is the agency or a private contractor—the
terms of the winning proposal will be binding, subject to formal contract amend-
ments that would not break faith with the original RFP. Since violations of this
principle could open the MEO to protest by losing bidders and the necessity to
recompete, the terms of the RFP and the winning proposal will determine the future
shape and substance of the MEO when it is established as a separate organization
to perform only those tasks specifically included in the acquisition documents—in
return for the specified price. Thus, the award process will largely lock in the MEO
design for the next five years, assuming the MEO’s performance is acceptable to
the CO, who must certify to this fact each year as a condition of the MEO’s con-
tinued existence.
This is a more rigid framework than in a typical federal agency internal reorga-
nization or process reengineering initiative. And it may be more risky. The rule of
thumb in these competitive sourcing cases is that any government proposal should
offer at least a 25 percent cost saving if it hopes to win, and many proposals aim
much higher. By necessity, therefore, government proposals generally include re-
organization, consolidation of many existing offices, major personnel reductions,
and significant amounts of automation—some or many of which may be untried
and not guaranteed to work as planned. Because the proposal reaches so far into
the unknown, it may be based on estimates and assumptions that may not turn out
to be accurate when actual numbers become available. Adjustments will need to

be made when the facts emerge, but there will be great pressure to honor the cost
caps put in place by the competitive process, since that promise is a key reason
to do competitive sourcing. From a performance standpoint, competition may be
found to have wrung out most resources that could provide any margin for error.
So, this may create a very tight and challenging fit.
The test for whether an adjustment can be made is likely to be the strength of
the case that new information has come to light that would clearly justify making
a contract adjustment for any private contractor that might have won the work. If
this case can be made and the agency can find additional resources elsewhere, a
formal amendment to the LOO will need to be made through the MEO’s CO in
the agency’s acquisition office.
Actually launching the MEO may be a daunting task in the short time allotted
for this purpose, and the agency’s human resources office may be at the center of
this effort. If the new MEO is being created by consolidating a widely dispersed
field operation into a largely centralized headquarters operation, and significantly
downsized at the same time—as in the Forest Service case—then everyone formerly
carrying responsibilities for the reorganized function, and everyone ending up in
the MEO, will need action by the HR office. New job descriptions will need to be
created for all positions in the MEO, everyone wishing to work in the MEO will
need to apply for a new position there, and everyone accepted to work in the MEO
will need a new appointment to their MEO job. Personnel who have been perform-
ing jobs affected by the reorganization but neither applying for nor being accepted
for employment by the MEO, will need personnel actions to transfer them to other
jobs, change their job descriptions, retrain them for other positions, or process pa-
pers for voluntary transfers to other agencies or separations from federal service.
Reductions-in-force (RIFs) were not used in either the Forest Service or NIH, but
if they had been, they would have created major new HR workloads as well.
In the Forest Service case, 1,260 full-time equivalent (FTE) employees were
affected by the MEO proposal, so this created a massive, sudden demand on the
HR office that required a good deal of top-level attention. At NIH, two large MEOs
were proposed at the same time—and also in the midst of a non-MEO consolidation,
downsizing, and automation of the agency’s HR office—largely to meet outside
expectations for cost savings. Fortunately, modest delays in setting up one of the
NIH MEOs, and two major unforeseen delays in setting up the other one, spread
out what could have become an unmanageable HR workload.
The message to HR offices suggested by these two cases seems clear, however:
plan ahead to accommodate the added workloads created by MEO awards. This
message is especially important when the agency is contemplating several MEOs.
Managing the FAIR Act inventory in the context of agency-wide workforce plan-
ning, and scheduling competitive sourcing activities to avoid bottlenecks, could
help to avoid unmanageable peaks.
Extra workloads associated with setting up MEOs also affect other parts of the
agency. Obviously, extra workloads fall onto the acquisition office and the office
responsible for finding suitable office space for the new organization. But not as
obvious is the extra work of counseling employees who are having problems ad-
justing to changed circumstances, training employees to do things in new ways—
especially when new software and procedures are being introduced—and providing
relocation services when significant numbers of employees are being moved all at
once. The nature of large MEO proposals is to bunch up these transition needs into
large batches—which may require surge capacity to handle smoothly (see Buss and
Thompson, chapter 6, for an analysis of surge capacity during disasters).
NIH established a dedicated change management office to assist its transition to
a major new suite of management software modules and found it very helpful.
Establishing Accountability for Performance and Cost Control
The Forest Service MEO was set up to be accountable for improving IT services
agency-wide, while cutting costs. It is walled off to be responsible for a limited
number of service delivery tasks, with a specific service level agreement (SLA)
and performance measure established for each one. Each SLA is measured regu-
larly, and quarterly quality assurance meetings are held with the leaders respon-
sible for delivering all of the services and commanding the resources available
to fix any shortfalls. Table 5.1 illustrates how this SLA performance monitoring
process worked in the first full year of operation of the Forest Service MEO that
consolidated and slimmed down almost all of the agency’s computer, telephone,
and radio services.
All costs internal to the MEO were tallied continuously from the beginning, but
were not presented at the quarterly meetings, since the MEO was operating within
its budget and no one was concerned about the bottom line until near the end of the
first year, when costs were considered. However, the external costs were neither
tallied systematically nor considered in MEO-monitoring meetings. No attempt was
made to measure the cost of “work left behind” in the national forests and Forest
Service research stations when the IT function was consolidated at headquarters.
Some of the consolidated IT work may still be getting done in the field, especially
where the people previously responsible for it remain there (assigned to other
work); it is simply easier and quicker to do this than to go through a remote call
center where you do not know the people and they do not know your situation.
At NIH, where the Academy had the opportunity to study the effects of several
consolidations, the amount of work left behind was quite large—and unaccounted
for. At the Forest Service, this problem was recognized informally, but considered
something that would correct itself over time as the previously responsible em-
ployees retired or moved on to assignments elsewhere. Similarly, the costs of the
Forest Service HR, acquisition, and A-76 offices incurred to service the IT MEO
were not measured. So, the MEO stayed within its cost cap, but the full cost of the
effort was not counted.
Table 5.1 50
Implementation Year Performance Indicators, Acceptable Levels of Performance, and Quarterly Scores
(expanded and refined in subsequent years)
Indicator and Weight Acceptable Level of Performance Q1 Q2 Q3 Q4

1. Respond to customer complaints and inquiries, 99% of complaints and inquiries responded to 100 100 99.3 100
(“ticket” logged in for each case), 5% within 1 day; easy cases resolved
2. Manage response times for complex cases, 10% 95% of complex cases are resolved and 82.97 78.95 77.46 75.46
confirmed with customer before case is closed
Bruce D. McDowell
3. Perform IT consulting (technical approval request 99% of research results completed in 10 days Null Null 98.24 100
development, resource request review), 5%
4. Make evaluations and recommendations on IT 95% of recommendations and evaluations 95 100 100 67
infrastructure, 5% provided within agreed-to time frames
5A. Resolution of endpoint health tickets, 10% Resolve Tivoli* desktop problems within 5 days 98.21 90.08 97.55 Null
99% of the time
5B. Endpoint health 95% of desktops and laptops remotely 93 96.67 96.68 95.57
managed within 30-day time frame
6. Implement and monitor security plans, SOPs, 95% of security items implemented within 99 82 85 91
etc., 10% agreed-to time frames 99% of the time
7. Develop agency enterprise network tactical, 99% of plans submitted within agreed-to time 99 100 100 100
strategic, and project plans, 10% frames each quarter
8. Resolve network component problems, 15% 99% of cases closed within 5 days of opening 97.52 91.76 92.93 96
9. Troubleshoot and resolve server software 99% of cases closed within 2 days of opening 90.63 89.34 91.02 93
problems, 15%
10. Troubleshoot and resolve desktop software 99% of cases closed within 5 days of opening 91.74 76.03 86.24 96
problems, 15%
11. Troubleshoot and resolve radio problems 99% of cases closed within 5 days of opening Null Null 74.13 65
12. Troubleshoot and resolve telephone problems 99% of cases closed within 5 days of opening Null Null 81.55 78
Source: NAPA (2006b), p. 39.
*Tivoli is the system management software program used by the Forest Service that allows remote access to computers for purposes of install-
ing, updating, and configuring hardware and software components.
The internal MEO accountability system is very straightforward and designed

explicitly to be that way. The SLAs measure MEO program outputs and the costs
of the MEO measure program inputs. This is a contained system, and the measures
are all fairly quantitative and precise. The MEO has pretty good control over both
its use of inputs and the provision of its services (program performance), and the
MEO has no responsibility for program outcomes (the larger impacts in the For-
est Service and the nation of performing its services), which might be affected by
external factors beyond the MEO’s control.
Two external factors did affect the provision of the MEO’s services during its
first year, but were managed successfully to result in only temporary lowering of
service levels. One was a pair of computer virus attacks fairly early in the first year
of performance, and the other was the total wipeout of the MEO’s prime desktop
computer supplier by Hurricane Katrina—in about the middle of the first year.
The MEO maintained a very strong focus on customer service throughout its
first year, and was very alert in managing the external forces and internal problems
that degraded service levels. A customer advisory committee and regular customer
surveys were instituted from the beginning. This focus was relatively new to the
government and may be one of the greatest strengths of the MEO initiative.
However, the exclusivity of this focus on performance also proved to be a
distraction from one of the most important factors in the success of the MEO’s
performance—its employees. The next section considers the need to properly care
for the MEO’s employees.
Getting the Best out of MEO Employees
The Forest Service did not begin its MEO operation with an employee advisory
committee or an employee survey comparable to the two mechanisms it established
to track where it was with its “customers.” But it gradually came to hear from
grassroots workers operating this new organization. The conclusion was that an
MEO is a very stressful place to work.
There are several reasons for this conclusion—beginning with these folks being
classified as holding commercial-type jobs. The message is clear: as long as they
stay in these jobs, they will be subject to the uncertainty of having to compete to
hold those jobs—not just once, but multiple times. Their career path is no longer
clear. The incentive is to transfer into a more predictable, inherently governmental
career path. And it will be easier for the best-qualified employees to transfer out
than for the less-qualified ones to do so.
This tendency shows up early as top talent begins to leave the agency—or at least
these jobs—shortly after their agency gives notice of its intent to allow outsiders to
compete for a given function. Then, as delays mount prior to the final decision to
establish the proposed MEO, attrition continues to grow. The competitive sourcing
process, in and of itself, is fairly long and complex. In addition, the agency deci-
sion to award MEO status to the government offer may be appealed by a losing
private bidder. In addition, affected government employee unions can enter formal
protests after any bidder protests have been resolved. If the union protest reaches
an impasse, it may need to be resolved by the National Labor Relations Board
(NLRB)—which has a very long backlog of cases. So, the whole process can take
several years, as indeed NAPA observed in one agency. During an extended period
of time like this, it is not unusual for the surplus of workers that would be created
by the agency’s downsizing to turn into a long list of vacancies that will need to be
filled—including many positions previously held by highly experienced employees
who had been counted on to fill key leadership roles in the new organization.
Working to avoid any grounds for protests, and to enter the competition with
employee unions behind the government proposal, could pay off if it eliminates
transition attrition. And a strong, cost-conscious performance once the MEO is up
and running can also pay off by reducing the possibility that future competitions
will arise soon and once again put these same commercial-type employees’ careers
at risk. This effort will help to dispel the often prevalent idea that the MEO is just
a stop on the way to eventual outsourcing to the private sector.
Once in the MEO, however, many employees have noticed that their workloads
increased noticeably—even unacceptably—as a result of the competitively induced
downsizing of staff. More work to be done over a larger territory, stretching far
from home and keeping employees on the road for longer periods of time and more
constantly, creates not only increased job stress, but also increased family stress.
Many employees will have new bosses to get used to, new tasks to perform, new
equipment and software to get used to, and new locations to work from.
In these situations, it is not surprising that some employees will need counseling
and other support services—perhaps including retention bonuses in some cases.
These special needs should not be left to become afterthoughts. They should be
anticipated and provided for in the MEO proposal in order to ensure that the MEO
will be a smoothly performing organization.
Modifying the Agency to Get the Best from Its MEOs
As MEOs have been created here and there within agencies, they have been treated
as one-of-a-kind organizations. But, as they multiply as anticipated under the FAIR
Act, they can be expected to become a new class of federal organizations. Large
agencies and departments can expect to incorporate several.
To get the most benefit from these new mechanisms, the departments and agen-
cies should consider how to nurture and learn from them. On the nurture side, the
agency or department may wish to consider beefing up its HR and acquisition
offices, and creating a special change-management office. On the learning side, a
tech-transfer office might make sense.
There is no reason why the performance management and cost accounting les-
sons demonstrated by MEOs—and the savings realized—could not be replicated
by other organizations in the federal government. But where is the incentive to do
so? Perhaps the biggest contribution made by the FAIR Act is its requirement for
competition. It provides incentive to sharpen the cost-cutting pencil to produce
savings—on paper at least—in the neighborhood of 25 percent, instead of the 8 or
9 percent savings more typically produced by standard government reorganization
and process reengineering initiatives (Gansler 2006, 97–99).
Some would argue that the A-76 competitive sourcing process introduces too
much risk and neglects to count some of the real costs involved—against the sav-
ings claimed. But it does seem to create a cost-savings stretch goal against which
to measure future in-house federal proposals for reorganizations and process
reengineering initiatives. Future in-house cost-cutting proposals might be able to
get as good results without the extra expenses and FAR restrictions involved in the
competitive acquisition process, but they should not stint on the augmented HR
and change-management services needed to make them succeed without disrupting
the agency. Competitive sourcing may not be the only way to get real savings in
the federal government.
NIH pursued competitive sourcing and standard administrative restructuring
side-by-side for about three years—with greater emphasis on the standard approach
than on the new one. The Academy did not have the opportunity to directly compare
the two—to find the performance and cost-saving results. But such a study would
be of great interest.
Emerging Best Practices for Getting the Best from MEOs
For now, though, the lessons that seem to be emerging to get the best results from
MEOs are:
• Don’t skimp on preparing the original proposal to establish an MEO. If your

proposal wins, you will have to live with it for a long time. Try to make sure
it is as realistic as possible. Look at the experiences of other MEOs and try
to avoid their mistakes. Resist the temptation to cut so deep as to damage the
chances for successful performance.
• Don’t rely on untested technology. Automation is often taken for granted; plug
it in and it will work. This is often not as simple as assumed, but this lesson
seems very difficult to learn. Government agencies have to learn it over and
over. Get the best advice you can about this before incorporating it into your
proposal.
• Within the limits of the FAR, try to ensure that the agency leadership and any
relevant unions agree with basic outlines of the MEO proposal. And certainly,
involve them in setting up the MEO once it is approved. Establishing the
MEO will be challenging enough without either opposition or indifference
impeding it along the way. The ancillary services needed from the agency’s
HR and acquisitions offices will be vital to success. Ensure that they will be
available and supported by top management.
• If amendments to the LOO become necessary during the set-up period or dur-
ing the first year of operation, make sure to work closely with the agency’s
top management and budget officer to obtain any additional resources that
may be needed.
• Give as much attention to the morale and special needs of MEO employees
as you do to the MEO’s customers—from the beginning. They are key to
successful performance.
References
Gansler, Jacques S. 2006. “Moving Toward Market-based Government: The Changing Role
of Government as the Provider.” In Competition, Choice, and Incentives in Government
Programs, ed. John M. Kamensky and Albert Morales, chapter 2. Lanham, MD: Row-
man & Littlefield.
National Academy of Public Administration (NAPA). 2005. Effective Administrative Re-
structuring: Lessons from the NIH Experience. Washington, DC: NAPA.
———. 2006a. New Tools for Implementing “Most Efficient Organizations” (MEOs) in the
Federal Government: Symposium Proceedings. Washington, DC: NAPA.
———. 2006b. First-Year Assessment: USDA Forest Service Information Solutions Orga-
nization. Washington, DC: NAPA.
Redburn, F. Stevens, Robert J. Shea, and Terry F. Buss, eds. 2008. Performance Manage-
ment and Budgeting: How Governments Can Learn from Experience. Armonk, NY:
M.E. Sharpe.
6
Building Surge Capacity in the
Disaster Workforce
Improving SBA’s Response to Mega-Disasters
in the Future
Terry F. Buss and Joseph Thompson
This work is dedicated to the men and women, mostly unsung heroes all, who
risk their lives and give their time unselfishly helping victims of disasters.
In 2005 hurricanes Katrina and Rita battered the Gulf Coast region, overwhelming
the capacity of government disaster assistance agencies, nonprofits, and the private
sector to meet the needs of disaster victims.1 The Small Business Administration’s
(SBA) Disaster Loan Program, managed by the Office of Disaster Assistance
(ODA), as the federal government’s primary source of funding for restoring the
homes and businesses of disaster victims, found itself overwhelmed by 422,000
loan applications. Not only was it the largest disaster response in SBA’s history,
the volume of work from this single disaster represented almost one-fourth of the
total disaster work performed since SBA was created in 1953.2
The disaster loan program provides low-interest loans and working capital to
business owners (20 percent of total loans granted) and homeowners (80 percent of
total loans granted) devastated by disasters.3 The disaster loan program begins op-
erations generally the next day following the declaration of a disaster, making ODA
among the first to arrive on the scene of a disaster. Disaster loans have lower interest
rates and more favorable terms than conventional loans. Economic Injury loans up
to $1.5 million to small businesses provide working capital until normal operations
resume. Physical Disaster loans provide for permanent rebuilding and replacement
of uninsured or underinsured disaster-damaged privately owned real or personal
property, up to $200,000 for individuals and $1.5 million for businesses.
ODA was roundly criticized for its management of disaster assistance following the
Gulf Coast storms. Victims of the disasters, elected representatives, the Government
Accountability Office (GAO), media commentators, and witnesses at numerous public
hearings all complained about SBA’s performance (GAO 2007a, 2007b). As SBA ad-
ministrator Steven Preston noted: “Like every other level of government—local, state,
55
56 Terry F. Buss and Joseph Thompson
and federal—SBA was initially overwhelmed by Hurricane Katrina. This demand surge
left the agency struggling to meet the needs of thousands of disaster victims.”4 These
criticisms stung SBA’s staff, particularly those in ODA who were, as one observer
noted, accustomed to being seen as the “good guys” who provide timely, long-term help
to disaster victims. During the September 11 response to the New York City terrorist
attack, for example, ODA was applauded for its efforts (GAO 2003).
The dilemma for ODA, from a policy perspective, is how to maintain a surge
capacity to meet victim needs in rare mega-disasters without spending excessive
amounts of taxpayer dollars maintaining capacity while waiting for something bad
to happen, which thankfully rarely does.
The National Academy of Public Administration (NAPA), at the behest of the
House Committee on Appropriations’ Subcommittee on Science, State, Justice,
Commerce and Related Agencies, and with the full cooperation of the SBA, studied
ODA’s short- and long-term disaster response to hurricanes Katrina and Rita in
2005 and Orlando, Florida’s short-term response in the field to the tornado disasters
in December 2006. Here, we report the results of the study. We provide a brief
overview of how the disaster loan program works, then we look at how ODA was
staffed to respond to disasters. We point out that ODA was in the middle of a major
reorganization that was not complete and it had numerous other organizational is-
sues in play when the 2005 hurricanes hit. So, not only was ODA surprised by the
hurricanes, it also was not fully capable of responding as it should. Next, we look
at the consequences of the failed workforce surge. Finally, we offer an overview
of possible policy interventions to address ODA surge capacity issues. Some are
under study at ODA and in Congress; others might be considered as well. We begin
with an overview of how we conducted the study.
Study Overview
A panel of four members—including three NAPA Fellows5 and a panel member

with extensive disaster loan program experience—guided the study. The panel
brought to the project a combination of disaster planning, management, policy,
and research experience in financial and legal policy, management in the private
and public sector, and other lending programs.6
The study began with an analysis of key policies, procedures, and processes, reveal-
ing how the ODA program is intended to work, its program goals and policy priorities.
This background evaluation informed the later assessment of how ODA operates during
actual disasters and its limitations and constraints under mega-disaster scenarios.
In all, more than 125 personal interviews were conducted in Washington and in the
field—Texas, Mississippi, Louisiana, and Florida—with public officials at the federal,
state, and local levels, and other staff in nonprofits and private organizations.
During site visits to the Gulf Coast and Florida, we visited Disaster Recovery
Centers (DRCs)7 and interviewed managers and staff from ODA and the Federal
Emergency Management Agency (FEMA) and representatives from other federal,
Building Surge Capacity in the Disaster Workforce 57
Figure 6.1 Disaster Loan Business Process
Outreach Loss Underwriting Closing & Servicing &

& Intake Verification Disbursement Collections
Source: SBA/ODA, Office of the Associate Administrator (April 2007).
state, and local agencies. Other interviews included members of key private and
nonprofit organizations—e.g., Red Cross and church groups—that also provide
disaster assistance. Site visits made in fall 2006 focused on ODA’s disaster response
to those affected by the Gulf Coast hurricanes. Site visits to central Florida in De-
cember 2006 immediately following a series of tornadoes allowed us to observe
ODA’s disaster response in progress during a “normal” disaster. Interviews were
undertaken with ODA managers and staff both in the DC headquarters and at
ODA’s Herndon, Virginia, Administrative Operations Center and Disaster Credit
Management System Center, as well as senior leaders at SBA who have supervisory
and/or policy authority over ODA, including the SBA Administrator and Deputy
Administrator. NAPA also interviewed ODA managers and staff working at the
Fort Worth, Texas, Processing and Disbursement Center (PDC), serving victims
of the Gulf Coast hurricanes and other recent disasters.
This study was also informed by the experiences of disaster loan applicants
and recipients—forty home loan applicants and forty business loan applicants in
March 2007. We conducted focus groups and individual personal and telephone
interviews in New Orleans, Louisiana, and Biloxi, Mississippi. Focus groups and
interviews elicited client views about how well the disaster loan program functioned
following hurricanes Katrina and Rita.
The Disaster Loan Process
Though the size of disasters varies, ODA business processes do not (see Figure
6.1).
Outreach and Intake
For homeowners or renters seeking post-disaster federal assistance, an initial step

is to register with FEMA, either in person at a DRC located at the disaster site, or
by telephone, or online. If the applicant’s income is high enough to meet income
thresholds established by SBA, FEMA refers applicants to ODA for a loan ap-
plication; if income is less than the threshold, then FEMA refers applicants to the
FEMA Individual and Family Grant Program.
Prospective applicants who visit a DRC meet with an ODA Customer Service
Representative who provides information about the program and assists applicants
in filling out paperwork, which is then forwarded by express mail to ODA in the
Fort Worth, Texas, PDC. Internet and phone applications go directly to Fort Worth
for processing, bypassing DRCs.
The DRC workforce consists mostly of staff recruited from within fifty miles of
a disaster site. Having workers live in a disaster area saves the government travel
and per diem costs. These workers are recruited locally through the mass media,
especially newspaper and radio advertisements. There are no special skill or educa-
tion requirements (with the exception of being good at dealing with people under
great stress), and workers can be quickly trained to process initial loan paperwork
(essentially a ten-page document asking for basic information).
Potential applicants for business physical disaster or economic injury loans
do not register with FEMA, because the applicants’ financial circumstances are
considered to be too complex for the threshold screening test.
Information from hard copy applications is keyed into the SBA disaster loan
database by hand and accompanying supporting documents are scanned into the
system. At this point, SBA again assesses both individual and business applicants’
potential ability to repay, based on each applicant’s credit history. Business credit
reports are printed and then scanned into the Disaster Credit Management System
(DCMS), the computer system used to process loan applications.
If the applicant is not creditworthy, the application is declined. Otherwise, the ap-
plication is forwarded to Loss Verification. At the same time, an inquiry is faxed to the
Internal Revenue Service (IRS) asking for verification of the applicant’s income.
Loan officers are highly skilled personnel with backgrounds in banking, accounting,
insurance, or allied fields, conducive to making loan decisions. They work primarily
out of the Fort Worth office and are recruited locally in Fort Worth when possible.
Loss Verification
Loss verifiers conduct on-site inspections to:
• determine the estimated cost of repair or replacement of real, personal, and

business property
• estimate replacement and pre-disaster fair market value of property
• gather information to help loan officers establish applicant eligibility
• determine if property is located in areas requiring special insurance
• provide estimated values of undamaged real property offered or required as
collateral
Applications for business economic injury loans do not go through loss verifica-
tion. Instead, ODA reviews documentation provided by the applicant in support
of the business’s prior earnings and expenses as an indication of ability to repay.
Disaster victims may find these documents difficult to obtain because they have
been destroyed or are inaccessible, and may need to work with ODA to re-create
the necessary information.
Loss verifiers are also recruited locally when possible to save on travel and
per diem. Loss verifiers must have extensive backgrounds in construction or con-
tracting sufficient to accurately evaluate property damage and estimate the cost
to rebuild.
Underwriting, Closing, and Disbursement
During the underwriting stage, ODA loan officers decide whether or not to approve
a loan. Loan officers examine the applicant’s credit quality and income to determine
ability to repay a loan of sufficient size to repair or rebuild the home or business.
Standards and procedures for this determination are shaped by statute, historical
program experience, and, in some cases, the disaster itself. The underwriting stage
ends with approval or decline of the loan application.
Loan Servicing and Collection
Once the final loan disbursement is made, responsibility for managing loans
transfers from ODA to SBA’s Office of Capital Access (OCA). OCA ensures that
borrower information is kept current and modifies loans when appropriate—for
example, when a paid insurance claim enables a borrower to reduce the size of a
loan. But OCA’s primary focus is collection of delinquent loans. OCA employs
permanent SBA staff who are not much affected by the need to surge to create
capacity: their work progresses over a period of up to thirty years and does not
have the same sense of urgency as that of ODA.
The 2005 Surge: Disaster Incidence, Staffing, and Productivity
The casual observer would be amazed at the number of “official” disasters oc-
curring annually in the United States. Between 1997 and 2006, there were 2,140
disaster declarations from all official sources (see Table 6.1). Indeed, the United
States is one of the most disaster-prone countries in the world. Ironically, FY
2005 saw the lowest number of presidential declarations in ten years, but the
largest single disaster in the program’s history—Katrina. ODA also responds to
numerous smaller disasters, including those declared by SBA and governors (30
to 60 annually), as well as those declared by the Secretary of Agriculture (82 to
268 annually).
Interspersed among this continual, annual wave of disasters are occasional mega-
disasters (or catastrophic disasters) (see Table 6.2). Hurricane Katrina in 2005 was
the largest by far, followed by the 1994 Northridge, California, earthquake, 2004
Florida hurricanes, and hurricane Andrew in south Florida in 1992.
Obviously, the inability to predict mega-disasters in the context of relatively
stable, smaller disaster events over time plays havoc with the management of the
disaster workforce, and hence with the ability of ODA to perform well.
Table 6.1
Disaster Declarations, 1997–2006
Source
Presidential SBA Governor Secretary of
Year declaration declaration certification Agriculture Total
1997 38 31 8 129 206
1998 45 48 12 85 190
1999 40 29 9 112 190
2000 22 38 12 116 188
2001 30 24 15 82 151
2002 30 34 13 126 207
2003 64 37 12 112 225
2004 41 28 2 154 225
2005 21 32 3 226 225
2006 25 35 5 268 333
Total 356 336 94 1,410 2,140
Note: Table does not include other “official” disasters declared by the Secretary of Com-
merce and Defense Military Reservist Economic Injury Disaster Loans.
Table 6.2
ODA Assistance to Four Largest Disasters
Disaster loan Total loan amounts

Event applications approved
Gulf Coast hurricanes (2005) 422,253 $10.6 billion
Northridge, California, earthquake (1994) 250,402 $4.0 billion
Florida hurricanes (2004) 181,751 $1.8 billion
Hurricane Andrew (1992) 45,727 $700 million
Staffing
Staffing for the disaster loan program fluctuates dramatically on an annual basis
and goes off the charts during mega-disasters. To accommodate this, ODA has
special hiring authorities from the Office of Personnel Management (OPM) that
are not even remotely similar to standard personnel systems even in SBA, ODA’s
parent agency. ODA staff are not part of a collective bargaining unit. ODA day-
to-day staffing consists of a handful—in April 2007 there were 21—of permanent,
full-time civil servants and a much larger number—historically around 350—of
“cadre” staff. The cadre staff are career civil servants who are “on-call seasonal”
workers. Though most in fact work year-round, under ODA policy, they are guar-
anteed only six months’ work annually.
When the workload exceeds the capacity of full-time and cadre staff, ODA hires
temporary workers and draws on its reserve corps. Temporary workers are typically
sought from within a fifty-mile radius of a disaster site in the case of customer ser-
vice representatives and loss verifiers at DRCs, or from the Fort Worth vicinity in
the case of loan officers. Reserve corps workers reside on a call-up list where they
are on “no pay” status until called up. They may be deployed virtually anywhere
in the United States. Should they not be able to work a disaster, their names could
be deleted from the call-up list.
To assess workforce surge capacity issues, it is necessary to understand work-
ing conditions at DRCs and in Fort Worth. DRC workers—temporary and reserve
corps—receive only a few hours’ notice of a deployment and are expected to be
on-site in one or two days. Those who are employed typically take a leave of absence
from their regular jobs. Working in a DRC, although rewarding, is difficult. Staff
work long hours, seven days a week, to get the job done. They live near the site with
limited access to amenities such as showers, hot meals, electrical power, and proper
beds, depending on the circumstances. Some DRCs are located in buildings, but
many are situated in tents. Disaster sites are dangerous places, where workers can
be injured. When DRC workers provide outreach or loss verification, they some-
times are accompanied by police for the safety—homeowners have been known
to shoot at looters in disaster areas. Disaster sites are, needless to say, depressing
places filled with human misery. Although it is not officially part of their job, DRC
workers occasionally end up comforting and counseling disaster victims. When we
were studying the disaster response to tornadoes in central Florida one week after
they touched down, killing nineteen people, the DRC in which we were working
had to be immediately evacuated of people and equipment because another wave
of tornadoes was forming.
As noted, Fort Worth houses loan officer functions for ODA. At peak periods
during the disaster response, loan officers may find themselves working long hours
without days off, trying to clear the case backload. During Katrina, loan officers were
at work for many weeks, rather than a few days as required in normal disasters.
Some temporary workers, including the reserve corps, soon discover after ar-
riving at DRCs or Fort Worth that they cannot handle the work conditions, have
unexpected family or personal issues, become ill, or receive notice from their
employers that they are about to be terminated, so they quit. The impact of turn-
overs is huge: though the peak number of temporary and reserve corps employees
in 2006 was 3,994, ODA estimated that it hired about 7,000 employees. Disaster
work creates large staff turnovers and accommodates staff working for varying
lengths of time, complicating workforce surge management.
Of course, some people thrive on helping others in disasters. Many DRC work-
ers we interviewed were once disaster victims themselves, and they wanted to give
something back. Others were in business in a region and saw an opportunity to
62
Table 6.3
Changes in Disaster Loan Staffing, 2002–2007
2002 2003 2004 2005 2006 2007

Low Peak Low Peak Low Peak Low Peak Low Peak Current
Permanent 8 8 8 8 8 11 11 11 12 12 21
Cadre 329 353 347 357 331 354 279 331 234 358 384
Terry F. Buss and Joseph Thompson
Temporary 379 602 270 517 75 2,354 469 3,672 2,317 3,994 1,886
Reserve corps 200 (est.) 320 (est.) 70 (est.) 115 (est.) 25 (est.) 70 (est.) 25 310 310 700 905
help out their neighbors. Some were just searching for adventure. An issue with
managing the reserve corps, as opposed to the temporary workforce, is that they
tend to drift away if there are not enough disasters to keep them employed or if
their circumstances have changed through finding alternative employment, moving
out of town, becoming ill, getting married—just about anything. Unfortunately,
they do not always make their intention not to work a disaster known to ODA. This
gives the false impression that there are more people available to work disasters
nationwide than there really are.
Table 6.3 shows the dramatic swings in the workforce within and across years.
Productivity
As might be expected, ODA’s disaster response to the Gulf Coast hurricanes was
significantly slower than policymakers expected based on past experiences with a
few catastrophic events. No one anticipated the magnitude of Katrina, and the surge
capacity in place was insufficient to process the disaster by several magnitudes.
Although loan processing expectations were 18 days for business loans and 14 days
for home loans, ODA took 71 days, on average, to make loan decisions. Figure 6.2
shows that ODA was processing disaster loan applications eight months following
Katrina. Figure 6.3 shows comparable processing delays in just one component of
the process—loss verification.
Costs in processing disaster loans can fluctuate wildly because of an inability
to manage the surges and vacillations in normal disaster years. Too little or too
much capacity creates cost issues. Table 6.4 shows the dramatic rise and fall of
average costs per application processed over the period FY 2001 to FY 2006.
Year 2006 likely boasts the highest average cost because of the confusion in the
Katrina response.
ODA staff were overwhelmed by the sheer volume of applications received, but
the applications themselves were delayed in coming in. Many people had evacuated
considerable distances from the Gulf Coast and had difficulty returning. Disaster
loans require that applicants be on-site during the loss verification process. This
is significant because the temporary and reserve corps workforce generally do not
Table 6.4
Cost per Application Processed, FY 2001–2006
2001 2002 2003 2004 2005 2006

Cost per application processed $1,752 $3,506 $2,644 $1,994 $2,775 $4,000
Percentage change from

prior year ↑100 ↓25 ↓24 ↑39 ↑44
Source: SBA Performance and Accountability Report, FY2002–2006.
Figure 6.2 Applications Received Following the Gulf Coast Hurricanes
140,000
120,000
100,000
Applications
80,000
60,000
40,000
20,000
0
Sep-05 Oct-05 Nov-05 Dec-05 Jan-06 Feb-06 Mar-06 Apr-06 May-06 Jun-06
Figure 6.3 Loss Verification Backlog Following Gulf Coast Hurricanes
140,000
Number of Remaining Loss Verification Inspections
120,000
100,000
80,000
60,000
40,000
20,000
0
Oct-05 Nov-05 Dec-05 Jan-06 Feb-06 Mar-06 Apr-06 May-06 Jun-06

Figure 6.4 Distribution of Disaster Loan Disbursements Following Gulf

Coast Hurricanes
180,000
160,000
140,000
120,000
Disaster Loans
100,000
80,000
60,000
40,000
20,000
0
Jan-06 Feb-06 Mar-06 Apr-06 May-06 Jun-06 Jul-06 Aug-06 Sep-06 Oct-06 Nov-06 Dec-06 Jan-07
Undisbursed Partially Disbursed Fully Disbursed
plan to process disasters for more than a few days at a time. Most would not have
believed that their services would be required for six to eight months.
Applications for loans as above are at one end of the process; disbursing monies
to disaster victims is at the other. ODA does not have historical data on the time it
took to fully or partially disburse disaster loans. Data for loans in 2006, however,
show very long disbursement times (see Figure 6.4). For example, by July 2006,
of the 153,000 loans approved for the Gulf Coast hurricanes, over 60,000 had had
no disbursement, and another 60,000 had been only partially disbursed. There
were several external factors that precluded borrowers from requesting disburse-
ments, including borrowers not being ready or able to rebuild, and borrowers who
decided to relocate or wait for grant funds before making a decision to take their
loan funds.
Table 6.5 shows application approval rates for disaster loans over ten years.
Around one-half—give or take a percentage point or two—of all loans were ap-
proved. One reason for this high turndown rate is that DRC customer representatives
suggest that most people visiting the DRC for assistance go ahead and apply for a
loan even it they don’t end up getting approved or needing it (e.g., insurance may
cover the loss). This practice front-end loads the process with “bad” applications
that overwhelm the system. Most of these applications will be paper-based, mailed
overnight by express mail from DRCs, adding even greater expense.
Because quickly infusing money into disaster sites is key to recovery, and in-
Table 6.5
Disaster Loan Approval Rates, 1997–2006
Percentage of
Applications
Year Applications Withdrawals Approvals Approved
1997 107,526 15,598 47,135 51.3
1998 76,300 14,038 30,147 48.4
1999 104,641 25,340 35,288 44.5
2000 62,651 12,291 27,302 54.2
2001 122,599 24,417 47,192 48.0
2002 48,937 11,883 18,789 50.7
2003 69,474 16,985 24,082 45.9
2004 85,885 18,633 26,719 39.7
2005 189,094 43,210 58,821 40.3
2006 369,910 71,721 169,534 56.8
deed, the purpose of the disaster loan program, disaster victims became extremely
upset when their government lets them down. Elected officials, advocates, news
commentators, and political agitators were quick to complain as well.
The Perfect Storm: Mitigating Circumstances
The impact of the Gulf Coast storms on ODA’s disaster loan processing capabilities
was compounded by several factors:
• ODA reorganization
• Restructuring of loss verification under A-76
• Insufficient management information system capacity
• Inability to anticipate a mega-disaster
ODA Reorganization
When Hurricane Katrina struck, SBA was in the middle of realigning its ODA
organizational structure (see NAPA 2007). ODA had previously operated with four
area offices nationwide. Each office provided the full range of disaster response
services for a particular geographic area such as customer service, loan processing,
and administrative support. The four offices generally operated independently of
one another. Under the realignment, SBA centralized its Disaster Loan Program’s
customer service function (a call-in center for answering questions about the status
of loan applications) in its Buffalo office and its loan processing function in its
Fort Worth office. The field operations centers in Sacramento and Atlanta were
responsible for all disaster field operations, public information, and congressional
relations functions. Ironically, some believe that ODA operations in Katrina may
have been even more problematic under the old system.
Restructuring of Loss Verification
ODA was in the final stages of the Office of Management and Budget’s A-768
process for contracting out loss verification operations when the Gulf Coast
storms occurred. The George W. Bush administration had as a policy the
privatization of any government service or function that was not “inherently
governmental”—that is, only government could or should provide the service
or function. Because loss verification clearly fell within the A-76 process,
ODA was compelled to reengineer this function. This fundamental change in
the loan approval process—which may have been a good management deci-
sion in itself—became a bad one when it occurred around the Katrina disaster,
contributing to loan processing backlogs.
Insufficient Management Information System Capacity
The Disaster Credit Management System, the computer system used to process loan
applications, underwent major revisions in 2004. System development contractors,
among their other mistakes, did not anticipate the capacity required to handle the
unprecedented number of concurrent users stemming from the Katrina workload,
resulting in significant down time and slow response times (GAO 2007a). In short,
the loan officers could not all access the system at one time.
Unrealistic Mega-Disaster Preparation
As already observed, SBA had not anticipated a disaster of Katrina’s magnitude

(see GAO 2006, 2007a; NAPA 2007). The number of applications received, the
speed with which they arrived, and the size of the workforce and related space and
support services needed were unprecedented. SBA did not have a plan to meet the
demand, and it acknowledged that the method it used to forecast activity resulting
from disasters did not anticipate anything approaching the scope of this disaster.
SBA relied on estimates based on prior experience, especially the 1994 Northridge,
California, earthquake, which had been the largest disaster before 2005. That event
generated less than half of the value of loans approved following Katrina.
GAO reported in February 2007 that SBA had engaged in limited logistical
disaster planning before the Gulf Coast hurricanes, and that insufficient planning
likely contributed to initial challenges faced in the agency’s response. GAO pointed
out that SBA had not used sophisticated approaches, such as catastrophic risk
modeling or disaster simulations, to prepare a comprehensive disaster plan, even
though such techniques are available in the private sector and are used by some
government agencies (GAO 2007a).
Policy Options
An array of major options could be pursued by policymakers in addressing the

disaster workforce surge issue, including:9
• Automating disaster loan processing

• Reengineering the disaster loan business process
• Privatizing disaster loan processing
• Supplementing ODA workforce with other federal agency, nonprofit, SBA
volunteers
• Providing tax and other incentives to maintain viable volunteer list
Some of these options tinker around the margins of the surge problem. None are
mutually exclusive. Some are relatively expensive to execute, others rather cheap.
Were all of these options to be implemented, surge capacity would be greatly en-
hanced. Whether these options would meet the needs of disaster victims for some
unforeseen mega-disaster in the future remains to be seen. SBA is, as of September
2007, actively exploring the policy options below based on the NAPA report and
its own policy analysis (see SBA 2007).
Automating Disaster Loan Processing
After assessing ODA operations in the field, it seemed clear that SBA could reduce
the magnitude of the surge by automating as much of the entire loan process as
possible. Computers substitute for labor and are less expensive to operate.
SBA could automate initial loan applications originating in DRCs. Rather than
having disaster victims fill out paper applications, then sending them overnight
express to Fort Worth where they would be entered by hand into DCMS, the process
could be done electronically from the point of initiation.
SBA could establish an automated loan underwriting system to render a pre-
liminary credit decision within minutes and eliminate the time-consuming process
of manually creating a credit profile for those applicants lacking a credit score. An
automated underwriting would also be useful for all applications, not just those
without a credit score. Private lenders employ this technology, saving time and
reducing expense (see NAPA 2007 for a review).
The “credit elsewhere test,” to determine whether applicants have access
to other sources of credit, which make them ineligible for federally subsidized
disaster loans, consumes what SBA officials estimate to be 10 percent of loan
officer time and resources. Since the test is amenable to automation, SBA might
revise the credit elsewhere test by basing it on borrower credit scores, net assets,
and the applicant’s ability to afford loan payments at the market rate through a
cash flow analysis.
To expedite decisions for loan applicants, reduce processing errors, and more
fully automate underwriting decisions, SBA might establish a comprehensive
electronic exchange of information with the IRS that eliminates the manual steps—
faxing requests—built into the current process. SBA would also seek the statutory
authority to include the tax filing release request on disaster loan applications.
SBA and the IRS would establish a process to fully automate electronic exchange
of applicant tax information for the purpose of expeditiously processing disaster
victims’ loan applications.
Reengineering the Disaster Loan Business Process
Making financial underwriting decisions before the loss verification stage in the di-
saster loan process would significantly reduce unnecessary inspections and diminish
the likelihood of future loss verification backlogs following catastrophic disasters.
Currently, in cases where there is an absence of property to inspect following total
destruction from a disaster, loss verifiers still conduct on-site loss verification in-
spections. In cases where there may be an absence of property to inspect following
a disaster, SBA could use available technology and FEMA loss verification reports
whenever practical in place of on-site loss verification inspections.
Privatizing Disaster Loan Processing
The disaster loan origination process could be changed to enlist the help of the
private sector during catastrophic disasters. Note that the private sector often
conducts the work of government, as in the case of the student loan program
operated by banks. The downside in using private sector contractors is that they
might cost more to employ than temporary federal employees. The presumption
is that the efficiency gained by contracting with the private sector would make up
for the cost differential. This is an open question, because the temporary disaster
workforce is already drawn from the private sector. Additionally, contracting with
the private sector may introduce more opportunities for fraud and abuse. In an
effort to expand staff capacity and serve disaster loan borrowers expeditiously
following a catastrophic event, SBA might pilot a disaster assistance program
utilizing banks and other financial institutions to process, close, and disburse
direct loans. SBA might conduct the pilot on a regional basis to establish proce-
dures and identify areas of operational weakness, potential fraud, and greatest
risk before implementing any full-fledged program to augment the origination
of direct disaster loans by SBA officials, as at present, during a presidentially
declared catastrophic disaster.
Options for Supplementing the Reserve Corps
Several options for supplementing the reserve corps workforce with volunteers or
unpaid workers are perpetually under consideration by SBA, the Bush adminis-
tration, Congress, and advocacy groups interested in disasters (see NAPA 2007).
ODA might partner with SBA Small Business Development Centers (SBDC)10 or
other nonprofit business assistance centers to employ their staffs as volunteers to
assist in disasters. Other federal agencies engaging in similar work—any agency
that processes loans would work—might be called upon to contribute staff as
needed. Even SBA staff that do not normally work in disaster assistance might be
asked to participate.
These approaches all have merit, although they do pose problems in their
own right for staffing disaster responses. In practice, volunteers from other
organizations probably do not contribute enough workers to even put a dent
in the surge. Volunteers, as is the case with those on the reserve corps list at
present, might not be available to work or might not want to work for extended
periods of time. Organizations lending volunteers to the disaster effort might
not allow them to be away from their jobs for an extended period. ODA has not
had good success in using volunteer workers from other parts of SBA to help
out during disasters. Coordination and training pose major problems for ODA
when it considers use of volunteers, especially as volunteers turn over and ODA
procedures change.
Tax and Other Incentives
Tax Incentives
Tax incentives are used widely to change individual and corporate behavior for the
public good. Tax incentives could help maintain a more viable reserve corps list.
Here is how the program could work. Reserve corps workers would receive either
a tax credit or tax deduction for remaining active on the reservist list. Tax credits
would be offered to those who are retired, unemployed, or not in the workforce—that
is, they have no earned income for the tax year. Tax deductions would be offered
to those who have earned income for the tax year. Tax credits or deductions would
be tied to (1) the amount of time workers served on the list, (2) their annual earn-
ings while on the list, and (3) whether they responded to a call-up for a disaster.
Compensation through the tax code could be varied in amount depending on the
three criteria above. Tax benefits would be capped at a level that provides a strong
incentive to participate in the reserve corps.
The longer the reservist remained on the reserve corps call-up list, the more tax
benefits he or she would receive. This provision is included because volunteers tend
to drop off the reserve corps list the longer they remain on it and are not utilized.
Once a reservist completes work on a disaster for which they received a wage and
received the appropriate tax benefits, they would start at the lowest (tax benefit)
rate and then increase until the next disaster. This provision reduces the cost to the
government of those who receive sufficient compensation to the point where they
do not really want to remain on the list. Should a worker be unwilling or unable
to participate in disaster work when called up from the reserves, they would not
receive a tax benefit through the tax code for that year or previous years.11 This
prevents people from signing up and then refusing to participate when called up in
later years, and reduces the incentive for volunteers to sign up even when they do
not intend to serve when called. Reservists may also be excluded from participation
in future years if they have not served when called.
Three other characteristics of the program include:
• Benefits through the tax code should be equivalent for reservists regardless
of whether a tax credit or tax deduction is used
• Those with special skills should earn tax benefits at a higher rate
• Tax benefits should accrue once ODA adds the reservist to the reserve
corps
Advantages of using the tax code to fund the reserve corps are several. First,
funding would be relatively stable, not subject to vagaries in the appropriation
process. Second, reservists would have a strong incentive to remain in the reserve
corps and work disasters, creating a stable volunteer workforce. Third, ODA would
have fewer coordinating responsibilities with other organizations, including keep-
ing them up to date on process, procedure, and policy.
Proposals to use the tax code to aid in disasters are under consideration at the
local, state, and federal levels, and some have been legislated. Victims—although
not disaster workers—of Katrina qualified for an Earned Income Tax Credit, dem-
onstrating the use of the tax code in disasters. Representative Nita Lowey (D-NY)
proposed giving tax credits to businesses that deployed employees during a disaster
under the Assistance for Individuals Delivering for America Act of 2005. Sena-
tor Jay Rockefeller (D-WV), in the Community Security Act of 2004, proposed
tax incentives to volunteer first responders and their employers. In a March 2004
report, Call to Action, the International Association of Fire Chiefs asked Congress
to “provide national tax incentives for certified volunteer firefighters, reducing
federal income tax by 3 percent annually.”12 The National Volunteer Fire Council
(NVFC), in sponsoring the Supporting Emergency Responders Volunteer Efforts
(SERVE) Act of 2005, asserted,
The NVFC strongly supports the passage of the Supporting Emergency Respond-
ers Volunteer Efforts Act, which would provide a $1,000 annual tax credit for
active members of volunteer fire and EMS organizations. A $1,000 tax credit
for volunteer firefighters and EMS personnel can serve as an important recruit-
ment and retention tool for local volunteer fire departments who are struggling
to meet the increased demands placed on them. With the ranks of the volunteer
fire service decreasing over 10 percent in the last 20 years, the federal govern-
ment should provide a small incentive to these brave men and women who risk
their life for little or no compensation to help reverse this trend. In fact, the cost
of this tax incentive to the federal government would be quite small compared
to the estimated $37.2 billion annual cost savings provided by the volunteer
emergency services.
At the local level, some communities offer property tax abatements for volunteer
first responders.
National Guard Model
Temporary workers and reservists may not have jobs to return to should they work
a mega-disaster requiring their services for extended periods of time—a major
disincentive to participate. One way to hold these workers harmless is to require
employers to take them back following disaster work.13 This has several precedents.
The National Guard more or less works this way for troops either called to active
duty or working on state-level emergencies. Another instance is maternity leave.
The clear disadvantage of such a policy is that it transfers the cost of disasters from
the federal government to the private sector.
Conclusion
SBA learned a lot from its failed response to the Katrina and Rita mega-disasters.
It is putting in place policies that should lead to more effective responses to future
mega-disasters. Other factors contributing to failure are no longer issues, so should
not affect the success of future responses. Is the reengineering of the disaster
loan program sufficient to avoid future failures in addressing mega-disasters?
No one knows for sure, because each disaster is different and the magnitude of
the next mega-disasters is unknown. SBA efforts to date should go a long way
in responding to Katrina-like events in the future. Unfortunately, the agency
remains vulnerable while it continues to improve its operations. Thankfully,
mega-disasters are rare.
Some of the innovations under consideration by SBA to improve its surge
capacity might be applicable to other agencies that need to surge in unanticipated
ways—primarily FEMA and perhaps those who fight wildfires in the West. Policies
and actions to consider include:
• Reengineer business models to reduce workforce needs and rely on increased

use of technology
• Include the need to surge in program or agency transformation initiatives so
as not to be caught by surprise
• Expand use of volunteers
• Enter into partnerships that include private sector enterprises and other
agencies
• Offer incentives to participate in a surge, and minimize negative effects for

having participated
Notes
Results presented here do not necessarily reflect the views of NAPA as an institution,
the NAPA panel that executed this study, SBA, or Congress. Any errors of commission
or omission are the responsibility of the authors. We would like to thank Chairman
Frank R. Wolf and Ranking Member Allan B. Mollohan on the House Appropriations
Committee for supporting the study, and the SBA staff, Administrator Steven Preston,
Associate Administrator Herbert Mitchell, External Affairs Liaison Becky Brantley, and
Field Operations Supervisor Carlton Abbott, for their assistance in gathering information
necessary for the study.
1. Details of the Hurricane Katrina mega-disaster and the multisector response are found
in Brinkley (2007) and Cooper and Block (2006).
2. ODA was created in 1981 exclusively to manage disasters.
3. Some assume erroneously that because they are under SBA disaster loans must be
exclusively a business recovery program.
4. Speech to the National Press Club, February 1, 2007.
5. See NAPA website at www.napawash.org for a profile of the organization. NAPA
is a congressionally chartered independent nonprofit whose mission is to improve public
management.
6. The panel included: Thomas Stanton, JD, an expert on government sponsored enter-
prises (GSEs); William Hamm, Managing Director of the Law and Economics Consulting
Group; Bernard Kulik, JD, former Associate Administrator of SBA Disaster Loan Program;
and John Shannon, former Acting Secretary of the Army.
7. A Disaster Recovery Center (DRC) is a readily accessible building, tent, or mobile
office where people may go for information about FEMA or other disaster assistance
programs.
8. See www.omb.gov for an overview of A-76 policy.
9. See NAPA 2007 and GAO 2007a for a review of other options. Also see Weiss 2007 for
recent congressional legislative and oversight activity to improve the program. Congress has
tried to improve the Reserve Corps concept in the Relief for Entrepreneurs Act of 2007.
10. Refer to SBDC program at http://www.sba.gov.
11. Tax benefits could also be calculated and awarded every six months, or at some other
time interval, rather than annually.
12. See: http://forums.firehouse.com/showthread.php?t=62472 (accessed 1–02–08).
13. Some advocates have even called on government to reimburse employers to hire
replacement workers when their employees volunteer for disaster work.
References
Brinkley, Douglas. 2007. The Great Deluge. New York: Harper.

Cooper, Christopher, and Robert Block. 2006. Disaster. New York: Times Books.
Government Accountability Office (GAO). 2003. SBA: Response to September 11 Victims and
Performance Measures for Disaster Lending. Washington: GAO, #03-385, January.
———. 2006. SBA: Actions Needed to Provide More Timely Disaster Assistance. Washington,
DC: GAO, #06-860, February.
———. 2007a. SBA: Response to the Gulf Coast Hurricanes Highlights Need for Enhanced
Disaster Preparedness. Washington, DC: GAO, #07-484T, February.
———. 2007b. SBA: Additional Steps Needed to Enhance Agency Preparedness for Future
Disasters. Washington, DC: GAO, #07-114, February.
National Academy of Public Administration (NAPA). 2007. Preparing for Catastrophe: Man-
agement Review of the Disaster Assistance Program. Washington, DC: NAPA, June.
Small Business Administration (SBA). 2007. Disaster Recovery Plan. Washington, DC: SBA,
June 1. Available at http://www.sba.gov/idc/groups/public/documents/sba_homepage/
serv_da_disastr_recovery_plan.pdf (accessed 1–02–08).
Weiss, N. Eric. 2007. Changes to the SBA Disaster Loan Program. Washington, DC: Con-
gressional Research Service, RL34058, June 22.
Part 3
Transforming Organizational Culture

7
The U.S. Government Accountability Office
A Case Study in Human Capital Reform
Honorable David M. Walker

Comptroller General of the United States
Although the world has changed significantly in the past twenty years, we are
poised to see even greater changes in the next twenty or thirty. To avoid irrelevancy,
businesses, nonprofit entities, and federal agencies will all need to adapt to an ac-
celerating pace of change. Transforming organizations to better meet the demands
of the twenty-first century will require wholesale changes in several policy and
operational areas, key among them human capital. This chapter examines how my
agency, the U.S. Government Accountability Office (GAO) is attempting to lead
by example in implementing human capital reforms.
At the end of the nineteenth century, the original Dow Jones Industrial Aver-
age consisted of twelve stocks. These were all powerful companies, the leaders in
their fields. Firms like National Lead, U.S. Rubber, and Tennessee Coal and Iron
were the Microsofts and Wal-Marts of their day. It is sobering to realize only one
of the original twelve Dow Jones companies survives today, and that is GE. The
rest could not adapt to changing conditions and either merged with competitors
or went out of business.
Efficiency, effectiveness, and relevancy are just as critical in government op-
erations. Today, the U.S. government faces a range of sustainability challenges on
many fronts: fiscal, health care, energy, education, the environment, infrastructure,
immigration, and the conflict in Iraq, to name a few. Many of these challenges are
complex and long-term in nature. It will take a sustained effort over many years
to address them.
Unfortunately, our government has a poor track record in adapting to new
conditions and meeting new challenges. Much of the federal government remains
overly bureaucratic, hierarchical, myopic, and narrowly focused. Agencies continue
to cling to outmoded organizational structures and strategies. They have also been
slow to adopt best practices. Although a few agencies have begun to rethink their
missions and operations, many federal policies, programs, processes, and procedures
are hopelessly out of date as well as conflicting or contradictory.
Hurricanes Katrina and Rita brought that point home in a painful way. The
77
78 David M. Walker
damage these storms inflicted on the Gulf Coast put all levels of government to
the test. A few agencies, such as the Coast Guard, did a great job. Other agencies,
the Federal Emergency Management Agency (FEMA) in particular, fell far short
of expectations. This was especially disturbing given that as far back as the early
1990s, GAO reports have pointed out serious shortcomings in natural disaster
preparedness.
Public confidence in the ability of government to meet basic needs was severely
shaken—and understandably so. If our government cannot handle known threats
like natural disasters, it is only fair to wonder what other public services may be
at risk.
Another concern is that much of government is not aligned with modern needs.
In fact, many federal programs and policies are geared toward social, economic,
and national security conditions from the 1950s and 1960s. To remain relevant to
the needs of current and future generations of Americans, our government needs
to rethink what it does, how it does business, and who should do that business—
federal workers, contractors, or some combination of the two.
To capitalize on opportunities and minimize related risks, any organization,
including the federal government, must be mindful of the big picture and consider
the future. Entities that endure periodically rethink their missions and operations.
They also tend to engage in continuous improvement. World-class organizations
understand that innovation requires change. An organization that stands still today
is going to get passed by and, ultimately, may not survive.
Human capital reform must play a central role in the government’s overall trans-
formation efforts. In both the public and private sectors, three factors are essential
to maximizing performance and accountability: people, process, and technology. Of
these, the most important by far is people. They define an organization’s character
and are responsible for its achievements. Success or failure can depend on whom
you hire and how you treat them.
The central idea behind human capital theory is that employees are an asset whose
value can be enhanced through investments in training, technology, incentives, and
other areas. At the same time, human capital policies cannot exist in isolation. To
be truly effective, they need to be linked to an organization’s mission, core values,
vision for the future, and specific goals and objectives.
The simple truth is that effective government requires a first-rate workforce.
Given the scope and breadth of the federal government—arguably the largest, the
most diverse, and most complex entity on earth—we can afford nothing less than
top talent in key government posts. In the modern era, civil servants must be able
to identify the risks associated with both old and new problems and develop in-
novative solutions to mitigate risk. These individuals also need to be committed
to the greater good and able to show others the way forward. A strong sense of
stewardship is vital. We need more men and women in government who are com-
mitted to leaving things better off and better positioned for the future.
Unfortunately, too many federal agencies lack enough people with the right
The U.S. Government Accountability Office 79
skills and the right attitude. In addition, the civil service is aging: large numbers of
federal executives and managers are expected to retire in the coming years. Many
of them are part of the so-called JFK generation, which answered our thirty-fifth
president’s call to “ask not what your country can do for you—ask what you can
do for your country.”
Despite these demographic trends, few agencies have succession plans in place.
The traditional approach of planning for the succession of one person against one
particular position is inadequate given the volume of turnover, particularly in the
leadership ranks. World-class organizations now find that they need to plan for,
recruit, train, and develop pools of cohorts of qualified candidates for succession
to ensure they have a good mix of talent to fill vacancies as they arise.
At the same time, the government faces stiff competition for top talent. Sought-
after prospective hires can be highly selective when it comes to job offers. In my
view, federal positions can be attractive if they offer opportunities to do meaningful
work that is recognized and rewarded.
In so many areas—recruiting, training, and development, job classification,
pay and benefits, and employee empowerment—the federal government lags
behind other sectors. Many federal personnel practices date back to the 1940s
and 1950s. For example, government organizations are often very hierarchical,
and the prevailing General Schedule (GS) pay scale tends to reward time in grade
rather than performance on the job (see Thompson and Seidner, chapter 11 for a
discussion of the issue). Moreover, the hiring process for many federal jobs can
be incredibly lengthy.
Clearly, government needs to be treating human capital as a strategic issue.
Unfortunately, human capital has been missing from most agency efforts to deliver
a more results-oriented and accountable federal government. Federal departments
have typically glossed over workforce planning and rarely mention it in their mis-
sion strategies. A growing human capital crisis now threatens the ability of some
agencies to carry out their missions. The situation is so serious that GAO added
“strategic human capital management” to its list of high-risk government areas
in 2001.
Government workers are not the problem. It is the absence of strategic planning,
the continued use of outdated personnel policies and practices, and the frequent
turnover in top federal leadership that have gotten us where we are today. The truth
is that meaningful government transformation will occur only when government
leaders view federal employees as an asset to be developed rather than a cost to
be cut.
Although broad-based civil service reform may not be at the top of the legislative
agenda at the moment, its time is coming. In the meantime, Congress has provided
selected agencies, including GAO, with greater flexibility to address their human
capital needs. So far, GAO has instituted a broad range of fundamental human
capital reforms, some based on legislation, others administrative in nature.
The effort to revise our personnel practices actually dates back more than
80 David M. Walker
twenty-five years. Until 1980, our personnel system was indistinguishable from
those of executive branch agencies—that is, GAO was subject to the same laws,
regulations, and policies as they were. With the expansion of GAO’s role in con-
gressional oversight of federal agencies and programs, however, concerns grew
about the potential for conflicts of interest. Could GAO conduct independent and
objective reviews of executive branch agencies, such as the Office of Personnel
Management, when these agencies had the authority to review GAO’s internal
personnel activities? As a result, GAO worked with Congress to pass the GAO
Personnel Act of 1980, whose main thrust was to make GAO’s personnel system
more independent of the executive branch.
Along with this independence, the act gave GAO some greater flexibility in
hiring and managing its workforce. It gave the comptroller general the authority to
appoint, promote, and assign employees without regard to certain executive branch
requirements found in Title 5. The act also set employees’ pay without regard to the
GS scale and established a merit pay system. By exempting our agency from these
requirements, the GAO Personnel Act of 1980 allowed us to pursue some significant
innovations in managing our people. One key innovation was the establishment of
a “paybanding” approach to classifying GAO’s analyst and attorney workforces,
along with the adoption in 1989 of a pay-for-performance system for these same
employees (see also Thompson and Seidner, chapter 11).
These changes did not affect GAO’s continued commitment to federal merit
principles, protection from prohibited personnel practices, and the application of
veterans’ preference in a manner consistent with the executive branch. In addition,
GAO is covered by Title VII of the Civil Rights Act, which forbids employment
discrimination. GAO takes pride in its diverse workforce and maintains a policy
of zero tolerance for discrimination of any kind.
When I first came to GAO in 1998, I found an agency that had recently experi-
enced a major downsizing over a several-year period. From fiscal year 1992 through
fiscal year 1998, GAO saw its workforce reduced by 39 percent—from 5,325 to
3,245 employees. To cope with mandated budget cuts, GAO had run a reduction
in force that involved cuts at headquarters and the closing of several field offices.
The agency also froze hiring; eliminated performance rewards; curtailed travel,
supplies, and other support costs; and scaled back investments in training and
technology. As a result, GAO faced a number of critical human capital, information
technology (IT), and work process challenges. In particular, GAO’s workforce was
seriously out of shape. It had a dearth of younger workers, and it was top-heavy
with mid- and upper-level employees (see Table 7.1). The lack of recruitment and
investment in GAO staff had produced a serious skills imbalance that threatened
the agency’s long-term viability.
As a result, with Congress’s approval and input from its employees, GAO began
to undertake a range of comprehensive human capital initiatives to enhance our
ability to recruit and retain a first-rate workforce. In 2000, Congress authorized ad-
ditional human capital flexibilities for GAO. In addition to giving GAO the authority
Table 7.1
GAO Shape Chart FY 1998 and FY 2007
FY 1998 FY 2007
(Actual %) (Actual %)
Senior Executive Service/Senior Level 3.9 4.0
Analyst band III 12.4 14.0
Analyst band II 46.1 41.8
Analyst band I 13.2 18.0
Attorney 3.5 4.5
Admin & professional support (APSS) 20.9 17.7
Note: Profiles represent staffing at the end of each fiscal year.
the establish senior-level positions to provide critical scientific, professional, and

technical expertise, the law also made performance the most important criterion in
the event GAO needed to carry out a workforce restructuring. The legislation also
authorized a three-year pilot program at GAO that gave the agency specific tools,
such as voluntary early retirements, to help it rightsize its workforce and bring in
new knowledge and skills.
Further flexibilities were authorized by the GAO Human Capital Reform Act
of 2004, which made permanent the temporary authorities authorized in 2000.
This legislation also eliminated the long-standing requirement that GAO give all
employees automatic annual pay increases regardless of performance.
Under the act, GAO also began to move to a more performance- and marked-
based pay system. Today, annual pay raises at GAO are tied more closely to
performance appraisal ratings. Employees whose performance is satisfactory and
who are not paid above competitive compensation ceilings receive an annual sal-
ary adjustment determined by the comptroller general. Additional compensation
depends directly on a person’s individual performance as compared to their peer
group.
GAO also hired a leading consulting firm to assist in developing competitive
salary ranges for all our job series based on surveys of public, private, and nonprofit
organizations with whom GAO competes for talent. Job responsibilities and pay
ranges at GAO are now classified according to an employee’s roles and respon-
sibilities and market-based conditions. GAO is among the first, if not the first,
federal agencies to adopt such a job classification and pay system for its permanent
employees on an agency-wide basis.
The act also gave GAO greater flexibility to reimburse employees for relocation
costs and to provide key employees with less than three years of federal service
additional annual leave. In addition, the act established an executive exchange
program at GAO to allow us to tap into knowledge and experience in the private
sector. In my view, more agencies need to be more open to the idea of partnering
82 David M. Walker
with other federal entities and with businesses and nonprofit groups to address
issues of common interest and concern.
Over the years, we have also adopted many best practices to help make GAO
an employer of choice. For example, to help our employees better balance the
demands of work and home, GAO provides flexible work schedules and telecom-
muting. In our Washington, D.C. headquarters, GAO provides an on-site childcare
facility and a fitness center.
GAO has also made it a priority to recruit aggressively at select colleges and
universities. Thanks to these efforts, and the use of student loan repayment authori-
ties and our first-rate training and development programs, GAO has been able to
attract and retain a first-class workforce. As a result, our workforce now has the
right mix of knowledge, skills, and ability. Through its efforts to acquire, develop,
and retain staff, GAO has assembled a diverse and inclusive workforce, which I
believe gives the agency a competitive advantage both in attracting top talent and
achieving our strategic goals and objectives.
To give our staff the tools they need to get the job done, GAO continually invests
in new computer hardware and software. In fact, for the third year in a row, CIO
magazine rated GAO among the top 100 public, private, and nonprofit organizations
nationwide in IT management. Likewise, more and more of the agency’s support
services are being automated. Employee-benefit as well as time-and-attendance
systems are now automated, and all GAO employees have online access to nearly
1,000 training classes.
As part of our commitment to investing in our workforce, GAO has also made
life-long learning a priority. We have tried to foster an environment that values
education. GAO has a chief learning officer who oversees our in-house training
center. That facility offers a wide range of classes to keep our employees up to
date on the latest professional trends and skills. We also offer opportunities for
outside training.
Our approach to learning blends core analytic skills, professional development
courses, and a leadership program. GAO supports voluntary communities of prac-
tice throughout the organization to enable staff in similar roles, or those that have
common interests, to regularly dialogue across teams. GAO has made a sustained
effort to provide both on-demand and scheduled learning opportunities at each
stage of an employee’s career, with particular attention to people’s needs as they
move from one level of responsibility to another.
At all levels of GAO, staff development is emphasized. All new hires are en-
rolled in our professional development program. As part of our executive candidate
development programs, we encourage our new executives to attend the Senior
Management in Government Program at Harvard’s Kennedy School of Govern-
ment or a comparable program. We have that found this is an excellent way for our
people to gain exposure to various leadership styles and concepts and improve the
ability to solve problems and manage change.
In 2007, we launched our first GAO-wide mentoring program linking senior and
junior employees according to shared interests and specific developmental goals.

This is an informal adjunct to the centralized training and coaching that occurs on
the job as part of our normal work.
For many years, GAO’s workforce has been predominately professional, and
that is still the case today. We count among our 3,100-plus employees economists,
social scientists, writers, attorneys, and accountants as well as specialists in areas
ranging from national defense to health care. The difference today, with our greater
focus on human capital, is that old institutional divisions within the agency have
given way to a more inclusive and participatory approach to making decisions
and staffing jobs. A particular assignment may have input from staff across the
agency—seasoned employees with institutional memory, mid-level hires who have
worked at other government agencies or in private industry, and younger workers
with fresh perspectives and cutting-edge skills.
We have also undertaken a number of employee empowerment initiatives.
Among other things, GAO conducts annual electronic employee feedback surveys
on key issues. We’ve also established employee suggestion and rewards programs
and an elected Employee Advisory Council to advise top management on employee
concerns.
Piece by piece, GAO has built a modern human capital system that is credible,
equitable, affordable, sustainable, and linked to the goals in our strategic plan. In the
final analysis, all these initiatives are designed to help GAO better support Congress
and serve our country. I am always mindful that GAO is in the information business,
and any GAO report is only as good as the people who worked on it.
Not all of our human capital changes have been easy—or without controversy.
Obviously, reforms that affect an employee’s pay and job classification tend to be
very controversial. This is particularly true in a workforce like GAO’s, which is
highly educated and, by training, highly skeptical.
Even so, the overall result of GAO’s many human capital initiatives has been
improved performance, greater employee job satisfaction, and more effective use of
GAO’s resources. Feedback has been overwhelmingly positive. In fact, the Partner-
ship for Public Service recently ranked GAO second on its list of the best places to
work in the federal government. Today, GAO is not only better equipped to tackle
Congress’s toughest assignments; it is also better prepared for the future.
A report issued in 2005 by the IBM Center for the Business of Government was
similarly complimentary, concluding that GAO had successfully used human capital
management as part of its broader organizational transformation efforts. The report
said that “other agencies would do well to heed the lessons of the federal govern-
ment’s chief accountability office as they go about the critical work of reinventing
their own personnel systems. . . .” Although acknowledging that the GAO model
may be less useful for some executive branch departments, such as those that are
significantly larger, structured differently, and have multiple or diverse missions,
the report noted five lessons from GAO that had applications across government:
“the need to move cautiously when pushing major change; the need for strong
84 David M. Walker
workforce planning; the need to emphasize more targeted recruitment, hiring, and
retention policies; the need to beef up investments in systems for the selection and
training of managers; and the need for a fair, unbiased, and transparent system for
employee appeals.”
In addition to human capital changes, we have also undertaken other efforts
to transform how we do business. One of the first initiatives we undertook
after I arrived at GAO in 1998 was to develop a strategic plan. We issued our
first plan in early 2000, and we have updated it periodically to reflect changing
congressional needs and national priorities. Our most recent update was issued
in April 2007.
Any organization, whether it is a Fortune 500 company or a federal agency, needs
to be able to identify what is going on around it, decide what really matters, and act
on those issues in a timely manner. GAO’s strategic plan defines our mission, lays
out the key trends and themes that GAO will focus on, and outlines the agency’s
goals and objectives. GAO’s own strategic goals are ambitious but straightforward.
First, we seek to produce positive and measurable benefits for Congress and the
American people. Second, we try to meet the needs of our congressional clients.
Third, we want to help reinvent government so that it continues to meet the needs
of its citizens. Finally, GAO aspires to become a model federal agency and a world-
class professional services organization.
With the strategic plan in place, we reassessed our organizational structure and
resource allocations. In 2001, we trimmed our organizational units from thirty-five
to thirteen, reduced the number of field offices from sixteen to eleven, eliminated
an entire management layer, redistributed resources, and encouraged internal
teamwork and external partnerships.
The strategic plan is also a touchstone for our budgeting and spending deci-
sions. People, dollars, and technology are consistently allocated with an eye toward
GAO’s overall goals. We have also changed how we keep score to focus on results.
Achieving positive, measurable results has been central to GAO’s transformation
efforts. Since 2000, GAO has issued annual performance and accountability reports
that inform Congress and the American people about GAO’s accomplishments
and its plans for the coming year. For example, in 2006 GAO’s work produced
a record $51 billion in financial benefits. That is a $105 return on every dollar
invested in GAO. We also reported significant nonfinancial accomplishments. In
our view, this type of straightforward agency performance measurement and cost/
benefit reporting needs to become standard throughout government.
Another key lesson from GAO’s experience is the importance of managing
change. Top management must be willing to tap into the ideas of rank-and-file
employees. Obviously, the people on the front lines often have the best sense of
what is working, what needs to be fixed, and how things can be improved. In the
case of the federal government, civil servants are uniquely positioned to help realign
programs, eliminate inefficiencies, and fine-tune federal services.
A successful leader, or “change agent,” should gather the best available infor-
mation from every level of his or her organization before making decisions. At the
same time, leaders must ultimately make decisions on the basis of what they think
is right for today and tomorrow—even though they may not be popular. Agency
leaders need to effectively communicate key institutional decisions and the reasons
for them. Agency leaders should go out of their way to both inform and empower
their employees. As part of their stewardship responsibility, they also need to men-
tor those who will follow in their footsteps.
At GAO, we want our employees to have input into the changes that are taking
place and the direction in which GAO is headed. We have established an elected
twenty-two-member Employee Advisory Council (EAC) to meet with top manage-
ment once a quarter to discuss issues of mutual interest and concern. GAO also
regularly solicits employee feedback on all aspects of the agency’s operations as
well as proposed new policies.
Listening and responding to employees’ concerns and comments is particularly
important during a time of change. As comptroller general, I make it a point to
talk on a regular basis to all GAO employees via live broadcasts over our in-
house television system. During my remarks, which are known as “comptroller
general chats,” I make it a point to address various transformation issues as well
as external developments that may affect the agency. Importantly, I also answer
questions from EAC representatives based on comments they have received from
GAO employees.
Transforming government will not happen overnight. Success depends on
sustained leadership that transcends the efforts of a single person or a single ad-
ministration. Public officials will also need to partner with other federal agencies,
businesses, universities, and nonprofit groups, both domestically and internationally.
The bottom line: we can succeed with enlightened and sustained leadership.
GAO is proof that dramatic and fundamental human capital reform is both
desirable and achievable in the federal government. In fact, many of our efforts
are transferable and scalable. I am convinced that, in time, every department and
agency will have to consider the types of changes GAO has undertaken. My hope
is that other federal agencies, as well as entities outside of government, can learn
from our experience and apply what is useful to their own circumstances.
8
Strategic Human Capital Management in
Federal Government
Principles, Strategies, and the Case of NASA
Elwood F. Holton III, Sean C. O’Keefe, Vicki A. Novak, and

David M. Walker
Human resource management (HRM) practices in the federal government have

undergone a revolution that began in the mid-1990s and continues today. Com-
monly called strategic human capital management (SHCM), this revolution has
paralleled a similar one in the private sector. Federal human resource (HR) officers
are now called on to be strategic partners critical to accomplishing organizational
objectives rather than administrative gatekeepers. Today, HR professionals in the
public sector are called on to perform radically different roles demanding radically
different competencies (NAPA 2001).
This chapter presents an overview of SHCM, especially in the federal government.
First, we will review some of the key theories and studies in the academic literature.
Second, we will discuss the development of SHCM in the federal government, includ-
ing an overview of key concepts and models that have emerged. Third, we will discuss
the implementation of SHCM at the National Aeronautics and Space Administration
(NASA), which was the first executive branch agency to receive a “green” rating (the
highest rating) from the Office of Management and Budget (OMB) for meeting the
standards of the President’s Management Agenda (PMA). Finally, we will discuss
the implications of a strategic approach for HR professionals.
Theoretical and Research Foundations for SHCM
In this section we begin our discussion of SHCM by looking at three streams of

theory and research: HRM, human capital, and intellectual capital.
Strategic Human Resource Management
The strategic approach to human capital/resource management has dominated

the research agenda in HRM since the early 1980s. The origin of the strategic
86
Strategic Human Capital Management in Federal Government 87
approach is often traced to an article by Devanna, Fombrun, and Tichy (1981) in

which the authors talked about HR operating at three levels: strategic, managerial,
and operational, noting, “Only a handful of U.S. organizations approach HRM in
any systematic way at the strategic level” (54). They went on to call for a closer
integration of HR with business strategic planning and the integration of HR func-
tions in order to have greater impact on organizational outcomes.
Throughout the 1980s and early 1990s, academicians continued to refine the theoreti-
cal perspectives for SHRM (Schuler and McMillan 1984; Miles and Snow 1984; Schuler
and Jackson 1987; Lengnick-Hall and Lengnick-Hall 1988; Baird and Meshoulam 1988;
Schuler 1990; Wright and Snell 1991; Donk and Esser 1992; Schuler 1992). What was
at first a practice-based perspective became entrenched in the academic literature.
Several themes emerged in the literature. One, of course, was simply to define
what was meant by SHRM. A commonly used definition emerged in Wright and
McMahan (1992), which stated, “[SHRM] is the pattern of planned HR deploy-
ments and activities intended to enable an organization to achieve its goals” (298).
This definition had two implications:
• there must be a vertical linkage between HR practices and the strategic

management process of the organization
• it is the coordination of HR practices into a pattern of actions that will best
support organizational goals
These themes have dominated the literature on strategic HRM and continue to do
so to this day.
Academicians ground SHRM in what is called the resource-based view of the
organization (Colbert 2004; Lado and Wilson 1994; Prahalad and Hamel 1990;
Wright and McMahan 1992; Wernerfelt 1995). In the resource-based view, orga-
nizations can gain effectiveness and competitive advantage by capitalizing on the
strengths and capabilities of their internal resources, including HR competencies.
In the private sector, the push is to create internal capabilities that are unique and
not easily copied by other companies. Fundamental to SHRM is the resource-based
premise that in any organization, HR can add value to the organization’s strategy
rather than simply being a cost of doing business. Thus, the competency and ca-
pability of an organization’s people can be a strategic advantage.
Empirical Research on Strategic Human Resource Management
As the 1990s unfolded, researchers began to undertake the challenge of empirically

testing whether HR systems do influence organizational performance—a quest that
continues today. While individual HR practices had long been researched, what
was unique about this was that it (a) examined HR practices jointly as a system,
and (b) used organizational performance as outcomes.
Much of the seminal work in this area focused on a constellation of what are called
88 E.F. Holton III, S.C. O’Keefe, V.A. Novak, and D.M. Walker
“high-performance work systems” or HPWS. Such systems are “generally thought

to include rigorous recruitment and selection procedures, performance-contingent
incentive compensation, and management development and training activities linked
to the needs of the business” (Becker et al. 1997, 10). This approach was often referred
to as the universalistic view of HR (Delery and Doty 1996) in that it posited a set of
best practices that should be employed by all HR organizations.
An impressive body of research emerged showing that HR practices do contribute
to organizational performance (see, for example, Becker and Huselid 1998; Huselid
1995; Huselid, Jackson, and Schuler 1997; Youndt and Snell 2004). Although re-
search was conducted in the private sector—due to the readily available performance
measures—it nonetheless is important to the public sector because it demonstrated the
link between HR practices and strategic outcomes of the organization. In addition, it
reinforced the theoretical view that HR practices operate best when they are aligned as
a system. Becker and Huselid’s (1998) work showed three stages of HR sophistication:
(1) initially developing an HR architecture, (2) developing operational effectiveness,
and (3) aligning the HR system with the firm’s strategic goals. Moving from stage 2
to stage 3 resulted in a significant increase in the market value of the firm.
Human Capital Theory
Underlying the notion of HR as a key resource for the organization is human capital
(HC) theory. HC theory suggests that investment in people results in economic
benefits for individuals, organizations, and society as a whole (Sweetland 1996).
Schultz (1993) listed several critical attributes: (1) HC cannot be separated from the
person who has it; (2) HC is to be had by investing in people; (3) HC is related to
economic growth. Together these attributes emphasize the importance of investing
in people and increasing their knowledge and education levels.
HC theory focuses on the educational level of employees as a source of labor
productivity and economic growth (Becker 1993; Schultz 1961). One of the most
influential theoretical concepts of HC theory is the distinction between general and
specific training and knowledge (Becker 1960). General HC refers to overall educa-
tion and practical experience, while specific HC refers to education and experience
with a scope of application limited to a particular activity or organization (Gimeno et
al. 1997; Lazear 1998). Organization-specific training guarantees the sustainability
of HC because employees with such knowledge and skills may be more valuable
to the organization due to their organization-specific knowledge. These are the
employees that contribute to the core competence of the organization and provide
competitive advantage. These competencies are the hardest to replace.
Schultz (1961) defined HC as the knowledge and skills people acquire during
education and training, saying that this capital is a result of deliberate investment
that yields returns. HC means investing in both formal and informal education and
training, which enhances individual productivity by providing knowledge, skills,
and attitudes necessary for economic and social development (Psacharopoulos and
Woodhall 1985). Fitz-enz (2000) offers a more modern definition of HC as traits one
brings to the job: intelligence, fulfilling work energy, positive attitude, reliability
and commitment, ability to learn, imagination, and creativity.
When a firm invests in HC, three outcomes occur. At the individual level the
investment results in increased knowledge, skills, and abilities, which leads to
individual development and growth. At the organizational level the investment
results in better performance and productivity. Finally, at the societal level better
educated and developed individuals and highly productive organizations result in
cultural and economic growth and prosperous communities.
HC cannot be owned by the organization, making it distinct from any other
form of capital. After all, an organization’s HC can walk out the door at any time.
Despite the firm’s inability to own HC, it is imperative that it capitalize on it. What
differentiates one organization from another—and makes one more effective than
another—is not its fixed assets but how much knowledge, innovation, and creativ-
ity it can obtain from its people (Burud and Tumolo 2004). Everything starts from
investments in organization-specific skills and knowledge training.
Intellectual Capital
Strategic HC implies benefits for organizations in terms of organization-specific

knowledge linked to strategic goals. Since the 1990s, however, HC and its implica-
tions for organizations has been broadened to include intellectual capital. The latter
is a much broader notion and encompasses organizational tangible and intangible
resources. Intellectual capital was first defined by Thomas Stewart in 1998 as the
sum of everything people know that gives competitive advantage to the organiza-
tion. Clearly this definition is similar to that for strategic HC. However, according
to Edvinsson and Malone (1997), intellectual capital has three components: HC,
social capital, and structural capital. HC is the skills and knowledge acquired by
an individual. Social capital is defined in terms of the nature of relations between
organizational members. Such relations create complex systems, referred to as
social networks (see Wooley, chapter 10, on social networks). Structural capital
represents the organizational processes and mechanisms—including culture—that
embody the organization’s prior learning. Thus, it is the combined knowledge, in-
novation, skills, and ability of the company’s employees to meet the task at hand,
along with the organization’s values, culture, and philosophy that result in maximum
performance. Organizations must not only invest in developing their HC, but must
also create work environments enabling employees’ talent to flourish.
Public Sector SHRM Research and Theory
SHRM has also received attention in the public sector research literature.
McGregor (1988) made a critical distinction when he talked of two levels of
SHRM in the public sector. At one level, he called for HRM to be more aligned
with the strategic plans of an agency. At a second level, he noted that HR is the
resource upon which agency productivity depends. Thus, HC is a strategic re-
source, which he called strategic management of a strategic resource—a theme
that has driven most of federal HR reform.
Public sector literature has paralleled the general HR literature in its definition
of SHRM (Hays and Kearney 2001; Klingner 1993; Mesch, Perry, and Wise 1995;
Tompkins 2002). What is distinctive about the public sector research is the recognition
that HR organizations face special challenges in transitioning to strategic partners. As
Klingner (1993) explains, public sector HRM has been dominated by concerns about
balancing political forces with merit principles designed to protect employee rights.
In contrast, SHRM presses for efficiency and responsiveness to organizational goals.
These contradicting forces represent rather fundamental changes in public HRM that
are more complicated than those faced by the private sector.
Mesch, Perry, and Wise (1995) characterize these as the bureaucratic versus
strategic models. In the bureaucratic model of HRM, which had dominated the
public sector, “the primary focus is to protect the integrity of the process, which
is seen as fundamental to limiting inequitable treatment in the employment rela-
tionship or unfairness in the distribution of rewards” (389). It creates hierarchical,
centralized, uniform HRM to ensure consistency across agencies. In contrast, the
strategic model emphasizes decentralization and flexibility in authority. Excessive
rules and regulations are to be reduced in order to enable managers to act in the
best way possible to achieve organizational goals.
This literature does not suggest that reform is impossible, but it does highlight
the magnitude of the culture change that has been ongoing. In general, HR orga-
nizations across organizations have had to learn to be better business partners, but
the challenges have been greater in changing the culture of the federal HR system.
As the Government Accountability Office (GAO) noted in 1995, “the ‘one-size-
fits-all’ approach to managing people was deeply rooted in achieving pay equity
across government, reducing competition among agencies, and gaining efficiency
and savings through economies of scale” (11). But, these principles, however well
intentioned, had become a barrier to creating high-performance organizations.
Fortunately, the last decade has showed that barriers in the existing civil service
system were to some extent just perceived barriers. While some reforms had to be
made through changes in laws, a number of reports have shown that more flex-
ibility existed in the system than was perceived and considerable movement toward
SHCM was possible within the existing system (see for example GAO 1995, 1998;
NAPA 2000; OPM 1999).
Current Theory and Research
Despite the empirical success of this line of research, there has been a distinct move-
ment in the literature away from the universalistic best practice view of HR systems
to a contingency or fit perspective (Delery and Doty 1996; Becker and Huselid
2006; Colbert 2004). In this view, it is the fit between an organization’s strategy
and the HR practices that drives performance. While this line of thinking is not new
(Lengnick-Hall and Lengnick-Hall 1988), it has gained increasing importance as
organizations have explored the best-practice approach to HR. Best practices are
still important, but how they are bundled together depends on the unique needs
of the organization’s strategy. Thus, we can expect to find different organizations
employing different HR systems depending on elements such as environmental
conditions, organizational strategy, organizational life cycle, competitive pressures,
labor market conditions, and so forth.
The current challenge, then, is to define the nature of the contingencies. That is,
which types of HR systems are the best fit for different constellations of strategic
contingencies (Becker and Huselid 2006; Ferris et al. 2004)? Practitioners inher-
ently understand that different HR practices are called for in different organizational
contexts, but defining the exact nature of the fit remains a challenge for researchers
and practitioners.
The Evolution of SHCM in Federal Government
This section traces the evolution of thought and models for SHCM in federal
government. This overview is offered in part so that readers can understand the
historical evolution of the principles and models and their alignment with the general
SHRM theory. In addition, it is important to embrace not only the current models
in use, but also the underlying concepts and principles that are now embodied in
federal regulations and law. As will be seen, the evolution of thinking is completely
consistent with the SHRM literature and embodies all the key concepts discussed
in the previous section.
The Roots of the Federal Human Capital Revolution
The revolution of federal HRM has been unfolding since the mid-1980s, though
it has been most noticeable beginning in 2000. Table 8.1 summarizes some key
milestones in the history of HRM reform in federal government. This list is not
intended to be comprehensive, but rather representative of what has been a multi-
pronged effort by the GAO, OPM, NAPA, OMB, Congress, and others to change
the way federal government manages its workforce.
Implementation of SHRM first requires that organizations be strategic and
focused on results. Thus, the seeds of the revolution in federal HRM have to be
traced to the Government Performance and Results Act (GPRA) in 1993. This act
demanded a new level of results orientation and accountability in federal agencies.
Without this new strategic orientation, the recasting of federal HRM into a strategic
partner would not have been possible. GPRA also requires agencies to incorporate
an HC plan into their annual plans.
The Reinventing Human Resource Management (NPR 1993) report summarized
HR at that time:
Table 8.1
Key Milestones in Federal Strategic Human Capital Reform
Sowing the Seeds of Change
1989 The National Commission on the Public Service (The Volcker

Commission) releases “Leadership for America: Rebuilding the
Public Service”
1993 Congress: Government Performance and Results Act (GPRA) passed
1993 Office of the Vice-President—“National Performance Review:
Reinventing Human Resource Management”
December GAO: “Transforming the Civil Service: Building the Workforce of the
1995 Future”
June 1996 NAPA: “A Guide for Effective Strategic Management of Human
Resources” (NAPA 1996a) and “A Competency Model for Human
Resources Professionals” (NAPA 1996b) released
July 1998 GAO releases “Management Reform: Agencies Initial Efforts to
Restructure Personnel Operations”
September OPM: Office of Merit Systems Oversight and Effectiveness releases
1998 “Strategic Human Resources Management: Aligning with the
Mission” report
December NAPA releases “Success Building the Workforce of the Future to
1999 Achieve Organizational Success”
Strategic Human Resource Management Reform
January 2000 GAO releases “Human Capital: Key Principles from Nine Private
Sector Organizations”
July 2000 NAPA releases “The Case for Transforming Public Sector Human
Resources Management”
October 2000 Congress: Report of Senator Fred Thompson, Chairman, Committee
on Governmental Affairs, “Management Challenges Facing the New
Administration, Part 2: Federal Workforce Challenges”
December Congress: “Report to the President: The Crisis in Human Capital,”
2000 issued by Senator George V. Voinivich, Chairman, Subcommittee
on Oversight of Government Management, Restructuring, and the
District of Columbia
January 2001 GAO declares strategic human capital as a “high risk” area of
government management
March 2001 NAPA releases “Changes in the Human Resources Function since
1996: Implications for HR Competencies”
Summer 2001 President’s Management Agenda released with Strategic Human
Capital Management as one of five government-wide initiatives
October 2001 OMB releases standards of success for five government-wide
initiatives in the PMA
October 2001 Congress: Managerial Flexibility Act passed
December OPM releases human capital balanced scorecard to accomplish OMB
2001 guidelines
March 2002 GAO releases “A Model for Strategic Human Capital Management”
2002 Chief Human Capital Officers Act passed by Congress
October 2002 OPM releases Human Capital Assessment and Accountability Frame-
work (jointly developed by OMB, GAO, and OPM)
Today, the system’s functional operating components present a burdensome array

of barriers and obstacles to effective HRM. Hiring is complex and rule-bound;
managers can’t explain to applicants how to get federal jobs. The classification and
pay systems are inflexible. The performance management system is not adequately
linked to the organization’s mission and goals. The labor relations program is
adversarial. The federal workplace is not family-friendly, with its overly restric-
tive leave practices and limited implementation of available programs. Diversity
programs are fragmented, and affirmative employment planning and reporting
processes are duplicative and resource-intensive. Agencies see little value in the
efforts of central guidance agencies to monitor and control their activities.
In 1995, the then General Accounting Office, now the Government Accountability
Office (GAO), issued a report, “Transforming the Civil Service: Building the Work-
force of the Future,” to document the results of a symposium they held involving
public and private leaders. The pressures for change are evident in that report:
To remain viable in today’s demanding environment, public and private sector

organizations alike must improve their performance while holding the line on
costs. This is nowhere more apparent than among federal agencies, where pres-
sure is mounting for a government that works better, costs less, and employs a
smaller and more efficient workforce. The necessity to improve performance in
the face of steady or declining resources has led some organizations, both here
and in other countries, to make radical changes in the way they manage people.
These organizations have begun changing both their traditional organizational
structures and the approaches they have taken to managing their employees. In
place of centralized, hierarchical, rule-based systems, they are creating decentral-
ized, flatter, more flexible arrangements. And in place of highly detailed rules
to manage their employees, they are relying increasingly on a well-defined mis-
sion, a clearly articulated vision, and a coherent organizational culture to form
the foundation for the key business systems and processes they use to ensure
the successful outcome of their operations. Recognizing that people are central
to any organization’s success, these organizations give their managers greater
prerogatives to manage and their employees greater opportunities to participate
in the decisions that affect them and their work.
NAPA joined this call for a new approach in 1996, in its report “A Guide for
Effective Strategic Management of Human Resources,” stating (NAPA 1996a):
Downsizing, reengineering, restructuring—they jump off the front page of the

newspaper, are discussed on the evening news, and appear in the titles of articles
in business and human resource journals. Differences in the management of
organizations—public, private, foreign, domestic—are blurring as they face the
same forces of change. Many successful companies and several foreign govern-
ments have responded to these pressures by adopting a new management tool,
which merges strategic planning and HRM. This merger has resulted in a new
name to describe the process: Strategic Human Resources Management (SHRM).
This management process results from the recognition that mission accomplish-
ment depends upon an organization’s HR.
Table 8.2
Strategic Human Capital in the President’s Management Agenda

The Expected Near-Term Results
• Human capital strategies will be linked to organizational mission, vision, core

values, goals, and objectives.
• Agencies will use strategic workforce planning and flexible tools to recruit, retrain,
and reward employees and develop a high-performing workforce.
• Agencies will determine their “core competencies” and decide whether to build
internal capacity, or contract for services from the private sector. This will maximize
agencies’ flexibility in getting the job done effectively and efficiently.
• The statutory framework will be in place to make it easier to attract and retain the
right people, in the right places, at the right time.
The Expected Long-Term Results
• Citizens will recognize improved service and performance, and citizen satisfaction
will increase.
• Agencies will build, sustain, and effectively deploy the skilled, knowledgeable,
diverse, and high-performing workforce needed to meet the current and emerging
needs of government and its citizens.
• The workforce will adapt quickly in size, composition, and competencies to
accommodate changes in mission, technology, and labor markets.
• Government employee satisfaction will increase.
Source: OMB (2001).
HC issues continued to intensify during the late 1990s (e.g., GAO 1998; NAPA
1999). In January 2001, the GAO placed SHCM on its list of government-wide
high-risk areas, stating:
[w]e have determined that one new area—SHCM—merits designation as a

government wide high-risk. While legislation and other actions have been put
in place since 1990 to address most major management areas, the government’s
approach to managing its people—its HC—is the critical missing link in reforming
and modernizing the federal government’s management practices. Many agencies
are experiencing serious HC challenges, such as skills imbalances, succession
planning challenges, outdated performance management systems, and understaff-
ing. The combined effect of these challenges serves to place at risk the ability of
agencies to efficiently, economically, and effectively accomplish their missions,
manage critical programs, and adequately serve the American people both now
and in the future. To a significant extent, serious management challenges across
a wide range of federal agencies, covering programs that involve billions of
federal expenditures, can be attributed to shortcomings in how agencies manage
their HC. (GAO 2001, 11)
This clarion call was quickly followed by President George W. Bush, who placed
HC management number one on the PMA. Table 8.2 shows the expectations in the
PMA that would guide federal HR reform. Reflecting back to our earlier discussion
of SHRM theory, one can quickly see that this was a classic call for SHRM.
Operationalizing SHCM in Federal Government
The years following the release of the PMA were focused on operationalizing SHCM
within federal government. It is important to realize that at the point the PMA
was released, the reform efforts were being driven from GAO, OMB, and OPM,
as well as Congress. Thus, there was a period lasting until October 2002 during
which there were multiple models and criteria in existence. Each made important
contributions to the unified framework that ultimately emerged.
Government Accountability Office
GAO’s efforts to operationalize a model of SHCM began in earnest with the release of
key principles it distilled from exemplary private sector organizations (GAO 2000a)
(see Table 8.3). Although released prior to declaring SHCM as “high risk,” they none-
theless set the conceptual foundation upon which future models would be built.
Shortly thereafter GAO released “Human Capital: A Self-assessment Check-
list for Agency Leaders” as a first step for agencies to become HC organizations
consistent with the ten principles (GAO 2000b). Quite importantly, they defined
two foundational principles of HC management that were quite consistent with the
theory discussed earlier: (a) that people are assets whose value can be enhanced
through investment, and (b) that an organization’s HC policies must be aligned to
support the organization’s shared vision (GAO 2002b, 1–2). As will be seen in the
next section, it is this philosophy and self-assessment process that was used in the
beginning of NASA’s HC planning.
GAO (2002) extended their work and released “A Model for Strategic Hu-
man Capital Management.” In this model (see Table 8.4) they identified four HC
cornerstones and eight critical success factors. This model is a strong fit with the
general strategic HC literature and is quite consistent with the “fit” approach to
SHRM discussed earlier.
Office of Management and Budget
During this same time period, OMB was working to operationalize the PMA (OMB
2001). In 2001 they introduced criteria for each of the five management initiatives and
introduced the now well-known “red-yellow-green light” scoring system to rate agen-
cies on each of the initiatives (see the OMB website for details—www.whitehouse.gov/
omb/budintegration/pma_index.html). These criteria were specific in some areas but
broad and still vague in others. Nonetheless, at the time OMB released these criteria,
they published their first scorecard showing where agencies stood on the criteria. Of
the 26 rated, 23 received a “red” rating and only 3 received a “yellow” rating.
Table 8.3
Guiding Principles Developed by the GAO
Each of the nine private sector organizations in our review implemented human capital
strategies and practices that were designed to directly support the achievement of
their specific missions, strategic goals, and core values. Although human capital
management alone cannot ensure high performance, proper attention to human capital
is a fundamental building block to achieving an organization’s mission and goals. On
the basis of the information they provided, we identified 10 underlying and interrelated
principles of human capital management that are common to the 9 organizations:
1. Treat human capital management as being fundamental to strategic business

management.
2. Integrate human capital functional staff into management teams.
3. Leverage the internal human capital function with external expertise.
4. Hire, develop, and sustain leaders according to leadership characteristics
identified as essential to achieving specific missions and goals.
5. Communicate a shared vision that all employees, working as one team, can strive
to accomplish.
6. Hire, develop, and retain employees according to competencies.
7. Use performance management systems, including pay and other meaningful
incentives, to link performance to results.
8. Support and reward teams to achieve high performance.
9. Integrate employee input into the design and implementation of human capital
policies and practices.
10. Measure the effectiveness of human capital policies and practices.
These 10 principles of human capital management demonstrate that the 9

organizations viewed human capital as the foundation for their ongoing success and
viability. Because these principles could generally be applied in federal agencies
without statutory changes in many cases, agencies need only adopt and adapt, if
necessary, these principles to give human capital higher priority as they implement
performance-based management to achieve success and higher performance.
Source: GAO (2000a).
Office of Personnel Management
OPM also attempted to help agencies by introducing its initial HC scorecard in

December 2001 (OMB 2001). However, this meant that by mid-2002 there were
actually three different frameworks for SHCM in existence. GAO, OMB, and OPM
decided to join forces to produce an integrated framework to reduce confusion and
speak with one voice. The result was the Human Capital Assessment and Account-
ability Framework (HCAAF) that is still in use today (for details see www.opm.
gov/hcaaf_resource_center).
Table 8.4
GAO Human Capital Model, March 2002
Human Capital
Cornerstones Eight Critical Success Factors
Leadership Commitment to human Role of the human capital
capital management function
Strategic human capital Integration and alignment Data-driven human capital

planning decisions
Acquiring, developing, and Targeted investments in Human capital approaches

retaining talent people tailored to fit organizational
needs
Results-oriented Empowerment and Unit and individual

organizational culture inclusiveness performance linked to
organizational goals
Congress
The Chief Human Capital Officers Act of 2002 codified into law the principles of
strategic human capital management for the federal government. First, it created
human capital officer positions in each agency. These officers were charged with:
setting the workforce development strategy of the agency; assessing workforce
characteristics and future needs based on the agency’s mission and strategic plan;
aligning the agency’s human resources policies and programs with organization
mission, strategic goals, and performance outcomes; developing and advocating a
culture of continuous learning to attract and retain employees with superior abili-
ties; identifying best practices and benchmarking studies; and applying methods for
measuring intellectual capital and identifying links of that capital to organizational
performance and growth (CHCO act, sec. 1302).
It also mandated that OPM further codify these principles into a formal
system and law by requiring: OPM shall design a set of systems, including ap-
propriate metrics, for assessing the management of human capital by federal
agencies. The systems referred to under paragraph (1) shall be defined in regula-
tions of OPM and include standards for—aligning human capital strategies of
agencies with the missions, goals, and organizational objectives of those agen
cies; and integrating those strategies into the budget and strategic plans of those
agencies; closing skill gaps in mission critical occupations; ensuring continuity
of effective leadership through implementation of recruitment, development,
and succession plans; sustaining a culture that cultivates and develops a high
performing workforce; developing and implementing a knowledge manage
ment strategy supported by appropriate investment in training and technology;
and holding managers and HR officers accountable for efficient and effective
HRM in support of agency missions in accordance with merit system principles
(CHCO act, sec. 1304).
Changing Competencies for Federal Human Resource Professionals
The demands for SHCM in federal government led to a redefinition of competen-

cies needed by federal HR professionals. A series of key studies (NAPA 1996b,
2001; OPM 1999, 2000) along with literature from the private sector (Robinson
and Robinson 2005; Ulrich 1997) have highlighted an array of new competencies
needed for HR professionals in order to function effectively in the new federal
HC environment.
A complete review of these competencies suggests similar conclusions. HR
professionals must stretch beyond their traditional administrative and transactional
roles. These studies point to new roles including business partner, change agent,
and leader (NAPA 2001; OPM 2000). HR professionals have been called on to
reinvent themselves to become performance partners and consultants. To function
as a strategic partner requires HR professionals to (a) understand the “business”
functions of their agencies; (b) have a working knowledge of all HR processes—to
be generalists, not just specialists; (c) think systemically to link HR systems with
organizational strategic plans; and (d) continue to operate efficient and responsive
HR processes. Only then will HR have a “seat at the table” of strategic planning
and achieve the potential of SHCM.
The Case of the National Aeronautics and Space Administration
It is against this backdrop that NASA undertook its HC reforms. As stated earlier,
NASA was the first federal agency to receive a “green” rating from OMB, indicat-
ing that it has met the criteria specified by OMB and OPM.
There were multiple drivers of this effort. Obviously the government-wide
efforts described above were critical. Equally important, NASA faced strate-
gic HC challenges: “A world-class science and engineering agency requires
a world-class workforce. NASA seeks the ‘best and brightest’ scientists and
engineers (S&E’s) to accomplish its core work. It also requires a highly
competent, skilled staff to support NASA’s technical programs and address
the Agency’s financial, acquisition, and business management challenges”
(NASA 2002, 6).
NASA’s ability to attract and retain a world-class, diverse S&E workforce is
threatened by several nationwide trends: a shrinking S&E pipeline, increased com-
petition for technical skills, and lack of diversity among applicants. Contributing
to this challenge are skills imbalances and lack of depth in critical competencies,
significant loss of knowledge due to projected retirements, and increased recruit-
ment and retention problems.
The Strategic Human Capital Planning Process at NASA
In early 2002, because of these many internal and external drivers and challenges,
there was wide management acceptance that NASA needed a strategic and inte-
grated approach to HC management, a roadmap for the future. Soon after the new
NASA administrator was appointed in 2001 and stated that SHCM was the linchpin
of the PMA, the chief human capital officer (CHCO) met with him to discuss the
need for the development of a strategic human capital plan (SHCP), and he told
her to proceed as quickly as possible. More importantly, he assured her that she
had his complete support on this critical project. They agreed the CHCO would
serve as the champion for this effort and that the project needed to be completed
within a four-to-five-month period because of its importance and the looming HC
crisis. With the administrator’s support, the next and most important step in the
process was to get the right team of senior managers engaged in the development
of the SHCP. The CHCO knew the effort would not be successful unless she had
the active involvement and buy-in of several key and influential senior leaders in
NASA who would be accountable for delivering program results. In addition, she
also knew the project—and ultimately the SHCP—would fail if it were viewed as
only an HR initiative.
So, she met with the four enterprise or mission directors who were responsible
for the major programs of NASA and several strategically selected center directors
and the associate administrator for Equal Opportunity to get their commitment to
personally participate. The team was intentionally kept small to ensure quicker
results given the tight timeline. And, interestingly, unlike with some other HR
projects, the team members were enthusiastic and wanted to be involved, reflect-
ing their commitment to the importance of SHCM and their recognition that a
workforce crisis was looming.
In spite of this, getting started and proceeding with the development of the
plan was sometimes frustrating because of the level of the participants, their busy
schedules, and the fact that the CHCO wanted only the principals to attend the team
meetings. They persevered, however, and made steady progress with the CHCO
serving as a full team member in addition to playing an important facilitating role
to make sure the team stayed on track.
The team began by discussing what a SHCP should look like in terms of format,
and what it should contain. In addition, they used guidance from OMB, OPM, and
GAO and reviewed several examples of strategic HC plans from industry and other
government agencies. But they were largely developing the plan from scratch.
After considerable discussion, they settled on five pillars (discussed in the next
section) as the architecture on which to build the plan because these were areas
pointed out as important in the strategic HC plans of a number of successful Fortune
500 organizations. Then they spent a significant amount of time defining these and
developing associated goals and strategies relevant to NASA. The next step was
the assessment or gap analysis of NASA’s HC strengths and weaknesses, pillar by
pillar, including identifying problems the team felt needed to be addressed, and
outcomes and results they wanted to see achieved through HC programs. This was
the most controversial part of the process because the team members had varying
ideas and vocalized strong opinions about the benefits and effectiveness of cur-
rent programs, what new or revised programs/activities were needed, and where
resources/attention should be focused in the future.
After lengthy discussions and occasional disagreements, the team agreed on nine
HC focus areas or improvement initiatives they felt were very important, merited
special emphasis, and could be expected to yield the greatest benefits given resource
limitations in NASA. They also had long discussions about how best to measure
the effectiveness of HC programs and initiatives and ultimately developed a hier-
archy of metrics (see next section). About halfway through this process, the team
also decided two documents were needed rather than one: a high-level strategic
plan (Strategic Human Capital Plan, or SHCP) that would be flexible enough to
accommodate mission and programmatic changes and with a life of approximately
five years; and a shorter-term, more tactical implementation plan (Strategic Human
Capital Implementation Plan, or SHCIP) with specific activities and milestones
with a life of approximately two years.
Once an initial draft of the SHCP was developed and significant work had
been done on the SHCIP, some of the team members involved their staff in the
development of the action plans for the improvement initiatives, working with the
corporate HR staff. However, the principal team members remained committed
and were actively engaged in reviewing, blessing, and “signing on” to everything
that was developed during this process.
During the four to five months the team was developing the SHCP and SHCIP,
communication on progress within and outside NASA was deemed to be very
important, as was getting buy-in from many stakeholders. The CHCO updated
the administrator and other senior-level management at weekly staff meetings
on the team’s progress, and several iterations of the plans were shared with the
entire senior leadership team and comments incorporated. At every opportunity
it was emphasized that everyone’s commitment and buy-in was critical even
though a small team developed the documents. Toward the end of the process,
formal briefings on the plans and their content were conducted not only by HR
staff throughout the agency but also by technical senior leaders who recognized
the importance of SHCM.
The CHCO also kept OMB and OPM closely in the loop as the plans were
developed, gave them frequent progress reports, and shared drafts with them. In
fact, since these agencies issued the guidance on SHCM and graded NASA on its
progress, there were frequent discussions on the specific activities, schedules, and
metrics identified in the improvement initiative action plans, and their comments
were taken seriously.
NASA’s CHCO also shared draft plans with GAO as well as with congressional
staff interested in NASA’s HC efforts. And, before the team received the administra-
tor’s final blessing on the plans, they were sent to several universities, professional
groups (e.g., NAPA), and other CHCOs for a final critique.
Lastly, it was extremely important to communicate with and get buy-in from the
employees of NASA. In addition to regular communication with the workforce during
the time the plans were being developed, the completed SHCP and SHCIP were sent to
all employees as well as posted on the web. In addition, trifolds reflecting the pillars,
goals, and improvement initiatives were widely distributed. Beyond this, initiatives
and HC programs and strategies were discussed widely throughout the agency in
management and employee sessions, and they became well known and understood.
These sessions were not always led by HR staff but often involved the technical
senior leaders of the agency too who had bought into the importance of SHCM in
a way never experienced before in NASA.
NASA’s Strategic Human Capital Program
As described above, NASA was at the forefront of strategic human capital planning
in federal agencies and thus was developing their plan before the final HCAAF
existed. Thus, they examined and adapted the various frameworks discussed to
create a framework that fit NASA’s needs and had buy-in from senior management
in the agency. However, after the HCAAF was released, the NASA plan was in
compliance with the then new standards.
Metaphorically, the system was envisioned as a three-legged stool. First, and
quite importantly, the NASA HC program was linked directly to the NASA vision
and mission, which can be viewed as the top of the stool. The three legs were the
fundaments of the HC program—the foundation that would enable NASA to achieve
its vision and mission. Any strategic HC system (the legs of the stool) has to have
the three fundamental components found at NASA: a long-term strategic plan; a
shorter-term action plan to move the organization forward and keep it focused on
its most important assets, its people; and an accountability framework to assure
that the plan is successful. The three legs work together to make the overall HC
program effective and enable NASA to achieve its vision and mission. Remove any
one of them, and the “stool” doesn’t support the vision and mission. This framework
operationalizes the theoretical notions discussed earlier of vertical and horizontal
integration of the human resource system.
At NASA, the long-term strategic plan was called the “Strategic Human Capital
Plan” (NASA 2002). It was designed to be strategic and to last five years or more.
It had three hierarchical components: pillars (5 defined), goals (12 defined), and
strategies (29 defined).
The plan matrix is shown in Table 8.5. As can be seen, there were five pillars
defined: strategic alignment, strategic competencies, learning, performance culture,
and leadership, which very closely paralleled the OMB and OPM models available
at the time. For each pillar, long-term goals were defined, and for each goal, key
strategies were defined.
Table 8.5 102
NASA Strategic Human Capital Plan: Goals and Strategies
Pillar (in bold)

Goal Strategies
1.0 Strategic Alignment: NASA aligns human capital to support the vision and accomplish the agency’s mission and goals.
1.1 Establishment of an agency that is well 1.1.1. Verify a clear linkage between the human capital strategies of the agency and
structured organizationally and matches its the mission, vision, and goals as stated in the NASA Strategic Plan.
workforce and workload to support its mission 1.1.2. Assure clarity of key goals, measure progress toward their achievement, and
in a safe, effective, and efficient way. periodically assess the effectiveness of the organizational structure in achieving the
goals.
1.1.3. Leverage organizational capabilities through efficient and effective use of civil
servants, contractors, grantees, and other nonagency resources.
1.2 Creating an agency in which employees 1.2.1. Use the performance management system to clearly assign to the leaders of
understand that what they do and how they do specific organizations, and hold them accountable for, the activities and functions
it supports overall agency goals. required to achieve NASA’s objectives.
1.2.2. Assure all employees understand how their assignments contribute to
achievement of the agency goals.
1.2.3. Effectively, fairly, and equitably use performance management to enable
employees to understand their role in achieving agency goals, individual
performance, and desired improvements, and hold them accountable.
1.3 A situation in which human resources (HR) 1.3.1. Assure alignment of human resources activities to contribute—through specific
activities clearly, effectively, and efficiently achievement of excellence in the five pillars—to achievement of the agency’s key
support and enable the agency’s mission. goals.
1.3.2. HR policies and processes enable the agency to effectively and efficiently
manage its workforce.
1.3.3. Human resource management professionals partner with agency top
management in developing strategic and program plans.
E.F. Holton III, S.C. O’Keefe, V.A. Novak, and D.M. Walker
2.0 Strategic Competencies: NASA recruits, acquires, and retains a diverse workforce with world-class capabilities in strategic
competencies needed for all components of its mission.
2.1 An agency that knows the competencies it 2.1.1. Develop, utilize, and periodically update an integrated workforce planning and
needs, and the workforce is concentrated in analysis process, and associated information technologies, including competencies
those competencies. required to achieve NASA goals, and allow an agency-level view as they relate to
projected programs.
2.1.2. Conduct periodic competency gaps assessment and use results to target
recruitment and development activities.
2.2 A situation in which NASA recruits, acquires, 2.2.1. Utilize NASA’s exciting and fulfilling work to attract and retain employees with
and retains world-class employees in the essential competencies.
essential competencies. 2.2.2. Provide the workforce with sufficient resources to succeed in their assignments.
2.2.3. Facilitate leadership strategies that support NASA’s values.
3.0 Learning: NASA promotes a knowledge-sharing culture and a climate of openness, continuous learning, and improvement.
3.1 The creation of a climate of open sharing of 3.1.1. Strategically invest in training and development opportunities, including
relevant knowledge to facilitate best practices, coaching and mentoring, and foster a climate of continuous learning and
promote personal and professional growth, and improvement.
avoid failures.
3.2 The active collecting, sharing, and utilization of 3.2.1. Stimulate and encourage the capture and exchange of knowledge within the
best practices learned from NASA’s successes agency.
and failures. 3.2.2. Provide a process for enabling the collection, sharing, and utilization of best
practices from failures and successes.
4.0 Performance Culture: NASA creates a culture that focuses on results, motivates employees to perform, and ensures fairness
in the workplace.
4.1 The fostering of an inclusive climate where 4.1.1. Assure that the agency’s human capital programs and processes create an
employees are valued, treated fairly and with inclusive climate where employees are treated fairly, respected by management
respect, and where they feel empowered and their peers, and are valued for their meaningful and fulfilling contributions.
Strategic Human Capital Management in Federal Government
to make meaningful, relevant, and fulfilling

contributions.
103
(continued)
Table 8.5 (continued)
104
Pillar (in bold)
Goal Strategies
4.2 An environment in which equal opportunity 4.2.1. Enhance and fully utilize management, holding it accountable for maintaining an
and diversity are utilized and valued for their inclusive workforce and fostering an inclusive environment.
contribution to the agency mission. 4.2.2. Promote employee education and training of equal opportunity and diversity to
strengthen the agency’s appreciation of the value added of a diverse and inclusive
workforce.
4.3.1. Assure linkage of employee and managerial rewards, recognition, development
and performance to agency key goals.
4.3 The establishment of a rewards and

recognition system that acknowledges high-
level performance and encourages the
behaviors the agency desires in individuals and
groups.
5.0 Leadership: NASA ensures it has leaders who are adaptable; who inspire, motivate, and guide others toward goals; who
mentor and challenge the workforce; and who demonstrate high standards of honesty, integrity, trust, openness, and respect.
5.1 The recruitment, selection, hiring, and 5.1.1. Assure that the agency senior management is involved in the process of
retention of a diverse, high-performing cadre of recruiting a diverse cadre of high-performing leaders.
leaders who are nurtured through training and 5.1.2. Provide mentoring, training, development, and coaching opportunities to equip
development opportunities. employees to assume leadership positions within the agency.
5.1.3. Establish methods and processes for leadership continuity.
5.1.4. Assure that developmental opportunities improve supervisory effectiveness in
managing and developing employees.
5.2 An atmosphere in which leaders are held 5.2.1. Hold leaders accountable for consistently applying management practices
accountable for overall performance, at the aligned with NASA’s values.
individual and organizational levels, and for 5.2.2. Hold leaders accountable for performance at the organization as well as the
maintaining high standards of honesty, integrity, individual level, including civil service workforce actions and associated costs.
safety, and equal opportunity principles. 5.2.3. Ensure that the value and spirit of equal opportunity and diversity are an integral
part of leader evaluation and management expectations.
5.2.4. Create a climate where ethical and moral behavior is understood and followed.
The shorter-term action plan was called the “Strategic Human Capital Imple-
mentation Plan” (NASA 2004a). It was designed to be more tactical and to last
only about two years. After conducting a baseline assessment on where NASA
stood at the time, nine improvement initiatives were identified. As Table 8.6 shows,
these initiatives were linked to the goals and represented critical near-term steps to
move toward the goals and strategies defined by the plan. Each initiative also had
a defined outcome or result expected.
Then, for each initiative, a specific action plan was developed, with activities,
milestones, and metrics to assess progress toward accomplishing that initiative.
An accountability component was contained in a roles and responsibilities matrix
that defined the roles that each level of the organization would play in achieving
the goals laid out in the plan clearly defining agency-wide ownership. In addition,
measurement and assessment were critical in helping NASA senior management
determine if progress was being made toward meeting HC goals, if current initia-
tives were effective or not, and if programs needed to be modified, canceled, or new
ones implemented. Thus, a hierarchy of metrics was developed to help gauge the
successful implementation of the goals, strategies, and improvement initiatives:
1. Very basic measures at a project level that would provide insight into the
health of an initiative or program and be mostly of interest to the HR com-
munity. An example might be the number of executives who participated
in training/development activities.
2. Higher-level measures that would provide useful feedback to management
at multiple levels on current programs/initiatives so that course correc-
tions could be made, if necessary. An example might be whether or not
a specific development program for executives was producing effective
results.
3. A “critical few” metrics that senior management would be especially
interested in because of their importance to the NASA workforce and
mission, and these would generally be broad and cut across several of
the pillars, goals, strategies, and improvement initiatives.
The two critical metrics identified in the plans are:
• Continuous progress in closing gaps in NASA’s critical competencies, which

relates to several pillars and improvement initiatives and for which NASA
implemented several major HC programs
• Alignment of NASA’s HC strategy with its mission, goals, and organizational
objectives, which cuts across all the pillars and improvement initiatives and
relies on an annual government-wide OPM survey to provide data
A close read of the plan shows that it was carefully woven together to be a model
SHCP. First, it clearly linked HC to the strategic goals of the agency. Second, it
106
Table 8.6
NASA Strategic Human Capital Plan Improvement Initiatives
Pillar (in bold)

Goal Summary Problem Improvement Initiative Outcomes/Results
Strategic Alignment
The agency is organized to • Failure to achieve “One NASA” Develop and implement an agency- • “One NASA” with integrated
support its mission in a safe, due to ambiguity in roles and wide integrated workforce planning capabilities to support NASA
effective, and efficient way. responsibilities or stovepipe and analysis capability (see Action missions.
Each organization behaviors. Plan 1). • Better deployed workforce and
understands its contribution • Smaller workforce—not deployed Increase the utilization of flexibilities enhanced mission performance.
to the agency mission and most effectively. and tools to ensure a highly skilled, • Increased ability to attract and
each employee understands • Inadequate ability to track/forecast diverse, and productive workforce retain a highly skilled, diverse
his or her personal human capital across programs. (see Action Plan 2). workforce.
contribution.
Strategic Competencies
NASA understands the • Inadequate ability to identify Develop an agency competency • Agency has skills it needs.
competencies required imbalances in current and management system that defines • Contribute to ensuring a source
for safe and successful projected workforce arising from competencies the agency must of competencies needed to
missions, and recruits, changing priorities and turnover. retain and those for which it will rely assure future mission success.
acquires, and retains a • A shrinking national pipeline of on industry, academia, and others
world-class workforce talent needed for the future. (see Action Plan 3).
representative of the nation’s Ensure that NASA education
diversity and consistent with programs match a diverse
competency needs. population of students with
projected NASA workforce needs.

Pillar (in bold)
Goal Summary Problem Improvement Initiative Outcomes/Results
Learning
NASA assures mission • Failure to capitalize on—and Ensure that training and • Better performance through
success by using existing “institutionalize”—lessons learned development programs build a more knowledgeable, more
knowledge effectively and from failures and successes. needed competencies, including highly skilled workforce.
acquiring new knowledge • Insufficient attention paid to more effective incorporation of • Higher mission success rate.
through learning. mentoring. knowledge sharing and mentoring
in the development of the employee
(see Action Plan 5).
Capture knowledge and lessons
learned (from failures and
successes) in a more effective,
systematic way (see Action Plan 6).
Performance Culture
NASA achieves excellence • Performance expectations Assure that the agency-wide • Improved individual and
by valuing and recognizing ambiguous (e.g., accountability, performance management system organizational performance.
performance in an effort vs. results). focuses on accountability for results • Enhanced mission success
environment in which all • Failure to deal adequately with (see Action Plan 7). through more effective use of
employees feel encouraged poor performance. Assure that employee rewards the diverse talents/abilities of
to contribute. and recognition programs are the workforce.
adequately linked to performance
that contributes to achievement of
agency goals (see Action Plan 7).
Leadership
NASA has leaders who • Lack of an integrated, strategic Ensure that an integrated strategic • Agency has right kind and
think strategically, inspire approach to leadership training and development program number of diverse leaders to
employees, and achieve development. builds needed agency leadership achieve mission success.
results. • Agency does not fully benefit competencies (see Action Plan 8). • Effective process to
Strategic Human Capital Management in Federal Government
from insights/experience of develop leaders for future

existing leaders when developing NASA leadership roles/
future leaders.
107
responsibilities.
integrated all elements of HC management into a mutually reinforcing system

including workforce analysis; competency and skills assessment; recruitment, hir-
ing and retention; performance management; leadership development, succession
planning, and career development.
Transforming the NASA HR community
Early on, when it was clear that SHCM was becoming an area of focus in the federal
government and in NASA, NASA’s center HR directors and the CHCO decided
they needed to transform the NASA HR community to be ready to accept the new
challenges. They saw this as an opportunity to “be at the table” as consultants and
partners with management rather than to just oversee transactional work, but they
knew they had to “step up.” They held a series of quarterly meetings beginning
in the summer of 2002 to chart a new course for the NASA HR community and
called it the “One HR” initiative. This was a big challenge because the HR offices
throughout the agency were used to operating as nine separate and independent
organizations, but the effort resulted in a major transformation. They defined
desired roles and work and did some reorganizing at the corporate and center
level to make sure they had the right people in the right positions. They also hired
several new HR professionals at the corporate and center levels and better aligned
skills with position requirements. As a result of these efforts, the HR community
became more credible to management and more involved in strategic discussions
and decisions.
A realization for NASA at this time was that there were existing flexibilities
in laws and regulations that could be taken advantage of to a greater extent in
managing their HC assets. However, it was also determined that new flexibilities
were needed to assist the agency in attracting, hiring, and retaining a world-class
staff. After considerable effort, the NASA Flexibilities Act of 2004 was passed by
Congress, consisting of a number of new “tools” to enable the agency to achieve
its HC goals and objectives.
Implementation Events
Two key aspects of the implementation process are notable. First, on February 1,
2003, tragedy struck NASA and the nation when the Columbia space shuttle was
lost during its return to earth. Subsequently, the Columbia Accident Investigation
Board (CAIB) was created to investigate the accident and make recommendations
to prevent future ones. The “CAIB Report” (NASA 2003) was released in August
2003 and was far-reaching in its investigation and recommendations, focusing
not only on technical issues but also on organizational issues that led to the disas-
ter. NASA then created an internal committee, which released the “Diaz report”
(NASA 2004b) in January 2004 to respond to the CAIB report recommendations
on organizational issues.
A major organizational crisis such as this had the potential to derail the SHCM
effort. Instead, it actually served as a catalyst to accelerate implementation of key
parts of the plan. The SHCM plan was crafted to be sustainable no matter what
happened and proved to be robust enough to embrace the CAIB report recommen-
dations without derailing it. What the CAIB report did was to bring four specific
areas to the forefront as priorities—leadership development, communications,
culture change, and mentoring. Efforts in these areas were redoubled in order
to get the space shuttle program back on track. Furthermore, the process used in
developing the SHCM proved to be a good model, so it was also used in preparing
the Diaz report.
The second implementation issue has been the apparent need to expand the HC
planning process. The SHCM plan described in this chapter only encompassed
NASA’s civil service workforce. Yet NASA has more than double the number
of its civil servants employed as contractors. NASA is expected to become more
reliant on this multisector workforce to meet its needs for a flexible and scalable
workforce (NAPA 2007).
Lessons Learned About Developing a Successful SHCP
Clearly, developing a SHCP is a major undertaking for any organization. While

each organization will have its own special needs and character, there are some
lessons learned from the NASA case that illustrate some critical success factors to
making the planning process work:
Investing in and truly valuing human capital is critical to mission success. There
was little dispute at NASA that the expertise of its people were its most vital asset.
Without the right mix of knowledge and competency, the agency simply would
not succeed.
Top management support is not optional. NASA’s top administrator made it
absolutely clear that HC was the linchpin of the PMA and would be the same for
NASA. In addition, the plan itself was developed by senior management, which
created a high level of buy-in.
SHCM is EVERYONE’s job. Perhaps most understated in all the models is that a
shift to SHCM also entails a shift away from HR being “just HR’s job.” Once HC
strategies are linked to the mission and goals of the organization, it is everyone’s
job to make them happen.
Accountability needs to be built in at all levels of an organization. Strategic plans
of any type without accountability for results usually just collect dust on a shelf.
The process used to build the plan is critical. One cannot underestimate the
importance of buy-in while building the plan, particularly within the senior
management team. One has to allow time for debate and dialogue to air different
perspectives from around the organization. The goal is for it to be “owned” by
management rather than to be viewed as HR’s plan.
Create a sense of urgency. At the same time, planning processes that are allowed
to run without a sense of urgency often end up wasting a lot of people’s time. There
is a delicate balance to strike between allowing enough time to create buy-in and
enough urgency to make sure it gets done in a timely manner.
Allow adequate time for the development and planning process. A good strategic
HC plan takes time to develop. And it needs time from some of the busiest people
in your organization. It is a challenge, but it must be a priority for those involved
in the process.
Customize the plan to fit the organization. As stated earlier, the state of the art
in HRM is finding a plan that fits your organization’s unique situation and needs.
Simply, if your strategy is unique then your plan will be also. Thus, there is no
such thing as a one-size-fits-all SHCP.
Don’t reinvent the wheel—benchmark. Notwithstanding the above, there is little
need to start from scratch. There are now many examples from the public and private
sectors of effective strategic HC plans and organizations. It would be foolish not
to freely beg, borrow, or steal whatever components fit your organization. You can
jump-start and shorten your organization’s transformation process by doing so.
Develop the tactical plan to go along with the strategic plan. If your strategic
HC plan is to work, it must have the detailed tactical plans to accompany it.
A strong “chief human capital officer” is needed to lead the process. It takes
considerable skill and talent to lead a SHCP process and the HR organization that
results. The leader needs to have strong facilitation skills, keen strategic insight,
and strong HR fundamentals.
Communicate, communicate, communicate! It can’t be overstated—commu-
nication is critical to success. In the early stages it is essential to communicate
with senior management, later with mid-level management, and eventually with
everyone in the organization. Everyone has to understand the plan and live it for
it to be successful.
Keep external partners in the loop. In the federal government it is important to
keep your key external partners informed and involved along the way. Share your
drafts and keep them updated on your progress. Seek their comments and input so
that the final product will meet not only your agency’s internal needs but also the
standards set by your external partners.
Conclusion
The strategic HC revolution has continued to pervade federal human resource prac-
tices. As of June 2007, 15 of the federal executive agencies had received a “green”
rating from OMB and the other 11 received a “yellow” rating—a considerable advance
since only 2001, when the original scorecard showed no “green” agencies and all
but three of them rated “red.” However, just because so many agencies have “gone
green” doesn’t mean the work is done. Because strategic management is a dynamic,
ever-evolving process, so too is SHCM. Thus, the work at NASA is ongoing as their
strategic plan has evolved and new workforce challenges have emerged.
SHCM is not just a fad—it is here to stay. As shown in this chapter, it has deep
roots in theory and research as well as a long track record of success in the private
sector and now in federal government. The continued growth of the “knowledge
economy” combined with changing workforce demographics will present bigger
and bigger challenges for HR in the federal government. Both practice and research
show that it is the best way for HR to meet these challenges in the private and public
sectors. HR needs to continue to be a strategic partner to meet these challenges and
help government agencies achieve their goals.
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9
Organizational Transformation
Strategic Succession Management and
Leadership Development
Ruth T. Zaplin and Sydney Smith-Heimbrock
This chapter explores three imperatives for an organizational transformation

agenda emerging from the new global environment: (1) strategic human capital
management (SHCM)—the U.S. Office of Personnel Management’s (OPM 2007a,
2007b) new approach through which federal agencies are aligning personnel
management with organizational transformation and effectiveness, and, as it
relates to the leadership and knowledge management component of the SHCM
paradigm, (2) strategic succession management and (3) leader development (see
Zaplin and Smith-Heimbrock 2008). This chapter explores public and private
best practices, focusing on innovations in the federal workplace, to demonstrate
how these imperatives translate into a cogent business case for innovation in
leader development.
A basic premise is that the most effective approaches to organizational transfor-
mation are those that integrate all three imperatives. We believe it is increasingly
urgent for the more common, process-driven federal organization of today—with
a culture that discourages innovation and organization agility—to adopt the SHCM
paradigm. In short, implementation of the SHCM paradigm, done well, will fos-
ter innovation and organization agility and lead to better performance outcomes
over time and, to successfully accomplish this task, leader development must be
understood within the wider context of SHCM.
The chapter begins with an overview of the key challenges today’s leaders face
in a global environment, including the need for organizations and individuals at all
levels of the organization to be change-adept. Dorfman (2003, 1) states:
[g]iven the many bilateral and multilateral exchange agreements with other
countries to which the U.S. is a party, there is almost no policy arena that does not
require public administrators to engage with international counterparts and moni-
tor global trends and events. More and more, successful mission accomplishment
for agencies requires the ability to influence events and ideas across national and
cultural boundaries—in essence, to exercise effective global leadership.
114
Succession Management and Leadership Development 115
We present an overview of SHCM’s contribution to organizational transforma-

tion—including a visual depiction of the SHCM paradigm. Within the leadership
and knowledge management component of the SHCM paradigm, strategic suc-
cession management and leader development are presented as key components
to ensure organizational effectiveness and transformation. Finally, one leadership
development best practice—coaching—is highlighted. For the purposes of discus-
sion, coaching is defined as “a way of working with people that leaves them more
competent and more fulfilled so that they are more able to contribute to their orga-
nizations and find meaning in what they are doing” (Flaherty 2005, 3). Coaching
leaders, particularly C-level executives, has received comparatively little attention
in public administration research as an effective approach to address SHCM goals
in the context of the organizational transformation agenda.
The Need for Change-Adept Leaders
Traditionally, organizational cultures have been marked by structural approaches

to authority and production. Leaders generally knew that they were invested with
formal authority. This is much less true today. Because today’s organizations are
flatter and less hierarchical, many people called to lead find that their formal au-
thority is not particularly useful. To get people moving in the right direction they
must rely on personal influence, diplomacy, and skill in communicating, conflict
resolution, and the carrot of motivation (Harvard Business Essentials 2004). To
exacerbate matters, today we are moving at an accelerating pace toward a post-
structural and synergistic global culture—one more comfortable with spontaneous
process, more accepting of what looks like chaos, and more apt to perceive control
as something that emerges, not something that is imposed. Being comfortable with
chaos is what experts say is necessary to function effectively in the new networked
economy (Slater 2001; Blandin 2007).
In this global environment, organizational leadership and management go
from:
• Overseeing work to also doing it

• Organizing hierarchies to organizing communities
• Imposing work designs and methods to understanding them
• Hiring and firing workers to recruiting and retaining them
• Building manual skills to building knowledge skills
• Evaluating job performance to assess behaviors that lead to innovation and
productivity
• Ignoring culture to building a knowledge-friendly culture
• Supporting the bureaucracy to fending it off (Davenport 2001, 47)
Additionally in this environment, all organizations, from the Fortune 500 to

the local nonprofit agency, need greater reach. In order to be in more places, to
116 Ruth T. Zaplin and Sydney Smith-Heimbrock
become more aware of regional and cultural differences, and to integrate into co-
herent strategies the varying work occurring in different markets and communities,
organizations need to be change-adept. According to leading transformation expert
Rosabeth Moss Kanter (2002, 55–56), change-adept organizations share three key
attributes, each with a particular role for leaders:
• The imagination to innovate. To encourage innovation, effective leaders help

develop new concepts—the ideas, models, and applications of technology that
set an organization apart.
• The professionalism to perform. Leaders provide personal and organizational
competence, supported by workforce training and development, to execute
flawlessly and deliver value to ever-more-demanding customers.
• The openness to collaborate. Leaders make connections with partners who
can extend the organization’s reach, enhance its offerings, or energize its
practices. Such collaboration requires risk-taking behaviors, the willingness
to engage with stakeholders in new ways and to identify new partners—with
their own interests—previously perceived as outside the traditional scope of
the organization’s reach.
Leaders and managers in the future will have to continuously adapt to the new
world they will face. This requires, according to Kanter (2002, 55–56):
• Creating networks—because a leader cannot possibly know enough, be in

enough places, or understand everything happening inside or outside the
organization.
• Developing kaleidoscope thinking—a way of constructing patterns from the
fragments of data available, and then manipulating them to form different
patterns.
• Communicating well—if compelling visions are to become reality.
• Building coalitions—in order to involve the people who have the resources,
the knowledge, and the political clout to make things happen.
• Sharing leadership—including transferring ownership to others.
• Learning to persevere—in order to create lasting change.
• Making everyone a hero—by recognizing, rewarding, and celebrating ac-
complishments.
Given the vast number and range of skills that tomorrow’s change-adept leaders
will need to acquire, it is not surprising that shared leadership may emerge as the
leadership model of the future (Greenberg-Walt and Robertson 2001). Currently the
subject of some debate, at the highest level shared leadership means splitting the
responsibilities of the executive between two or more individuals. In the broader
sense, it means empowering individuals at all levels of the organization and giv-
ing them the opportunity to take the lead. It is a leadership model that is becoming
more common as the old, top-down management structure gives way to flatter, more
decentralized forms, and is seen by some experts as a way of promoting agility
(elaborated upon further below), proactivity, and autonomy (Greenberg-Walt and
Robertson 2001). It is also increasingly demanded by a networked constituency
that perceives public accountability as getting the job done—rather than adhering
to strict bureaucratic silos and hierarchies that prevent timely response to public
need (Kettl 2007).
The shared leadership model, and leading experts’ thinking in general on
transformational leadership, does not see leadership as a fixed set of character
traits or as linked to an exalted position. Rather, leadership is seen as an organi-
zational capability (Lawler 2001). This thinking is based on the assumption that
it is possible—and necessary—for everyone to lead: leaders are made, not born.
Kouzes and Posner (2002, 83) state:
If we assume that leadership is learnable, we can discover how many good leaders
there really are. That leadership may be exhibited on behalf of the company, the
government, the school, the religious organization, the community, the volunteer
group, the union, or the family. Somewhere, sometime, the leader within each of
us may get the call to step forward. Ordinary people are capable of developing
themselves as leaders far more than tradition has ever assumed possible.
We also posit that leaders are made/developed not born. Viewed from this
perspective, leadership is rooted in the systems, processes, and culture of the
organization where all employees, when given the opportunity to develop to their
full leadership potential, will want to take initiative, and, according to Spreitzer
and Cummings (2001, 246):
• Act more like owners and entrepreneurs than employees or hired hands (that
is, they assume owner-like responsibility for financial performance and man-
aging risk)
• Take the initiative to solve problems and to act, in general, with a sense of
urgency
• Willingly accept accountability for meeting commitments and for living the
values of the organization
• Share a common philosophy and language of leadership that includes toler-
ance for contrary views and a willingness to experiment
• Create, maintain, and adhere to systems and procedures designed to measure
and reward these distributed leadership behaviors
The challenge to develop global leaders arises at a time when it is increasingly

difficult to attract, develop, and retain people. Record low unemployment rates and
a shortage of skilled workers have created a “war” for talent. Skilled employees
with high potential are in high demand, creating fierce competition among orga-
nizations trying to attract them (Spreitzer and Quinn 2001). Organizations with a
competitive advantage create a leadership culture that attracts and keeps the best
and the brightest. Moreover, employees want to know they are valued and that the
organization is investing in them. High-potential workers are reluctant to leave once
they experience this investment. They know they will be unsatisfied and unfulfilled
in an environment with less opportunity (Spreitzer and Quinn 2001).
Given today’s competitive environment for talent, having a steady supply of
the right leaders, at the right time, in the right place, doing the right thing is a tall
order. It is especially so in a world where organizations are rapidly flattening and
using multisector workforces and team-based structures; markets are becoming
more complex and interrelated; knowledge workers will continue to have little
organizational loyalty, instead preferring to view themselves as professional free
agents interested in working only for the leader who provides the most challenge
and opportunity (Greenberg-Walt and Robertson 2001); and, there is a dearth of
people who are accomplished in their disciplines, want to do leadership, and are
competent at it. It is no wonder that many executives see their central task as de-
veloping other leaders and actively helping followers reach their own leadership
potential. If they fail, it is usually not for lack of technical skill but the inability to
establish effective human connections—upward, downward, and outward—that
motivate and inspire people, build effective teams, and make organizations work
through people; the only ways today’s organizations can work (Bacon 2003).
Overview: Strategic Human Capital Management
OPM defines SHCM as an organizational system that “focuses on results aligned

with mission and strategy, not processes. It places the right people in the right
jobs at the right time to most effectively perform the work of the organization
and has become a focal point of federal agencies” (OPM 2007a, 1). SHCM marks
a continuing evolution of government personnel management from transaction-
and process-based personnel management through human resources management
(HRM), which introduced a business focus to the work of attracting, developing,
and managing people. With SHCM, HRM’s traditional business process orientation
widens in scope to encompass the strategic focus of organizational effectiveness.
SHCM ensures that “agency mission requirements drive all human resource activity,
and all agency staff contribute directly to achieving agency results and are rewarded
accordingly” (OPM 2007a, 1). SHCM fulfills its vital function for federal agencies
by strategically planning and implementing leadership, talent, and performance
management systems that align with agency mission, provide accountability for
results, and comply with merit system principles. A visual depiction of the five
elements of SHCM demonstrates the integration of all human capital management
practices within one strategic system (see Figure 9.1).
SHCM begins with effective human capital planning strategically aligned
with agency outcomes. Strategic human capital planning integrates the range of
existing personnel planning efforts—including workforce planning, diversity, and
Figure 9.1 Strategic Human Capital Management
Planning and Evaluating

Implementation
goal setting results
Leadership and
knowledge
management
Results-oriented
Strategic alignment Accountability
performance culture
Talent management
Provides performance
Provides direction Delivers hum an capital information
Source: Office of Personnel Management, 2007.
succession—into one vision for moving the agency toward mission accomplishment
and organizational transformation. Starting with strategic integration of planning
assures that leadership succession plans focus on organizational outcomes and that
individual development is aligned with organizational needs.
Once the planning phase has been accomplished, SHCM practitioners move to
the three implementation systems: leadership and knowledge management, results-
oriented performance culture, and talent management. Leadership and knowledge
management is where effective succession management and leadership development
approaches are designed and implemented. Whereas traditional succession manage-
ment matched basic recruitment and retention tactics to predicted departures and
retirements, SHCM demands a more strategic and future-focused approach. From
this perspective, strategic succession management and leadership development are
an ongoing process of assessing current and future organizational needs, designing
and executing strategies to meet those needs, and assessing the results. Federal
managers increasingly recognize the urgent need to transform their organizations
into change-adept and accountable providers of public goods and services.
This transformation agenda—coupled with the unprecedented turnover in
workforce generated by the anticipated baby boomer retirement wave and newly
mobile workforce—underscores the need for what Joiner and Josephs (2006)
call leadership agility. Leadership agility—the ability to lead effectively under
conditions of rapid change and mounting complexity—is increasingly needed,
not just in the executive suite but throughout the organization. The challenge
for an organization, then, becomes how best to create and maintain leadership
agility in order to maintain a cadre of empowered, change-adept people/leaders
throughout the organization, not just at the executive level (Spreitzer and Cum-
mings 2001).
A visual depiction of strategic succession management shows the integration
of ongoing strategic planning, program design, implementation, and evaluation
(see Figure 9.2). In this new paradigm, succession management looks far differ-
ent from the traditional, individual-by-individual approach to assuring continuity
in leadership. Specifically, the traditional succession planning model that appears
to guide much leadership training in the federal government involves identify-
ing those best qualified to serve as future top executives and then providing this
select group with extensive training and development opportunities. Only those
selected for participation through an extensive, competitive application and review
procedure are allowed to participate. In the new SHCM paradigm, strategic suc-
cession management becomes a mechanism through which an agency transforms
and shapes its future organizational culture and structure. Rather than react to a
changing organization, strategic succession management positions the organization
for the future and reaches well beyond the immediate need to replace retiring or
departing leaders by building bench strength with qualified leaders who already
exist in the organization. Strategic succession management links predicted demands
on the organization—including possible external factors and identified internal
organizational development goals—to the development of leaders and a talent
pool of emerging leaders who can serve as organizational change agents. Effective
strategic succession management also links directly to talent management—another
implementation system within the SHCM paradigm—in order to inform recruitment
efforts for leadership positions.
Planning Strategic Succession Management
As the SHCM cycle shows, the first and most critical phase of an effective strategic
succession management system is the planning process. In the planning phase,
human capital officers engage with agency leaders to create a clear articulation of
organizational needs. These needs are based on data that project future demands
on the organization and the workforce competencies and resources these demands
will require. Among the key questions posed during this phase is the one that asks
how the organization’s mission is evolving. For federal agencies, the question is,
“what will be the public need in five years? What will be the business scenario in
ten?” (Stone 2007). The future demands and scenarios identified should suggest
an organizational change agenda. The agency’s succession management strategy
Figure 9.2 Strategic Succession Management
Strategic Planning
• Understand organizational needs
• Create goals and objectives
• Define success with stakeholders
Succession Planning
Evaluation
• Synthesize Design Program design
design
Evaluate results: • Design approach to
metrics data recruitment,
Were organizational meet the object
• Analyze results retention, and
objectives achieved? • Identify metrics to
against goals development
If not, why not? measure success
• Identify areas for programs
change/improvement
Implement
leadership development,
recruitment/retention,
knowledge management
Implementation
Succession Management and Leadership Development
• Execute the program design

• Collect data on identified met rics
121
is then designed specifically to accomplish this organizational change agenda.

Leadership development, discussed further below, is married with succession
management as one function that builds a high-performance, high-involvement
work environment (NAPA 2005).
A good example of this vital link between strategic succession management and
organizational transformation is found in the Department of Interior’s (U.S. DOI)
Succession Plan (2006). In 2005, DOI projected that retirements from management
and leadership ranks would reach a daunting 85 percent of senior level (GS-14/15)
and senior executive service (SES) by 2015 (DOI 2006). While DOI’s leadership
succession plan identifies seventeen actions to address this challenge, the plan
establishes the principle that all succession activities relate the agency’s strategic
plan and individual departmental operating plans “in order to focus on both cur-
rent and future needs . . . [and] facilitate broader transformation efforts within the
DOI by selecting and developing leaders and managers who support and champion
change” (NAPA 2005, 10). Agency transformation is a key objective of the plan,
which drives this transformation agenda deep into the organization by identifying
“talented employees at multiple organizational levels, early in their careers or those
with critical skills who will be mentored as they pursue a management career”
(NAPA 2005, 11). All employees have access to DOI’s leadership competency
model and assessment tool in order to begin early in their careers to develop the
skills and achievements that characterize effective leaders.
Private sector leaders have long recognized the critical role of strategic succes-
sion management and leadership development in driving organizational transforma-
tion. Cor Herkstroter, the former chairman of the Royal Dutch/Shell Group, once
asked his top 50 to 60 leaders to suggest improvements to the company’s financial
performance. Shell’s committee of managing directors decided that a new leader-
ship development process could be a catalyst for organizational change, resulting
in creation of Shell’s Leadership and Performance Program. After the program
showed positive measurable returns in the United States and elsewhere, Shell
made it corporation-wide (Fulmer, Gibbs, and Goldsmith 2000). At Johnson and
Johnson and Shell, the heads of the leadership development process have senior-
level business experience. The use of business leaders is based on a belief that
executive participation will help ensure buy-in from the employees and will keep
the programs practical (Fulmer, Gibbs, and Goldsmith 2000).
Succession management strategies must ultimately demonstrate their effective-
ness in delivering organizational results. Therefore, the succession management
plan must clearly define what success looks like. The plan should: (1) specify the
organizational needs that will be met by succession management activities; (2)
identify the strategic goals that will meet these needs; and (3) define the specific
outcome measures that will be used to determine whether the goals have been met.
Agencies must ensure that systems are in place to gather, analyze, and use the data
needed to measure results. Getting data into usable form for decision making is key.
Human capital officers must have the ability to analyze information and apply it to
strategic decision making and to develop recommendations for agency leadership

decision making on selecting and resourcing succession management strategies.
In addition, the specific resources needed to achieve these goals must be included
in the strategic succession management plan. While adequate funds for program
activities are critical, they are only one piece of the resource puzzle. Another key
resource required is agency leadership engagement. Agencies can assure this en-
gagement by building participation into the strategic succession planning process.
One example of this engagement is the Royal Canadian Mounted Police’s (RCMP)
senior executive committee, which consists of the agency’s chief executive, chief
human capital officer, and six other officials. The committee meets quarterly to
discuss the organization’s succession needs, and to make decisions on development,
placement, and promotion of its top 600 officer and civilian employees. Talent
management is thus integrated fully into succession management and leadership
development strategies in order to achieve organizational outcomes (GAO 2003).
RCMP’s model is echoed across Canada’s government’s attention to succession
management. Each year, Ontario’s secretary of the cabinet—Ontario public ser-
vice’s top civil servant—convenes and actively participates in a two-day succession
planning and management retreat with the heads of every government ministry.
They discuss anticipated leadership needs across the government, as well as the
individual status of about 200 high-potential executives who may be able to meet
those needs over the next year or two (GAO 2003).
Designing and Executing Strategic Succession Management
Once an agency’s leadership has participated in and approved a strategic succes-

sion management plan, the agency’s human capital officials move to the design
phase. From the private and public sectors, there is a wide array of program options
that promise to deliver results for organizational transformation and succession
management. Any design choice should demonstrate why it is the best approach to
accomplishing the goals of the succession management plan. Some options:
1. Targeted recruitment and hiring

2. Incentives (retention/relocation, pay adjustments, flexible workplaces)
3. Career paths
4. Competency assessments for staff that demonstrate leadership potential
5. Leadership development programs at all levels of the organization
Each program selected should include an implementation plan with clear time-
lines, milestones, and completion dates. In addition, programs should be integrated
to assure logical sequencing of activities for employees and the organization. As an
example, competency assessments based on the qualifications required for leader-
ship should be made available to employees at all levels of the organization—and
not just at the point of entry into a leadership development program. Since selection
into leadership development programs is highly competitive, it is critical to assure

that all employees have access to the information they need to build their track
record of leadership and results. It also helps drive leadership development down
through the organization’s hierarchy, creating a true learning organization where
leadership competencies are recognized, developed, and rewarded at all levels.
Once a succession program has been selected, it is critical to monitor its per-
formance, using the selected performance metrics, on an ongoing basis. This close
attention to how the program is progressing enables human capital officers to make
midstream adjustments to implementation. Monitoring should include regular
communication with program participants and with agency leadership. As an ex-
ample, the Veterans Health Administration (VHA) uses its twenty-one divisions
or networks across the United States to regularly oversee and monitor its national
leadership program. The VHA instituted quarterly meetings of the twenty-one
network coordinators to assess the success of individual programs and to discuss
what can be learned on a national, broad-based level. The questions asked at these
meetings are simple: “What can be improved?” and “What can we do differently?”
The regions also run a web-based Annual Planning Evaluation to specify issues,
challenges, or problems—and to document successes. A national deployment
committee compiles the assessments to make program recommendations. Clini-
cal, business, and financial measures are part of the overall process. Based on this
ongoing assessment, regional programs are further refined, continually building
on lessons learned (OPM 2006).
Leading organizations link their leader development programs to organizational
transformation needs as outlined in the SHCM paradigm. Their leadership develop-
ment programs, discussed in the next section related to coaching, deliberately aim
at both horizontal growth and vertical transformation as necessary correlates to
accomplishing SHCM goals, life-long learning, and adaptation to the ever greater
demands of a rapidly changing global society. In this scenario, an individual’s ideal
leadership development plan supports both horizontal learning and the transition
to the next, more complex meaning-making stage in order to fulfill SHCM goals.
Because coaching can be a critical component, particularly related to vertical trans-
formation, it is especially useful in developing change-adept executives.
Leadership Development and Executive Coaching
Most learning, training, and development in an organizational context is geared

toward developing people by teaching them new skills, behaviors, and knowledge
in order to enable them to apply their new competencies to widening circles of
influence (Cook-Greuter 2004). In the words of Cook-Greuter, this “horizontal”
development is “like filling a container to its maximal capacity” (276).
In addition to horizontal development, developing change-adept, transforma-
tional leaders also calls for vertical development—development of inner potential.
Vertical development calls for supporting people to transform their current way of
making sense toward broader perspectives, expanding, deepening, and enriching

a person’s current way of meaning-making (Cook-Greuter 2004). This vertical
development is what Cook-Greuter calls transformations of consciousness (277).
In vertical development, only specific long-term practices, self-reflection, action
inquiry, and dialogue as well as living in the company of others further along on
the developmental path have been shown to be effective (Cook-Greuter 2004).
From a continuous learning perspective, leader development—both horizontal and
vertical development—is viewed as an ongoing process based on the assumption
that no single developmental event, no matter how powerful, is enough to create
lasting change in an individual’s approach to leadership tasks (Van Velsor, Moxley,
and Bunker 2004).
Traditionally coaching was seen as horizontal development—a by-product of
performance appraisal—an activity through which managers work with subordinates
to foster skill development, impart knowledge, and inculcate values and behaviors
that will help subordinates achieve organizational goals and prepare them for more
challenging assignments. Now there is an emerging emphasis on coaching as an
essential skill set for leaders (Whitworth et al. 2007), and the definition of coach-
ing has widened significantly. The expanded view of coaching is about vertical
development—shifting the observer so that the person being coached begins to see
what to do from a different perspective, consistent with what Cook-Greuter (2004,
277) calls meaning-making.
In the coactive coaching model, when an employee is with her coach, she “re-
discovers” the unique person that she is—the natural, effortless, genuine self. Then,
anchored in herself, the leader automatically accesses more creativity, inspiration,
and drive. Most importantly, people are drawn to others who are authentic—
comfortable in their own skin—and people will trust and follow them more; that is,
people want to be led by someone “real.” This is partly a reaction to the turbulent
times we live in. It is also a response to the public’s widespread disenchantment
with politicians and businesspeople (Goffee and Jones 2005, 88):
Authenticity is not the product of pure manipulation. It accurately reflects

aspects of the leader’s inner self, so it can’t be an act. But great leaders seem
to know which personality traits they should reveal to whom and when. They
are like chameleons, capable of adapting to the demands of the situations they
face and the people they lead, yet they do not lose their identities in the process.
Authentic leaders remain focused on where they are going but never lose sight
of where they came from. Highly attuned to their environments, they rely on
an intuition born of formative, sometimes harsh experiences to understand the
expectations and concerns of the people they seek to influence. They retain their
distinctiveness as individuals, yet they know how to win acceptance in strong
corporate and social cultures and how to use elements of those cultures as a basis
for radical change.
The basic underlying assumption of the coactive leadership coaching model is

that leaders who are capable of developing their inner potential automatically create
higher engagement, personal development, and performance for others—the core

qualities of change-adept leaders. Within the leadership coaching model described,
the interactive elements described continually reinforce each other and create a posi-
tive spiral. The coactive coaching relationship challenges the person being coached
to become a master of his own perspectives and mindsets, and of the freedom this
brings to create what one wants. A leader who is a master of his own perspectives and
mindsets challenges the unexamined assumptions and perspectives that limit him from
being creative—and that impedes the creativity of others. The leader also, through
the leadership coaching experience, learns to remain flexible in response to the con-
sequences of actions, continually iterating until the desired results are achieved.
Within this model, the job of a coach is to understand the client’s structure of
interpretation, then in partnership, alter this structure so that the actions that follow
bring about the intended outcome. Coaches do this by providing a new language
that allows the client to make new observations. Flaherty (2005, 9) states:
We cannot find chartreuse unless we have the language for it. We can’t find the
brake pedal in our car unless we have the language of driving. We can’t observe
what we’re feeling if we don’t have the language of emotion. We can’t tell if we
are communicating effectively if we don’t know what to look for.
The second vital element the coach provides is practices that allow the language
introduced to become permanently part of the client’s structure of interpretation.
Flaherty (2005, 10) states:
No one can learn to drive a car simply by learning the language of automobiles
and traffic laws. After learning that language, we must get behind the wheel,
spending many hours practicing driving. It’s only by this continual, focused,
intentional practice that we become competent drivers. Practicing without know-
ing the language may leave us able to drive, but we will be powerless when
breakdowns occur or when we have to coordinate our driving with other people,
say at a crowded urban intersection.
In essence, to connect the importance of language and practice to the products

of coaching, language is what allows the client to be self-correcting and self-
generating, and it is practice that makes it possible for the client to become an
excellent long-term performer.
From the SHCM perspective, self-correction means that the person being
coached can observe when they are performing well and when they are not and will
make any necessary adjustments independently of the coach (Flaherty 2005). Self-
generation means that the person being coached can always improve. Well-coached
people know this and will continually find ways on their own to do so. They will
practice more, or they will watch others perform, or they will learn an activity that
will strengthen them in a new way that improves their competence.
For C-level managers, the odds are that many will need coaching either in their transi-
tion into new positions or to prevent derailment. According to Bacon (2003, 293):
In his study of good-to-great leaders, Jim Collins and his research team identi-
fied only eleven CEOs of the 1,435 companies in their initial sample as Level 5
leaders—the type of leader “who builds enduring greatness through a paradoxical
blend of personal humility and professional will” (p. 29). Few of these, Collins
notes, are recognizable names: “They were seemingly ordinary people quietly
producing extraordinary results” (p. 20). If one accepts Collins’ conclusion that
very few CEOs qualify as Level 5 leaders, then there is a considerable need for
C-level coaching, especially when leaders are promoted to C-level positions or
assume those positions from another organization. In our experience, the first three
months or one hundred days is the most critical, because this is the honeymoon
period, during which new executives need to establish their leadership within the
new organization or in the new position and when people inside the organization
are apt to be most forgiving as new executives learn to “get it right.”
Coaching the C-level executive, particularly someone new to the organization,

means asking a lot of questions throughout the organization about what people
expect from this new leader and interpreting and passing on those expectations.
It means looking for the critical success factors and uncovering critical obstacles
(Bacon 2003). In the context of establishing an SHCM culture, it means helping the
executive assess his/her leadership style to see how it can be an asset or a liability
related to leading organizational transformation.
Best Practices and the Future of Strategic Succession Management
Leading organizations that embrace strategic succession management as part of the

SHCM process have a number of best practices in place. They have:
1. Leadership that is committed to organizational transformation. Risk taking
is inherent to organizational transformation, and requires leaders who are willing
to take those risks—and who encourage others to take risks. Officials responsible
for strategic human capital management must be reassured that innovative ap-
proaches that achieve organizational outcomes will be rewarded, and not discour-
aged. Agency leadership must visibly support the SHCM agenda of organizational
effectiveness.
2. Human capital officials who have the capacity to engage in the strategic
conversation with agency leadership. Human capital officials must have a seat
at the table when strategic discussions take place. In the federal sector, the Chief
Human Capital Officers Act made great strides in assuring that human capital is
part of the agency’s overall strategic planning. Drilling this strategic capacity down
throughout agencies’ human resource operations is critical to assure that human
capital officials are working collaboratively with line managers to incorporate HR
into their strategic thinking and decision making.
3. Human capital officials who have the capacity to use data for predicting
organizational need and measuring the results of human capital programs. Trans-
forming human capital professionals from transaction processors to analysts and
strategic thinkers is critical for supporting agency leadership in making informed
decisions that position the organization for the future. Talent, time, and resources
must be dedicated to human capital data systems, analysis, and planning.
4. Workforce development funds dedicated to the program requirements of strate-
gic succession management. In periods of scarce public resources, human resource
and workforce development funds are often the first to be cut. The key for effective
SHCM is to assure that budgetary decision makers understand the effect that amply
resourced human capital operations can and do have on the agency mission.
5. Human capital officials who know how and why to evaluate SHCM strate-
gies. The evaluation of SHCM strategies should ask the simple question: Did the
program accomplish its stated organizational objectives? If not, why not? Two
key principles should guide program evaluation. First, a range of data should be
gathered and analyzed rigorously as a way to identify program areas that need im-
provement. Not only should qualitative data from program participants be obtained,
but this information must be matched up against quantitative workforce data. As
an example, the Social Security Administration (SSA) made improvements to its
recruiting system and expanded its leadership development programs in response
to findings from its Retirement Wave Analysis. This analysis combined retirement
projections (based on time-in-service disaggregated by occupation) with focus
groups of recent SSA retirees to determine what issues affected an employee’s
decision to retire. By specifying more clearly how organizational factors affected
retirement decisions, SSA was able to adjust a number of the specific initiatives
within its succession management strategy. These included training managers
on behavior-based interviewing and developing a competency-based structured
interview process; increasing hiring to over 3,300 per year; and expanding the
leadership development program (OPM 2006).
Program evaluators must be open to concluding that the program chosen
was not effective for achieving the organization’s goals or that implementation
choices rendered the program ineffective. To counteract a possible desire to pro-
tect a specific program from close scrutiny, agencies should consider procuring
independent evaluations by third-party organizations, and using transparent and
rigorous criteria that focus on organizational impact. Only through the transparent
evaluation of succession management programs can agency leaders and human
capital officers make effective decisions for future planning. Obtaining the par-
ticipants’ input is key to an effective evaluation and to demonstrating that agency
leaders are committed to incorporating employees’ input into the organization’s
transformation actions.
But all of the above is not enough if an organization’s culture does not emphasize
the value that leadership development is self-development (Kouzes and Posner
2002). Warren Bennis called the “management of self” (knowing your skills and
deploying them effectively) a leadership commandment. “Management of self is
critical,” he says, because “without it, leaders and managers can do more harm
than good.” In addition, the leader’s (self) voyage of development is not an easy
one. In the words of Rooke and Torbet (2005, 76):
Some people change little in their lifetimes; some change substantially. Despite
the undeniably crucial role of genetics, human nature is not fixed. Those who
are willing to work at developing themselves and becoming more self-aware can
almost certainly evolve over time into truly transformational leaders.
Additionally, for those who are willing to work at developing themselves, we

believe that the importance of coaching to engender authentic leadership, within
the context of SHCM, will continue to grow as organizational structures get flatter
and the necessity for continual learning and change-adept leadership is recognized.
Some of our best institutions, from corporations to change agencies to schools,
are learning that there is another way of doing business, a way that is consensual,
cooperative, and communal: they are fulfilling a different prophecy and creating
a different reality (Palmer 2000).
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10
Four New Models of Networked
Leadership Development
Kitty Wooley
In 2003, four unrelated groups of federal employees (Feds) in Washington, D.C.,

began investing substantial amounts of personal time into generating solutions to
two problems with which human capital practitioners everywhere are familiar:
• inadequate or ill-fitting support for inexperienced new hires, leading to feel-

ings of isolation, and
• a disconnect between leadership training and succession planning, fueling
employee disappointment and disengagement.
Either outcome makes it difficult for an agency to realize the intended return on
investment. On that basis alone, the emerging solutions that follow are worthy of
study. This chapter reports on new networks that have been generated by employees
of several federal agencies—networks with the potential to turn these problems into
solutions. Here, four such networks are labeled networked groups, because neither
network nor group fully captures the potential of what is happening.
I have functioned as initiator, advisor, or observer in all four networked groups.
All involve continuing inputs of discretionary energy by Feds for work-related
purposes, have strategic development of the individual as an underlying theme,
and constitute de facto leadership development. Three are interagency; all are
multisector to a degree. Each has something unique to contribute to the human
capital dialogue. To the extent that federal agency decision makers can embrace the
mindsets associated with this activity, they can leverage them to increase employee
ease and engagement, attract collaboration across dissimilar agency components,
and equip bureaucracies to handle more complex problems. Better public service
can result.
Why Do Networked Groups Matter?
Networked groups matter because they can do things traditional hierarchies can’t.
The governmental response to Hurricane Katrina, taken as a whole, should inspire
a sense of urgency: another huge natural disaster, or similarly complex, nonroutine
131
132 Kitty Wooley
event, will happen again. A credible response presupposes agile, well-coordinated,

competent action by federal agencies, the private sector, religious institutions, civic
organizations, and state and local government. (See chapter 6 on Katrina and the
federal surge workforce.) Don Kettl of the University of Pennsylvania anticipates
some challenges that will accompany the development of innovative human capi-
tal solutions (Kettl 2006). One challenging circumstance occurs when those who
possess key information work at the bottom of the hierarchy. As more new hires
enter the federal workforce, this will increasingly be the case.
Agency first-line supervisors and middle managers, who are doing more with less
and who may feel that they are fighting fires all the time, are understandably less
concerned about rethinking organizational structure than about meeting deadlines
that impact today’s bottom line. A manager here and there may be conscious that
an employee has begun requesting conference rooms for after-work meetings with
other Feds, but as long as the requests do not interfere with the organization’s abil-
ity to function, that’s the end of it. As yet, there is surprisingly little recognition,
anywhere in the community, that something new and potentially very helpful has
emerged. The good news is that the dynamics of the networked groups can exist
within agencies without reorganization or funding, as long as some flexibility exists
and boundaries are somewhat permeable. The behaviors can coexist comfortably
with strong internal controls, although not with micromanagement. The real con-
trol, though, derives from a participant’s public service orientation and alignment
with agency mission—something that the human capital community’s emphasis
on “line of sight” has begun to address.
The Ability to Generate the Right Relationships Is an Asset
Government thinking about human networks has not moved far beyond the chal-
lenges associated with controlling them. A radical exception is the establishment
of Intellipedia, a breathtaking development in which a conscious tradeoff of some
control for improvements in analytic speed and integration is under way (Walker
2007). The wiki accompanies a cultural shift across the intelligence community,
from need to know to responsibility to provide. Mike McConnell, Director of
National Intelligence (DNI), who explained the necessity of this shift in an April
4th plenary session of Government Executive magazine’s 2007 Excellence in
Government conference, indicated that the best intelligence depends on analysts’
reaching across entrenched silos and empowering counterparts. At the beginning
of a task, all parties may be total strangers. Some participants may be much less
seasoned. Neither factor can be allowed to stand in the way of collaboration aimed
at producing the best possible intelligence.
Networked groups described below also reach across silos and empower coun-
terparts, for reasons that should interest agency executives. Connecting relation-
ships signify access to talent, experience, and efficacy beyond an organization’s
boundaries. Once connected, self-starting participants’ behaviors represent an
Four New Models of Networked Leadership Development 133
opportunity to increase employee engagement, retention, and even recruitment, if

agency senior leaders are able to expand their mental models enough to embrace
the behaviors the way DNI has begun embracing Web 2.0 culture. Challenging?
Absolutely. But, as the intelligence community is demonstrating, a “both/and”
solution can catalyze energy and creativity. The good news is that numerous young
and middle-aged Feds are using their leisure time to set themselves tasks, master
new skills, and link up with like-minded people in a manner that prefigures new
capacity in government.
But Organizational Networks Are Nothing New, Are They?
Twenty-five years ago, John Naisbitt’s Megatrends (1988) asserted that a shift from
hierarchies to networks was occurring in response to the failure of hierarchies to
support solutions to big problems. He observed that most hierarchies were unable to
connect employees laterally, independent of their locations within the organization.
Technology companies were seen as pioneering a shift in this area. While not every
prediction (“smashing the pyramid”) has come true, the networked groups described
below harken back to two phenomena Naisbitt described: the egalitarian aspect of
the horizontal link, and the fact that rewards can result from empowering others.
And each networked group connects across organizations in different ways.
Those phenomena do not harmonize immediately with bureaucratic sensibilities,
one reason why the full potential of the networked groups may not have hit the
human capital radar, despite the fact that each has fairly broad reach. The largest
has appeared in print and radio (e.g., Azaroff 2006; Hardy 2006; “FEDTalk” 2006)
and has received invitations to partner from all sides. What has not emerged is a
nuanced understanding of the reasons such networked groups exist or the true
solution potential that they embody. Not everything about them is remarkable; for
instance, it is still the norm that a small subset of members tends to do most of the
work. But, in every networked group, one encounters hugely committed Feds who
are building capacity for government on their personal time, who are hoping to be
enlisted on the job for purposes that are worthy of their capabilities.
The Networked Groups
Young Government Leaders (YGL)
Megan Quinn of the Environmental Protection Agency (EPA) and Steve Ressler of
the Department of Homeland Security (DHS) began hosting happy hours in 2003
out of a sense that there were not enough ways for young Feds to connect, inside or
across agencies. Gatherings over the next two years consisted of a steadily growing
group that convened at locations near downtown Washington, D.C. In 2005, the
group co-hosted a happy hour with Labor’s Effective Advocates for Development
(LEAD), a young Fed group at the Department of Labor. In the same year, a website
134 Kitty Wooley
(www.youngovernmentleaders.org) was launched, committees were established,

and the first of a series of YGL articles appeared in the Public Manager. The found-
ers, who had been invited by several organizations to participate on panels about
recruiting and retaining young Feds, were careful to delegate opportunities to other
YGL members. This generous and strategic decision freed the founders to pursue
additional marketing activity in order to build name recognition that would attract
members and invitations to participate in government human capital conversations.
Simultaneously, a group of young Feds began meeting in Atlanta and requested
YGL chapter status, the first of several non-Washington-based Feds to do so (see
Figure 10.1 on pages 136–137).
In March 2005, the founders attended an Evening of Excellence hosted by the
Council for Excellence in Government. The program was designed to honor a
State Department employee, Susie Baker, who had won a Senior Fellows Award
for her contribution to the growth of YPro (see below). Susie chose to invite a
panel of interesting young Feds, who talked about intergenerational leadership
with a room full of senior employees from across government. Steve Ressler and
other young Feds lined the walls. There was a palpable tension in the room until
one of the panelists answered a senior manager’s loaded question in a beautifully
nuanced way—at which point everyone in the room relaxed and the dialogue
caught fire. Three of the four networked groups described here were in the room
that night, a stimulus for further YGL expansion to acquire a senior advisor and
set up a Yahoo! Group that still supports the executive team. Since then, YGL
has partnered numerous times with the Council for Excellence in Government,
the National Academy of Public Administration, other good government orga-
nizations, and Office of Personnel Management (OPM) conference planners in
recruiting and retention discussions. YGL members now serve on a Council for
Excellence in Government advisory board and the board of editors of the Public
Manager.
As of June 2007, more than 1,000 young Feds from most civilian and military
agencies had registered at the YGL website. By then, after-work programming had
expanded beyond panel discussions to include a joint happy hour with Young AF-
CEA (a spin-off of the Armed Forces Communications and Electronics Association,
which tailors professional networking events to younger IT contractor employees),
a financial education seminar, and an interactive session on self-mentoring, with a
self-employed educator and business writer, that was attended by nearly seventy-
five young Feds. The year before, YGL developed formal strategic planning and
considered ways to develop financial support (as well as the things such support
would allow YGL to do) as Megan Quinn headed off to graduate school. This was
done under the leadership of two committed Government Accountability Office
(GAO) analysts, Adrienne Spahr and Katherine Walker, following the development
of bylaws and an election process. Active YGL members were elected to fill public
relations, communications, strategic planning, social networking, and membership
committees, as Walker chaired professional development. experience in a particu-
lar discipline, such as public relations, was not a prerequisite for that committee’s
chairmanship, although prior service on a committee was.
This illustrates a YGL way of life that is rare in civilian government: cross-training.
One of the reasons this group has expanded so much is that it gives young Feds a
way out of the boxes to which they’ve been assigned within their agencies. The
executive team, committee members, and ad hoc volunteers acquire advanced skills
or knowledge as they realize that they need them and will be able to use them right
away. For instance, YGL leaders learned how to vet incoming partnering proposals
from for-profit organizations in 2006 to ensure that federal ethics rules would not be
violated, and returned a new member’s proposal in 2007 accompanied by a concern
about Hatch Act compliance. People with a variety of job classifications learn how to
plan events, write press releases, get restaurant space for happy hours, book confer-
ence rooms at other agencies, and anticipate unintended consequences. Members are
gaining experience and savvy at an accelerated rate, as they benefit from the cross-
fertilization of ideas that occurs when different agency cultures come in contact.
U.S. Department of State Young Professionals Society (YPro)
YPro and YGL members take responsibility for their own development in many
of the same ways, although the former was designed specifically to foster relation-
ships and career development among young State Department foreign service and
civil service professionals and has a formal membership process. As an employee
organization formally recognized by the State Department, it collects membership
dues from over 500 members and accounts for expenditures. It was established by
Elizabeth Ash and Stephanie Hallett in September 2003, following an open house
that they organized to confirm sufficient interest. Ash and Hallett, new hires at the
State Department the year before, met on Take Your Child to Work Day and dis-
covered that they had one big thing in common: they felt isolated from most other
employees because they were considerably younger. In addition, Ash had not had
the benefit of new employee orientation, because she began work as a contractor.
Hallett (the sole HR practitioner among the founders, who is now overseas) and
Ash decided to explore how to create a State Department affinity group in order
to gather other young employees. After they wrote bylaws, recruited an advisory
board, and received approval from a sponsoring organization, Hallett and Ash
kicked off the new professional and social networking group. Committees include:
professional networking, overseas outreach, mentoring, social networking, admin-
istration, membership and recruitment, and marketing.
Although YPro limits membership to State Department and U.S. Agency for
International Development employees, it has partnered with organizations as dif-
ferent as the CIA young professionals group, Miriam’s Kitchen, and the World
Bank. With their counterparts in the other affinity groups, YPro chairs serve on the
Diversity Advisory Council convened by the Office of Civil Rights, YPro’s sponsor.
YPro members are regular participants in new employee orientation sessions. A
136 Kitty Wooley
Figure 10.1 YGL Perspective on Recruitment and Retention of Young

Professionals
CHALLENGES IN RECRUITING TOP TALENT

TO FED CAREERS
• Many young professionals choose jobs in the private sector because it takes too
long to hear back from federal positions they applied to
• Many young professionals don’t know the benefits of public service or the types
of challenging and rewarding careers offered
Some Possible Solutions to Attract Young Professionals:

• Market the benefits of public service and develop performance systems that offer
incentives
• Emphasize that government careers can be challenging and rewarding (they
provide an opportunity to serve the country and fulfill personal interests)
• Offer student loan reimbursement
• Design true “pay for performance systems” (e.g., bonuses tied to
performance)
Strategies for More Effective Recruiting:

1. Develop a hiring process that is quicker, clearer, and less burdensome
• OPM should take the lead in streamlining the online application process,
incorporating electronic responses to and updates to applicants, and a better
communication mechanism between USA jobs and agencies
2. Take advantage of career fairs held at universities, colleges, and other venues
• Deliver on-campus presentations that are equivalent in quality to those delivered
by private sector companies
• Establish relationships with career centers to help spread the word (especially
for lesser-known agencies)
• Put on more job fairs and more vigorously publicize them
• Emphasize opportunities, benefits, perks, and other advantages of federal
employment and clearly explain the government hiring and promotion
process
• Utilize young feds groups, like YGL, to participate in recruitment fairs for specific
agencies or for the federal government in general (through OPM or Partnership
for Public Service “Call to Serve”)
3. Offer internships or similar short-term programs
• Design innovative internship or short-term employment that get young
professionals in the door quickly and allow both the agency and young Fed to
determine if there is a match for the long-term (e.g., offer conversion to full-time
at the end of a successful intern program)
• Create more professional development programs, like the Presidential
Management Fellows Program
• Develop more internship and training programs that are geared for under-
grads
• Establish grad/post-grad internship/scholarship/training programs with less
strict eligibility requirements (i.e., programs that aren’t available only for GS
14/15 candidates or for individuals with 4–5 years’ experience)
4. Take proactive steps to bridge the gap left by retiring feds

• Work with upper management and Human Resources to accelerate recruitment
and hiring practices
• Utilize internet job-search resources, including USA Jobs, monster.com, “Best
Places to Work,” and so forth.
• Encourage positive word of mouth—especially from Young Feds’ friends who are
federal employees themselves
CHALLENGES FACING FEDERAL GOVERNMENT IN RETAINING TOP TALENT
• Private sector jobs are booming, providing ample choices and often higher pay for
types of jobs similar to those offered in government
• Gen X, Y, and Z are less interested in job security, more interested in challenging,
fulfilling careers
Some Possible Solutions to Retain Top Talent in Government:
1. Continued development opportunities

• A balance between work responsibilities and career development activities
• The opportunity to try different assignments in house or outside the agency, which
may benefit the entire agency
• Encouragement and approved leave to attend lectures, conferences, and so on,
to gain knowledge and new skill sets that benefit the organization
• Provide training opportunities or detail assignments (IT Exchange Program and
the Voyagers Program)
2. Promote uniquely challenging environment with direct application and effect on the
nation, including
• A culture that supports the office’s mission and strategic plan (or the opportunity
to work on developing the same for the office)
• Opportunities to move into leadership positions as rewards for good work
• Travel opportunities
• A sense of being appreciated or recognized
• An opportunity for employees to see how their work “makes a difference” and how
it fits into the larger government picture
• The chance to work with others who share their passions and work ethic
• Opportunities to network with other future leaders in their work
3. Ability to influence policy decisions and design high-quality programs on the ground
4. Support from and open communication with supervisor and peers
• Clear and frequent communication of expectations, goals, individual development
plans (with goals, milestones, and benchmarks), as well as clear and frequent
feedback on job performance and progress
• Motivation and inspiration for the ultimate attainment of SES/GS14–15 positions
• Advice or, if possible, mentoring
• Positive incentives instead of negative incentives to stay in the same office
• An environment of mutual respect, given experience levels; this is especially
important in offices where an age gap exists
• Encouragement to attend non-work-related functions such as retirement
celebrations, office parties, and so forth, in order to enhance new employees’
familiarity with the rest of the office’s staff
Note: Drafted by YGL leadership in 2006.

138 Kitty Wooley
rich variety of offerings occur at various times of the day and week. Sample event
titles, as reported in the group’s 2004–2005 annual report, follow:
• Unwritten Rules of the State Department with Mac Saddoris

• Meet Paul Foldi from the Senate Foreign Relations Committee
• Happy Hour with World Affairs Council
• USA–Panama World Cup Qualifier
• Evening of Diplomatic Networking at Meridian International Center
• Professional Reading Group led by Donald Jacobson
YPro, like YGL, sends out a weekly e-mail event listing to members and sup-
portive others. Some participants in the other three networked groups keep tabs on
YPro’s ever-changing offering. This innovative program, including the practices
of its co-founders, may represent a turnkey solution for some agencies that are
challenged in supporting new hires.
Conversations About Leading (CAL)
Conversations About Leading (CAL) was begun by Jackye Zimmermann, a former

university French instructor and fine arts aficionado who manages the Editorial
Policy, Publications, and Printing group at the Department of Education (ED).
CAL began in April 2003, following the September graduation of two dozen ED
employees from the Council for Excellence in Government’s Fellows Program. The
idea, incubated as Zimmermann experimented with happy hours as a way to see the
other program participants again, was for the group to stay together and find ways
to deliver a return on investment to the agency. The author and two graduates from
previous years formed a steering committee that has operated continuously since
then. In September 2004, Zimmermann received an Honorable Mention through
the Council for Excellence in Government’s Senior Fellows Award Program in
recognition of the idea’s promising potential.
About 350 people receive invitations to CAL’s events, including current and for-
mer fellows, prior speakers, Presidential Management Fellows, and other interested
employees and guests. Anyone who expresses interest is added to the mailing list.
Decisions are made by e-mail; in-person meetings are held to a minimum because
the planners work in widely dispersed buildings in Washington. The monthly
brown-bag sessions are conducted in centrally located buildings. Attendance ranges
from fifteen to thirty people. Although the original aim—to keep the senior fellow
cohort together—was never realized, a broad variety of young and middle-aged
Feds, individual contributors, and managers finds value in the sessions and has
continued to come together in dialogue. Regular visitors come from Department
of Health and Human Services (HHS) and Treasury, and two prior guest leaders
(retired Feds, who deliver process communication training to National Aeronautics
and Space Administration employees and teachers nationwide) come from Mary-
land when they are not traveling. Each August, a two-hour retreat is held in lieu of
programming. The retreat is attended by past participants and interested visitors,
whose input helps shape the slate of guest leaders for the next eleven months.
Visiting leaders speak pro bono, as there is no budget for travel or honoraria. In
its one expenditure per year, the steering committee uses personal funds to donate
dessert and drinks for the retreat. Overall, the arrangement is light and fast enough
to be sustained month after month under all workload conditions.
The first guest leader was Thomas P. Skelly, director of ED’s Budget Service
since 1997 and holder of three Presidential Rank Awards. Over time, the group
has looked outward for others who lead by example and who are willing to engage
with the group. For example, in June 2007, Conversations About Leading hosted
Don Jacobson, director of the Consular Training Division at the Foreign Service
Institute, Department of State. Don, a YPro mentor who invests his discretionary
time to improve government, is known for developing a website, www.govleaders.
org that aggregates leadership development content from many sources. Perhaps
the high point in CAL’s history was a visit from Christian McBride, the jazz bassist
from Philadelphia who has performed with many jazz greats and is now co-director
of the National Jazz Museum in Harlem. His presence and perspective on leader-
ship delighted participants, who spent 90 minutes considering how it is that a jazz
band can work, given its complex and improvisational nature.
At one point, a leading-from-the-middle theme was sustained for several months,
to model the steering committee’s belief that true leadership is primarily about
behavior, not position. This concept of leadership is seen by the committee as a
key enabler of an employee’s assumption of responsibility, feelings of efficacy, and
engagement in mission. If leadership can be about behavior, then everyone has the
potential to become a leader. However, if leadership is only about position, then it
follows that employees whose names are not found on the organization chart are
not leaders and are unlikely ever to become leaders—and thus are not responsible
to exercise leadership in their sphere. Two completely different story lines follow
from these beliefs, with vastly different consequences for the organization.
Senior Fellows and Friends (SFF)
Senior Fellows and Friends grew somewhat accidentally out of a dinner en-
gagement in July 2003, following a conversation between the author and Jim
Trinka, now at the Federal Aviation Administration, about his research on the
unique, vital strengths of Internal Revenue Service (IRS) middle managers and
how that focus was helping them improve agency performance. Other senior
fellows, including a DHS leadership coach who helped set up the dinner, and
acquaintances who were focused on improving government were invited to at-
tend. Ten people subsequently met in an Arlington restaurant, looked at Trinka’s
data and accomplishments, and engaged in a spirited dialogue with him. After
a few weeks, some of the participants inquired about the next dinner. This pre-
140 Kitty Wooley
sented the author with a choice that aligned with a business goal (do something
to generate a return on investment for her agency after having been sent through
a high-quality leadership training program the year before) and a personal goal
(invent a sandbox in which Feds and others who wanted to improve government
could have ideas, escape the limitations of their employers’ outdated assessments
of them, and egg each other on to develop ways to create personal updrafts that
could lead to improved mission delivery).
The original 10 have grown to about 375 people from government, local cor-
porations and nonprofits, universities, and good government organizations. Their
rank, which is not on display during the evening, ranges from senior executive to
young Fed, with an occasional intern, although most participants tend to be mid-
level. Attendance ranges from one to three dozen, although the average is about
two dozen. The emphasis is on the practice of friendly collegiality and construc-
tive conversation that can open mental or physical doors for participants. Events,
mostly dinners, originally were held about four times per year but now occur more
frequently. They are offered at the founder’s cost, prepaid or on an honor system,
depending on the extent to which restaurants with dedicated meeting spaces and
decent food require prepayment. That setup has been found to remind participants
that they are responsible for their performance, whatever the task (in this case,
RSVP’ing, showing up, ensuring that the author recoups costs and the wait staff
is adequately tipped, and so on). In four years, all participants have risen to these
high expectations, and that enables SFF to continue.
As with all the other groups, guest speakers are invited to appear pro bono,
and they do. The opportunity to talk about one’s work with a group of Feds and
colleagues from other sectors is appealing to many. The speaker lineup has varied
widely, including such guests as Roz Kleeman, an extraordinarily accomplished
former Fed now at George Washington University; Mike Frenz, who handled real
estate transactions for the 2002 Winter Olympics and is now a vice president at
Ginnie Mae; Brian Friel, a National Journal columnist who writes “Management
Matters” for Government Executive; Chris Mihm, managing director of Strategic
Issues at GAO (who also is looking at the intersection of bureaucracy and network);
and many other talented, constructive individuals who are making a difference.
Participants have found creative ways to leverage new relationships with speak-
ers, as in the case when a senior State Department employee connected a visiting
Russian with Mike Frenz to discuss Ginnie Mae business practices a few weeks
after Mike’s appearance.
A sentence in the Wall Street Journal’s June 8, 2007, review of “Ocean’s
Thirteen” provides an apt comparison: “The director, Steven Soderbergh, and
his large, cheerful cast have managed to make the least possible movie that
still resembles a movie [italics added], as opposed to ‘Ocean’s Twelve,’ which
resembled nothing more than a ramble through European scenery” (Morgen-
stern 2007, W2). This describes SFF. It is the least possible structure that can
enable a rolling conversation about government and leadership, to which some
of the same people return again and again. Active membership revolves slowly
as people take jobs in other cities, develop other interests in retirement, or get
too busy at the office. Once, a project management leader who presides over
monthly chapter dinners in Maryland was astounded by the fact that so many
people who could not come RSVP’d “No” at Evite.com—and then proceeded
to explain why not. He thought that this behavior (routine for SFF) signified a
high level of interest.
Perhaps such interest springs from the fact that there is almost no focus in the hu-
man capital community on activating the untapped potential of long-time employees.
This seems odd because many baby boomers will not retire within the next three
years. It is as though OPM and agency heads do not believe that people continue
to learn and grow in middle age. If that is true, then they overlook one piece of the
solution to the retirement tsunami. In late 2006, Harvard professor Steve Kelman
devoted an entire column to the damage done by supervisors who do not believe that
people can change (Kelman 2006). Most agencies do not excel at talent management
yet, and perhaps the lack of belief in people’s ability to change is one reason why. It
would benefit human capital practitioners to pay attention to specific management
practices at various levels that either foster or destroy employee capacity-building,
and then develop compelling stories that can be used to teach agency leaders how
to mitigate the impact of supervisory underestimation of employee capability on
talent management.
Recommendations for Agency Leaders
Each networked group described above has characteristics that can prompt new
thinking and practical action by agency leaders. Two of many possible paths are
outlined below.
Make More Room for High Performers
This recommendation would require substantial commitment and courage from all
parties and would have corresponding transformative potential.
Host a discussion with the YGL executive team at the agency and encourage
inexperienced new hires to become active YGL participants. Commit to an ongo-
ing relationship with the latter, build rapport, and have periodic discussions about
what they are learning, how they think it can be applied within the agency, and
what they think are barriers to such application. Follow the barrier discussion as
far as it goes. If, at some point, a need for dialogue about generational differences
comes up, have a facilitated dialogue. Keep it professional and follow it as far as it
goes. Everyone learns; everyone has to give a little. Executives and managers hear
things they may not want to hear, but their understanding grows and they come
to respect their workforce. Employees of all ages hear things they may not want
to hear, but they get more savvy about how government works and thus come to
respect agency leadership. Develop incremental solutions, not grand plans, that
142 Kitty Wooley
support the mission and encourage self-starters to take more responsibility. Coach
and support supervisors as they make adjustments. Move self-starters away from
supervisors who cannot adjust.
Establish an Informal Leadership Development Mechanism
This recommendation is intended to complement formal agency leadership pro-

grams, not replace them. It arises from the knowledge that the selection process
for any such program is imperfect, and people are missed—or, they “turn on”
when it’s “too late.”
Agency human capital executives could put out a call for collegial employees
who have demonstrated an ability to work across boundaries and with many
different people, charter a workgroup, and task it with the development of a
recommendation for the establishment of an agency-based networked group
within a specific timeframe. Rather than handpicking representatives from each
component, the networked group way would be to follow the energy, letting
employees self-select. If they have the abilities described above, they will reach
into every component on their own initiative. The workgroup could be instructed
to travel to the departments of State and Education in order to gather informa-
tion from YPro and CAL leaders, returning to the agency to work through it
and brainstorm formats, programming, and all other aspects including group
leadership during facilitated sessions. Programming content, and the extent
to which a new group would be structured, would vary by agency culture and
business challenges. A discussion of draft recommendations and questions with
executive sponsors would allow the parties to arrive at mutually acceptable
solutions. After getting necessary buy-in at the chief executive officer (CXO)
and program executive level and ensuring that the new leaders understood
agency expectations and how to handle logistics, the executive sponsors would
then mobilize internal communications to support publicity drafted by the new
leaders. All employees should be encouraged to attend as they choose, and su-
pervisors should be encouraged to enable their attendance. Executive sponsors
would be well advised to form a permanent bond with group leaders and meet
periodically, establishing a pipeline that connects employees with the chief hu-
man capital officer (CHCO) and provides the agency with another mechanism
for implementing CHCO Council best practices as it invites employees to ac-
celerate their own growth.
Conclusion
To focus on numbers or any other single characteristic of a networked group is

to miss the point, which is that both newer and seasoned Feds are using their
own time in very positive ways to develop abilities that accomplish results and
add value in the workplace. To the extent that CHCOs and other CXOs are able
to see and respect such efforts, this presents them with an opportunity. People
will see what their filters let them see. From one angle, any of the above could
be seen as groups of people who are merely playing at leadership. But look
at the outputs and preliminary outcomes that have been achieved primarily
on employees’ discretionary time: don’t they speak to many current needs in
government?
References
Azaroff, Rachel. 2006. “Hire me already!” Federal Computer Week, October 9. Available
at www.fcw.com/article96316–10–09–06-Print (accessed 10/122/07).
“FEDtalk: Young Federal Workers.” 2006. February 17. Available at www.federalnewsradio.
com/index.php?hlpage=5&nid=35&sid=712178 (accessed 10/22/07).
Hardy, Michael. 2006. “Megan Quinn and Steve Ressler: Accidental organizers.” Federal
Computer Week, October 9. Available at http://test.fcw.com/article96352–10–09–06-Print
(accessed 10/22/07).
Kelman, Steve. 2006. “A learning-Oriented workplace produces more positive achieve-
ments but also more mistakes.” Federal Computer Week, December 18. Available at
www.fcw.com/article97093–12–18–06-Print (accessed 10/22/07).
Kettl, Donald F. 2006. The Next Government of the United States: Challenges for Per-
formance in the 21st Century. Washington, DC: The IBM Center for the Business of
Government.
Morgenstern, Joe. 2007. “Film Review.” Wall Street Journal, W2, June 8.
Walker, Richard W. 2007. “Government Taps the Power of Us.” Federal Computer Week, May
21. Available at www.fcw.com/article102750–05–21–07-Print (accessed 10/22/07).
Part 4
Innovation in Action
11
A New Look at Paybanding and Pay
for Performance
The Views of Those Participating in Federal
Demonstration Projects
James R. Thompson and Rob Seidner
In recent years, federal agencies have evidenced a great deal of interest in payband-
ing—a system that places civil servants in a few broad bands that relate to pay for
performance, rather than a system that promotes people through a number of steps
based on longevity and seniority. Since the first payband system was implemented at
a naval research facility in China Lake, California, in 1980, twenty-three additional
such systems have been developed (Thompson 2007). Once implementation of the
National Security Personnel System at the Department of Defense is complete,
approximately 900,000 federal employees will be paybanded.
The popularity of paybanding is largely attributable to flaws with the General
Schedule (GS), the predominant compensation and classification system in the
federal government. Concerns with the GS include that (1) little consideration is
given employee performance in the pay-setting process, (2) classification proce-
dures place too much authority in the hands of classifiers and too little in the hands
of line managers, (3) too many resources are expended identifying and enforcing
relatively small distinctions between levels of positions. Paybanding, in contrast,
makes it easier to adjust pay according to performance, allows managers a major
role in the classification process, and obviates the need to make fine distinctions
between positions.
Agencies have used a variety of authorities to gain exemption from the GS and to
implement paybanding. A number have sought and received designation as personnel
demonstration projects pursuant to the provisions of the Civil Service Reform Act
of 1978. Under that law, agencies can request that certain provisions of the act be
waived for purposes of testing alternative human resource management approaches.
As a result of a requirement that demonstration projects be rigorously evaluated, a
significant quantity of data has been compiled on the outcomes of these projects. In
this chapter we review that data to assess paybanding as a human resource manage-
ment (HRM) innovation. We are interested in (1) whether payband systems have met
147
148 James R. Thompson and Rob Seidner
their stated objectives, (2) what can be learned more generally about payband systems
as a result of the experiences of these agencies, and (3) whether, on the basis of these
experiences, paybanding should be extended to other agencies.
History of Paybanding in the Federal Government
Paybanding as a HRM innovation was first implemented in 1980 at the Naval

Air Warfare Center Weapons Division in China Lake, California.1 China Lake is
a research and development laboratory having a high proportion of scientists and
engineers. The facility was undergoing a reorganization at the time; with payband-
ing, fewer positions would have to be reclassified. Other advantages of paybanding
from the perspective of facility management were that it allows (1) management
to offer higher salaries to new hires than is generally possible under the GS and
thereby offers recruitment advantages, and (2) line managers have more authority
over pay and classification matters. Under the GS, classification experts decide
the grade to which a position is assigned. With paybanding, there is less need to
make fine distinctions between positions, so the classification function can there-
fore generally be handled by line managers. These managers, in turn, can be held
accountable for the performance of their units.
Subsequent to China Lake, a series of other agencies have implemented payband
systems pursuant to personnel demonstration project authorities (see Table 11.1).
The National Institute for Standards and Technology (NIST) initiated a paybanding
demonstration project in 1988. That project was extended indefinitely by Congress
in 1996. Pursuant to the National Defense Authorization Act of 1995, demonstration
project authority was delegated to a group of research and development laboratories
in the Department of Defense. Eight separate personnel systems, each covering a
single laboratory, were set up pursuant to this authority starting in 1997. In 1998,
acquisition employees at the Department of Defense were included in a demonstra-
tion project. Although the project does not officially end until 2012, acquisition
employees will gradually be transitioned to the National Security Personnel System
and will be covered by the paybanding provisions of NSPS. The Department of
Commerce initiated a demonstration project for several units in 1998 as well. The
majority of participants in the project are from the National Oceanographic and
Atmospheric Administration. That project is due to expire in 2008.
Pursuant to the provisions of Civil Service Reform Act (CSRA), all the personnel
demonstration projects have been subject to formal evaluations by outside entities.
The Office of Personnel Management (OPM) has performed the evaluations for
some of the projects, and in other instances, the agencies have retained private
contractors. The data cited here draw from those evaluations. For purposes of the
evaluations, comparisons were made between the results for the demonstration
projects and for control or comparison groups. Although the various evaluations
have some survey questions in common, there is some variation in method and
format, so the data are therefore not comparable in all instances.
Table 11.1
Paybanding Demonstration Projects in the Federal Government
Date Imple- Department No. of Employees Evaluation Reports

mented or Agency Units/Groups Units Paybanded Paybanded Available
1980 Defense Navy Space Warfare Systems Command, San Years 1–14
Diego and Naval Air Warfare Center
Weapons Division, China Lake, CA 8,000
1988 Commerce National Institute of Stan Years 1–5
dards and Technology 3,000
1996 Defense Acquisition Employees 6,500 Year 3
1997 Defense Air Force Research Laboratory 2,400 Year 5
1997 Defense Army Aviation and Missile Research Year 5
Development and Engineering Center 1,200
1998 Commerce Technology Administration 6 Years 1–7
Economics and Statistics
Administration 508
National Oceanic
and Atmospheric
Administration 6,377
National Telecommuni
cations and Information
Administration 76
Office of the Secretary 360
1998 Defense Naval Sea Systems Command Warfare Year 4
Centers 21,000
1998 Defense Army Engineer Research and Year 4
Development Center 1,600
1998 Defense Army Medical Research and Material Year 4
Command 1,100
A New Look at Paybanding and Pay for Performance
1998 Defense Army Research Laboratory 1,900 Year 4

1999 Defense Naval Research Laboratory 2,800 Year 3
149
2001 Defense Army RDECOM Communications—

Electronics Research, Development
and Engineering Center 2,000
Paybanding Project Objectives and Measures
Table 11.2 lists the stated objectives of the five demonstration projects reviewed
in this study and also identifies those objectives toward which the paybanding
intervention is targeted. One such objective is to improve the quality of new hires.
One criticism of the GS is that with few exceptions, the salaries of new hires must
be set at step 1 of the grade to which their position is assigned. A concern is that
this puts agencies at a disadvantage when competing with outside organizations
for talent. In most payband systems, starting salaries can be set anywhere within
the band to which the position is assigned, thus allowing the hiring official flex-
ibility in offering a salary above the minimum. At the Department of Commerce,
for example, the width of the entry-level band for scientists and engineers is the
equivalent of six GS grades, giving appointing officials significant discretion in
setting starting salaries.
A second objective common to most of the projects is to increase the retention
of high performers. Paybanding allows a closer link between pay and perfor-
mance than is generally possible in the GS system. Annual pay increases can be
linked directly to individual performance such that those receiving high ratings
receive greater pay increases than those receiving lower ratings. With the GS, in
contrast, the vast majority of employees receive a single-step increase every 1,
2, or 3 years, regardless of performance.2 Payband systems generally go further,
however, by (1) allowing base pay increases greater than the equivalent of an
additional step in the GS system, (2) denying base pay increases, including the
general pay increase, to poor performers, and (3) scaling base pay increases
according to performance rather than simply limiting such increases to one or
two steps.3 A presumption is that the higher pay available under paybanding can
induce the high performers to stay.
A third objective of most payband systems is to provide managers with more
authority over pay and classification matters. The GS has been criticized on
the basis that classification decisions, which can have important organizational
consequences, are made by classification experts on the basis of technical con-
siderations rather than by managers on the basis of management considerations.
Similarly, the rigid GS pay rules allow managers very limited influence over
the salaries of their subordinates. Paybanding gives line managers greater influ-
ence over the workplace, which can be used to enhance unit and organizational
performance.
Table 11.3 lists specific measures of payband system effects (as identified in
Table 11.2) as employed by the evaluators of the five demonstration projects. For
example, paybanding “allows flexibility in setting starting pay,” one measure for
which is, “perception of recruit quality.” Two measures of the objective “provides
greater financial rewards to high performers,” are “perception of links between
pay and performance” and “turnover of high and low performers.” Commonly
used measures of the objective “gives managers more authority over pay and
Table 11.2
Payband Personnel Demonstration Project Objectives
Paybanding Element Effect

NIST1
Improved recruitment of high quality researchers Allows flexibility in setting starting pay
Increased retention of high performers Provides greater financial rewards to high performers
Strengthening of the manager’s role in personnel management through the Gives managers more authority over pay and classification
delegation of personnel authorities matters
A more efficient and flexible personnel system
China Lake2
Enhance the effectiveness of the laboratory by developing an integrated Gives managers more authority over pay and classification
approach to pay, performance appraisal, and position classification and by matters
allowing greater managerial control over personnel functions.
Commerce3
Improve organizational and individual performance
Increase quality of new hires Allows flexibility in setting starting pay
Improve fit between position requirements and individual qualifications Allows flexibility in setting starting pay
Increase likelihood of getting a highly qualified candidate Allows flexibility in setting starting pay
Increase recruitment and retention of high performing employees Provides greater financial rewards to high performers
More efficient human resources management Gives managers more authority over pay and classification
matters
More effective human resources management
Increase delegation of authority and accountability to managers
Better human resources systems to facilitate organizational mission and
A New Look at Paybanding and Pay for Performance
excellence
Continue support for goals in recruiting, rewarding, and retaining minorities,
women, and veterans
151
(continued)
152
Maximize the contributions of all employees
AcqDemo4
Demonstrate that a flexible and responsive personnel system will enhance Allows flexibility in setting starting pay
DoD’s ability to attract, motivate, and retain a high quality AT&L workforce Provides greater financial rewards to high performers
DoD Labs5
Improve the effectiveness of DoD laboratories through a more flexible,
responsive personnel system
Increase line management authority over human resource management
Recruit, develop, motivate, and retain a high-quality workforce Gives managers more authority over pay and classification
matters
Allows flexibility in setting starting pay
Provides greater financial rewards to high performers
Adjust workforce levels to meet strategic program and organizational needs
1Summative Evaluation Report, National Institute of Standards and Technology Demonstration Project: 1988–1995, p. ii.
2Management Report IX: Evaluation of the Navy Personnel Management Demonstration Project: A Summary Assessment of the Navy Dem-
onstration Project (1986), p. 1.
3Department of Commerce Personnel Management Demonstration Project Evaluation: Year Seven Report, p. 2-2.
4DoD Civilian Acquisition Workforce Personnel Demonstration Project, Interim Evaluation Report, Volume 1 Management Report, p. 1-3.
5Summative Evaluation 2002, DoD S&T Reinvention, Laboratory Demonstration Project, p. 2.
A New Look at Paybanding and Pay for Performance 153
Table 11.3
Payband System Evaluation Measures
Paybanding Element Effect

Provides greater financial rewards Perception of links between pay and
to high performers performance (percent agreement)
Turnover of high and low performers (percent
agreement)
Allows flexibility in setting starting Perception of recruit quality
pay
Gives managers more authority Perception of supervisors of expanded authority
over pay and classification in the area of classification (percent
matters agreement)
Perception of supervisors of expanded authority
in the areas of pay and promotion (percent
agreement)
Global Pay System Criteria
Efficiency Cost neutrality
Equity Perception of fairness of pay-setting processes
Employee acceptance Pay satisfaction
Support for demonstration project
classification matters” are “perception of supervisors of expanded authority in

the area of classification” and “perception of supervisors of expanded authority
in the areas of pay and promotion.”
Also listed in Table 11.3 are measures that relate to global criteria of pay system
effectiveness. Three such criteria commonly accepted that are pay system efficiency,
equity, and employee acceptance. With regard to efficiency, all of the personnel
demonstration projects have been held to a standard of “budget neutrality,” meaning
that the costs incurred under paybanding would not be greater than costs that would
have been incurred under the GS. Equity can be assessed based on the perceptions
of employees of the fairness of the pay-setting process, and employee acceptance
can be assessed according to satisfaction with the demonstration project.
Outcomes of Paybanding Demonstration Projects
In this section, we review outcomes of the various demonstration projects on seven

measures:
1. Perception of links between pay and performance

2. Turnover of high and low performers
3. Perceptions of recruit quality
4. Perception of supervisors of expanded authority in the area of classification

5. Perception of supervisors of expanded authority in the areas of pay
6. Satisfaction with demonstration project
7. Paybanding system costs
Perception of Links between Pay and Performance
Data in Table 11.4 lend support to the contention that payband systems allow a closer
link between pay and performance. The percentage of demonstration project par-
ticipants who agreed with the statement, “Pay raises here depend on how well you
perform,” increased from 47 percent in Year 1 to 60 percent in Year 10 at China Lake,
from 36 percent (baseline) to 54 percent in Year 7 at the Department of Commerce, and
from 27 percent (baseline) to 57 percent in Wave 1 of the Department of Defense (DoD)
laboratories.4 In each of the three organizations, a significantly lower proportion of
control group participants were in agreement. At AcqDemo, the question was phrased,
“In this organization, my pay raises depend on my contribution to the organization’s
mission.” The percentage of respondents in agreement with that statement increased
from 20 percent as a baseline measure to 59 percent in Year 5. Only 19 percent of
control group respondents expressed agreement with that statement in Year 5.
Turnover of High and Low Performers
Table 11.5 summarizes the responses of demonstration project and control group
participants to questions on perceptions of turnover of high and low performers. The
percentage of demonstration project participants agreeing with the statement, “High
performers tend to stay with this organization,” increased from 31 percent in Year 2
to 42 percent in Year 10 at China Lake. The percentage of control group respondents
in agreement with the same question declined from 29 percent to 24 percent over the
same period. A similar result was found at AcqDemo, where, by Year 5, 37 percent
of demonstration project participants agreed with the statement, “High contributors
tend to stay with this organization,” compared to 27 percent of control group mem-
bers. agreement among demonstration project participants in Year 8 at NIST was 42
percent compared with 31 percent of control group members.
Differences in levels of agreement of demonstration project and control group
members with regard to the statement, “Low contributors tend to leave this organiza-
tion,” were much narrower than for the question about high performers. By Year 5,
only 18 percent of AcqDemo participants agreed with that statement, compared to
15 percent of control group members. Similarly, by Year 8, only 15 percent of NIST
project participants agreed that low performers tend to leave compared to 10 percent
of control group members. The Department of Commerce project evaluation includes
actual rather than perceptual data on turnover among low and high performers. Data
show significantly higher turnover among low performers than among high perform-
ers. However, no comparable data are available for control group members.
Table 11.4
Perception of Links Between Pay and Performance (percent agreement)
Pay raises Under the present

here depend system, financial rewards
on how well are seldom related to
Project you perform. employee performance.
Navy Demonstration Project1
Demonstration project Year 1 47 58
Year 10 60 32
Control group Year 1 46 60
Year 10 40 65
Department of Commerce2
Demonstration project Baseline 36
Year 7 54
Control group Baseline 34
Year 7 35
In this organization, my
pay raises depend on
my contribution to the
organization’s mission.
AcqDemo3
Year 5 59
Year 5 19
NIST4
Demonstration project Baseline NA
Year 8 55
Control group Baseline NA
Year 5 30
Pay raises depend on
my contribution to the
accomplishment of my
organization’s mission.
DoD Labs (Wave 1)5
Demonstration project Baseline 27 22
Year 4–5 57 51
1Broad-Banding in the Federal Government: Technical Report, Table 8, p. 25.
2Department of Commerce Personnel Management Demonstration Project Evaluation:
Year Seven Report, p. 4-43.
3DoD Civilian Acquisition Workforce Personnel Demonstration Project, Interim Evalu-
ation Report, Volume 1 Technical Report, p. II-46.

4Summative Evaluation Report, National Institute of Standards and Technology Dem-
onstration Project: 1988–1995, Table 4.23, p. 65.

5Summative Evaluation 2002, DoD S&T Reinvention, Laboratory Demonstration Project,
Table G-10, p. G-20.

Table 11.5
Turnover of High and Low Performers (percent agreement)
High performers
tend to stay with this
Project organization.
Demonstration project Year 2 31
Year 10 42
Control group Year 2 29
Year 10 24
High contributors Low contributors

tend to stay with this tend to leave this
organization. organization.
AcqDemo2
Year 5 37 18
Control group Baseline 35 13
Year 5 27 15
NIST3
Year 8 42 15
Control group Year 1 39 22
Year 8 31 10
DoD Labs (Wave 1)4

n.a.
Department of Commerce 5
Number of
Number of separated Turnover rate
Perf Score Category employees employees based on 130
90–100 1,392 30 2.2
80–89 2,049 59 2.9
70–79 435 23 5.3
60–69 75 10 13.3
50–59 18 3 16.7
40–49 10 5 50.0
ation Report, Volume 1 Technical Report, p. II-41.

Table G-10, p. G-20.

Year Seven Report, Table 4–70, pp. 4–78.

Perceptions of Recruit Quality
Data with regard to perceptions of recruit quality (Table 11.6) do not show clear
trends. The percentage of demonstration group respondents at China Lake who
agreed with the statement, “This center is able to attract high-quality candidates,”
declined from 54 percent to 47 percent between 1979 (baseline) and 1989 (Year
10). However, the proportion of control group members agreeing with the same
statement declined by an even greater amount (51 percent to 30 percent). At the
Department of Commerce, in contrast, the percentage of demonstration project par-
ticipants agreeing with the statement, “My organization is able to attract high-quality
employees,” increased from 45 percent in the baseline survey (1998), to 66 percent
in Year 7 (2004). However, there was a similar increase in the level of agreement
among control group participants (47 percent in 1998; 65 percent in 2004). The
AcqDemo results are similar to those at Commerce with significant jumps in the
percentage of respondents agreeing with the statement, “This organization is able to
attract high-quality candidates,” between the baseline measurement and Year 5.
At NIST, the evaluators asked hiring officials to compare the capabilities of
recent hires to the rest of the workforce. Data show that whereas in the baseline
survey hiring officials estimated that 43 percent of their new hires ranked in the top
10 percent of the workforce, by Year 8 (1995), officials ranked only 34 percent of
new hires in the top 10 percent of the workforce. The corresponding control group
percentages remained constant at 30 percent.
The Year 4–5 evaluation for DoD labs included various measures of the quality
of new hires such as level of education, licensed or not licensed, and membership
in professional associations. The evaluation summarized the results as follows:
In nearly all cases in which data are reported, there appear to be no significant
changes in the quality of new hires at NAVSEA laboratories. However, the num-
bers reported are too small to determine statistical significance. Across Wave 1
laboratories, trends indicate a decrease in the hiring of PhDs and an increase in the
hiring of employees with Bachelor’s degrees. NUWC Newport indicates a similar
trend in Wave 2. Average GPA of new hires shows a slight decrease across time for
all NAVSEA laboratories in which data were reported. Similarly, the percentages
of new hires holding professional licenses, those having participated in postdoc
programs, and those holding professional memberships all show a slight downward
trend. One exception to this trend is the percentage of professional memberships
for NUWC Newport, which has increased slightly from an “all Navy” average of
28% in 1997 to 32% currently. . . . The lack of a trend for improved quality can be
explained in part by the competitive economy and resulting difficulty in attracting
qualified candidates that existed from 1997 to 2000, the years in which the dem-
onstration was implemented. (Department of the Navy 2000, F5)
The report identifies the state of the economy as an important, uncontrolled variable
with regard to hiring. During periods when the economy was weak (late 1970s, early
1990s), new hires ranked highly compared to current employees; during periods when
Table 11.6 158
Perceptions of Recruit Quality (percent agreement)
Project
Navy Demonstration Project1 This center is able to attract high-quality candidates.
Year 10 47
Year 9 30
Department of Commerce2 My organization is able to attract high-quality employees.

Year 7 66
Year 7 65
AcqDemo3 Technical Report II-26 This organization is able to attract high-quality candidates.
Year 5 47
Year 5 45
What was your (hiring official’s) assessment of the overall capabilities

of the person hired compared to the rest of your workforce?
NIST4 Top 10 Top 25 Avg. Below Avg. Poor

Demonstration project Baseline 43 42 11 3 1
Year 8 34 39 18 3 1
Control group Year 1 30 42 16 NA 2
Year 5 30 36 24 6 0
1Recruitment of Scientists and Engineers in Four Navy Laboratories: Management Report XIV for the Navy Personnel Management Demon-
stration Project, Table 5-3, p. F-5.
2Department of Commerce Personnel Management Demonstration Project Evaluation: Year Seven Report, Table 4-61, p. 4-68.
3DoD Civilian Acquisition Workforce Personnel Demonstration Project, Interim Evaluation Report, Volume 1, Technical report, Table 17, p. II-26.
4Summative Evaluation Report, National Institute of Standards and Technology Demonstration Project: 1988–1995, Table 5.11, p. 82.
Table 11.7
Perception of Supervisors of Expanded Authority in the Area of

Classification (percent agreement)
I have enough authority to

Project influence classification decisions.
Year 9 54
Year 9 40
AcqDemo3
NIST4
Year 8 60
Control group Year 1 n.a.
Year 5 34
Has classification authority been

delegated to you? (percent yes)
DoD Labs (Wave 1)5
Demonstration project Year 1–2 20
Year 4–5 18
Control group Year 1–2 15
Year 4–5 14
Year Seven Report, Tables 4-9, pp. 4-12.
ation Report, Volume 1 Technical Report, Table 12, p. II-16.


Table E-4, p. E-5.
the economy was strong, new hires ranked less well relative to current employees. It
is difficult to assess the independent effect of the intervention in this circumstance.
Perception of Supervisors of Expanded Authority in Classification
Data with regard to the perception of supervisors of expanded authority in the

area of classification (Table 11.7) are ambiguous. The percentage of supervisors
Table 11.8
Perception of Supervisors of Expanded Authority in the Areas of Pay

(percent agreement)
I have enough authority to

Project determine my employees’ pay.
Navy Demonstration
Project1
Year 9 51
Year 9 12
AcqDemo3
NIST4
Year 8 54
Year 5 12
DoD Labs (Wave 1)
Demonstration project n.a.
Year Seven Report, Table 4-50, pp. 4–58.

agreeing with the statement, “I have enough authority to influence classification

decisions,” increased from 35 percent to 54 percent between Year 2 and Year 9 at
China Lake, but there was an even greater increase in the percentage of control
group supervisors with the same statement over the same period. At the Department
of Commerce, by Year 7, 49 percent of demonstration project supervisors agreed
with this statement versus 41 percent of control group supervisors. Differences
were greater at AcqDemo, where, in Year 5, 64 percent of demonstration project
supervisors were in agreement with the statement versus only 30 percent of con-
trol group supervisors. Data show an increase of from 36 percent to 60 percent in
perceptions of expanded authority in the area of classification by demonstration
project supervisors at NIST between the baseline survey and Year 8. At DoD labs,
in contrast, the percentage of demonstration project supervisors agreeing with the
Table 11.9
Satisfaction with Demonstration Project
I am in favor of the
China Lake1 demonstration project. China Lake
Commerce2
NIST3
Year 8 70 71
DoD Labs (Wave 1)4
Year 4–5 55 47
Overall, the demonstration project

is an improvement over the
previous performance rating and
AcqDemo5 compensation system.
1Effects of Performance-Based Pay on Employees in the Navy Demonstration Project:
An Analysis of Survey Responses 1979 to 1987, Table 16.
Year Seven Report, Table 4-1, p. 4-2.


Table 1.2, p. 6.
statement, “Has classification authority been delegated to you?” decreased from

20 percent in Year 1–2 to 18 percent in Year 4–5. A possible explanation for these
differences is that the different projects incorporate different design features and
that the different organizations engage in different practices with regard to the
delegation of classification decisions.
Perception of Supervisors of Expanded Authority for Pay
Data regarding the perception by supervisors of expanded authority in the area of

pay (Table 11.8) show significant and positive improvement over the periods that
the various demonstration projects were in place. At China Lake, the percentage
of demonstration project supervisors agreeing with the statement, “I have enough
authority to determine my employees’ pay,” increased from 10 percent in Year 1 to
51 percent in Year 9. The corresponding percentages for control group supervisors
over the period baseline to Year 9 dropped from 15 percent to 12 percent. As of Year
7, there was a 19 percentage point difference between demonstration project and

control group supervisors in agreement on the same statement at the Department of
Commerce and a 36 percentage point difference in Year 3 at AcqDemo. The percent
of demonstration project supervisors at NIST that agreed with this statement increased
from 18 in the baseline survey to 54 in Year 8; the corresponding percentages for
control group supervisors dropped from 16 to 12 between Year 1 and Year 5.
Satisfaction with Demonstration Project
Table 11.9 shows data on employee satisfaction with the demonstration projects
at the various sites. Data for China Lake for the corresponding period are also
provided as a benchmark. Employee support for demonstration projects is included
as a global measure of employee acceptance of paybanding systems. In general,
data show high levels of acceptance with substantial majorities expressing support
for each of the demonstration projects with the exception of AcqDemo, where 46
percent of employees expressed satisfaction with the project.
Cost
Data with regard to the comparative cost of the various demonstration projects
(Table 11.10) are somewhat limited. Cost data were compiled for only three of
the five projects. Data show that salary costs at both the China Lake and NIST
projects were higher than for the respective control groups. At China Lake, OPM
estimated that salary costs for the demonstration labs were approximately 6 per-
cent higher than for the control group for the first ten years of the project. Data for
the NIST project show that salaries for the demonstration project were 4 percent
higher than for the control group for the first three years of the project. At Com-
merce, the growth rates for the Demonstration Group and the Control Group were
approximately the same.
Discussion
Figures 11.1a–d depict the presumed means by which paybanding impacts organi-
zational performance. As summarized in Table 11.11, data from the five personnel
demonstration projects are consistent with some of the links but not with others. Data
in Table 11.4 are consistent with the proposition that payband system employees
perceive a closer link between pay and performance than do GS employees (links a,
d, e, and h in Figures 11.1a and 11.1b). Whether the amount of pay “at risk” under
the payband/pay-for-performance demonstration projects is sufficient to induce
changes in individual behaviors (link b in Figure 11.1a) is uncertain, however.
Also uncertain is how and whether improved individual performance impacts
organizational performance (links c, g, j, and m in Figures 11.1a, 11.1b, and 11.1c).
W. Edwards Deming and Joseph Juran estimate that only approximately 15 per-
cent of the variation in organizational performance is attributable to differences
Table 11.10
Paybanding System Costs
China Lake1
Year 10 “Average salaries at the demonstration labs are 5.9% higher than at
the control labs as a result of the demonstration project.”
Commerce2
Year 7 “The compounded average annual growth rate was nearly the same
for both the Demonstration Group (4.56 percent) and the Comparison
Group (4.88 percent) over time.”
AcqDemo
n.a.
NIST3
Year 5 “While NIST has maintained budget neutrality at the organizational
level, it has not done so at the individual employee level.”
NIST4
Year 3 “Table shows that relative to the control sites, salary costs at NIST are
3.91% higher for the period 1987–1990.”
DoD Labs
n.a.
1Salary Costs Under the Navy Demonstration Project: Management Report XIII, p. 1.
Year Seven Report, p. 5-1.
onstration Project: 1988–1995, p. 38.

4Broad-Banding in the Federal Government: Technical Report, p. 62.
in levels of performance of individual workers (Blair, Cohen, and Hurwitz 1982).

Most of the variation, according to Deming, is explained by differences in sys-
temic factors. Therefore, even presuming that workers can be induced to perform
at a higher level as a result of pay-for-performance, the impact on organizational
performance is uncertain.
In its evaluation of the Department of Commerce Demonstration Project, con-
sulting firm Booz Allen Hamilton (2006) convened focus groups of employees.
Among the questions that were posed was the following; “Thinking about the fact
that the Demo Project was designed to improve performance, do you think employee
performance has improved, stayed the same, or worsened over the past seven [two]
years?” Booz Allen Hamilton summarized the results as follows:
When asked in focus groups whether individual performance has improved since
the Demonstration Project began, most Demonstration Group participants indi-
Figure 11.1 Models Depicting Potential Paybanding Organizational Impacts
164
a Pay- b Incentives to c Improved
A Paybanding performance perform at a organizational
link high level performance
e Higher pay for f Lower turnover g

higher among high
performers performers
d Pay- Improved
B Paybanding performance organizational
link performance
Lower pay for Higher turnover

lower among low
h performers i performers j
k Flexibility to offer l m Improved

Higher-quality
C Paybanding higher starter organizational
hires
salaries performance
n Greater o Greater p Improved

managerial managerial
D Paybanding organizational
authority—pay + influence over
performance
classification workplace
Table 11.11
Demonstration Project Results
Demonstration
Links Project Results Contingencies
Figure A
a +
Is the amount of pay at risk sufficient to induce a
b ? change in behavior?
Does improved individual effort translate to better
c ? organizational performance?
Figure B
d +
e +
f ?
g ? organizational performance?
h +
i –
j –
Figure C
k +
l ?
m ? organizational performance?
Figure D
n +
o +
p ?
cated that it had either stayed the same or improved; no participants felt that it
had declined because of the Demonstration Project (see Table 4-83 in the report).
Those who indicated that it has remained the same had perspectives ranging
from a belief that performance is already high to concerns that the system lacks
sufficient motivators to improve performance. Some of those who indicated that
employee performance has improved added caveats such as that improvements
have been slight, that higher performance is not sufficiently recognized, and that
initial performance improvements have stabilized (Table 4-89 in the report).
As part of its evaluation of the DoD science and technology (S&T) labs dem-
onstration project, OPM tried to determine whether the demonstration projects
impacted laboratory quality. OPM’s report includes the following statement: “The
demonstration project interventions are expected to contribute to increased labora-
tory quality. As our model of R&D Performance . . . illustrates, there are many other
factors that influence laboratory quality, thus no direct causal link can be postulated”
Table 11.12
Organizational Performance
My agency’s efforts to implement the laboratory demonstration project to date have

improved this organization’s programs/operations/projects.
DoD Labs (Wave 1)1 Agree Undecided Disagree

Demonstration project Year 1–2 18% 37% 45%
Year 4–5 37% 29% 34%
Table C-17, p. C-10.
(Department of Defense 2002, E5). Also, as part of the evaluation, employees were
asked whether they agreed with the following statement, “My agency’s efforts to
implement the laboratory demonstration project to date have improved this orga-
nization’s programs/operations/projects.” A bare plurality of demonstration project
participants agreed with the statement in Year 5 (see Table 11.12).
The data provide some support for the proposition that high performers will
be more likely to stay as a result of higher pay (link f in Figure 11.1b). At China
Lake, AcqDemo, and NIST (Table 11.5) an increasing proportion of demonstration
project participants agreed with the statement, “High contributors tend to stay with
this organization.” Data from the Department of Commerce demonstration project
show much lower levels of turnover among high performers than low performers,
but in the absence of similar data for the control group, it is not possible to draw
any conclusions as to whether that result is attributable to the demonstration project.
Consistent with the discussion above, even if the perceptions of project partici-
pants are accurate and turnover among high performers is lower as a result of the
demonstration projects, it is not possible to thereby conclude that organizational
performance has improved (link g, Figure 11.1b).
Data do not support the proposition that paybanding/pay-for-performance results
causes low performers to leave the organization at a higher rate than they would
otherwise. Relatively low percentages of project participants at AcqDemo and
NIST (18 percent and 15 percent, respectively) agreed with the statement, “Low
contributors tend to leave this organization,” in Years 5 and 8 respectively.
As discussed, data are ambiguous with regard to whether the quality of recruits
at the various organizations that are part of the five demonstration projects has
improved (link 1, Figure 11.1c). In general, the state of the economy appears to be
the dominant influence on recruit quality.
From Tables 11.7 and 11.8 above, it is possible to conclude that demonstra-
tion project managers perceive that they have more say about classification
and pay matters as a result of paybanding (link n, Figure 11.1d). By defini-
tion, these managers therefore have more influence in the workplace (link o,
Figure 11.d). The consequences for organizational performance have not been
demonstrated however.
Conclusion
Although it would not be completely inappropriate to claim that, “paybanding

works” based on the results of the demonstration projects, such a claim would
have to be qualified on the basis of the many gaps that exist in our understand-
ing of the organizational impact of paybanding. Certainly, the early results are
encouraging. Demonstration project participants clearly perceive a closer link
between pay and performance, and managers perceive that they have more au-
thority over pay and classification matters. The payband systems that have been
implemented in a demonstration project context have generally received the
support of employees.
Other results are less compelling. Although demonstration project results show
some increase over time in the proportion of project participants who perceive that
“high contributors tend to stay with this organization,” the numbers are still not high.
Very low percentages of respondents perceive that “low contributors tend to leave this
organization.” Nor has any demonstrable impact on recruit quality been demonstrated.
The ultimate purpose of paybanding is to improve organizational effectiveness, but
evaluation methods do not yet permit any conclusions on this point.
It is important to consider context when interpreting the results of the demonstration
projects. To date, the demonstration projects represent relatively small units in which
top management has been able to devote significant attention to system implementation.
This level of attention is not possible in larger agencies, and system success could be
impeded as a result. Phasing the system in, as is being done with the National Security
Personnel System at DoD, is one solution. Also, to the extent that it is easier to foster
broad participation in system design and implementation in smaller units, large size
could inhibit obtaining employee trust and acceptance.
It is important to note that most of the paybanding demonstration projects have
been sponsored by units with research and development missions. Education and
training levels for the employees in these units are high, and levels of unionization
among these employees is low. Unions have generally been skeptical of payband-
ing on the basis that assessment methods are inherently subjective. Suspicions of
favoritism or bias on the part of some employees are inevitable. When pay is at risk,
the potential for conflict over appraisal results becomes significant. Also, scientists
and engineers generally have more and better employment opportunities than do
rank-and-file white-collar workers who constitute the bulk of the workforce in
most agencies and may feel less threatened by the implications of paybanding than
would employees in other agencies. The main point is that despite some indicators
of success, officials need to be cautious in interpreting the results of the payband
demonstration projects and need to carefully consider the circumstances in which
that success has been achieved.
Lessons Learned
Lesson 1—Payband systems work. Such systems have received widespread

acceptance from managers and employees. Managers gain greater control over
the pay of their subordinates; control that can be used to encourage higher levels
of performance.
Lesson 2—Payband systems sound more radical in theory than in practice. The
reality is that in most organizations with payband systems, virtually all employees
continue to receive the general cost-of-living increase and an additional base pay
increase. As a result, it is easier for these plans to achieve employee acceptance.
Lesson 3—Payband system implementation needs to be carefully managed. One
explanation for the apparent success of most of the payband demonstration projects
is that the units in which the projects have implemented are relatively small, and,
as a result, top management has been able to devote significant time and resources
to the implementation process. This is harder to achieve in large agencies such as
DoD and Department of Homeland Security (DHS). One solution is to phase the
system in as is being done at DoD.
Lesson 4—Payband systems provide significant recruitment advantages. A
number of the units that have adopted paybanding are S&T laboratories where the
recruitment of scientists and engineers has been a challenge. With paybanding,
prospective employees can be offered a significantly higher starting salary than
is generally possible under the General Schedule, which makes it easier for these
units to achieve their recruitment objectives.
Lesson 5—With paybanding, managers can be held accountable for results.
Under the General Schedule, this is more difficult because key classification and
compensation decisions are out of the manager’s hands. Good managers can use
the additional authority implicit in paybanding/pay-for-performance systems to
encourage high performers to stay and low performers to leave.
Notes
1. Although CSRA limits personnel demonstration projects to five years, the project
was extended and eventually made permanent by Congress.
2. The GS does allow for high performers to receive a quality-step increase or the
equivalent of two steps.
3. See Thompson (2007) for multiple examples of how payband systems incorporate
pay-for-performance elements.
4. For purposes of its evaluation of the DoD laboratory demonstration projects, OPM
divided the eight projects into two groups; those that started in either 1997 or 1998 (Wave
1) and those that started in 1999 (Wave 2). Only the data from the Wave 1 laboratories are
included in this review.
References
Blair, John. D., Stanley L. Cohen, and Jerome V. Hurwitz. 1982. “Quality Circles: Practical
Considerations for Public Managers.” Public Productivity Review 6: 9–18.
Booz Allen Hamilton, Inc. 2006. Department of Commerce Personnel Management

Demonstration Project Evaluation: Year Seven Report. Washington, DC: Booz Allen
Hamilton.
Department of Defense. 2002. “Summative Evaluation 2002, DoD S&T Reinvention,
Laboratory Demonstration Project,” Table E-4, p. E-5.
Department of the Navy. 2000. “Recruitment of Scientists and Engineers in Four Navy
Laboratories: Management Report XIV for the Navy Personnel Management Demon-
stration Project,” Table 5-3, p. F-5.
Thompson, James R. 2007. Designing and Implementing Performance-Oriented Payband
Systems. Washington, DC: IBM Center for the Business of Government.
12
Employee Retention and Engagement
Tim Rutledge
The job market, including that for the federal workforce, is transforming how or-
ganizations recruit, train, and develop their key employees. Managers at all levels
are challenged to learn new ways of relating to people for whose performances
they’re responsible, especially superior performers.
This chapter explores the structural changes in the job market and the demograph-
ics that underlie them. It stresses the need to leave some old workplace assumptions
behind and adopt new, and perhaps unfamiliar, ones. The chapter explains how
employee loyalty has been replaced by employee engagement and some of the
challenges inherent in making the best performers disinclined to change employers.
The reader will see how the role of the manager is becoming ever more crucial in
keeping talent. Key themes throughout this chapter are:
• Play defense. Manage the “Exit” door to make it unattractive to key

employees.
• Differentiate the workforce by identifying talent and treating it differently.
• Keep some older workers.
• Create and sustain engaging employment experiences, not just jobs.
• Manage talent at a corporate level.
• Carefully identify for supervisory roles people who can be engaged
supervisors.
Offense and Defense
In every organization, in the view of employees, there are two doors: one marked
“Enter,” and the other marked “Exit.” These doors correspond to “playing offense”
and “playing defense,” respectively. Most organizations do a good job of manag-
ing the “Enter” door. This is where recruiting happens: aggressively bringing the
right people into the organization. Everything organizations do to get a signature
on an offer letter is playing offense. But no organization wins just with offense.
Everything that happens after the new hire signs on is playing defense. Defense is
taking the steps necessary to reduce the likelihood that the employee will leave.
Most organizations devote almost no management attention to the “Exit” door.
170
Employee Retention and Engagement 171
From a Buyer’s to a Seller’s Job Market
The reason why the “Exit” door gets ignored is a result of the North American
buyer’s job market that has been in place for forty years and is only now coming to
an end. A buyer’s market in jobs is characterized by a surplus of job seekers over
job openings. The buyer’s market began when the baby boom generation, the most
populous generation ever, began to spill onto the job market, beginning around
1965. There weren’t enough jobs for so many people, and policymakers became
concerned with unemployment rates and job creation programs.
Because the buyer’s job market has lasted for so long, a number of assumptions
and workplace practices have grown up. Chief among the assumptions is:
Employees who leave can always be replaced.
This assumption leads to a lack of concern over employees who walk through
the “Exit” door. It has been in place for so long that no one active in organizational
life today can remember anything different. This memory gap causes people to
believe that the buyer’s job market, and the assumptions it supports, are permanent.
They’re not. The coming seller’s market will sweep them away.
Today we’re entering a seller’s job market, a market in which there are more
job openings than job seekers. Whereas in a buyer’s market the advantage lies with
employers, since the supply of workers exceeds the demand for their services, in a
seller’s market this advantage is eliminated. It’s a short-handed economy. Policy-
makers will shift from finding jobs for people to finding people for jobs. We need
a new assumption:
I need to identify my key employees and take steps to keep them from leaving,
because I may not be able to replace them with comparable talent.
From Loyalty to Engagement
This period was also characterized by a culture of employer and employee loyalty.
By and large, employees could count on remaining with an employer for life, barring
egregious behavior. This psychological contract broke down in the mid-1980s, but
it has returned in a new form. Here’s how I once put it (Rutledge 2005, 22):
Loyalty is indeed dead, but only in the sense that nature dies in winter.
Employees themselves have brought it back to life, and in the process
they’ve changed it and given it a new name. It’s now engagement.
Loyalty is commitment for the long term. Engagement is a commitment too, but
it is short-term. Loyalty is like marriage: “Till retirement do us part.” Engagement
is like, well, an engagement. It may lead to something more permanent, but it may
not. And everybody acknowledges this.
172 Tim Rutledge
What Is Engagement?
Engagement is the state of being attracted, committed, and fascinated.
• Attracted: I want to do this work.

• Committed: I’m going to do this work professionally and well.
• Fascinated: I love doing this work!
The good news is that workplace engagement, short-term though it may be, can
be renewed over and over if employees feel that they are in engaging employment
experiences, and not just jobs. If they feel attracted, committed, and fascinated,
they will be disinclined to leave.
Increasingly, U.S. federal agencies are recognizing the importance of an engaged
workforce. In 2003, the Best Place to Work initiative began to survey employees to
capture the levels of engagement. The Federal Mediation and Conciliation Service
(FMCS) was recognized as one of the Best Places to Work in 2007. Reviewers
noted that FMCS “uses a rigorous selection process to hire new mediators and also
works hard to provide professional development opportunities for them.”
FMCS is continually on the lookout for qualified mediator candidates. As a re-

sult, the FMCS applicant pool is usually well-stocked with hundreds of mediator
candidates. Applicants who qualify after the initial screening process go through
a series of highly structured interviews that involve role play simulations and a
formal presentation. Then, after they’re hired, even the most experienced new
mediators are assigned mentors and receive training.
The Service also pays close attention to each mediator’s professional develop-
ment. For example, the agency has presented a series of regional workshops to
its staff on key industries and issues, including aerospace and health care. FMCS
also sponsors biennial professional development seminars for all mediators.
These seminars provide valuable training, and also bring together the otherwise
far-flung mediator workforce.
Buyer’s Market Blind Spot
Despite the difficulty in replacing talent, organizations are behaving as though

they were still in a buyer’s job market, and redoubling their recruiting efforts.
Management is focused relentlessly on the “Enter” door. Here are two examples:
We checked Workopolis for July 30, 2007, to see the number of job postings for
recruiters (playing offense) and organizational development specialists (playing
defense). Here are the totals for Canada on that day:
Recruiters 527 postings

Organizational development 9 postings
Placing more and more resources at the “Enter” door won’t shore up defenses. The
second example: There is a software development company that is experiencing
turnover at a rate of 40 percent annually. They have a problem and they know it.
But they refer to it as their recruiting problem, and, having framed it in this way,
their solution is to recruit harder.
Now it would appear that this company isn’t having a very hard time getting
people in the door. It’s the other door that’s the problem, but they literally don’t
see it. They are analogous to a baseball manager whose team loses a game 13 to
10 ordering extra batting practice because they didn’t score enough runs. Their
offense is fine: it is lack of defense that’s the issue. These examples point to the
existence of a blind spot caused by continuing to believe that employees who leave
can always be replaced. Organizations that embrace the seller’s market assumption
will outperform those that don’t.
The Differentiated Workforce
Many organizations measure employee turnover, the rate at which people use the
“Exit” door. This is a useful thing to do. Useful too is a turnover target. It’s hard to
know what to do about the rate of turnover if there is no consensus on how much is
too much or too little. Turnover data are just numbers, charts, and graphs, however.
There are no names or faces on turnover numbers. One resignation is accounted
for in the same way as any other. Turnover data do not provide information on
which employees are leaving. Bearing in mind our new assumption for the seller’s
job market . . .
I need to identify my key employees and take steps to keep them from leaving,
because I may not be able to replace them with comparable talent.
We must distinguish between employees that are talented and those that are
not. This means, first of all, redefining the word “fair.” In the buyer’s job market,
fair came to mean treating everybody the same way. The equating of fairness with
equal treatment resulted in the watering down of rewards available to employees
who were superior performers, including the tendency to assign the same perfor-
mance rating (usually “satisfactory”) to 75–80 percent of employees, regardless
of performance.
Treating all employees the same is a holdover from the industrial workplace.
Let’s say there were thirty workers in a plant whose job it was to punch holes in
fabric. Their supervisor managed their performances to ensure that each of them
punched holes identical to all the others. It wouldn’t do if someone could tell which
holes were punched by me and which by you. They had to be the same. Worker
individuality was a liability.
These sorts of jobs still exist, but they’re not being created very much any more.
What is being created today are jobs in which the individual, aided by technology,
174 Tim Rutledge
can make a unique contribution to the organization. The supervisor needs to manage
the performance of this person by treating him as an individual, because that is what
he is, and because no one else in the organization is doing what he’s doing.
There is nothing less fair than taking a superior performance and a less than superior
one and rating them the same. If key employees come to believe that this is happening,
they will conclude that performance doesn’t matter. And when the headhunters call,
they’ll answer, believing that the grass must be greener somewhere else.
Identifying talented, retention-eligible employees and treating them differently is
important, because truly superior performers have options as never before. They’re
in short supply. The manager’s challenge is to build figurative walls around these
key employees, just as organizations do with their key customers, and for the same
reason: so they won’t get poached away. These people are hard to replace.
Another reason to treat talent differently is as a way of managing the organiza-
tion’s reputation. All younger employees nowadays are connected by technology
to a network of friends and contacts, all of whom are sharing information about
their workplaces with each other. The people to whom superior performers are
connected are more likely to be superior performers themselves, or to have the
potential to be, than are the contacts of other employees.
When your good performers communicate favorably about their employers,
they encourage other good performers to have a look at their workplaces with a
view to joining. This connectedness serves as an informal, but powerful, referral
program. The opposite is also true: when key employees communicate unfavor-
ably about their employment experiences, their contacts absorb that information
and may be guided by it.
Who Is a Key Employee?
Organizations need to put in place objective criteria for identifying retention-

eligible employees. The people who need to agree on these criteria must first reach
consensus on what they are, because otherwise disputes about who is talented will
be common, and there will be no mechanism for sorting them out that does not
involve some application of organizational power. Here are some possible criteria.
Key employees
• produce consistently superior results

• volunteer for cross-functional teams
• are well and favorably known to senior management
• express an interest in areas outside their own department (big picture
orientation)
• demonstrate the organization’s competencies and values
• actively seek performance feedback from a variety of sources
• embrace changes necessary for organizational success
• engage in learning and development activities
The U.S. civil service is no stranger to this concept. Public service employees
may compete based on objective criteria, for engaging opportunities such as training
or advancement. This process allows those employees with the greatest capacity to
contribute to the organization’s mission to realize their potential. Managers need to en-
courage employees with high apparent potential to compete for these opportunities.
The figurative walls that we’re building around key employees are reserved for
those retention-eligible employees. We have only so much retention capital to spend;
we need to spend it where it will provide the best return. This does not mean that we
want other employees to leave. It means that we’re not actively working to make the
“Exit” door unattractive to them. Besides, it’s easier to replace them, because they’re
not in such short supply. Headhunters are not calling them as often as they are our
retention-eligible employees, so they have fewer external opportunities. This may
sound uncaring. It isn’t; it’s a reflection of the need to do things differently in a seller’s
job market. Retention-eligible employees are more likely to grow a business over the
long term than are other employees. That’s why retention capital is reserved for them.
You can’t keep everybody; trying to do so is a setup for failure. Taking measures to
keep the best is investing in the future growth of the enterprise.
Tracking Talent
When employees join an organization, their experience with the process typically
consists of meeting a recruiter and the hiring manager. In most organizations, once
new employees have had the corporate orientation, they are turned over to the tender
mercies of their managers and the corporation loses sight of them. This won’t do if
talent is to be retained. In a seller’s job market talent needs to be owned, not by one
department or one manager, but by the organization. Remember that to be fair to key
employees you must treat them differently; this means managing them corporately.
Old buyer’s market management tactics, such as hoarding talent, or not provid-
ing career mobility within the organization—tactics that may have been tolerable
when there were more job seekers than jobs—cannot be allowed to persist where
there aren’t enough people to fill vacancies. “Ownership” of retention-eligible
employees has to be at the CEO level. Managers can tap into this pool when they
have projects or initiatives central to the strategic plan, and when a retention-eligible
employee can contribute meaningfully and benefit from being involved. Managers
can borrow talent, but they have to return it improved.
Organizations will work out the details of managing key employees according
to their own circumstances and needs. The main thing is to separate management
of their performances and careers from any one particular manager.
What About Money?
Some organizations will be tempted to use money or other rewards to keep talent
from leaving. And indeed that can work. But consider the drawbacks. Take the case
176 Tim Rutledge
of an individual who works at a very large and successful corporation. He’s well
paid for what he does. And he hates his job. hates it. So every once in a while his
employer gives him a raise or some stock so that he’ll stay. So he stays. And he
hates it. He is retained with money but not engaged. This may seem a fairly benign
way to retain a person whose services are needed. And as long as it’s just one per-
son, there’s probably little harm done. But the organization is paying a disengaged
employee more and more for the same performance (or less). The productivity of
the job declines. You can imagine what this would do to overall productivity if the
practice were multiplied over ten jobs, or fifty.
Getting a raise in pay or other tangible rewards is like eating a big, delicious
meal. You push yourself away from the table, saying, “Man, that was good,
and I’m stuffed. I couldn’t eat another thing.” A few hours later you’re hungry
again. Organizational rewards are like that. The effects of a raise, a promotion,
a bigger office, or a grander sounding title, are exhilarating at the time, but they
wear off fast.
Role of the Manager
A central consideration in creating and sustaining engaging employment experi-

ences, and not just jobs, is this:
The most important factor in my willingness to engage with the work of my

organization is my feeling about my relationship with my manager.
If employees think their relationship with their manager is a good one, it’s
amazing what they’ll do, and do happily. If they don’t think it’s particularly good,
they’ll believe the grass is greener elsewhere. For key employees, the relationship
with a manager is most important. In my book (2005, 25), I wrote,
My manager is the gatekeeper between me and the rest of the organization.

He’s the traffic officer who gives me green lights, and also red ones, with re-
spect to my access to the wider organization. He controls the information that
flows down to me and the information that flows up. Some of the information
that he allows to flow down to me impacts directly what I do, how, when,
where I do it, etc. And some of the information that he causes to flow up is—
inevitably—about me! As a result of this power to interpret the organization
to me—and me to it—I’m acutely aware of my manager’s presence, absence,
tone of voice, dress, punctuality, likes, dislikes, habits, closed door, open door,
time spent with me or with others, biases, interests, moods, small talk, favorite
sports team, use of e-mail—an acuteness that I invest in no other person in
the organization!
The word “power” appears in the excerpt above. Organizations need to recog-
nize that the position of front line supervisor, or team leader, is a position that has
organizational power. We’re not accustomed to thinking of it in this way. And as
far as senior managers themselves are concerned, it is not a very powerful role. But
from the employees’ perspective it is a very powerful position indeed.
People promoted or appointed to supervisory positions acquire organizational
power. Nobody knows how they’ll tend to use that power because nobody screens
for it. What does this power consist of? Anyone with supervisory responsibilities
has, from the employees’ point of view, the power to:
1. tell employees what work to do, where, when and how to do it, and with
whom
2. assign (or withhold) tasks of varying difficulties, challenges, pleasantness,
and visibility
3. interpret company policies
4. approve vacations and other absences, or not
5. assign overtime hours
6. rate performances and approve pay increases/bonuses
To the employee who has no organizational power, this is a lot!

It is essential, therefore, to take great care in selecting supervisors. Sometimes
this happens, but too often the position goes to the person who has been there the
longest, or to the best worker. Neither length of service nor technical skill is a
predictor of supervisory success.
One way to sort candidates for supervisory roles is to ask them if they want
the responsibilities. People who say they don’t are doing the organization a
big favor. They are identifying themselves as noncandidates and preventing
the promotion of the “wrong people.” The wrong people are most often the
subjects of books in which they’re referred to as the “toxic supervisor,” or the
“boss from hell.”
A logical way to acquaint employees with the supervisor’s responsibilities is
to share the job description with them. A caution: almost every job description
for supervisor and above is 90 percent functional and 10 percent managerial. A
description of a market research manager’s job is heavy on the doing of research
and light on managing the performances of market researchers. Looking at the
description of a recruiting manager’s job might leave the impression that it is a
recruiting position with a higher salary.
So candidates need to be clear on what the supervisory component of the job
is. They need to understand that they’ll be expected to give away their old job and
focus on managing. Then when asked if they want to be a supervisor, they’ll know
what they’re responding to.
How does supervisor selection tie in to retention and engagement? People
in supervisory roles for whom supervision is not a good fit will not be engaged
supervisors, and will be unlikely to create engaging employment experiences for
their people. If we want to avoid the boss from hell and the toxic supervisor, we’ll
treat supervisor selection seriously.
178 Tim Rutledge
Elements of Engagement
We have already established that one challenge of managing is to build figurative

walls around valuable employees. Let us now consider the building blocks of these
figurative walls. Here the focus will be on what engaged managers can do to put
the blocks in place. Organizations themselves, at a macro level, have a role to play
through policies and programs that help managers create engaging employment
experiences. But even if the organization isn’t being very helpful in this regard,
managers still have a responsibility to keep talent from leaving.
The manager’s role is crucial because true workplace engagement flows from the
employee’s relationship with the work experience (which includes the manager).
The work experience is the combination of the work itself and the environment in
which it is performed. Engagement doesn’t come about as a result of factors external
to the work experience, factors such as gym memberships, time at the company
chalet, parental leaves, vacation, wellness centers, or education assistance. There is
nothing wrong with these initiatives; they just don’t give you engagement, because
they’re not part of the work experience.
Here are the elements of employee engagement that we’ll elaborate on:
1. Communicate the big picture

2. Implement flexible working conditions
3. Promote individual learning
4. Differentiate performances
5. Conduct retention interviews
6. Recognize achievements
Communicate the Big Picture
To engage key employees, managers ensure that they understand how what em-
ployees do links to something that is bigger than the department. This is where
mission and vision come in.
An organizational mission statement describes the organization’s reason for
being. It describes why the organization does what it does. Not what it does, but
why. The Walt Disney Corporation has a mission statement: “To make people
happy.” That is why the company exists, and why it does what it does. Note that
the statement answers the question “why,” not “what.”
A departmental mission statement may refer not to something outside the cor-
poration, but to the whole organization or a different part of it. An IT help desk
function might have this mission statement: “Our mission is to sustain employee
productivity by ensuring that information technology can be used as intended.”
Again, this is why the function exists. There’s no reference to the “whats”: resetting
passwords, installing phone lines, refreshing screens, and so forth. Their reason
for being is about productivity. Help desk employees who understand that they
maintain productivity can become engaged with their work. If they believe that
they just reset passwords, engagement is pretty well impossible.
Employees who understand how their roles contribute to the organization’s mis-
sion find it relatively easy to engage with the organization’s work. The opposite
is also true. It’s kind of hard to engage with your organization’s work without that
vital link.
A vision statement is a “what”: a big, audacious “what” about something that
the organization has never done before, and maybe that no one has ever done. In
1962 President John F. Kennedy said: “We will put a man on the moon by the end
of this decade.” OMIGOSH! said everybody. (There’s an OMIGOSH! reaction to
good vision statements.) “How are we supposed to do that?!” Nobody knew how
to in 1962. A vision statement is not concerned with how. That comes later. The
vision states the “what” with a time line. Henry Ford said: “I will build a motor
vehicle so that anyone earning a decent wage can afford one.” OMIGOSH! Henry.
How are you going to do that? Actually, Ford had an idea as to how he was going
to do that. But no one had ever done it before.
As in the case of mission, employees who understand how their work contributes
to the realization of the company’s vision can become engaged with that work. It is
the manager’s responsibility to make that link, on a daily basis if necessary.
Implement Flexible Working Conditions
Today’s employees view their work as an important part of their lives among other
important parts of their lives. Baby boomers tended to put work first, but younger
people don’t. As a result, fixed, unchanging working hours are a turnoff. Younger
employees react favorably to flexibility in when and where they work. Their family
obligations or community interests may require them to be somewhere other than
the workplace at one time or another during regular business hours. They don’t
mind working at odd hours. Here are ways managers can introduce flexibility into
work times:
• implement the condensed workweek

• schedule overtime in advance
• encourage working from home where possible
• make some jobs part-time
• install a core workday of 10 a.m.–3 p.m. with flex time around that
• institute community volunteer days
Promote Individual Learning
One thing that employees have learned is they need to update their knowledge and
skills continually. They don’t expect to work their entire careers for one employer,
so they need to remain attractive throughout their careers. The opportunity to do
180 Tim Rutledge
this is part of an engaging employment experience. Most impactful learning takes

place on the job in real time. External courses have their place, but employees
place more value on learning that happens during the work experience. Here are
some ways to make this happen.
Showcases and Displays
When departing employees are asked why they’re leaving, one frequently cited
reason is that they couldn’t see a career path inside the organization. This often
means that they lacked awareness about the organization as a whole (and that the
organization had not inquired into the employees’ career aspirations). Engaged
managers deliberately expose key employees to the wider company. Sometimes
this can happen through elaborate displays put on by different departments. Or it
can be as simple as having the manager of another area visit your area and answer
questions. Either way, the purpose is to allow your key people to see that they may
be able to pursue their career goals without leaving your company.
Skunk Works
This sounds like a punishment, but it refers to the practice of setting aside a small
amount of time each week to allow key employees to work on something of inter-
est to them, whether or not it is part of their jobs. Post-it notes were invented in
a skunk works.
Customer Contact
Some jobs can be performed without the employees ever meeting a customer.
Arranging for employees to come into contact with customers from time to time
anyway can help them see how what they do is of value to the customer.
Mentoring
If an employee has been designated retention-eligible, it makes sense to provide

a mentor. A mentor is a supplement to an engaged manager, not a substitute. The
key employee’s manager may be engaged, but may not have the background to
help the employee understand company culture. This is a role for older workers to
take on instead of proceeding into full retirement.
Differentiate Performances
The willingness of key employees to engage with the organization’s work depends
on how confident they are that the company’s performance evaluation system will
recognize and reward their contributions. Employees know who is performing well
and who isn’t. If they perceive that those differences aren’t recognized, the good
ones will disengage fast.
Differentiating performances through ratings requires an act of courage on the
part of the manager. It shouldn’t, but it does. Differentiating, either with a “better
than satisfactory” rating or a “less than satisfactory” one means that some ratings
fall into the “exceptional” category, and are treated accordingly. It means that
the manager is inviting additional scrutiny, more work, and possibly unpleasant
conversations. The way to avoid all this is to rate as many performances as pos-
sible “satisfactory.” That is the only rating that glides through the system without
attracting attention.
Survey after survey of employees uncovers dissatisfaction with performance
management. What may be lurking behind this finding is a failure to deal with poor
performance. If key employees observe that marginal or poor performers are not
being escorted, professionally and sensitively, through the “Exit” door, they will
open the door themselves to walk through.
It shouldn’t be difficult to assign superior ratings to the performances of
retention-eligible employees who are deserving. The hard part is dealing with the
poor performers in such a way as to send a message to talent that the organiza-
tion won’t tolerate substandard performance. For most companies this will be a
culture change.
Conduct Retention Interviews
One way to treat talent differently is to conduct retention interviews with key
employees. The purpose of the retention interview is to remind the employees that
they are still retention-eligible, and to elicit some information about their states of
mind vis-à-vis the organization. Managers ask questions like:
• What do you like best about the company?

• How do you feel about the company’s long-term direction?
• What do you like best about your job?
• Can you tell me how you’re challenged in your job?
• Why do you stay?
• If you were to leave, what would you miss? What would you not miss?
Answers to these and other questions can provide clues about how engaged the
employees are and whether or not they’re at risk of being poached.
Tracy Parzych, CEO of International Time Recorder Co. Ltd., a provider of
payroll-related services in Toronto, has done this with excellent results. Retention
interviews are conducted by managers in the firm with their retention-eligible em-
ployees. “We find the questions and discussion extremely valuable,” says Parzych,
“both [in terms of] the performance appraisal and creating future goals, as well as
ensuring that we are ‘job sculpting’ and providing employees [with] proper tools,
182 Tim Rutledge
an environment they want, etc.” The mere exercise of conducting these retention
interviews sends a powerful message to the employees that they are being treated
differently.
Recognize Achievements
One of the most disengaging feelings for any employee is the sense that their
achievements go unrecognized. The individual feels isolated, performing heroic
deeds all alone, and no one seems to notice or care.
Inexperienced managers, if they find themselves supervising a disengaged per-
son, frequently reach for a reward to confer. Organizational rewards are accessed
through policies and procedures. Managers need permission before granting them.
They are tangible, concrete, and the demand for them always exceeds the supply.
As we have seen, the impact of rewards is short-term. (This impulse is what pro-
duces layered job titles, e.g,. senior programmer, intermediate programmer, junior
programmer—three different titles for the same skill set.)
What disengaged employees need is recognition from someone who matters,
almost always the manager. Recognition is given at the manager’s discretion, costs
nothing but a few seconds of time, needs nobody’s permission, and has long-term
impact. Every manager has a bottomless bag of it. Most forms of recognition are
riffs on “thank you.” Here are a few:
• Increase in responsibilities
• Pat on the back
• Time off
• Expression of confidence
• Time with manager
• Actionable performance feedback
• Special assignment
• Organizing/leading a meeting
• Having suggestions acted on
• Being listened to
Every employee needs recognition for achievements; retention-eligible employ-

ees are no exception. The above list consists of samples of positive recognition,
implying that recognition can also be negative, as in:
• Lack of performance feedback

• Meeting with manager interrupted or canceled
• Undesirable assignment
• Micro management
• Being kept in the dark
• Being treated with disrespect/insensitivity
• Absence of manager support

• Being excluded
• Not being consulted in one’s areas of responsibility
• Being held to a higher (or lower) standard than others
• Being checked up on
• Being asked to pick up someone else’s slack
• Having no context for assignments
• Being compared negatively to others (“Why can’t you be more like . . . ?”)
Regrettably, examples of negative recognition come more readily than positive

ones. Negative recognition can be constructive if it is part of performance feedback.
But, whether or not it is carefully contextualized and supported by an engaged
manager, negative recognition has long-lasting effects, and care needs to be taken
when it is delivered. What is crucial for engaging retention-eligible employees is
that they receive from their managers recognition for what they accomplish.
Keep Some of Those Older Workers
Most employers have seen no reason to manage the “Exit” door. As long as the baby
boomers were in the job market, there were always lots of applicants for vacancies.
We are using the past tense to refer to the tenure of boomers in the workplace. They’re
still there, of course, but we need to get used to the idea of their departure. As they
reach retirement eligibility, they will ask themselves two questions: (1) Do I want to
keep working? and (2) Can I see my way clear financially to stop working?
Most people will answer “No” to the first question, and “Yes” to the second. After
all, they’re supposed to retire. It’s where they’ve been heading all their working
lives, and pension arrangements make it possible.
Boomers entered the job market in droves, and that’s how they’ll leave it. But
the market can’t afford that. In Canada, the federal minister of labour is on record
as saying that all the employees in the federal public service who will become
eligible to retire in the next five years simply cannot be allowed to. There aren’t
enough people coming up behind. “Employers must now retain the services of
skilled older workers rather than discharge them with pensions to make room for
younger workers. Companies have never dealt with this situation before. Given
the increasing longevity, declining birthrates, and the disproportionate size of the
baby boom generation now approaching traditional retirement age, we must look
at the workforce quite differently and adapt our workforce management practices
accordingly” (Dychtwald, Erickson, and Morison 2006, 14; emphasis added).
The challenge, then, is to redefine retirement to include the continuous presence
of some of the baby boomers in the workplace. Two ways to do this are: (1) shorten
the workweek for older workers so they can still contribute to the organization while
having a “golf and grandkids” life, too; (2) give older workers roles as mentors
and coaches for future leaders.
184 Tim Rutledge
Summary
The shift from a buyer’s market in jobs to a seller’s market requires organizations
to abandon some long-standing workplace practices and adopt some new ones. To
recap the key ones:
1. Play defense. Manage the “Exit” door to make it unattractive to key em-
ployees.
2. Differentiate the workforce by identifying talented employees and treating
it differently.
3. Keep some older workers.
4. Create and sustain engaging employment experiences, not just jobs.
5. Manage talent at a corporate level.
6. Carefully identify for supervisory roles people who can be engaged su-
pervisors.
References
Dychtwald, Ken, Tamara Erickson, and Robert Morison. 2006. Workforce Crisis: How to Beat
the Coming Shortage of Skills and Talent. Cambridge: Harvard Business School Press.
Rutledge, Tim. 2005. Getting Engaged: The New Workplace Loyalty. Ottawa: Mattanie
Press.
13
Building Relationships to Fix the Federal
Talent Pipeline
An Innovative Approach in Chicago Provides a
Model for Recruitment Success
Rob Seidner and James R. Thompson
the debate over whether and why the federal hiring process is failing to ensure
a future talent pool loses sight of the projects that are already successfully con-
fronting the problem. In Chicago, a unique partnership has developed between
public service agencies and local universities to improve the dialogue and build
a talent pipeline from the schools to government. The Government College Re-
lations Council (GCRC) is meeting regularly to foster partnerships between the
two communities. The goal is to assist agencies in recruiting for positions while
simultaneously educating students and career counselors on why and how to
choose public service internships and careers. By collaborating with the Chicago
U.S. Federal Executive Board (FEB) to leverage its resources, GCRC is able to
reach a wider audience. According to the Partnership for Public Service (PPS),
this is the only such affiliation in the country. This new initiative has already
demonstrated early success with top students entering into public service. It has
the potential to resolve decades-old recruiting problems at a minimum financial
cost and change the tenor of discussion about public service on campuses across
the country.
This chapter examines the need for innovative recruitment methods in the
context of the pending retirement wave and regulatory constraints on hiring. The
structure of the collaboration is described in detail based on interviews from GCRC
leaders, members, affiliates, and students. A literature review explains how this
organization can be replicated and reveals that the ingredients for a similar effort
are present elsewhere.
The Retirement Tsunami
The federal government is by far the largest employer in the United States, with
approximately 2.7 million civilian employees, or about 2 percent of the workforce.
185
186 Rob Seidner And James R. Thompson
Federal employees, representing more than 800 different occupations, are present
in almost every county in the country and throughout the world (CCEA 2007).
Recruitment for these vital positions remains an ongoing challenge. Considering
government’s responsibility and scope, the potential consequences are grave if these
positions are not staffed by people able to adequately perform the jobs. Also at is-
sue for agencies are the knowledge gap created by the retiring staff and integrating
new hires into the institution while maintaining seamless service.
The director of the U.S. Office of Personnel Management (OPM) has declared
that the federal government faces a “retirement tsunami” because three-fifths of
its 1.8 million (non-postal) workers will be eligible to retire during the next ten
years. OPM estimates that by 2015 approximately two-fifths of all current federal
employees will have retired (OPM 2006). Senior management faces an even
larger exodus. OPM estimates that 90 percent of the approximately 6,300 Senior
Executive Service (SES) federal executives who occupy the top government posi-
tions will be eligible to retire within ten years (GAO 2007a). Some positions are
particularly susceptible; half of all contracting officials and 90 percent of Social
Security Administration (SSA) claims examiners will be eligible to retire in the
next 10 years (FAI 2007, OPM 2007a), while 40 percent of mine safety inspectors
will be eligible within five years (GAO 2007b) and up to 23 percent of air traffic
controllers at the busiest airports are currently eligible (Rosenberg 2007).
The retirement wave in the federal sector has been written about extensively
since the mid-1990s. The number of people retiring has not been as high as
initially predicted, because more employees are working past their retirement
eligibility dates. Reasons for this are varied, but as the decision is personal, it is
impossible to predict actual retirement rates with certainty. However, substantial
retirements are indeed occurring. In 2006, 58,583 federal employees retired, 3.7
percent of the total workforce. This percentage has held constant since 2004, and
OPM predicts it will increase slightly in the foreseeable future. The retirements
need to be combined with an additional non-retirement-related attrition rate of
approximately 2.7 percent per year to get a more complete picture of federal
recruitment needs (Friel 2007). When employee transfers between federal agen-
cies are included, the total government-wide turnover rate in 2006 was 7.11
percent (OPM 2006).
Federal employees are eligible to retire at age 55 with 30 years of service. In
2006, the average age of federal employees was 48 (OPM 2006), an increase of
several years since the 1990s. This age-creep is due in part to fewer entry-level hires.
The federal government predominantly hires mid-career professionals instead of
traditional-age recent graduates. Out of the 96,353 new hires in 2006, 54 percent,
or 52,696, were older than 35 (Friel 2007). When taking into account that all new
law-enforcement hires must be younger than 36.5, the average is even higher for
non-law-enforcement agencies. In 2005, nearly 60 percent of federal workers had
more than 15 years of service (CBO 2007). Some departments and agencies have
workforces with an average age over 50 (OPM 2007d).
Building Relationships to Fix the Federal Talent Pipeline 187
Thin Talent Pipeline
As the elderly population increases to a larger percentage of the total population,

the competition for the best talent will grow fiercer (GAO 2007c). The federal
government must vie for staff with the private sector, nonprofit organizations, as
well as state and local governments. With almost 90 percent of federal employees
based outside of Washington, D.C., oftentimes local, state, and federal agencies
are recruiting from the same talent pool. During the past fifty years, the population
in metropolitan and suburban areas increased from 85 to 213 million people, and
it continues to increase rapidly (Stephens and Wikstrom 2000). This has forced
local governments to expand in size to meet their citizens’ needs as well as to ad-
dress issues such as the environment and health care (Ibid. 2000). At least fifteen
states currently face their own retirement deluge, with about 25 percent of their
employees eligible to retire within five years (Walters 2007).
Complicating the exodus is the need for new recruits with advanced credentials. In
2005, 49 percent of all federal employees had college degrees. Ninety percent of those
in professional occupations in all employment sectors held college degrees, with about
half also holding graduate degrees. While government has specifically been recruit-
ing college graduates since at least 1954 (Ingraham 1995), by 1975, only 30 percent
of federal employees had college degrees (CBO 2007). Such degrees are needed for
management or professional jobs, which represent approximately 44 percent of the
federal workforce compared to 32 percent of the private sector (Barr 2007a).
During the past thirty years the nature of federal work has changed from predomi-
nantly clerical to predominantly professional. For example, because of technological
advances, agencies such as the Internal Revenue Service (IRS) and SSA no longer need
tens of thousands of employees to enter data manually from handwritten forms. Instead,
the government needs those with professional degrees to investigate and oversee claims,
grants, contracts, and programs. Even the nature of law enforcement has evolved. In
place of only street-policing skills, law-enforcement organizations now need those with
skills in technology and accounting to reflect the new nature of crime. Professionals are
also required to analyze and manage functions that the government used to perform.
Since the 1960s, there has been a dramatic increase in the outsourcing of work that
had previously been performed in house (Light 1999). Departments such as Energy
outsource a high proportion of work, with the government acting in a regulatory role.
Overall, hires today need to be, and are, better educated (CBO 2007).
Fix the Hire

There is a wide gap between the established patterns of recruitment and
training of civil servants in the United States and the actual composition and
organization of the bureaucracies. The doctrine and practices of the civil
service personnel systems are designed, in large part, to deal with a kind of
bureaucracy, which no longer exists.
—Wallace S. Sayre, 1954
The failures of the federal government’s hiring processes have been extensively
documented and written about by agencies and in the media. Multiple features of
law and regulation make it difficult to hire in a manner that preserves and expands
accumulated knowledge. Agencies are rarely able to hire or promote employees
in advance of a pending retirement in order to ensure a seamless transition and
continuity. Instead positions are often vacant for several months because agencies
do not or cannot recruit for the position until it is actually vacated, regardless of the
amount of notice provided. Repeated independent analyses have concluded that the
government’s hiring criteria are invalid. Minimum qualification standards are often
antiquated, and unrelated education may be substituted for experience. Application
grading relies on applicants’ self-rating and the quality of a credential is considered
irrelevant (PPS 2004; Ingraham 1995). This system has persisted for decades as a
result of cultural inertia and a lack of decisive congressional action.
Broader personnel reform efforts, termed “demonstration projects,” include
recruitment as a major focus. However, the largest programs at the departments
of Homeland Security and Defense have largely stalled amid litigation and con-
gressional opposition. The key tool is allowing the selecting officials to offer
higher pay to top candidates instead of relying on the traditional entry-level pay
rates. Misinterpretations of the Merit System Principles and Prohibited Personnel
Practices, as well as the Veterans’ Preference Act and multiple hiring flexibilities
cause confusion among managers and human resources (HR) departments. The
result is that a system initially designed to place power in the position instead of
the individual, in order to ensure that government would operate regardless of who
occupies the position, now has difficulty adequately guaranteeing long-term and
constant succession plans to ensure continuing operations.
Lavigna and Hays (2004, 248) succinctly stated, “Public sector recruitment has
a notorious reputation for being slow, unresponsive, bureaucratic and passive. Too
often, public agencies have assumed that qualified applicants would clamor for
job openings” (emphasis in original). OPM itself has declared the hiring process
“broken” and is submitting proposals for new legislation while requiring agencies to
immediately adopt new, flexible staffing models (OPM 2006). Congress passed leg-
islation that allows agencies to offer hiring incentives and flexible hiring authorities
to provide some latitude when it comes to quality candidates or those with critically
needed skills, but these flexibilities do not come with implementation funding, and
the forty-seven agencies that paid about $140 million in bonuses to recruit, retain,
and relocate employees used existing operating funds (OPM 2007b).
Despite all the warnings, not enough has been done from a comprehensive,
government-wide standpoint. In 1996, OPM delegated recruitment to the individual
agencies in an effort to streamline the hiring process. A negative consequence was
that each agency recruited on its own, often competing with other agencies. The
government lost the economy of scale gained with centralized recruiting in terms
of costs and building relationships (PPS 2006). Agency HR offices became highly
centralized and often eliminated the local recruiters who knew the community
talent pool firsthand. Based on multiple interviews by the authors, agencies rarely
have standardized recruitment plans to cover all their positions nationwide; most
departments allow each subagency to have a completely separate hiring plan at
the expense of the efficiency of a coordinated recruitment strategy for the entire
department. Information is rarely shared between divisions and agencies. Agencies
fail to cooperatively recruit for specific careers such as engineering and account-
ing. It must be noted that while this effort potentially hurts overall operations,
individual agencies that indeed take more active recruitment approaches are able
to hire quicker and more strategically, a vast improvement from traditional hierar-
chical models and centralization. The nimbleness enables them to better compete
with the private sector for top talent. These best practices need to be studied to
encourage replication.
OPM utilizes its central position in the federal HR community to provide tools
other agencies may leverage. Its USAJobs.Gov website is the one stop applicants
need to find all open competitive positions. Its functionality includes storing five
resume versions and ten search agents that e-mail candidates may use when their
desired jobs open, resulting in 260,000 daily e-mails (OPM 2007c). Other tools
include surveys to help applicants identify how their personality and experience
match specific federal careers, a translator to compare private experience to fed-
eral qualification standards, and tutorials on how to use the website. OPM also
created a series of television commercials titled “what have you done at your job
today?” and paid to air them in markets with available federal positions. Further
leveraging resources, OPM taped webinars on how to find federal jobs and other
related topics, allowing greater access to the information. These programs require
an assessment of their effectiveness.
Who Is Uncle Sam?
Organizations such as the PPS were founded to help publicize the accomplish-
ments of government because the government has not done so itself. Its founder,
Samuel J. Heyman, was inspired to create the organization after learning how few
top graduates consider public service. Citing record levels of community service,
Heyman stated, “The challenge is now to convert that interest in community service
into a similar commitment to government service. . . . people may differ about the
size of government, . . . [b]ut everybody agrees whatever the size, the quality has
to be really good” (Lewis 2007).
The federal government does not adequately brand a recruiting strategy. Many
of the benefits of working for the country’s largest employer are lost when each
agency recruits for specific vacant positions independently instead of comprehen-
sively targeting skill categories or talent pools. Most agencies limit their recruiting
to websites and participation in occasional job fairs when vacancies exist. Collins
and Stevens (2002) found “that early recruitment-related activities interacted
with one another such that employer brand image was stronger when firms
used publicity in conjunction with other early recruitment-related activities.”

CareerBuilder, one of the largest online job listing services, reported receiving
1.2 million government job searches per month, but was concerned enough at
the lack of branding that the company donated a section of its site for agencies
to advertise themselves. A CareerBuilder executive commented, “One of the
biggest things we hear from job seekers is that they don’t hear about opportunities
in the government” (Ballenstedt 2007).
Getting to Know You
Part of the benefit for agencies of building long-term relationships with schools
is to build the horizon for future employment. While an agency might not have
an immediate need, it is realistic that in two or three years vacancies will exist.
In committing to a long-term relationship with a school, agencies are meeting
underclassmen and -women who will become knowledgeable about government
jobs and will potentially be interested in those positions when they graduate.
Such an approach also allows students to properly prepare to meet the minimum
education requirements for professional positions. As an IRS recruiter lamented
to the authors, “Government service seems to appeal to many students. It would
be great if we could let students know the qualifications for our positions early in
their academic tenure so they could actually know the positions and have the right
courses to qualify.” Starks’s (2007) review of the “Outstanding Scholar” excepted
appointment hiring authority, which is based on academic standing, found that
agencies were able to improve their quality hire rate by matching students’ majors
with congruent positions.
In an article on recruiting for public service, Lavigna and Hays (2004, 242)
summarize that, “simply filling positions is one issue, but to optimize recruit-
ment results—to attract ‘the best and the brightest’—requires a more coordinated
and proactive approach” (emphasis in original). The approaches they describe
are incremental and can be employed by any public agency to change how it
identifies, recruits, screens, and hires civil servants. Specifically, these include
making procedural (regulatory barrier) changes, creating process innovations,
and using technological applications. Mathews and Redman (1996) advocated
less emphasis on expensive recruitment tactics and to “get personal” with col-
lege recruits to better identify those with the essential personal attributes. Davy
(1959) found the best recruiting method for public service positions was getting
professors to discuss them and arranging personal visits and counseling by gov-
ernmental recruiters.
The federal government has not done an acceptable job of recruitment since the
halcyon days of President Kennedy’s call to “ask not what your country can do for
you—ask what you can do for your country” led to an influx of highly motivated
and skilled employees. Yet no new policies have been implemented to reflect the
fact that “the Federal Government is facing new and more complex challenges in
the twenty-first century because of long-term fiscal constraints, changing demo-

graphics and other factors” (GAO 2007a, 1).
“Ask Not What Your Country Can Do For You”
Government has many hurdles to overcome to improve the prospect of hiring top
college graduates. Those who choose public service careers do so because they
want to draw meaning from their work or because money and stable employment
are not the primary motivators (Pattakos 2004). However, government service is
often maligned by those elected to oversee it. Campaigning against government is
the norm. Lane and Wolf (1990, i) stated that the customary presidential campaign
attacks on bureaucracy are a reason the public has a “tangible sense of Federal
institutional breakdown and declining morale.” According to Paul Light (1999),
the last presidential campaign in which both candidates seemingly supported pub-
lic servants was Nixon-Kennedy in 1960; he noted that by 1980, Ronald Reagan
considered “government as a bastion of fraud, waste, and abuse.” The 2008 presi-
dential election is shaping up to be anti–civil service. As Washington Post “Federal
Diary” writer Stephen Barr (2007b) stated, “Federal employees and government
contractors seem likely to get caught in the crossfire.” The hostile portrayal of
the bureaucracy by elected officials is compounded by the media, which rarely
focuses on government success stories. Senior government managers report that
the negative comments impede recruitment and foster an environment of distrust
toward bureaucracy (Garrett et al. 2006). Students also develop negative attitudes
(PPS 2005).
Defending civil service at different levels, Charles Goodsell (1994, 167) com-
mented that “roughly 20 million Americans work for government. We all recog-
nize that this huge slice of the population does not consist solely of lazy bums,
incompetents, or the psychologically malformed.” Lane and Wolf (1990, i) wrote,
“America has squandered one of its most critical resources—a fine civil service.”
PPS (2005) reported that fewer than 10 percent of college seniors consider serv-
ing their country as the top reason to work in government. A negative correlation
exists between a high GPA and interest in a public service job, while fewer than
25 percent of college seniors believe their parents would be proud of them for ac-
cepting government jobs instead of a private sector or nonprofit position. This is
not a new problem, as only 6 percent of political science professors in 1959 stated
their students had a positive view of government service (Davy 1959). Programs
such as Princeton University’s Woodrow Wilson School of Public and International
Affairs and Columbia University’s School for Public Affairs are no longer turning
out many public servants. The Wilson School is being sued by its benefactors, as
only about 10 percent of its fellows go into government foreign affairs positions
while just 36 percent of Public Affairs graduates enter public service (Kinzie 2007;
Knight 2007).
In order to attract the best candidates, government must first change the public’s
perception of government work and why careers in government can be rewarding.

A highly public effort to accomplish this was the publication of two reports (1989,
2003) by the National Commission on the Public Service, also known as the Volcker
Commission after its leader, former Federal Reserve Chairman Paul A. Volcker.
These bipartisan commissions made a series of recommendations to strengthen the
civil service. In the first report, the commission made seven recommendations that
could be summarized as getting “the top jobs in government filled as fast as pos-
sible by the most qualified candidates in the nation” (Light 2007, 408). According
to Paul Light’s recent analysis of the first commission (2007), accomplishments
included the 1989 Government Ethics Reform Act, the 1998 Federal Vacancies
Reform Act, and the Presidential Transition Act of 2000. However, action did not
occur on other matters such as speeding appointments, limiting the number of
political appointments, and financial transparency. The second commission had
fourteen recommendations, including one specifically on recruitment.
An Australian study demonstrated that to attract university students to the public
sector, it is necessary to communicate the opportunities offered and minimize any
misconceptions about the image of public service (Taylor 2005). Those who are
considering nonprofit careers must be shown that they can also have a positive
impact by serving in government. Those focused on career tasks must be shown
the unparalleled experience that can be gained in government as a consequence
of the resources and size of government operations. To those who are concerned
with benefits, the government must highlight its competitive salaries, top-rated
401(K)-equivalent retirement plan, and generous vacation schedule.
“Ask What You Can Do for Your Country”
Despite the aforementioned challenges, the federal government has reasons to be

optimistic. The Washington Post reported that a May 2007 poll found that more
people’s dream jobs were in government than in the private sector. In some cases,
the preference was by a 3:1 margin. Government was preferred even in high-paying
positions. For example, being a federal judge was preferred over being a senior
law partner, and being a National Cancer Institute scientist was preferred over a
position as a biomedical in-house scientist (Barr 2007b). The Merit Systems Pro-
tection Board’s survey of 2,000 new entry-level hires found that more than half
were specifically looking for a federal position, many with a particular agency
(MSPB 2007). PPS (2006) summarized several benchmark results based on a
representative sample of 3,200 students on perceptions of government service and
recruitment. They found that student interest in federal jobs is relatively high at 42
percent, but that only 13 percent felt knowledgeable about federal positions. Those
who learned more about such positions acknowledged feeling more positive about
federal service. The biggest deterrent to working for the government had to deal
with the perception that government bureaucracy is stifling.
In terms of outreach, PPS noted that even though college students predomi-
nantly use the Internet to search for a job, the most effective recruiting comes
from personal interactions. Professors, who are in an excellent position to provide
advice to students, overwhelmingly believe the federal government has good jobs
for their students, but less than 20 percent felt very knowledgeable about the work
available. Adding to recruitment complexity is that students now expect tailored
job announcements. In terms of diversity, Hispanics, whites, Asians, and African
Americans look for different job requirements and have different public service
views.
Finally, as a master’s student commented to the authors, the government needs to
identify and advertise the most attractive features to working for the government.
The new generation of America[ns], i.e. millennials, are motivated by different
things than previous generations. Job security and benefits, the long-standing
mantra of government employment, will not attract the top talent of the new
generation. The opportunity to contribute immediately and have meaningful work
that impacts society would certainly attract a lot of the talent.
The Chicago Initiative
In Chicago, an innovative partnership has formed to build an effective talent pipe-

line between the colleges and the public sector. The Government College Relations
Council (GCRC) was founded in 1968 as a professional development organization
in which members could exchange information about government opportunities.
The organization is inclusive, comprising federal, state, county, city, and suburban
government representatives as well as the full range of accredited post-secondary
colleges/universities from elite private to large state schools to community colleges.
GCRC has members from throughout the upper Midwest, including Wisconsin,
Indiana, and Iowa, but the largest concentration comes from the greater Chicago
area. GCRC has approximately 125 members representing 60 agencies and schools.
The volunteer efforts of its members result in a professional series of programs that
are consistently evolving to respond to pressing topics and needs.
GCRC has grown and shrunk in stature throughout the years, but by 2002 the
group was rapidly fading in importance to the member communities as changes in
recruitment practices were making it irrelevant to its target audience. Recognizing
the need for change, the GCRC Steering Board transitioned the organization from
a focus on information exchange to fostering individual relationships. What exists
today has deep roots in terms of name recognition and membership connections,
but also operates with the flexibility of a newer organization unencumbered by
tradition. As a former GCRC president stated to the authors,
That came after we looked at ourselves in a hard light. We had been doing the
same type of meetings repeatedly and our member participation had declined . . .
we had become stagnant. The result was that we had to institute some changes
that involved assessing member satisfaction, changing meeting locations and
styles, and finding fresh topics. It was not an easy transition.
By reaching out to students in a more informal, open manner instead of rely-

ing on the Internet or large job fairs, GCRC modified its goals and procedures.
GCRC has increased the size of its membership and its profile by developing
individual relationships between agencies and the schools likely to produce the
needed students.
The sixteen-member Steering Board, evenly split between government and
college representatives, is responsible for the majority of programming as well as
for managing the infrastructure. The all-volunteer leadership often devotes its time
as collateral work duties. In addition to splitting the number of board seats, each
side (agencies, schools) is representative of the diversity within its community.
On the college side, seats are divided equally to ensure each type of college is
represented. Categories considered include public/private, large/small, two-year/
four-year, sectarian/nonsectarian, and Chicago/outside the city. All majors and
degree types are included to provide talent pipelines for all types of public service
careers. On the government side, board representatives are from federal, state, and
city government agencies and are responsible for white- and blue-collar work as
well as professional and administrative positions. This structure guarantees that
GCRC remains attuned to the needs of different agencies and recognizes the dif-
ferent types of students that colleges educate.
GCRC requires its government members to adhere to the principle of equal
employment opportunity, and its colleges must follow the Principles and Practices
of College Placement and Recruitment, published by the National Association of
Colleges and Employers. These two broad principles are the generally accepted
practices for each community and allow GCRC to stress ethical operations and
adherence to federal and local merit system principles.
In an effort to increase the size of the membership, GCRC controls costs and
is funded by small membership and meeting fees. In most cases, the meeting hall
is donated by an agency or college and the majority of speakers volunteer their
time. Member agencies also share the cost of office operations such as printing and
mailing, although technology has eliminated many of these expenses. A part-time
contract webmaster maintains the website, which remains as an ongoing expense
even as other costs have been eliminated.
Each of the three meetings per year focuses on a topic of mutual interest to both
agencies and colleges. Topics rotate between those where colleges can teach agen-
cies and vice-versa. In the past year, the Federal Emergency Management Agency
(FEMA) presented on how colleges can implement continuing operation plans in
case of emergencies, the state of Illinois discussed personal security against ID theft,
and OPM and the City of Chicago discussed how to navigate their hiring processes.
Meanwhile, college personnel led sessions on generational differences, targeting
the millennial students and using popular sites such as MySpace and Facebook for
recruiting and research. The topics are intended to be of mutual interest—for example,
how to integrate recently returned veterans onto campus and/or the workplace.
GCRC also revamped the tri-annual newsletter to center on success stories
instead of recapping previous events. Each issue includes a spotlight on a recent

intern who subsequently attained a regular government job. The subject provides
advice and discusses both the internship and his/her current position. These subjects
serve as case studies for schools and agencies to highlight that utilizing hiring flex-
ibilities can lead to great success. The newsletter also provides updates on major
issues related to hiring that give an overview and talking points. A spotlight on
members helps connect schools and agencies.
Perhaps the most popular events are GCRC’s public service job fairs. GCRC
hosts at least one annual government job fair that coordinates participation among
as many as eighty local, state, and federal agencies. The 2006 event brought in
around 1,500 current students and recent graduates while the 2007 job fair registered
almost 1,000. A mini-job fair with 25 agencies in the fall of 2006 attracted almost
500 participants. These job fairs are completely devoted to public service and are
intended to build awareness with students. One result of the repeated interactions
among the agencies at GCRC events is the ability to then refer students to different,
possibly more appropriate recruiters. Coordination helps students understand federal
service as a unified employer with one mission and multiple career paths.
As a result of the heightened attention, the executive director (ED) of the Chicago
U.S. Federal Executive Board (FEB) made GCRC an affiliate of the organization and
agreed to co-sponsor events. The FEBs, present in the twenty-eight major hubs of
government outside Washington, D.C., pool resources to provide common services.
It is the vision of the FEB that led to the partnership with GCRC: “To become a
premier and valued asset: A nucleus of enthusiastic leaders for intergovernmental
initiatives”; the mission enabled the implementation: “FEBs are catalysts for
developing partnerships to coordinate intergovernmental cooperation to advance
local and national initiatives” (FEB 2007, 1).
In 2006, recruitment outreach was chosen as a FEB focus. The FEB recognized
that GCRC was already accomplishing much of the outreach task and determined
it would be mutually beneficial to collaborate. The FEB now leverages its central
coordinating role of the almost 200 federal agencies in the area to support GCRC.
The FEB is unique in its ability to communicate with all of the agencies in the
region. It also has the power of representing the entire federal community, thereby
encouraging agencies to participate more in GCRC events.
In one of the strongest marks of the partnership, GCRC has sponsored an ongo-
ing internship at the FEB. GCRC opens an announcement to juniors and seniors
at member schools. Judging candidates on their credentials and commitment to
public service, GCRC recommends the top three candidates to the FEB. The staff
at the FEB interviews the candidates and selects the intern. GCRC provides a
$1,000 stipend for the semester. The interns work at the FEB office on a variety of
programs of interest to both the organization and to the interns. Interns examine
issues related to recruitment that may assist both the FEB and GCRC. While at the
FEB, the interns are introduced to multiple agency heads and have the opportunity
to network. Additionally, the interns gain valuable insight and experience into
federal government operations that can be parlayed into a public service career
after graduation.
internships and other student employment opportunities will become a larger area
of focus of GCRC. Few agencies are fully aware of the numerous different methods
to hire interns, with or without funding. Students are allowed to volunteer with
agencies and receive academic credit. Many schools also now require students to
complete a practicum by working with a government agency or nonprofit. Students
who work with the government are able to see firsthand how public service careers
may be rewarding. Publicizing and encouraging agencies to use these authorities will
be accomplished by creating a database housed on GCRC’s website of all schools
with practicum classes, by agencies posting potential projects, and by requests for
interns. The website will also host a unified calendar of all the different job fairs
in the region so that agencies may make a cohesive recruitment schedule.
Setting the tone for the future direction of GCRC, the Environmental Protect
Agency’s Assistant Regional Administrator Walt Kovalick challenged the members
in a 2007 keynote speech to: “(1) Find a management ‘sparkplug’; (2) Determine
available mechanisms to bring students on board; (3) Locate willing supervisors;
(4) Create a relationship with school(s); and (5) Make sure the intern’s experience
is a good one.” He highlights that each side bears a responsibility; that it is not just
the job of government to reach out to colleges, but the job of the colleges to ensure
students and professors are also getting the message. GCRC hopes to expand the
audience while sticking to the one message: A cohesive approach will help reinforce
public service career information.
Results
The efforts have paid early dividends. Several agencies have changed their lo-
cal recruiting strategy from only conducting outreach activities when a position
is vacant to developing ongoing relationships with talent pools. In turn, college
career counselors have reached out to federal agencies to recruit at their schools.
Both segments report increased interest from students asking about public service,
including those in the top of their classes.
One career counselor of a top-ranked school stated, “Personal contact with
government recruiters has definitely increased and been quite positive. For those
agencies that have made some kind of presence on campus—presentations, career
fairs, etc. —students are much more aware of these agencies and realize the breadth
of positions these agencies can have.” A director of a large graduate school career
center is “seeing more government recruiters from a variety of agencies.” She also
states that since more agencies have come to campus, the number and quality of
students asking her about public service position has increased. The former GCRC
president, a career counselor, proclaimed, “The recruiters I have met have actually
visited my school and spoken to students. That’s a great thing in my opinion.”
Meanwhile, another career counselor from a state university said he hoped he had
“been able to open the eyes of some of the agencies that there are qualified people
outside of the Chicago land area.” The career director from a sectarian college
gained a “better understanding of the federal employment process, better ability to
talk to students about government jobs and the hiring process,” and about contacts
within agencies.
Government personnel have also seen improvements. Representatives surveyed
for this article from ten federal agencies report fielding more questions from stu-
dents, developing more relationships with individual colleges, and having more
meaningful conversations at job fairs. One small-agency representative felt that
students had a better idea of her agency despite its general lack of publicity. Other
agencies report they have increased the depth and quality of the applicant talent
pool for the Federal Career Intern Program (FCIP), an excepted appointment for a
developmental two-year, rotational program. Graduate students who were encour-
aged to apply for the Presidential Management Fellows Program (PMF), an elite
program targeting future SES, also reached out to Chicago agencies upon being
selected. Agencies also believed they received faster commitments from their top
picks. PMF and FCIP are two national programs that require local publicity to
attract elite students. A regional director of a federal agency stated, “I think both
parties get credit: colleges are much more proactive now that they know we exist.
And having met some of the counselors gives me name-recognition; I don’t have
to explain who I am or why I want to discuss [the agency].” Being a part of GCRC
helped a large federal department with “a growing awareness of the work we need
to do to improve our academic outreach and increase in strategies and ideas for
how to improve that outreach effort.”
The most compelling proof of results comes from the students who do find
federal employment as a result of the GCRC and FEB outreach initiatives. Dozens
of students who have been hired directly credit the connections they made at these
events for leading them to jobs. Several of them provided comments that justify the
reason for GCRC. One recent graduate who was hired as a FCIP in Washington,
D.C., stated:
Hearing from practitioners in the field at an information session that I attended

was really helpful in showing me what one can gain from federal employment
and what day-to-day responsibilities one can expect. It convinced me to consider
federal employment, where previously I was looking mainly at nonprofit job
opportunities. I recently got a job offer that never would have happened without
the connection.
Another recent graduate hired as an auditor said, “Bottom line is, the interactions
I had at the [GCRC] job fair really got the ball rolling.”
Educating students about job opportunities in the public sector remains a key
to convincing top talent to choose public service. A recent Human Resources
master’s graduate attested, “I was only aware of the [misconceptions] of work-
ing with the government—unmotivated workers in a highly bureaucratic system
with below-value salary and career opportunities more determined by seniority

than merit. The exposure to a highly motivated employee showed me that those
misconceptions were not entirely true.” An underclassman who attained a federal
internship stated, “I became much more knowledgeable about the selection process
and long-term goals in the public service.” A senior felt, “These presentations did
achieve one major goal and that was enhancing a positive view of working in the
public sector. My observation is that there is a pattern of growing and aggressive
government recruitment at the school targeted at multi-lingual citizens, minority
and diversity—[an] attempt by the government to be competitive for the best.”
Replication
What is starting to happen in Chicago can be adopted by other cities. GCRC, operat-
ing with volunteers and limited budget, is unable to devote the resources to oversee
franchises. The FEBs are non-appropriated and lack the finances to underwrite the
expansion. Therefore, if the Chicago initiative is to expand, it will need to replicate
itself via innovation diffusion, allowing its lessons to spread almost autonomously
to other locations. Making changes is possible, although not easy. “Governments
invariably struggle with implementation because they hold a centre-periphery
model of diffusion or learning, which rests in turn on a theory of the stable state”
(Freeman 2006). Accepting Herbert Simon’s (1957) belief that the best solution
cannot always be explicitly researched and found because too many choices exist,
the goal becomes finding a satisfying program for results (Walker 1969).
Walker aptly defines (1969, 881) innovation as “a program or policy which is
new to the states adopting it,” no matter how long the policy actually has existed.
Knowledge moves between entities, spreading an idea in time. According to Eye-
stone, “classically, the idea of diffusion refers to a pattern of successive or sequential
adoption of a practice, policy, or program either across countries or across sub
national jurisdictions such as states and municipalities” (cited in Freeman 2006,
369). Rogers (1995) defines diffusion as a process by which an innovation is com-
municated through certain channels over time and among the members of a social
system. He describes a typical pattern that includes early adopters, followed by
the bulk and then the “laggers” (Freeman 2006). The change engine comes from
individuals or small groups at first.
The initial innovators are policy entrepreneurs, people who seek to initiate
dynamic policy changes by identifying problems, networking, shaping coalitions,
and shaping the debate (Mintrom 1997). “Crafting arguments in support of their
proposed policy innovation is critical for policy entrepreneurs if they are success-
fully sell—‘broker’ their ideas to potential supporters” (Mintrom 1997). Sabatier
and Heclo sequentially developed the advocacy coalition framework; “the concept
of the advocacy coalition serves to aggregate large numbers of actors and organiza-
tions at different levels of government into manageable units of analysis” (Freeman
2006, 56). First though, “prospective adopters need accurate information about the
goals, designs, and actual operation of policies under consideration” (Mossberger

and Wolman 2003, 428). According to Rogers, reinvention can occur during diffu-
sion that can improve the original program (Mossberger 2000). Once a program has
the stamp of legitimacy, it has momentum and can be replicated (Walker 1969).
In the case of recruiting, “polydiffusion” can be an asset as it occurs through
vertical and horizontal channels in an interactive network. The federal govern-
ment’s mobilization might inspire other entities. Various scholars have suggested
that policy innovations diffuse across states on a regional basis (Mintrom 1997).
Professional organizations such as GCRC can disseminate the “how-to knowledge”
with what is specific to Chicago versus what is generic. As Mossberger (2000)
succinctly explained, it is much easier to “modify the idea than to start with a new
one, explaining it and defending it.” Using a bounded rationality framework, the
information becomes a process tool to get to a goal-driven result dominated by
expertise, allowing for replication (Mossberger 2000).
Several of the GCRC Steering Board members agreed about what would be
necessary for replication. To make GCRC work in other cities, you need some
grassroots efforts by colleges and government recruiters. They need to get to-
gether to share needs, concerns, and ideas and to collaborate on bringing value to
each other. They must devise a continuing regular meeting schedule and develop
career fair opportunities for students and agencies, and so on. A structure needs
to be in place with a consortium of schools to support it that can weather the
high turnover in college career offices. Initially, a key group of willing, able,
and energetic volunteers from college/university career services and government
people need to get started along with possible assistance from GCRC. A balanced
board made up of different types of college members and a variety of govern-
ment recruiters ensures equality. That can be tricky at times when, for instance,
a local government member slot exists, but no one is willing to fill it. At least
3–4 key people from career services and 3–4 people from government agencies
should be present. A leader or cohort of leaders who believe in the process and
want it to happen needs to step up. Running a group like GCRC is a lot of work,
especially for anyone who would like a leadership position as an officer. At the
core, the group needs clarity of mission and goals, recognizing that they will not
be able to reform the federal hiring system or find every student a job. When the
focus on the goal or purpose (helping connect students with government jobs) is
lost, momentum also is lost. Finally, the most intangible requirements are desire
and strong will.
Several cities have the proper ingredients to replicate the Chicago initiative,
namely FEBs to provide the initial structure and multiple schools and agencies in
a region. The program can be started without any changes to law or regulation.
It would not require coordination from Washington or capital investments. The
potential for developing new talent pipelines is great while the risk is low, creat-
ing the perfect situation for federal agencies to stretch their recruitment budgets
in an innovative manner.
Note
The viewpoints represented in this article are those of the authors, not any of the organiza-
tions mentioned, regardless of authors’ affiliations. For more information on the GCRC,
please go to: www.gcrcassociation.org for current leadership information.
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14
Competencies for Success in International Leadership
in Challenging Times
Daniel Spikes and John Stroup
The role and position of the United States in the world has been a perennial issue
since the founding of the republic.1 The influence, and indeed the vulnerabilities,
of the United States make it imperative for thoughtful Americans—and especially
for those in positions of public trust—to consider how best to ensure national
interests. As a contribution to that larger subject, we identify the competencies
that government executives whose work has international implications should
possess. Although our focus is on the U.S. federal government, we believe that
our observations extend to other national bureaucracies, and perhaps multinational
corporations. Our account is based on a review of academic research, an examina-
tion of U.S. government examples, and a survey of what federal executives say
they need to know for their work.
Modern-Day Theories of Competencies
Descriptions of competencies for international leadership have tended heretofore to

be vague and general in nature. Our research, however, shows that there are specific
skills and knowledge needed for international work that lie outside the traditional
canons of leadership and management. Those qualities, described below in greater
detail, include appreciation for the role of the United States in international affairs,
comprehension of the impact of the international economic system, understanding
of foreign societies, cultivation of personal and institutional relations, and ability to
employ appropriate strategies for public advocacy. The literature on the competen-
cies for leadership and management, especially in the United States, tends to focus
on skills and abilities that might be applied in equal measure to almost any field of
endeavor (see Zaplin and Smith-Heimbrock 2008). The same observation is true
for most of the studies that illuminate qualities needed for international leader-
ship. Before presenting the results of our survey of U.S. government officials, it is
worth examining some of the more significant definitions of the competencies for
international leadership and to distinguish between generic characterizations of
leadership and management skills and those qualities that have specific relevance
for work with international implications.
202
Competencies for Success in International Leadership 203
The study and practice of leadership and management, especially as promoted

by generations of experts and practiced by consultancies, has been reviewed re-
cently and amusingly by Matthew Stewart (2006) in the Atlantic Monthly. Stewart,
a student of philosophy who was a founding partner for a successful consulting
firm, left that profession and examined, for the first time and out of retrospective
curiosity, the literature of management. His article exposes some of the ques-
tionable premises, faulty data, and hyperbole that have informed the profession
since its origins in the Principle of Scientific Management of Frederick Winslow
Taylor in 1899. Those exaggerations recall the characteristics of the “confidence
man” who haunts the history of U.S. intelligence agencies as described by Rhodri
Jeffreys-Jones (2002), where exaggeration and political considerations sometimes
trump rational analysis to the detriment of organizations, policies, and ultimately
the public interest.2 In his jaunty but thoughtful review of leadership and manage-
ment theory, Stewart describes the heuristic nature of many of the commonplace
notions of that subject—“they can lead you to solutions, but they can’t make you
think”—and concludes that the study of philosophy and literature arguably provides
better preparation and mental discipline for professional life than most advanced
degrees in business administration, although he concedes that such degrees have
merit for networking and credentialing. We believe that those criticisms have some
merit, and that similar conclusions might apply to studies and programs that discuss
international competencies in the context of public management.
In 2003, the RAND Corporation published a survey of leaders in government,
business, and the not-for-profit sector in the United States to learn which compe-
tencies they thought were necessary for international work (Bikson, Treverton,
and Lindstrom 2003). Results showed consensus on the need for cognitive abil-
ity, interpersonal skills, character, tolerance, adaptability, and teamwork. Foreign
language and area expertise were somewhat less important for managers, perhaps
because many believed they could hire to need. This research also illustrates basic
distinctions between the public and private sectors in that business has greater
flexibility than government in hiring noncitizens.
The RAND report also highlights some positive trends in government, including
hiring flexibilities and the encouragement of portfolio careers, in which executives
can gain broader experience through assignments to other agencies and departments.
The Career Development Program for Foreign Service employees who wish to
compete for promotion into the Senior Foreign Service at the Department of State
is an example of an internal approach to developing flexibility and portfolio careers
(U.S. Department of State 2005). Under the leadership of the Director of National
Intelligence, the intelligence agencies are endeavoring to take a community-wide
approach to developing international capacities in their organizational leaders
(Office of the Director of National Intelligence 2006). Political appointees in
federal agencies have an important role, the authors note, but the pendulum seems
to have swung too far in that direction. They argue that senior jobs in agencies
should be reserved for career personnel to ensure depth, experience, continuity,
204 Daniel Spikes and John Stroup
and an incentive for career advancement (see especially Ink 2007). It is worth not-
ing, moreover, that the champions of the two examples cited above—the Director
General of the Foreign Service and the Director of National Intelligence—are,
respectively, distinguished representatives of the civilian and the military services
who possess the experience and the sensibility to understand the challenges and
the rewards of new policies.
RAND study authors clearly state that the ability to work well across agencies
is vital, and that implementing portfolio careers that allow for meaningful cross-
agency assignments provides a way to encourage that skill. Globalization of issues
and economies should prompt agencies to reexamine certain fundamentals. For
example, the need for clarity and diligence in hiring noncitizens and the fact that
government, business, and nonprofit institutions are not competitors but collabo-
rators now are matters of conventional wisdom. The psychology of globalization
is an interesting and related idea for the development of international leadership
competencies, with the development of multiple and sometimes novel senses of
identity (Arnett 2002). Despite the need for government-specific skills and capaci-
ties, most of the studies of global competencies, however, focus on the world of
business, and it is to a short review of those works that we now turn.
An attempt to improve on generic categories, and to consider the possibilities of
national differences, is the object of a pilot study of competency profiles reported
by German, Australian, and American managers in an article by J.B. Hunt (1995).
His comparative analysis presents by national group the rankings of ninety-one
competency elements. Hunt identifies seven broad areas of thematic variance
among the three groups:
• Relative emphasis on leadership and team-building
• Degree of flexibility in decision-making
• Emphasis on planning and control
• Persuasion and influence strategies
• Sensitivity to national differences
• Understanding information technology
• Regard for financial implications
Although this study admittedly provides only an illustrative and suggestive pic-
ture of international diversity, it does not isolate—nor does it seek to distinguish—
competencies specific to work with international connections, although some of
those qualities clearly are inherent in some of the areas of thematic difference
such as “sensitivity to national differences” and “persuasion and influence strate-
gies,” assuming, of course, that such sensitivity or persuasion are appropriate to
the audiences in question.
It is not surprising that European experts have taken a different approach that is
more sensitive to international considerations. Koen Becking and Nikol Hopman
(1985) have examined leadership development in the public sector in the European
Union and have published their conclusions on the “competencies for Europe.”
Their definition of seven core competencies for Europe includes a suggestive mix
of attitudes, skills, and knowledge that warrants attention. In their system, each
of the seven competencies is arranged under one of those three broad categories,
and each core competency, similar to the classification of competencies used by
the U.S. Foreign Service, includes detailed subsections. The seven “competencies
for Europe” are:
• Open-minded
• Innovative
• Possessing integrity
• Possessing social skills
• Possessing communication skills
• Result driven
• Possessing knowledge at different levels
Many of the subcategories, such as flexibility, honesty, judgment, and teamwork

skills, are reasonable and similar to those of most of the systems we have exam-
ined. The list is rather more distinctive for the emphasis placed on social skills and
institutional and international knowledge, including linguistic skills, cross-cultural
communication, negotiating skills, strategic perspective, and appreciation for the
organization and priorities of member states in the European Union. The list cer-
tainly is an improvement over the more generalized and self-referential approach
common in the United States, but its one apparent weakness is that there is no
emphasis on the extra-European aspect of public service. In that connection, it
should be noted that Becking and Hopman indicate the urgency of addressing the
needs for global leadership and that the core competencies for the top officials of
the European Commission include the development of a global mission (1985).
The conclusions of Becking and Hopman, as suggested above, recall the de-
scription of competencies used for many years by the U.S. Foreign Service. By
law, the Department of State and other foreign affairs agencies—the U.S. Agency
for International Development and components of the Department of Agriculture
and the Department of Commerce—have precepts for the evaluation of members
of the Foreign Service. The Department of State expresses those competencies as
leadership skills, managerial skills, interpersonal skills, communication and foreign
language skills, intellectual skills, and substantive knowledge (see Spikes 2008).
The general categories of competencies are unremarkable in themselves, especially
in view of the common jargon of leadership and management, but analysis of the
narrative description of the competencies suggests some distinguishing features
for global leadership.3 In the more detailed descriptions under each category, those
distinctive passages include such fundamental skills as understanding of foreign
societies, foreign language skills, cultivation of persons and institutions, analytical
and policy skills, and participation in public advocacy.
Most of the published work on the competencies for success in international
leadership, however, seldom goes beyond describing characteristics that might fairly
be described as common to most any kind of professional endeavor. For example,
of the twelve competencies described by Moran and Riesenberger (1994) in their
fundamental work on international business, there are three that seem distinctive:
having a global point of view, knowing and respecting other cultures, and treating
others as equals. To be fair, other competencies in their list, including teamwork
and negotiation, have additional value in an international context, but they also are
qualities needed in most common endeavors. There are several recent studies from
European scholars that provide useful summaries of the literature on the subject
(Suutari 2002; Jokinen 2005). While there are exceptions, they tend to emphasize
personal characteristics such as having a global perspective, cross-cultural sensitiv-
ity, self-awareness, and an open and agreeable nature (Cagliuri 2006). Other experts
have elaborated on those themes in a more practical manner and have identified other
characteristics. Black and Gregersen (1999), for example, cite five such qualities: (1)
the drive to communicate, (2) a broad sense of sociability, (3) cultural flexibility, (4)
a cosmopolitan orientation, and (5) a collaborative style of negotiation.
In the United States, the Office of Personnel Management (OPM) has established
a set of fundamental competencies and “executive core qualifications” (ECQs) for
the Senior Executive Service, or the most senior officials in the civilian ranks of
the U.S. Civil Service system. The competencies at the heart of the list are generic
and unobjectionable, if tinged in part with understandable hues of fashionable
concern as well as with the familiar litany of interpersonal skills, oral commu-
nication, integrity and honesty, written communication, continuing learning, and
public service. OPM arranges the core qualifications under the headings “leading
change,” “leading people,” “results-driven,” “business acumen,” and “building
coalitions.” Noticeably absent from these lists is anything having to do with inter-
national considerations, a significant omission in a world of interconnections and
for a workforce in which 40 percent of senior executives report that their work has
international implications (www.opm.gov/ses/ecq.asp).
Global Leadership Consortium Competency Research
Federal Executive Institute surveys found that more than two-thirds of U.S. gov-
ernment executives reported that their responsibilities included international work
but that the majority of those involved spoke no language other than English and
rated their own international proficiency as substandard in most categories (http://
governmentexecutive.com/dailyfed/1005/100505mm.htm). Areas for improvement
noted by respondents included (Brower, Newell, and Ronayne 2002, 20):
• Substantive knowledge of the global economy, national security issues, intel-

lectual property rights, export control, and environmental issues
• Cultural sensitivity and country and regional expertise, including government,
regulatory, and economic structures
• Protocol and strategies for working with foreign governments and corporations
• Understanding U.S. –foreign nation partnership agreements and the implica-
tions of such agreements on international policies
• Negotiation skills and communication strategies for international audiences
To challenge or to confirm those results, during April 2007 we conducted a

new electronic mail survey of 645 senior members of the U.S. Civil Service and
members of the Senior Executive Service (SES) whose responsibilities had policy
implications. We report the results in Table 14.1 below.
Table 14.1
Global Leadership Consortium Survey Data
There is an international aspect to my work or that of my office
Total Respondents 147

Yes 110 75%
No 37 25%
Many, but not all of those surveyed had participated in programs at the National
Academy of Public Administration and Federal Executive Institute. Of the 645
persons contacted, 147 responded to the survey. Participants were asked an initial
question regarding whether they perceived an international aspect to their or their
office’s work:
Question 1: There is an international aspect to my work or that of my office. (If

yes, please continue; if not, this question completes the survey.)
If participants answered “yes” to this question, they then were asked to complete
three more questions to describe the substantive, practical, and regional expertise
for which they, or their staff, were interested in receiving further training:
Question 2: The areas where my staff or I might benefit from training include
substantive knowledge of issues (please check all that apply)
Question 3: The areas where my staff or I might benefit from training include
practical knowledge of U.S. policies and bilateral/multilateral rela-
tions (please check all that apply)
Question 4: The areas where my staff or I might benefit from training for country
or regional expertise (please check all that apply)
Figures 14.1, 14.2, and 14.3 list the specific issues for questions 2–4 and provide
percentages on the responses for each specific issue.
Figure 14.1 Percentage of Federal Executives Indicating Interest in Further

Training on Substantive Knowledge of International Issues
Applying the Executive Core Qualifications to
international work 30%
Global implications of American political and 25%

judicial institutions
Intellectual property rights 30%
Trends in globalization and issues of 44%

Substantive areas of knowledge
common concern
Character and role of international business 38%
Image of the U.S. in the world 47%
Conflicts of ideologies 27%
Nature of domestic and international terrorism(s) 32%
Role of nonstate actors 28%
Organization and influence of multilateral

29%
organizations and their instruments
Role of U.S. in international affairs 65%
Energy and natural resources 33%
International economic system and global impact 55%
Global perceptions of U.S. political-military 38%

establishment 0% 10% 20% 30% 40% 50% 60% 70%
Percent indicating interest in further training
This new data, in view of the literature on leadership competency described

earlier, suggests at least three areas for discussion. First, and recalling Matthew
Stewart’s (2006) criticisms of management literature, the effort to create competen-
cies generally remains grounded in the premise that complex human interactions
can be simplified and replicated by defining a particular set of behaviors necessary
for leadership. As Woodruffe notes, competency itself “seems to be used as an
umbrella term to cover almost anything that might directly or indirectly affect job
performance” (Woodruffe 1992). We suggest that current theory underlying human
resource development and personnel management may have moved too far from
specific substantive and intellectual content, skills, and abilities that one must have
in order to succeed as a global leader in the public sector. In short, competency
models often rely too much on generalized proposals for leadership.
It is worthwhile to consider what a competency is. In management education, a
competency is essentially a constructed image of a particular skill set of behaviors
that can be synthesized under a single heading. Competencies are a constellation
of latent and observable variables reduced and simplified. Consider, then, what a
competency does. For the most part, individuals are required to demonstrate a set
of accomplishments that fall under that heading. These images of competency,
Figure 14.2 Percentage of Federal Executives Indicating Interest in Further

Training on Practical Knowledge of U.S. Policies and Bilateral/
Multilateral Relations
Influencing and advocating for one's position 41%

Use of technology as a communications tool 27%
Management of multinational workforce 25%
Protocol and etiquette 50%
Practical areas of knowledge
Presentation techniques 41%

Foreign language skills or issues 25%
Leadership and management skills 45%
Critical analysis 29%
Tools for research 24%
Basics of international treaties and agreements 37%
Performance and measurement of results 39%
Reconstruction and development for failed or 23%
distressed states
Crisis management 34%
Cross-cultural sensitivities 68%
International negotiation skills 54%
0% 10% 20% 30% 40% 50% 60% 70% 80%

Percent indicating interest in training
Figure 14.3 Percentage of Federal Executives Indicating Interest in

Training for Country or Regional Expertise
Australia 25%
East Asia 47%

Country of regional areas for expertise
South Asia 35%
South America 38%
Central America 35%
North Africa 25%
Sub-Saharan Africa 28%
Middle East 38%
Eastern Europe 42%
Western Europe 48%
North America
(Canada/Mexico/Caribbean) 48%
0% 10% 20% 30% 40% 50% 60%

Percent indicating interest in training
like all other human definitions of performance, can be narrowed or broadened to

suit the desired purpose.
International competency models often seem to be linked with previous indi-
vidual contributions rather than setting out a set of skills, knowledge, and values
necessary for future contributions. Certainly, as international work goes, transferring
knowledge from one particular context to another may lead to less than successful
solutions. Evolution of markets, and the interplay of global politics and cultures,
should push current thinking on international competencies from past behavior
toward the skills and knowledge necessary to solve problems in the future. Con-
necting international contexts with the skills to implement such a course of action
is paramount for federal work. Thus, international leadership competency train-
ing might be more beneficial for federal executives if international training were
to become more of an effort to expand the imagination of federal executives for
work in novel situations. That is, training for knowledge or skills for international
work is long over. The work of today’s and tomorrow’s federal executive requires
training for the competencies that employ both.
A second point is directly related to the call made by Treverton and Bikson in
a 2003 RAND issues paper:
The United States confronts a world that is both networked and fractured, both full
of promise and full of danger. The global role of the United States in the century
ahead will require both breadth and depth. It will demand deep understanding
of particular languages and cultures, including those from whence danger might
arise, as well as broad, strategic perspectives on the economic and political forces
that will shape the world. (10, emphasis added)
This broad call suggests a central purpose for the education of international
competencies. One of the primary purposes of training and education generally is
to help learners create and fill a space between difficult problems and actions for
solutions. The results of this survey show that federal executives desire a return to
more specific substantive issues and practical skills for international work. Perhaps
this new survey of federal executives will help educators and practitioners better
to clarify specific content that will support more country-specific information as
well as broader trends in international affairs.
The data summarized above help to define the substantive information and
specific skill sets that international leadership trainers may do well to incorporate.
First, the role of the United States in world affairs remains an important substan-
tive issue for federal executives. Because two of the top substantive issues involve
thinking about the influence and perception of the United States in world politics,
markets, and governance, international educators may do well to focus on those
relations. Further, these data point out that international competencies, at least for
Americans, require an introspective look at the influence of domestic policies that
may shape international relations. Echoing expressions of much of the country,
federal executives seem to be concerned about the image of the United States and
what that means to their own work. That federal executives desire further area or
regional expertise about countries in North America strengthens that hypothesis.
Federal executives, however, also are concerned about the global context with
which they may or may not be familiar. The second and fourth areas for substantive
training involve thinking about globalization more generally. In other words, public
sector leaders in the United States are interested in broad international trends that
have an impact on their work. The results for desired area or regional expertise point
out that beyond the contiguous neighbors of the United States, federal executives
find themselves desiring further training primarily on countries in East Asia and
Europe. Perhaps surprisingly, the Middle East, in a tie with South America, is at
fifth place, although the level of interest, at 38 percent, is not insignificant.
The data also point out what practical skills these federal executives need in
order to put this substantive knowledge to good use. Cross-cultural sensitivities,
international negotiation skills, and protocol and etiquette abilities all suggest the
primacy of face-to-face interactions between federal executives and their counter-
parts in foreign governments and businesses. Rather than focusing on general skill
sets applicable to any leadership situation, these results point to relational skills
specifically tailored for international work.
Finally, let us put to rest the notion that a federal manager can do his or her
work without the international skills, knowledge, and temperament required to do
the public sector work. As our results show, 75 percent of the respondents incorpo-
rate some international factors into their work and responsibilities. To garner and
enhance these capacities, we also must first adopt a culture of management train-
ing. The development of international capacities must become an integrated goal
among leaders across government. As the results demonstrate, federal executives
and their agencies also should take international competencies seriously because
senior officials in the public sector perceive the need for it.
As fundamental competencies go, the ECQs created by OPM contain some
helpful conceptions of competency. Certainly, “leading change,” “leading people,”
being “results-driven,” showing “business acumen,” and “building coalitions”
are important in any professional situation, but our results show that specific
areas of substantive knowledge and practical skills also are important. Adding an
international perspective to those ECQs, used primarily for personnel selection
and for accountability, would, in our view, be a positive development. We also
would encourage executive educators to consider trends in international relations
and the global environment. One promising line of research would be to focus on
the knowledge, skills, and attitudes that federal executives possess and employ in
international contexts. Lines of international competency education then might be
formulated to build on prior knowledge and to open new paths for the development
of globally competent federal leaders.4
The most significant finding of the survey, however, remains the fact that sub-
stantive knowledge and practical skills matter, at least for the American officials
we surveyed. We believe that those abilities, coupled with the more generic skills
described in general studies of leadership skills and in the OPM competency list,
provide a more reliable guide to what managers need to know to be successful in
international work.
Notes
1. This is true from the famous injunction of George Washington in his Farewell Address
to avoid foreign entanglements, through the perceptive observation of Baron Winspeare, a
Neapolitan diplomat assigned to the United States in the 1840s, who noted that Americans
always will appeal to law as a basis for action, inventing new principles as necessary, to
contemporary political arguments for and against intervention abroad. Cf. Imma Ascione,
“Immagini dell’ America nei documenti diplomatici napoletani,” in Stati Uniti a Napoli:
rapporti consolari 1796–1996 (Naples: Filema 1996).
2. See Jeffreys-Jones (2002). The investigation after Pearl Harbor and the formation of
the Central Intelligence Agency, in part to coordinate the work of the several intelligence
agencies, is one suggestive example.
3. For details, see U.S. Department of State, Foreign Affairs Handbook, Chapter 3
Exhibit H (http://www.state.gov/m/a/dir/regs/), and Spikes (2008).
4. The questions for such a survey might include: (1) have you received any training
for international or global competencies? (2) what formal education have you had on those
subjects? Was it experiential in nature? Did it involve your academic studies in high school,
college, graduate school? (3) What post-graduate work have you done on global issues? (4)
What have your international experiences been?
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Becking, K., and N. Hopman. 1985. Excellent Public Leadership: 7 Competencies for
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Bikson, T.K., G.F. Treverton, and G. Lindstrom. 2003. New Challenges for International
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15
An Agency-Level Look at Alternative Working
Arrangements in Federal Government
Sharon H. Mastracci and James R. Thompson
Taxpayers’ interests are best served by knowing that federal employees—sworn

to uphold the public good and work in the public interest—perform government
work. In order to get rid of a worker without notice or any due process,
[an] agency seems willing to be staffed by a group of contingent workers to
whom absolutely no loyalty, commitment, training or career development is
offered.
—AFGE President Bobby L. Harnage, March 12, 2003
[A]llowing private sector firms with an interest in NASA’s operations to send

[their] employees into the agency for two to four years would allow them to
“case the joint” for lucrative future contracting opportunities.
—AFGE General Counsel Mark D. Roth, July 18, 2002
These workers do not receive one single benefit—not health insurance, not life
insurance, not retirement, nor statutory appeals rights. These workers are left
helpless to plan for their future and have no job security.
—Rep. Frank McCloskey (D-IN), July 15, 1993
Core employees and unions need to view the supplemental workforce as helpers,
not vultures hovering over a dying organization.
—NAPA Center for Human Resources Management, September 1, 1998
Recent sweeping changes in staffing and personnel management have evoked

passionate responses such as these. Microsoft Corporation’s “permatemps”
symbolized the rough-and-tumble private sector employment landscape, and the
Microsoft employees’ lawsuit highlighted employer abuses of contingent work
arrangements. Similar trends in government have provoked alarm, as the above
quotes demonstrate. Who are these people in alternative working arrangements? Are
they victims of a Darwinian labor market, as Representative McCloskey suggests?
214
An Agency-Level Look at Alternative Working Arrangements 215
Are they pawns of exploitive federal agencies, as the AFGE president alleges? Or
worse, are they foxes in the henhouse, as the American Federation of Government
Employees (AFGE) counsel charges? Can calls for trust and cooperation from the
National Academy of Public Administration (NAPA) take root in such an emotion-
ally charged environment?
This chapter cannot tackle all of these questions. It can, however, investigate
the phenomenon that has elicited such strong reactions and provide insight on
contingent arrangements to policymakers and federal personnel managers. Amid
all of the reactions to contingent and alternative work arrangements in government,
sober insight is critical, for, as NAPA observes (1998, 7): “Whatever our personal
feelings about all of these changes, it is unlikely that the workplace and workforce
of the past will reappear.”
Federal agencies have been encouraged to explore ways to streamline their work-
forces; two important approaches have been through outsourcing or use of workers
in alternative or nonstandard capacities. Used interchangeably in the literature,
“alternative,” “nonstandard,” “temporary,” “term,” or “intermittent” employment
describes a job that is not permanent and/or not full-time. Private sector firms com-
monly employ workers in such capacities with the help of temporary help agencies
like Kelly Services and Labor Ready. The jobs include seasonal work during summer
for construction workers and during winter for holiday salespeople, and consultant
work for independent contractors and freelancers, writers, and technical experts. The
nature of federal government services differs from that of the private sector, but a need
for part-time, seasonal, and temporary work exists in government all the same. This
chapter explores aspects of nonstandard work in federal agencies, including trends
over time and the factors driving their use, such as fluctuations in agency headcount,
personnel costs, and type of functions performed by agencies.
Interest in nonstandard working arrangements (NSWAs) is rooted in succession
planning concerns as federal retirement projections attract more and more atten-
tion. Who will succeed high-level managers once they retire? Can federal agencies
maintain high rates of productivity if large proportions of their workforces retire,
as is projected? Office of Personnel Management (OPM) director Linda Springer
likens these managerial challenges to a natural disaster, referring to them collec-
tively as the “retirement tsunami.” She warns:
OPM estimates that sixty percent of the government’s 1.6 million white-collar
employees and ninety percent of about 6,000 federal executives will be eligible
for retirement over the next ten years. . . . We need to take steps now to expand
employment opportunities for the next generation of public servants. Because of
expected retirements, we are looking at a very different, very new set of people
who will be here eight, nine, ten years from now. The time to think about that is
now, not then. (Springer 2006)
The need to address succession planning has drawn attention to flexible and
nonstandard employment in federal agencies. Hiring workers in nonstandard ar-
216 Sharon H. Mastracci and James R. Thompson
rangements has been identified as a strategy to address succession planning and

cost-containment issues. Some agencies hire back former employees who have
retired. The prospect of supplementing their retirement income is attractive to many
annuitants. Anticipating retirements of large cohorts reaching thirty years of service
and recognizing the impact this would have on their workforces, the Social Security
Administration (SSA), the Internal Revenue Service (IRS), and the Department of
Justice (DOJ) developed retire-rehire programs to bring back annuitants who can
train newer employees and thereby maintain their institutional knowledge base.
SSA’s use of retirees for training frees up regular employees to perform ongoing,
mission-critical duties. OPM regulations, however, present obstacles to retire-rehire
programs. Those regulations require that the annuitant’s earnings be offset by the
amount of the retiree’s pension. The annuitant ends up working for free up to the
amount of his or her retirement check. Agencies can apply, and have done so, for
waivers of the “annuity offset” but waivers are subject to rigid requirements and
are not readily granted. These rules derive from policymakers’ concerns about the
appearance of double-dipping by federal workers receiving both pension and sal-
ary checks. Expanding annuity offsets beyond a few demonstration projects would
require a change in federal law. Bills have been introduced in both the House (HR
3579 [110th]) and Senate (S 2003 IS [110th]) to allow reemployed annuitants
to work up to six months without affecting their annuities. The idea to make the
annuity offset permanent drew attention of unions representing federal workers
(Rosenberg 2007):
Legislation introduced in the Senate . . . would allow federal retirees to return

to government service without taking pay cuts. The bill, unveiled by Sen. Susan
Collins (R-ME), on Friday is a top priority of Office of Personnel Management
Director Linda Springer, and is backed by a range of retiree and good government
groups. Some labor union officials have expressed concern about its potential
implications for current federal workers. Now, the salaries of federal retirees
who re-enter the workforce are cut by the amount of their pensions. Collins’ bill
would allow them to earn full salaries if they returned on a temporary limited
term basis.
House and Senate bills introduced in 2007 appear to have broader support than
previous legislative efforts and therefore the potential to change the law. Sooner
or later, federal personnel administrators will have to accommodate changes to
this law as well as the changing nature of work overall. Greater insight into the
evolution of federal employment is critical. To facilitate greater understanding of
nonstandard working arrangements in government, analysis proceeds as follows:
first, the average age of the federal workforce is discussed and compared with
demographic trends in employment to state and local government, private sector
firms, and nonprofit organizations. The age distribution of the federal workforce
illustrates clearly the potential for retirement waves to reduce employment abruptly
and leave a vacuum of leadership and institutional knowledge. Plotting this distri-
bution alongside those in other sectors shows that these challenges are unique to
federal personnel managers. Shifting demographic trends in new hires to agencies
underscore the significance of impending retirement waves.
Second, the percentages of NSWAs in all fifteen cabinet-level federal agencies
are examined. In some agencies, increases or decreases in permanent employment
and increases or decreases in NSWAs are almost perfectly correlated. In others,
no link exists, which suggests that a personnel manager’s decision to increase or
decrease the use of nonstandard work arrangements is independent of growth or
decline in the permanent workforce. The decision-making process surrounding
NSWA use follows a separate course—perhaps project-related or cost-related—
and does not vary as headcount changes. A few personnel managers in the federal
sector are quoted to shed light on management strategies. Third, for six federal
agencies the NSWA percentages are examined alongside personnel costs. The six
agencies were chosen because their proportions of nonstandard work arrange-
ments fluctuated significantly between 1998 and 2006. Personnel costs include
payroll costs, the cost of overtime pay, and agency contributions to health benefits
and retirement; each one tends to be lower for workers in temporary or part-time
jobs that do not offer benefits or retirement plans. Although NSWAs help agen-
cies address succession planning, they play an important role in cost cutting as
well. A brief look at employees’ reasons for working in NSWAs suggests that as
many as half do so because they have no choice, which is consistent with a cost-
cutting strategy. Finally, the chapter advances a few questions for policymakers
and managers to consider in light of agency-level trends in the use of nonstandard
working arrangements.
Federal Workforce Characteristics in Context
Two pictures of the federal workforce capture its uniqueness compared to the overall
labor force, and also underscore the unique challenges related to retirements that
its personnel managers must face in the coming years. Figure 15.1 shows the age
distribution of the federal workforce compared to state and local government and
to the workforce outside the public sector, and is consistent with previous analyses
of the federal workforce (CBO 2007; GAO 2000, 2001a, 2001b, 2007; Partnership
for Public Service 2007; Ban 1999).
Figure 15.1 demonstrates how large numbers of “baby boomer” retirements will
affect personnel demographics of federal agency workforces to a far greater extent
than changing workforce demographics will affect the private sector, nonprofit sec-
tor, and state and local government. Federal government expansions in the 1960s
and early 1970s preceded hiring freezes throughout the 1980s and downsizing and
outsourcing in the 1990s. Influences on human resource management processes
such as these were brought about by political/ideological ebbs and flows and have
produced challenges for personnel managers that are unique to federal agencies.
In addition to illustrating that federal workers are older—five to six years on aver-
Figure 15.1 Age Distributions of Workers in Core Federal Government, State

and Local Government, and Outside the Public Sector, 2005
4
Core Federal
State & Local Government
Government
3
Percent of Total
Outside the
Public Sector
0
18 20 22 24 26 28 30 32 34 36 38 40 42 44 46 48 50 52 54 56 58 60 62 64 66 68 70 72 74 76 78 80
Age
Source: U.S. Bureau of Labor Statistics’ Contingent Work supplements to the Current
Population Survey, February 2005.
Note: Moving averages are used to smooth the distributions, which are based on weighted
sample data and therefore more volatile than are distributions based on an entire population.
Due to the use of a moving average, each distribution appears to start at around 18-19 years
even though all age ranges start at 16 years.
age compared to state and local government and the private sector—Figure 15.1
also shows that retirement-eligible employees continue to work. According to
OPM, the number of federal workers with thirty-plus years of service has grown
from 6.9 percent in 1998 to 10.4 percent in 2006. A number of reports predicted
retirement waves to hit as early as 2005, but an increase in average years of ser-
vice as well as the fact that the majority of baby boomers have not quite reached
full retirement age helps to explain why the onslaught has not yet arrived in full
force. What is more, since retirements are not mandatory, it has become more
difficult to estimate when retirements en masse will hit the federal workforce; as
OPM observes: “Less than one in four employees that are eligible for retirement
actually retires in a given year” (2006, 11). Incentives for early retirement helped
to achieve workforce downsizing goals during the 1990s and can help personnel
managers to better anticipate impending retirement waves, but “early out” rates
have fallen steadily since the late 1990s (OPM 2006). Not only could half of the
federal workforce retire in the coming decade, but recent hiring efforts in federal
agencies will not offset the vacuum resulting from mass retirements. Between
1994 and 2004, new hires to the federal government have grown older and older,
as Figure 15.2 shows.
Figure 15.2 Age Distribution of New Hires in Federal Agencies, 1994, 1999,
and 2004
20%
1994 1999 2004
18%
16%
Percentage of Workforce
14%
12%
10%
8%
6%
4%
2%
0%
< 20 20-24 25-29 30-34 35-39 40-44 45-49 50-54 55-59 60-64 > 65
Source: Figure 6, “Age Distribution of New Hires.” Office of Personnel Management,

Federal Workforce Overview: FY 1994–2004. (2006 April).
The distribution of new hires shifts from single-peaked curves in 1994 and
1999, to a bi-modal curve in 2004, with a peak in the 25–29 age range and another
around the mid-40s. Age distributions of new hires to federal agencies in 1994
and 1999 mimic trends outside the federal government. A smoother distribution
across age cohorts provides a steadier stream of workers advancing through their
careers. If new hires in 2004 remain in the federal sector for the remainder of their
careers, federal agencies could face another succession crisis, albeit one of less
impact, in approximately twenty years. Sooner or later, a retirement wave will
hit the federal government because its workforce is older than that of the private
sector, nonprofits, and state and local government; and because its new hires are
older than in other sectors as well.
What Is Known about Nonstandard Working Arrangements

in Government?
Beyond succession planning, federal agencies use a range of alternative employ-

ment strategies to meet surge needs when demand for agency services fluctuates,
to support family-friendly workplaces, to recruit and retain talent, and to decrease
personnel costs. What is known about the use of contingent and nonstandard work
has come from both qualitative and quantitative analyses, the latter based on a na-
tionwide survey of contingent work administered by the Bureau of Labor Statistics

(BLS). Our research, and that of others, suggests that, in general, NSWAs are found
at either end of the job skills spectrum: in entry-level positions to screen workers
for relatively low-skilled clerical and technical jobs, and in high-skill jobs to obtain
specific expertise for a particular project, maintain continuity of leadership, or to
preserve institutional knowledge (Mastracci and Thompson 2005). Flexible work-
ing arrangements have served federal agencies well, but trends over time indicate
that their use has not grown (Ban 1999). OPM director Springer underscores the
importance of planning ahead for retirement waves, so as personnel directors in-
creasingly follow OPM’s recommendations to plan for impending retirements, the
numbers of NSWAs in federal government agencies should grow.
In addition, as agencies face increasing pressure to cut costs, NSWAs should
increase as well. BLS’s survey of contingent work captures demographic charac-
teristics of workers, occupations, and job functions, but not employers. These data
have been used to examine contingent work in the federal government, but the
authors have concluded that these data fail to capture agency-level trends, where
the “real action” might lie, and recommend that further research should focus on
agencies.
Contingent Work Arrangements over Time
Using data from OPM’s Central Personnel Data File (CPDF), trends in NSWAs are
tracked in proportion to total employment in an agency (OPM 2007). NSWAs are
defined as jobs that are not full-time and permanent (Mastracci and Thompson 2005;
Thompson and Mastracci 2005), as have Government Accountability Office (GAO)
reports (GAO 2000, 2007). This population is captured by focusing on two CPDF
categories: “not permanent” job appointments and “not full-time” work schedules.
NSWAs play different roles in different agencies, and this is demonstrated by their
share of total agency employment. In general, the fifteen cabinet-level agencies
can be divided into those where NSWAs comprise fewer than 10 percent of total
employment and those where NSWAs comprise more than 10 percent. Figures 15.3
and 15.4 depict trends in proportions of NSWAs by agency from 1998 to 2006. In
both, certain agencies are selected for further analysis because their NSWA share
of total employment varies more than others do over the time period.
The departments of Treasury, Justice, Defense, and Housing and Urban Develop-
ment (HUD) are highlighted because the authors examine them further against their
personnel costs and employment growth. Employment in both the departments of
Treasury and Justice fell after fiscal year 2003 due to the creation of the Depart-
ment of Homeland Security (DHS). Employment in several agencies was affected
as functions from other agencies became parts of DHS, and when large numbers
of workers were released and then rehired after Hurricane Katrina. Contingent ar-
rangements as a proportion of total employment did not fall, however. Figure 15.4
plots NSWA share of total employment in agencies where it exceeds 10 percent.
Figure 15.3 NSWAs as a Proportion of Total Employment (<10%),

by Agency
NSWA % of Total (<10%)
0.10
0.09
0.08
0.07
0.06
0.05
0.04
0.03
0.02 Labor Treasury

Defense Housing & Urban Development
Justice Energy
0.01 Transportation
0.00
1998 1999 2000 2001 2002 2003 2004 2005 2006
Source: Authors’ calculations using data from CPDF September employment data from
1998–2006.
Figure 15.4 NSWAs as a Proportion of Total Employment (>10%), by

Agency
NSWA % of Total (>10%)
50%
45%
40%
35%
30%
25%
20%
15%
10% Veterans Affairs Interior Agriculture

Commerce State Health & Human Services
5%
Education Homeland Security
0%
1998 1999 2000 2001 2002 2003 2004 2005 2006
Source: Authors’ calculations using data from CPDF September employment data from
1998–2006.
Veterans Affairs (VA) and Health and Human Services (HHS) are highlighted
for further study because their NSWA shares exhibit interesting variations over the
period, as well. Figure 15.4 shows the proportion of NSWAs in the Department of
Commerce (DOC) to have increased substantially up to 2000 with a subsequent
drop, but this change is due to the decennial need for temporary census enumera-
tors. Agencies facing seasonal demands such as these were not examined further
because their variations in NSWAs are predictable, the positions play a very specific
role in their agencies’ missions, and these roles tend not to change.
Changes in the Full-Time Permanent and Contingent Workforces

over Time
In some agencies, fluctuations in the employment of full-time, permanent employ-

ees do not coincide with changes in the percentage of nonstandard arrangements
in an agency. In other agencies, changes in NSWAs and changes in the full-time
permanent workforce are correlated nearly perfectly.
Correlations (Pearson’s r) in Figure 15.5 show there to be essentially no link
between growth in NSWAs and growth in the full-time permanent workforce in
the departments of Energy (DOE), Labor (DOL), and Homeland Security (DHS).
A somewhat weak relationship between the two is found in the departments of De-
fense (DOD), Interior (DOI), and Agriculture (USDA). This indicates that changes
in the number of people working in NSWAs are independent from changes in the
number of people working in full-time permanent positions. For instance, full-time
permanent employment in DOE has fallen while NSWA positions fluctuated and
then grew later in the period. Full-time permanent employment at DOL jumped
and stayed higher from 2001 to 2003 and then dropped while its NSWA workforce
shrunk steadily until about 2002 and then grew gradually thereafter. Somewhat
stronger links exist in VA, HHS, and HUD; and even stronger correlations are found
in the departments of Commerce and Education. As DOC’s full-time permanent
employment rises, employment in NSWAs falls, and vice versa.
The most striking results are found in the Treasury Department and the depart-
ments of State, Justice, and Transportation (DOT), where correlations between
full-time and NSWA employment are almost perfect. Between fiscal years 1998
and 2002, full-time permanent employment in the Treasury and DOJ was flat. The
extensive reorganization of these agencies that resulted in the creation of DHS
caused employment in Treasury and DOJ to drop, and their NSWA workforces
dropped accordingly. Full-time permanent employment at DOT remained steady
from 1998 to 2001, jumped in 2002, and returned to its previous trend thereafter.
NSWA employment at DOT did the same. Employment at the State Department has
neither grown nor fallen during this period. These agencies have experienced no
greater or lesser need for NSWAs. Their use only changes as overall employment
does. In contrast, other agencies have increased or cut their NSWA workforces
independently from their decisions regarding the regular full-time workforce. One
Figure 15.5 Correlations Between Changes in Full-Time Permanent

Employment and NSWAs
0.99 0.96
1.00 0.93
0.80 0.70
0.66
0.60
0.37
0.40 0.34 0.34
0.20
0.00
-0.03
-0.06 -0.07
-0.20
-0.20
-0.40
-0.40 -0.41
-0.60 -0.53
-0.80
-1.00
Source: Authors’ calculations using CPDF September employment data from 1998–
2006.
important lesson to be drawn from trends in these agencies is that there is no single
NSWA strategy to fit all agencies. What is more, an agency may need to shift its
own strategy as circumstances warrant. Federal personnel managers cannot follow
a “recipe” for NSWAs, implement it, and maintain a status quo. Each personnel
manager must answer several questions with respect to the unique needs of his
or her agency—questions with which this chapter ends, after several trends and
correlations are revealed.
Each agency can use NSWAs for a variety of reasons, and several types of
NSWAs can exist within a single agency. Katharine Abraham and Robert McKersie
(1990) find that employers make use of NSWAs to gain more flexibility to adjust
the quantity and skill mix of labor inputs; to save on compensation costs; and to
obtain special skills and services not currently available in-house. And Susan House-
man (2002), in her survey of a nationally representative sample of private sector
establishments, identified a number of reasons why firms make use of NSWAs;
the most commonly cited had to do with staffing flexibility. For example, over 50
percent of the firms surveyed use workers in one or more categories of NSWAs
to accommodate “unexpected increases in business” and/or to provide assistance
“during peak time hours of the day or week.” A high percentage of firms also use
workers in NSWAs to fill vacancies until a regular employee is hired, fill in for a
regular employee who is sick or on vacation, and for special projects.
The authors interviewed personnel managers in a dozen federal offices and
found that many base their decisions on the role of an occupation or job function
in the context of the agency’s mission (Thompson and Mastracci 2005; Mastracci
and Thompson 2005). Several managers cite their need for specific expertise for a
defined project. Several of them echo the sentiments of Marianne Jenkins, director
of human resources at USDA, who noted during an interview, “We don’t need a
permanent full time workforce a hundred percent of the time.” Director Jenkins
describes USDA’s efforts to work with OPM to obtain employees with specific
expertise “for those temporary positions related to BSE, which is mad cow dis-
ease. . . . We also have gone in and asked for a waiver of annuity offsets so that we
could bring in retired individuals and then it wouldn’t affect their annuity. Again
we have that because of the temporary work with BSE.” BSE, bird flu, and E. coli
contamination are examples of high-profile public health matters to which USDA
must respond quickly. NASA uses temporary and term appointments to obtain
highly skilled specialists for specific projects, as noted by Robyn Gordon of the
Glenn Space Center in an interview: “We have an aircraft that we fly to study the
icing and the weather patterns. If that icing work is being defined [so] that we’re
only going to do this for two years, that’s the length of the research project, [and]
we [hire] a term pilot for that period of time.”
According to Human Resources director Debra Tomchek in a telephone inter-
view, DOJ has used temporary and term appointments to bring in highly skilled
experts “to support the litigating divisions—antitrust and civil divisions—on large
federal cases when the state is building its case and doing research” (Tomchek
2004). Although DOJ’s use of NSWAs is limited by hiring and training costs, the
agency does not wish to cut corners in its personnel management processes:
[Our] positions require specialized skills obtained from the FBI academy, DEA
academy . . . we place a huge training investment in employees. A minimum
level of security clearance is needed, plus regular drug testing, fingerprinting,
and background checks, and all FBI [staff] have top-secret clearance and must
pass lie detector tests. The investments in training and security checks are very
high. All administrative personnel must have security clearance, as well.
The Department of Justice makes only limited use of NSWAs due to the high
costs of screening, hiring, and training its workforce. The Transportation Security
Administration (TSA) requires a workforce that can vary as demand for its services
vary. Jan Karicher is part of the TSA’s organization-wide human resource manage-
ment effort. He provides two clear examples of demand fluctuations that create a
need for a flexible workforce (Karicher 2004):
We have some temps, maybe some seasonals in Colorado in airports that are open
in winter for skiing but not in the summer. Another thing we have is split shifts:
we will permit an employee to work four hours in the morning and four hours in
the afternoon . . . based on traffic flow and the needs of the airport.
The benefits of NSWAs, however, involve other compromises. It is harder to re-

cruit for part-time, temporary, or seasonal positions compared to full-time, full-year
permanent jobs. Many of those who accept NSWAs do so pending an opportunity for
regular employment, and federal employers like the IRS and TSA cite high levels of
turnover among their seasonal and part-time employees respectively. Turnover increases
recruitment and training costs. Workers in temporary positions might be considered
second-class citizens relative to their colleagues holding permanent positions. There is
little incentive to invest in training for employees who may be with the agency for only
a short period of time. Moss, Salzman, and Tilly studied the experiences of four firms
in the electronics and insurance industries and found (2000, 95): “Managers generally
voiced negative opinions about the results of using temporary workers, including lower
productivity, higher turnover, and lower morale.” The firms found contingent work ar-
rangements to be most useful in routine functions such as security or mailroom work,
or establishing remote sites for low-level call-center and back-office tasks but not for
work “where commitment, communication, and the ability to innovate are most criti-
cal” (Ibid.). Personnel managers might choose to bear the costs of lower morale and
productivity, however, if they can cut personnel costs by using NSWAs.
NSWAs and Personnel Costs
One of the clearest and most criticized uses of contingent and temporary work is
to cut costs. This human resource management strategy is criticized because tem-
porary and part-time workers tend to earn lower wages than do their permanent
and full-time counterparts. They are also far less likely to have health, retirement,
and other benefits compared to permanent full-time workers. Houseman observes
from her analysis of employer practices (2002, 161):
Whereas the overwhelming majority of employers offered paid vacation and holi-
days, paid sick leave, pension benefits, and health insurance benefits to regular full-
time staff, few of them offered these benefits to short-term hires or on-call workers.
Less than half of employers offered paid vacation and holidays to at least 50% of
their part-time staff, and only about a third offered at least half of their part-time
employees paid sick leave, pension benefits, and health insurance benefits.
Companies employing NSWAs can save on wage costs as well as on benefit costs.
Temporary, short-term, or part-time workers are often not covered by the terms of
collective bargaining agreements in firms with unionized workforces and hence can be
paid at a lower wage. Kahn (2000, 243) references the use of temporary help agency
personnel as a means of holding down headcount, noting, “The corporate policy with
the most significant impact on temp use is head-count restriction, a common mecha-
nism used by central management to control costs and keep major decisions in their
own hands. . . .” Federal agencies are constantly pressured to hold down headcount.
Two strategies pursued by federal agencies to control the sizes of their workforces
have been outsourcing and using temporary working arrangements.
The cost of health insurance for federal employees is prorated based on the number
of hours worked. Thus an employee working half-time would have to pick up half the
total cost of health insurance. This amounts to several hundred dollars per month in
Figure 15.6 Reasons for Working in Federal Government NSWAs
Source: Authors’ calculations of BLS Current Population Survey Contingent Work

Supplement data, 1995–2005 (n = 263). Categories may not sum to 100 percent due to
rounding.
additional insurance costs, which is prohibitive for many workers. BLS data suggest
that fully half of all federal workers in NSWAs are working in temporary positions
involuntarily. However, BLS data also show that many workers, particularly retirees,
students, and those with personal or family obligations prefer part-time, temporary,
seasonal, and or contract work. It is in the interest of agencies seeking to tap into
this labor pool to make suitable job opportunities available by expanding NSWA op-
portunities. Such a strategy is likely to become even more compelling in the future
as a result of simultaneous slowing in the growth of the overall labor force and an
increase in the number of individuals working past retirement age.
Figure 15.6 summarizes these BLS data for federal sector workers in NSWAs.
The Current Population Survey provides twelve reasons why one might work in a
temporary or part-time job:
Personal preference
• I prefer a flexible schedule.

• To balance family or other obligations.
• To obtain experience.
• I wanted work for only a short period of time.
Economic conditions or the nature of the work
• I was laid off and rehired in a temporary capacity.

• Only type of job I could find.
• I hope this job leads to a permanent position.
• The nature of the work is seasonal.
• Other economic and earnings-related reasons.
Reasons not related to economic conditions
• Other personal reasons.

• Health limitations.
• Retired or exceeded Social Security earnings limit.
The response “currently attending school” stands alone as its own category, and
respondents must choose only one reason.
One-half of respondents working in a nonstandard work arrangement feel that
they do so involuntarily, rather than by personal preference.
Selected Agencies’ Trends in Personnel Costs
Six agencies were selected that exhibited significant changes in their NSWA share
of total employment, as shown in Figures 15.3 and 15.4. Do personnel costs prompt
human resource managers to use NSWAs? CPDF provides data on agency person-
nel costs, which include regular payroll and overtime pay, insurance benefits, and
retirement contributions.
The following charts plot percentage change in costs and NSWAs over time on
two vertical axes. Percentage changes from the previous year in personnel costs are
measured on the left-hand vertical axis in order to capture whether NSWA use is
responsive to fluctuations in cost. Time is measured on the horizontal axis and ranges
from 1997 to 2006. The number of NSWAs is measured on the right-hand-side verti-
cal axis with ranges that correspond to costs for the agency. For example, DOD is a
much larger agency than HUD and has a larger NSWA workforce. The right-hand-
side vertical axis for DOD (Figure 15.7) when percents are converted to number of
employees, ranges from zero to 75,000, while the same one for HUD (Figure 15.11)
ranges from zero to 1,000. Information on personnel costs was obtained from OPM
reports entitled Work Years and Personnel Costs. Only eight years are available, and
personnel cost data is plotted from 1997 to 2003. NSWA data come from the CPDF
September employment reports and are available from 1998 to 2006.
The purpose of combining information from these two sources is to determine
if agencies expand or contract their NSWA workforce in response to person-
nel cost changes. If so, then this would suggest that agencies are sensitive to
costs and use NSWAs as part of their budgeting strategy. Pearson correlation
Figure 15.7 Nonstandard Work Arrangements and Personnel Costs:

Department of Defense
Department of Defense (DOD)
80% 40%
70% 35%
60%
NSWA Proportion of Total Employment

30%
Cost Change from Prior Year
50%
Basic Pay 25%
Premium Pay
40%
Benefits (including Retirement) 20%
30% NSWA as a Proportion of Total
15%
20%
10%
10%
5%
0%
1999 2001 2002 2003 2004 2005 2006
1997 1998 2000
-10% 0%
Source: Authors’ calculations using CPDF employment data 1998–2006; OPM Work
Years and Personnel Costs reports for fiscal years 1996–2003.
coefficients between costs and NSWAs are also reported. Of interest are any
patterns that might suggest any relationship between an individual agency’s
personnel costs and the extent to which they rely on nonstandard work ar-
rangements. Most NSWAs do not have health or retirement benefits, nor are
they eligible for overtime pay; therefore, the agency would not make health
and retirement contributions on their behalf. Some part-time positions have
prorated benefits, so agency costs are lower even if benefits are provided. For
these reasons, one would expect to see that as NSWAs increase, benefit costs
and premium pay fall, as well. Workers in nonstandard arrangements tend to
earn less than do their counterparts (GAO 2000), so basic pay might be expected
to fall as NSWAs increase.
The DOD NSWA workforce has varied only slightly between 1998 and
2006. Percentage change in personnel costs are measured on the left-hand-
side vertical axis, and as Figure 15.7 shows, basic pay has climbed, as have
contributions to employee benefits. Costs and NSWA percentage do not appear
to correlate to one another, and this is confirmed by the Pearson correlation
coefficient that captures the link between NSWAs and costs. For DOD, this
coefficient is 0.03, which denotes the absence of any relationship between costs
and NSWAs. Figures 15.8 to 15.12 contain cost trends and NSWA trends over
time in the remaining five agencies selected. Like DOD, the size of the NSWA
workforces at HHS (Figure 15.8) and DOJ (Figure 15.9) are not correlated with
Figure 15.8 Nonstandard Work Arrangements and Personnel Costs: Health

and Human Services
Health & Human Services (HHS)
80% Basic Pay 40%
Premium Pay
Benefits (including Retirement)
60% NSWA as a Proportion of Total

30%
40%
20% 20%
0%
1997 1998 1999 2000 2001 2002 2003 2004 2005 2006
10%
-20%
-40% 0%

Department of Justice
Department of Justice (DOJ)
80% Basic Pay 40%
Premium Pay
Benefits (including Retirement) 35%

60%
NSWA as a Proportion of Total
30%
40%
25%
20%
20%
0%
1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 15%
-20%
10%
-40%
5%
-60% 0%

Treasury Department
Department of Treasury
80% 20%
Basic Pay
Premium Pay
60% Benefits (including Retirement)
NSWA as a Proportion of Total 15%

NSWA Proportion of Total

40%
20% 10%
0%
1997 1998 1999 2000 2001 2002 2003 2004 2005 2006
5%
-20%
-40% 0%
costs. Correlation coefficients indicate the absence of any link between the two:
rho equals 0.04 for HHS and 0.05 for DOJ. Evidence of stronger relationships
exists for the Treasury Department (Figure 15.10), HUD (Figure 15.11), and
VA (Figure 15.12).
Basic pay and contributions to employee benefits dropped for both DOJ (Figure
15.9) and Treasury (Figure 15.10) once DHS was created. Although DHS drew
from several existing departments, DOJ and Treasury were especially affected by
the reorganization. The size of the NSWA workforce at DOJ does not change in
response to personnel cost changes, but it does at the Treasury Department (ρ =
0.67). A rather strong and positive relationship exists between costs and the size
of the NSWA workforce at Treasury.
The size of the NSWA workforce and personnel costs are somewhat strongly
linked at both HUD (ρ = –0.54) and VA (ρ = –0.63). Both relationships are inverse,
which indicates that as one of them increases, the other decreases. Basic and over-
time payroll costs for HUD varied from 1997 to 2003, as did the number of people
employed in NSWAs. An interesting research project would be an examination
of whether personnel managers at HUD responded to rising costs by using more
and more NSWAs, or whether the changes in the size of the NSWA workforce
triggered the jump in payroll costs. On the other hand, VA personnel costs varied
only slightly between 1997 and 2003, but the size of the NSWA workforce dropped
sharply in 1998 and did not increase. Another area for further research would be
to investigate this linkage.

Housing and Urban Development
Housing & Urban Development (HUD)
100% Basic Pay 40%

Premium Pay
35%
Benefits (including Retirement)
80%
NSWA as a Proportion of Total
NSWAs as a Percent of Total Employment

30%
Cost Change from Previous Year
60% 25%
20%
40%
15%
20%
10%
0% 5%
2001 2002 2003 2004 2005 2006
1997 1998 1999 2000 0%
-20%
-5%
-40% -10%

Veterans Affairs
Veterans Affairs (VA)
50% 40%
Basic Pay
Premium Pay 35%

40% Benefits (including Retirement)
NSWA as a Proportion of Total 30%

30%
25%
20% 20%
15%
10%
10%
0%
5%
1997 1998 1999 2000 2001 2002 2003 2004 2005 2006
-10% 0%
Source: Authors’ calculations using CPDF employment data 1998-2006; OPM Work
Toward the Future of NSWAs in Federal Personnel Management
This chapter has raised several issues about contingent and alternative working
arrangements in federal agencies, but has only scratched the surface. Policymakers
must address several issues when considering agencies’ needs for NSWAs:
• Do certain occupations require full-time permanent staff?

• Do certain job functions require full-time permanent staff?
• Which agencies are able to create flexible workforces more readily than others?
• Some agencies face mission-specific barriers to increasing their use of NSWAs:
for example, the hiring and training costs faced by DOJ limit their use of
NSWAs; are there others?
Similarly, personnel managers must address several questions to align their

workers’ needs with their agency’s workforce needs:
• What are workers’ motivations for working in NSWAs in the federal

government?
• Do workers in NSWAs hold those positions in order to eventually obtain
full-time permanent employment with a federal agency?
• Are NSWAs in federal agencies more attractive to workers than contingent
work in the private sector?
Federal leadership cannot ignore these questions if they are considering the use
of NSWAs to address their workforce needs. Managers and policymakers who can-
not answer these questions must revisit their flexible workforce strategies. Unions
and good government groups could play a role in the process, as well. Results
from the analysis in this chapter provide strong indicators of the types of issues
to be resolved in a flexible workforce strategy and the factors that are related—or
unrelated—to federal agencies’ NSWA use thus far. These results also underscore
the variation of NSWA strategies across agencies as well as an absence of a one-
size-fits-all approach to pursuing greater workforce flexibility.
References
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16
Strategic Workforce Management
Innovation and Improvement at DTRA
Michael Simpson
The Defense Threat Reduction Agency (DTRA), an agency of the Department of

Defense (DoD), has faced a series of workforce management challenges, as have
other federal entities. Among the major issues were the following: fewer than an-
ticipated losses of capabilities due to retirement, unexpected losses of workers for
reasons other than retirement, difficulty attracting people with desired skill sets,
further difficulty retaining people with needed knowledge and experience, and
challenges in determining capabilities and experience that will be needed in the
future. This description of recent observations, decisions, and recommendations
to improve strategic workforce management at DTRA, and the process used to do
so, is intended to help other organizations improve their workforce management
approaches. One component of DTRA’s overall solution involved bringing in an
outside facilitator, Computer Sciences Corporation (CSC), not to fix a broken
system, but rather to improve, augment, and enhance the agency’s workforce
management procedures and policies.
Background
DTRA’s mission is to safeguard the United States and its allies from weapons of
mass destruction by providing capabilities to reduce, eliminate, and counter the threat
and mitigate its effects.1 In 1998, elements of the Office of the Secretary of Defense
staff, the Defense Technology Security Administration, the Defense Special Weapons
Agency, and the On-Site Inspection Agency were consolidated to form DTRA. Today,
the agency has authorized 1,955 military and civilian personnel, has a FY 2007 budget
of $2.68 billion, and includes four enterprises—Research and Development (RD),
Combating Weapons of Mass Destruction (CW), Operations (OP), and Business
Enterprise (BE)—the Advanced Systems and Concepts Office (ASCO), Security and
Counterintelligence Directorate (SC) and staff offices, including Equal Opportunity
(EO), General Counsel (GC), Inspector General (IG), Public Affairs (DIR-COS-PA),
and Legislative Affairs (LA). Human capital and the other support functions of acquisi
234
Innovation and Improvement at DTRA 235
Figure 16.1 DTRA Organization Chart
Director
Deputy Director
Security &
Counterintelligence
Advanced Systems
Staff Offices
& Concepts
Associate Director Associate Director Associate Director

Combating WMD
R&D Operations Business
Chemical/Biological
On-site Inspections
Technologies
Nuclear Cooperative Threat

Technologies Reduction
Counter WMD
Combat Support
Technologies
Basic & Applied

Sciences
tion, financial management and information management are combined in Business

Enterprise under the Associate Director for Business (see Figure 16.1).2
The agency, beyond the “vertical” organization of enterprises, is also “horizon-
tally” organized in seven campaigns (Situational Awareness, Control WMD Mate-
rials and Systems Worldwide, Defeat the Threat of Lost or Stolen Loose Nuclear
Weapons, Eliminate WMD as a Threat to the Warfighter, Protect the Homeland
from WMD, Transform the Deterrent, and Business Excellence), activities that cut
across and involve all the enterprises.3
Agency Challenges
Much attention has been paid to the fact that the public and private sector civilian
workforce is aging and potentially retiring, with subsequent challenges to employers
to hire younger, capable workers quickly enough, while retaining knowledgeable
and experienced workers long enough to train the next generation.4 While DTRA had
been considering these retirement-related challenges, it nonetheless was surprised
by the sudden losses of some highly experienced and high-level staff members.
These losses were compounded by other unexpected losses of workers for reasons
236 Michael Simpson
other than retirement—vulnerability to losses due to retirement, itself quite high,

was outpaced significantly in certain parts of DTRA by actual losses due to reasons
other than retirement. Further, hiring and retention rates in some areas were not
keeping pace with loss rates. While events involving RD were of concern, DTRA
decided to address the loss-hiring-retention and related challenges in an agency-
wide, strategic fashion, with an initial focus on RD. DTRA contracted with CSC
to facilitate and add technical expertise to the development and implementation of
an agency “strategic workforce management process and plan” (SWP).
Developing and Implementing an Agency SWP
A strategy was created for the development and implementation of SWP. DRTA’s
deputy director would chair a “Blue Ribbon Panel” (BRP), composed of the associ-
ate directors of the four enterprises (RD, CW, OP, and BE), as well as the director
of Human Capital. Interactive work to support the BRP’s decision-making function
was performed by “points of contact” for each enterprise or office, who collectively
formed the “Points of Contact” (POC) panel; while there was more than one POC
panelist from each enterprise, some offices sent no more than one POC panelist.
The CSC team, by serving as staff and rapporteurs, facilitated and brought technical
expertise to the work of the BRP and POC panel. Interactions within the BRP and
POC panel were, at times, intense. Focusing participants’ energies toward positive
and usable endpoints was a major accomplishment of this innovative method for
developing and implementing SWP.
While each POC and BRP panelist came from and represented enterprises or of-
fices, it was important that the sense of ownership of the agency SWP penetrate all
enterprises and offices. The CSC team facilitated crucial initial meetings to maximize
the sense of an agency-wide perspective and commitment—participants came to know
more about the other enterprises and offices, came to appreciate one another, and came
to see and understand agency-wide issues, policies, options, impacts, and objectives.
The exchange of viewpoints on enterprise-specific and agency-wide programs and
policies, not just during the initial meeting but through all the meetings among POC
and BRP panelists, was valuable, and the arrival at consensus, enabled SWP.
Targeted toward SWP, the POC, BRP, and CSC discussions, written assignments,
presentations, and products were designed around a four-step strategic workforce
planning process, composed of demand forecast, supply projection, gap analysis,
and strategy development. The six-month implementation process for SWP involved
broad scanning and deep inspection of workforce management within enterprises
and offices, with broad and deep formulation of recommended actions.
Observations, Decisions, and Recommendations
The following may be considered innovative, but the real innovation is the col-
laborative process involving the joint efforts of POC, BRP, and CSC.
Making BE-BH a Strategic Component. From the outset, it was apparent that
the human capital function (BH), while organizationally within the Business Enter-
prise, has a strategic role to play in SWP. While there are occasions when simply
replacing capabilities as they are lost may be adequate, there is a strategic role that
BE-BH can play, by coordinating enterprise-specific needs into agency-wide plans
and programs. From the beginning, BE-BH has been an integral component of the
BRP and POC panel work toward SWP.
Making DTRA SWP Authoritative. While there had been earlier efforts at SWP
on an enterprise or office level, an authoritative, agency-wide SWP would need to
be developed and implemented across DTRA. As such, an agency-wide directive
and instruction, with explicit SWP duties specified for participants across DTRA
(from individual workers up to and including the director) was the most authorita-
tive approach for the agency-wide SWP.
Making DTRA SWP Enduring, Strategic, and Integral. While unanticipated, im-
mediate vacancies may have been the near-term inspiration to build SWP, a truly
strategic, long-term approach to workforce management was needed, one not built
on transient workforce needs or management concerns. A SWP should be linked
closely with the programming, planning, budgeting, and execution (PPBE) system,
as well as the program objectives memorandum (POM) process,5 to ensure that SWP
would be an effort integrated with DoD’s planning and budgeting activities. SWP
incorporated goals and plans as long as fifteen years hence, and it was designed to
be enduring, strategic, and integral to DTRA and DoD.
Making SWP Inclusive. Even with the initial focus on RD enterprise needs,
DTRA staff capabilities transcended conventional science and technology skills.
Skill sets under agency-wide consideration were made more inclusive, designated
“STEMIT” to explicitly include science, technology, engineering, mathematics,
and information technology. The concept of workforce diversity was expanded to
include not only race, color, national origin, and gender, but also the diverse range
of skills and capabilities needed across DTRA.
While this first step in developing SWP focused on the RD enterprise, SWP
would be applied, over the near future, to DTRA’s other enterprises and offices.
Finally, this first step toward SWP centered on the civilian workforce, but in the
near future, it would include military, Intergovernmental Personnel Act (IPA)6 and
other similar workers, and contractors, all of whom may have important roles to
play in SWP. Ultimately, through the full use of the multisector workforce, SWP
would be maximally inclusive.
Keeping the Agency SWP Timely. It is important to have the agency’s vision
and mission leading efforts to develop SWP. As such, the director would provide
an annual strategic vision with guidance for planning as long as fifteen years.
The guidance, sufficiently detailed to enable SWP, would be presented to every
DTRA staff member to promote understanding of agency plans and processes.
Also, SWP would be reviewed annually to ensure its optimal relevance to plans
and processes.
238 Michael Simpson
Establishing the “As-Is” Condition for SWP. Sound information about the current
state of the workforce, the “as-is” condition, was needed to formulate a sound SWP
to arrive at the optimal “to-be” condition. Every DTRA staff member, encouraged
by managers as part of the annual employee evaluation process, should keep their
personnel data (training, education, licenses, and job responsibilities) current,
so that the agency-wide picture of extant capabilities would be current. Further,
while not universally endorsed, a DTRA-wide analysis of extant workers should
be conducted (sometimes referred to as a “seat analysis”) to determine that people
are optimally aligned to tasks, and that the workforce is optimally sized.
Enhance Retention Policies. From exit interviews, climate surveys, and general
conversations, at least for some workers, there was a perceived lack of growth and
advancement opportunities that could result in reduced job satisfaction, lowered
morale, decreased productivity, and departures from DTRA (both before and after
becoming eligible to retire). DTRA staff members, based on their personnel data and
as part of their annual evaluations, could benefit from an analysis of gaps in their
skills and capabilities, gaps that could be filled with appropriate training and educa-
tion. Such individualized personal development and continuous learning plans and
programs, including duty and assignment rotations within DTRA and with outside
governmental and private entities, could promote worker career success, enhance
worker retention, and simultaneously facilitate mission accomplishment.
Further, DTRA staff members, particularly those whose optimal performance is
technically oriented and not supervisory in nature, could benefit from alternative
mechanisms for advancement, which could be especially important because traditional
promotion opportunities are limited under the National Security Personnel System
(NSPS).7 Use of alternative criteria and mechanisms for advancement also can help
efforts to recruit new DTRA workers, especially those more technically oriented.
Some DTRA workers complained about bothersome commutes that were get-
ting worse, excessive and growing time demands on the job, and overall erosion
of quality of life due to work demands. The agency developed programs to im-
prove employee work-life conditions, and to make workers fully aware of these
programs—alternative work schedules, telework options, physical fitness and
employee assistance programs.
In order to have information about agency performance and worker satisfac-
tion, departing workers would complete an exit interview survey administered by
the equal opportunity (EO) office. An anonymous, network-based survey could
produce useful information. The EO office would provide this information to
enterprises and other offices each quarter. Biennial agency climate surveys would
be performed, with findings to be published across DTRA. Supervisors would
interview departing employees to learn their reasons for leaving, opinions about
the workplace, and, when appropriate, to encourage the worker not to leave or
possibly to return.
Institute Career Tracks to Help Retain and Recruit. Certain current DTRA staff
members (especially STEMIT, nonsupervisory personnel) were concerned about
ways to advance their careers. Similarly, prospective agency workers were curi-
ous about procedures, processes, and milestones in a possible career in DTRA.
Career tracks would be instituted to help retain current workers and recruit new
ones. Career tracks, extensions of personal development, and continuous learning
plans and programs would be a series of individually talented experiences, job
assignments and rotations, education and training, levels of responsibility, types
of work performed, skills required, and years of service. Such career-advancing
series can be persuasive in attracting prospective workers, as well as convincing
current workers to stay with DTRA and grow.
Improve, Augment, and Enhance Recruitment and Hiring. At least on some oc-
casions, losses of capabilities within an enterprise or office, and desires to acquire
capabilities, were considered within the directly affected enterprise or office, with
BE-BH brought in later. For SWP to succeed, addressing losses of capabilities or
desires to acquire capabilities needed to be done in a fashion that coordinated across
enterprises, offices, and BE-BH, and across the near and longer term. DRTA leader-
ship would annually coordinate plans and programs relating to the size, makeup,
and mix of capabilities of the near- and longer-term DTRA workforce.
Especially with sudden and unanticipated departures, operations could be jolted
from abrupt and unexpected job and personnel stops and starts. To ensure smooth
continuity of operations across individual workers and across programs and plans
into the future, succession planning and knowledge management (KM) would be
institutionalized. As part of succession planning, enterprises and offices would
identify key positions across the agency, the skills needed for those positions, and
contingency plans for unanticipated vacancies. KM, another component of suc-
cession planning, is the preservation of information from key personnel and dis-
semination to appropriate current and future workers and programs. There should
be an appointed KM professional.
DTRA’s image could be made more attractive to prospective STEMIT career
workers, whether young or more experienced. Several steps were identified to
achieve this:
• Making optimal use of web-based resources, including but not limited to

reenergizing DTRA’s website, considering a presence in Second Life,8 and
possibly an entry in the Facebook Marketplace.9
• Having first identified colleges and universities graduating students with capa-
bilities relevant to the agency, establish and maintain long-term relationships
with career and life counselors, deans, faculty, staff, and placement offices,
through regular real and virtual campus visits to interview prospective work-
ers, to participate in on-campus events such as symposia and conferences,
and to exchange academic and professional information.
• Making optimal use of Student Educational Employment Program (SEEP)
capabilities, including possibly hiring college students to serve as representa-
tives, marketers, event organizers, and recruiters at selected campuses.10
240 Michael Simpson
• When conducting recruiting activities, including agency professional per-

sonnel (on-site or remotely) and subject matter experts and managers, so
that prospective workers can “talk shop” and, when appropriate, be given
contingent job offers.
• Establishing and maintaining relationships and programs within which stu-
dents, faculty, and academic leaders could visit and explore areas of interest
and job possibilities at DTRA; selected institutions could be used as research
partners and as loci for sabbaticals and training; some institutions might be
willing to join in a DTRA “farm system” with opportunities and benefits to
the agency, academic institutions, and individuals.
• Marketing a unified and dynamic DTRA image and “brand,” via media releases and
articles in national, state, and local markets, through targeted discipline or subject
focused third-party e-mail, place-based advertising, and direct marketing.
• Reviewing policies regarding minimum job-posting duration and hiring deci-
sion time; it was observed that lengthy job-posting and hiring decision times
too often let desirable candidates slip away because other job offers are made
more quickly; while specific posting and decision times were not selected by
the POC panel and BRP, it was determined that enterprise and office managers,
as well as BE-BH, be actively involved in working to reduce the time to hire.
Making the Agency SWP Workable. While the ultimate goal of this activity was
the development and implementation of a DTRA-wide SWP, challenges of syn-
thesizing an agency SWP could be made more workable by having each enterprise
and office prepare and maintain its own SWP. From civilian and military personnel
database systems, each enterprise and office would get workforce demographics
and related data from BE-BH. Enterprises and offices would gather information,
perform analyses, and make strategic workforce management recommendations;
BE-BH would consolidate these enterprise and office SWPs into the integrated and
comprehensive SWP, with periodic review by DTRA leadership.
Measuring Agency SWP Progress. The U.S. Office of Personnel Management’s
(OPM) Human Capital Assessment and Accountability Framework (HCAAF) is the
current model of evolutionary progression from “Personnel” to “Human Resources”
to “Human Capital.”11 Strategic human capital management focuses on results
aligned with mission and strategy, not processes. It places the right people in the
right jobs at the right time to most effectively perform the work of the organization
and has become the focal point of federal agencies.
With consideration of OPM’s general HCAAF, metrics to gauge progress under

SWP would include:
• Approval by leadership of SWPs for each enterprise and office

• Attainment of workforce turnover rates less than benchmark values, especially
for key personnel
• Accomplishment of diversity goals (using the inclusive concept of diver-

sity that includes the diverse range of skills and capabilities needed across
DTRA)
• Attainment of vacancy rates lower than benchmark goals
As with all aspects of agency, enterprise, and office SWPs, metrics should be
tied to the PPBE system and POM process, incorporating goals and plans with
consistent and periodic refinement.
Conclusion
The development and implementation of SWP at DTRA depended on the active,

engaged, open, and receptive participation of each member of the POC panel and
BRP. I was a member of the CSC team12 that facilitated and brought technical
expertise to the effort, and it was impressively gratifying to witness the collabora-
tive spirit, active engagement, and constructive attitude demonstrated by all of the
participants. Knowledge and viewpoints about enterprises, the agency, and offices
were shared and analyzed, debated, and synthesized into a range of options and
actions that were carefully screened, and deliberate consensus was formed and
implementation begun. The evolution of thought, concern, and commitment to
be strategic and agency-wide augurs well for strategic workforce management in
DTRA’s future.
Notes
1. Department of Defense Directive, Number 5105.62. November 28, 2005. Available

at www.dtic.mil/whs/directives/corres/pdf/510562p.pdf (accessed 1–04–08).
2. “Business Enterprise.” Available at www.dtra.mil/be/index.cfm (accessed 1–04–08).
3. James Tegnelia. “Statement of Dr. James Tegnelia, Director, . . . Defense Threat
Reduction Agency, 21 March 2007, Before Subcommittee on Terrorism, Unconventional
Threats and Capabilities, House Committee on Armed Services,” page 12. Available at
http://armedservices.house.gov/pdfs/TUTC032107/Tegnalia_Testimony032107.pdf (ac-
cessed 1–04–08).
4. See the Partnership for Public Service/Grant Thornton, “Federal Human Capital: The
Perfect Storm,” July 2007. Available at www.ourpublicservice.org (accessed 1–04–08).
5. PPBE, the main means in DoD for identifying mission requirements and translating
them into budget and personnel resources needed to accomplish that mission, ensures that the
highest-priority needs are funded, and that major issues have been addressed within resource
constraints. The POM, the main document used to submit programming proposals, includes
analysis of missions, objectives, alternative methods, and allocation of resources. Available
at www.defenselink.mil/comptroller/icenter/budget/ppbsint.htm (accessed 1–04–08).
6. The Intergovernmental Personnel Act of 1970 (Public Law 91–648) enables “assign-
ments to or from state and local governments, institutions of higher education, Indian tribal
governments and other eligible organizations, to facilitate cooperation between the federal
government and non-federal entity through the temporary assignment of skilled personnel.”
Available at www.opm.gov/programs/ipa/Mobility.asp (accessed 1–04–08).
242 Michael Simpson
7. NSPS, as enacted by the National Defense Authorization Act for Fiscal Year 2004
(Public Law 108–136 [November 23, 2003]), allows DoD to establish a new civilian person-
nel management system. Contains basic information about NSPS. Available at www.cpms.
osd.mil/nsps/docs/NSPSRequirementsDocument.pdf (accessed 10–02–07).
8. Second Life, a 3-D virtual world within which participants live a virtual life, has
attracted NASA-Ames Research Center, IBM, Harvard University, and many other organiza-
tions to set up recruitment offices, research centers, schools, and more. NASA’s is available
at www.space.com/adastra/070526_isdc_second_life.html, and IBM’s is available at www.
technologyreview.com/Biztech/18016/?a=f (accessed 1–04–08).
9. Facebook Marketplace enables users to connect with job and other classified advertise-
ments. Available at www.facebook.com/marketplace/guidelines.php (accessed 1–04–08).
10. The SEEP provides federal employment opportunities to college and other students.
DoD currently employs one student at Michigan Tech University and one at the University
of Puerto Rico to market jobs, especially related to engineering, to peers. Available at http://
govexec.com/dailyfed/1106/112206r1.htm and www.opm.gov/employ/students/intro.asp
(accessed 1–04–08).
11. The U.S. Office of Personnel Management’s “Human Capital Assessment and Ac-
countability Framework (HCAAF) Resource Center” contains details about, among other
things, standards and metrics relating to human capital. For details, see www.opm.gov/
hcaaf_resource_center/ and www.opm.gov/hcaaf_resource_center/assets/hcaaf_ssm.pdf
(accessed 1–04–08).
12. The author, Dr. Michael M. Simpson, is a senior analyst with the Computer Sciences
Corporation. The viewpoints expressed here are those of the author and are not necessarily
those of CSC or DTRA.
Part 5
Managing the Management of

People
17
A Certified Assessment of Human
Resources Systems
An Innovative Pathway to Assurance
NAPA Fellows and Staff
Federal agencies risk mission failure if they are unable to recruit, develop, and sus-
tain the workforce necessary to meet the evolving complexity and scope of federal
missions. Whether human resource (HR) services and human capital strategies are
delivered on-site, through shared services centers or outsourced, chief human capital
officers (CHCOs) are concerned about their ability to ensure that the right people,
processes, and systems are in place to guarantee organizational success. In a series
of interviews, most cabinet-level CHCOs applauded the increased involvement of
senior leaders in developing human capital strategies, but expressed growing con-
cern about recruitment and hiring challenges, inadequate workforce management
skills, and the overall success and performance of shared services.
In 2007, the National Academy of Public Administration (NAPA) unveiled an
innovative model for improving, documenting, and assessing HR systems regardless
of the mode of delivery.1 In partnership with one of the nation’s most prestigious and
respected public universities, the University of California (UC), NAPA designed and
tested an assessment and assurance system for UC HR operations. The framework
presented here has general applicability to all public organizations.
The driving force behind the development of this system was a widely held
belief by UC leadership that the university needed high-quality HR policies and
programs to support its world-class academic and research operations. In addition,
UC’s Board of Regents was requiring assurances that HR policies are applied ap-
propriately and consistently throughout the ten campuses, five medical centers,
and two national laboratories that comprise the university system. To satisfy these
needs, UC leadership sought validated HR standards to measure and assess per-
formance against standards, identify any remedial actions that may be required,
and certify compliance.
No off-the-shelf HR standards or existing assessment models matched UC’s
requirements. Despite recent reforms and advances, there was little overall con-
sensus on a universal set of standards against which HR can be measured. Also,
245
246 NAPA Fellows and Staff
while there are programs to certify individual HR professionals on the basis of

their credentials or expertise, no program exists to certify HR systems as a whole.
As a result, UC turned to NAPA for assistance.
The Certified Assessment of Human Resources Systems (CAHRS) was devel-
oped to ensure that HR operations exhibit the same level of excellence that UC
enjoys in its primary mission areas of education, medical care, and research. The
CAHRS model, with HR standards that have been validated by the larger HR com-
munity, addresses a critical gap. Indeed, HR professionals involved in the design
and testing of CAHRS are beginning to ask whether it might provide a means for
removing government-wide strategic human capital from the Government Account-
ability Office’s (GAO) high-risk list.
The CAHRS model and process consists of five components (see Figure
17.1):
1. Validated HR Standards against which HR performance can be measured;

2. Readiness Review to prepare an organization for self-assessment;
3. Self-Assessment to formally compare HR operations to the standards;
4. Peer Review to ensure the integrity of the self-assessment by producing
an independent expert opinion on the extent to which the standards have
been met; and
5. Certification, which occurs when the peer review opinion attests or certi-
fies that an organization has successfully met all the standards.
• CAHRS is a continuous improvement process. CAHRS emphasizes reme-

dial actions and improved performance, and it encourages corrective actions
to the extent possible prior to moving forward. Realistically, an HR organi-
zation should expect to see some areas that need improvement, especially in
the early implementation period. CAHRS is not a report card, and it does not
rank organizations or compare one to another. Instead, it helps an organization
benchmark its own progress in achieving the quality HR operations set forth
in the standards.
• CAHRS is flexible, with benefits available at each stage. An organization
would not have to commit to the entire model in order to realize an improvement
in HR performance. For example, the HR standards alone could be very useful in
guiding policy development, training, staffing, and structure. Similarly, the readi-
ness review and self-assessment can be powerful self-help activities to improve HR
operations and provide enriching developmental experiences for those involved.
Implementing the entire model through peer review and certification offers external
validation and expert advice and guidance.
• CAHRS is designed to be transferable to organizations other than UC. Al-
though there has been some customization for UC use, the CAHRS standards
and processes can be applied to other organizations with relatively minor modi-
fication.
A Certified Assessment of Human Resources Systems 247
Figure 17.1 CAHRS Model Process
STANDARD
S
N
TIO
RE VIEW
ICA
RE
AD
Certified
CERTIF
INESS
Assessment
of HR Systems
A Pathway
to Assurance
PE V
ER
RE
T
LF -
EN
IE
W SE SM
ES
AS S
The CAHRS HR Standards
The HR standards are the cornerstone of CAHRS against which the effectiveness
and compliance of HR operations are assessed. The goal was to develop “generally
accepted” standards that would describe first-class HR operations in today’s world.
The CAHRS standards were developed with input from various experts (includ-
ing subject matter experts, thought leaders, and practitioners), validated at several
stages, and tested and refined through application at various pilot locations.
NAPA researched standards and measures suggested by the Office of Personnel
Management (OPM), the International Organization for Standardization (ISO), Mal-
colm Baldridge Award criteria, and the Saratoga Institute. Input was obtained from UC
stakeholders, NAPA fellows and staff and other experts, academics, representatives
of HR professional associations, such as the Society for Human Resources Manage-
ment (SHRM) and the International Public Management Association for Human
Resources (IPMA-HR). Additional systems reviewed included the federal govern-
ment’s President’s Management Agenda and Executive Scorecard for the Strategic
Human Capital Management Initiative and OPM’s Human Capital Assessment and
Accountability Framework. NAPA also consulted with practitioners and HR profes-
sionals from federal and state agencies, including GAO and the Commonwealth of
Virginia, and nonprofit organizations such as the National Association of Schools of
Public Affairs and Administration and the Partnership for Public Service.
The resulting CAHRS standards balance both strategic and operational dimensions
and recognize that service delivery remains the threshold issue for establishing HR
credibility. At the same time, they draw heavily from a strategic human resources
management model that suggests the evolving role of the HR office is “to support
the strategic mission of the organization by serving as full members of the manage-
ment team and linking personnel and HR policy to agency mission, goals, and policy.
Throughout the development process, the study team met with university and other
public sector managers to identify management challenges as they arose, and ensure
appropriate alignment of HR standards throughout the process. The resulting cross-
cutting and functional standards are the outcome of a rigorous effort to fully define
the elements, attributes, and indicators of performance of the complex and diverse
HR practice within centralized and decentralized environments.
Figure 17.2 depicts the seven standards and their associated core components,
called “key contributing elements.” The System-wide Management Standard describes
the elements, success attributes, and indicators that comprise roles, responsibilities,
policies, and activities of the corporate-level HR function. The HR Strategic Manage-
ment Standard introduces the components of modern, strategic HR practices, which
focus senior leadership attention on managing important people resources associated
with high-performing organizations. The HR Operations and Assurance Program
Standard describes the elements, success attributes, and indicators for the HR role in
compliance and the management of HR operations. The remaining standards describe
the elements, success attributes, and indicators of basic HR service delivery, the
threshold issue for establishing HR credibility. These functions include Employment
and Talent Management, Total Compensation and Benefits, Training and Develop-
ment, and Work Environment and Employee/Labor Relations. These four standards
are designed to enable specific outcomes measured by location-specific metrics. The
following section provides an overview of the seven standards, defined in terms of
the desired results, elements, success attributes, and illustrative measures.
Each standard is defined in terms of expected quality, actions, and/or outcomes
and further defined by multiple success attributes that provide more detailed per-
formance expectations. All success attributes are considered critical and must be
met in order to “pass” the standard successfully. Each success attribute, in turn,
has a number of success indicators, the building blocks necessary to achieve suc-
cess attribute requirements. Certain success indicators are designated “essential”
and must be met; there is some flexibility in applying the others. An organization
may wish to expand the number of essential success indicators, and believes that
is entirely appropriate to do so given circumstances and priorities. Table 17.1 is an
excerpt from the Employment and Talent Management Standard, which depicts the
relationship and structure of success attributes and success indicators for the talent
acquisition key contributing element (essential indicators are in bold italics).
CAHRS Standard for HR System-wide Management
Definition. As the University of California’s primary spokesman on HR matters and a

key initiating source of HR policy, the Office of the President (UCOP) and its HR and
Figure 17.2 CAHRS HR Standards
1. HR System-wide Management
• Strategic and Business Planning
• Policy Formulation and System
Design
• Communication, Consultation, and
Representation
2. HR Strategic Management 3. HR Operations and Program
• Accountability
Assurance
• Alignment, Integration, and • System-wide Operations
Implementation • Assurance and Evaluation
• Influence and Collaboration • HR Metrics and Continuous
• Workforce Analysis and Improvement
Planning • HR Staff Management
Cross-Functional • Systems and Infrastructure
• Ethical Values and Diversity
Management
• HR Consultation and Assistance
CAHRS HUMAN RESOURCES STANDARDS
Functional
4. Employment and Talent 5. Total Compensation and 6. Training and Development 7. Work Environment and
Management Benefits Employee/Labor Relations
• Needs Assessment
• Talent Acquisition • Analysis and Design • Program Design, Delivery, • Work Life
A Certified Assessment of Human Resources Systems
• Talent Management • Salary and Benefits and Evaluation • Health and Safety
• Performance Management Administration • Employee and Labor
• Rewards and Recognition Relations
249
Table 17.1
Excerpt from the Employment and Talent Management Standard
Key Contributing Elements Success Attributes/Indicators

Talent Acquisition 1. Success Attribute: The location’s talent acquisition
policies, programs, and/or activities provide an effective
framework for expeditiously acquiring the talent needed to
achieve mission goals and objectives consistent with UC
policies.
Success Indicators:
a. These policies, programs, and/or activities are
current and consistent with UC policies, ethical values,
standards of conduct, and related principles, and
comply with other appropriate contracts, laws, rules, and
regulations.
b. Relevant policies, programs, and/or activities are
linked to and facilitate the location’s achievement of its
mission, goals, and objectives.
c. These policies, programs, and/or activities are
effectively communicated to employees and managers.
2. Success Attribute: The location acquires a sufficient

number of highly skilled, diverse, and competent
employees when needed to meet priority mission
needs.
Success Indicators:
a. The location recruits qualified and diverse candidates
based on identified needs and recruitment plans.
b. Vacancies are filled within a time frame collaboratively
set by the HR department and its clients.
c. Recruitment strategies identify underrepresented
groups and reflect the diversity of the location,
community, and customer base.
d. Marketing, recruitment material, and interviews
inform candidates of UC mission, goals, objectives,
culture, employment contract, and total compensation
and benefits packages, and include an emphasis
on attracting well-qualified candidates for hard-to-fill
positions.
e. The location develops relationships with recruitment
sources to ensure candidate pipelines, especially for
hard-to-fill positions.
Source: The full text of all seven standards can be found in the 2007 NAPA report entitled
“A Model and Process for the Certified Assessment of Human Resources Systems: A Pathway
to Assurance.” Abbreviated “one page” versions of each standard follow.
Benefits Department (HR&B) help UC accomplish its missions by setting the strategic
direction for HR, identifying and championing resource and infrastructure needs, ef-
fectively and efficiently managing functions best handled at a centralized level, and
overseeing and consulting on HR operations at locations throughout the system.
Key Contributing Elements and Success Attributes
Strategic and Business Planning
• A collaboratively developed and effectively managed system-wide HR strategic plan

helps UC address its mission environment and meet its current and future needs.
• HR&B identifies system-wide HR resources and infrastructure needs and
advocates for their inclusion in UCOP’s and the locations’ budgets.
Policy Formulation and System Design
• HR&B supports mission accomplishment by creating responsive, efficient, and ef-

fective HR policies and programs consistent with all relevant UC requirements.
• Within established guidelines, HR&B creates total compensation and benefits
programs and plans that promote UC as an employer of choice.
Communication, Consultation, and Representation
• HR&B communications deliver consistent, timely, accurate, and clear

information.
• Through consultation and advice, HR&B helps UC managers, location HR staff,
and others understand HR policies, programs, procedures, laws, and regulations
to ensure compliant and appropriately consistent implementation.
• As the authoritative source on HR benefit programs and policies, HR&B
represents UC and serves as the point of contact in responding to both internal
and external inquiries concerning system-wide HR matters.
Accountability
• HR&B’s strategic initiatives are undertaken to identify opportunities to assure

that HR policies, programs, and activities are operating in a manner consistent
with UC standing orders and other policy requirements.
• A system of reporting from UC locations facilitates information exchange,
identifies best practices and improvement opportunities, and assures appro-
priately consistent implementation of policies and programs.
• Employee information is appropriately protected.
• Continuous improvement initiatives, such as CAHRS, for system-wide HR
programs and services are developed, implemented, and evaluated.
System-wide Operations
• System-wide programs and activities (such as Labor Relations, Direct Service

Activities, Risk Management, Diversity/Affirmative Action, Training and De-
velopment) enhance and strengthen the UC capacity to achieve its mission.
Illustrative Measures
Benchmark comparison with other universities; cost-effectiveness measures con-

cerning system-wide programs and activities; satisfaction at all employee levels
with compensation and benefits program and working conditions; completion rate
of improvement initiatives; timeliness in negotiating bargaining unit agreements;
locations’ feedback regarding satisfaction with HR&B communications and con-
sultation; extent to which HR&B has achieved its priority objectives.
CAHRS Standard for HR Strategic Management
Definition. In pursuing its mission goals and objectives, the location collaboratively
develops aligned and integrated HR strategic plans, identifies current and emerging
workforce needs, and promotes commitment to UC ethical values and diversity.
Alignment, Integration, and Implementation
• The HR strategic planning activities identify an integrated set of HR priorities

and actions that are clearly linked to the location’s goals and objectives.
• Planned actions are supported, implemented, and achieved.
Influence and Collaboration
• The chief HR officer and key staff members play a leadership and/or enabling
role in the strategic management of the location.
Workforce Analysis and Planning
• The location periodically analyzes current and projected workforce needs and
identifies critical current and/or future gaps and surpluses.
• The location develops strategies to address identified gaps and surpluses.
Ethical Values and Diversity
• The location demonstrates commitment to UC’s ethical values, standards of

conduct, and related principles of community.
• The location develops and delivers HR policies, programs, and/or activities

that promote the values of diversity and inclusiveness and related principles
of community.
Employee/Manager/location leadership satisfaction with HR strategic plans and

workforce analysis; feedback on value of HR involvement in location management;
proportion of strategic planning actions accomplished within designated timeframes;
evidence of gap closure; feedback from employees on location’s commitment to
diversity and inclusiveness.
CAHRS Standard for HR Operations and Program Assurance
Definition. Through exemplary management practices, the HR Department assures

UC leadership that it is a value-added part of the organization, providing high-
quality, responsive, and efficient services.
Assurance and Evaluation
• The HR Department conducts assurance and evaluation activities to determine

the consistency/compliance, quality and efficiency of the location’s HR poli-
cies, programs and activities.
HR Metrics and Continuous Improvement
• The HR Department defines a comprehensive set of metrics by which HR

programs and services are measured.
• HR performance demonstrates a culture and practice of continuous im-
provement.
HR Staff Management
• The HR Department employs, or has ready access to, sufficient numbers of

fully competent staff to carry out its mission successfully.
Systems and Infrastructure Management
• The location has the needed infrastructure and resources to accomplish priority
HR work in a cost-effective manner.
HR Consultation and Assistance
• The HR Department provides guidance and support that assists managers, su-
pervisors, and employees in solving problems in a timely, responsive manner.
Frequency of assurance and evaluation activities; proportion of HR functions

covered by review activities; comprehensiveness of published metrics; actual
performance against targets, including trend data; customer, manager, supervi-
sor, and employee satisfaction with delivery, content, and effect of HR programs;
feedback on value of advice and assistance provided by HR; expense and full-time
equivalent (FTE) ratios.
CAHRS Standard for Employment and Talent Management
Definition. The location acquires the talent needed to achieve mission goals and
objectives and effectively manages its employees to enhance organizational capac-
ity and improve individual performance.
Talent Acquisition
• The location’s talent acquisition policies, programs, and/or activities provide

an effective framework for expeditiously acquiring the talent needed to achieve
mission goals and objectives consistent with UC policies.
• The location acquires a sufficient number of highly skilled, diverse, and
competent employees when needed to meet priority mission needs.
Talent Management
• The location designs and classifies its work and helps employees manage their
careers in order to strengthen organizational and individual performance.
• The location effectively uses approaches and tools to retain critically needed
talent consistent with UC guidelines.
• The location responds effectively and responsibly to new conditions that
require changes in workforce composition and/or deployment.
Performance Management
• The location’s managers and employees demonstrate a commitment to per-

formance improvement and accountability.
Rewards and Recognition
• The location’s rewards and recognition actions result in sustained employee

and organizational performance.
Fill rates, that is, times to fill compared to established targets; hire offer acceptance
rates; manager/supervisor satisfaction with quality of hires; competency gap closure
as a result of hiring actions; cost per hire; employee satisfaction with career manage-
ment, performance management, and rewards; effectiveness of retention offers in
preventing loss of critical employees; percentage of appraisals completed on time.
CAHRS Standard for Total Compensation and Benefits
Definition. Within the scope of its delegated compensation and benefits responsi-
bilities, the location manages these functions so as to attract, retain, and motivate
a highly qualified diverse workforce, at the same time exercising stewardship of
public funds consistent with UC total compensation philosophy and policies.
Analysis and Design
• The location’s compensation decisions are guided by relevant UC total com-

pensation philosophy and policies, linked to the location’s mission goals and
objectives, and resulting in a highly qualified diverse workforce.
• The HR Department analyzes data and proposes changes to increase the ef-
fectiveness of its compensation and benefits package in attracting, retaining,
and motivating a high-quality and diverse workforce.
Salary and Benefits Administration
• Compensation and benefits responsibilities are carried out in a timely, efficient,

and responsive manner.
• Managers, employees, and applicants receive sufficient information about the
components of UC’s total compensation and benefits programs to understand
its intent and appreciate its value.
Market compensation rate comparison data; percentage of employees who decline

employment due to dissatisfaction with compensation and/or benefits; percentage of
actions or services provided within established time frames; employee/supervisor/

manager satisfaction with compensation and benefits; expenditure data; cost per
employee; frequency of internal compliance reviews and error percentage.
CAHRS Standard for Training and Development
Definition. The location’s training and development programs equip employees

with the requisite competencies to achieve current and future mission requirements
and improve individual and organizational performance.
Needs Assessment
• The location periodically identifies the training, development, and/or educa-

tion required to meet mission goals and objectives, fill critical skill gaps, and
help employees fulfill their job expectations.
Program Design, Delivery, and Evaluation
• Training, development, and/or education policies, programs, and/or activi-

ties are designed to improve individual and organizational performance to
accomplish current and future mission and leadership requirements.
• Appropriate strategies and approaches are used to assure effective, efficient
programs and/or activities to help employees improve performance and en-
hance career development.
• The location delivers sufficient and timely training to meet priority needs.
• Training and development programs and/or activities are evaluated to improve
content, delivery, and timing.
Accomplishments against training targets; percentage of competency gap closed;

total training costs over headcount; percentage of employees/supervisors or man-
agers trained; training days or hours; employee overall satisfaction with training;
supervisor/manager overall satisfaction with training; cost per trainee; training
expenditures as a percentage of total budget.
CAHRS Standard for Work Environment and Employee/

Labor Relations
Definition. The location provides a productive work environment by dealing with

employees and recognized bargaining units in a fair and constructive manner and
promoting a safe and supportive work environment.
Work Life
• The location’s work life policies, programs, and/or activities provide a frame-
work for a supportive work environment necessary to achieve UC’s mission,
goals, and objectives consistent with UC policies.
• The location’s work life policies, programs, and/or activities promote work
and family balance and contribute to UC as an employer of choice.
Health and Safety
• The location’s health and safety policies, programs, and/or activities provide
a framework that promotes a safe and healthy working environment.
• The location mitigates employee on-the-job injuries, minimizes worker com-
pensation costs and absenteeism, and provides reasonable accommodation to
employees with disabilities.
Employee and Labor Relations
• The location’s employee and labor relations philosophy, policies, programs,

and/or activities pertaining to dispute resolution, conduct and discipline, work
life enhancements, and collective bargaining provide an effective framework
for creating and maintaining a constructive work environment consistent with
UC policies, values, and other requirements.
• The location’s employee and labor relations policies, programs, and/or activi-
ties result in a fair, constructive, and supportive work environment.
Voluntary separation rate; contract negotiation timeliness; dispute processing timeli-

ness; absenteeism; dispute resolution outcome ratio; employee satisfaction with work
environment and work life programs; supervisor/manager satisfaction with employee/
labor relations; grievance resolution ratio, complaints, disciplinary actions; proportion
resolved informally; injury loss time factor.
Validating the Standards
The Academy validated the clarity, completeness, importance, and appropriateness

of the standards through multiple activities, including:
• a validation survey completed by NAPA, UC Advisory Group, Chief Hu-

man Resources Officers at various UC locations, other key UC stakeholders,
representatives of selected federal agencies and professional organizations,

and individual experts
• a NAPA-sponsored Executive Forum, composed primarily of HR executives
and professional associations
• NAPA-sponsored Performance and HR Consortia, which drew measurement
and HR experts
In each of these development and validation exercises, participants were asked

specific questions regarding the clarity, completeness, and importance of the
standards and their appropriateness for assessing HR contributions to mission ac-
complishment. In addition, the readiness reviews and self-assessments conducted
at the pilot UC locations provided extensive feedback, which was used to refine
and clarify the standards. These “dry runs” of the standards were important steps
in the validation process, as well.
In the end, NAPA had final responsibility for defining the HR standards. In doing
so, it recognized that the standards would likely evolve over time as experience is
gained in applying them in the “real world.” NAPA expects that some organizations
may wish to expand definitions or add new areas of emphasis, based on individual
circumstances and priorities.
Readiness Review
A readiness review is an informal self-help activity designed to prepare an organiza-

tion for formal self-assessment. Organizations should complete a readiness review
prior to launching a formal self-assessment.
The readiness review entails:
• Studying the HR standards.

• Informally assessing HR performance against those standards.
• Identifying remedial actions in preparation for more rigorous self-assessment.
Unlike the self-assessment, a readiness review does not require documentation of

conclusions, its results are not subject to peer review, and there is minimal reporting.
An HR organization has considerable latitude in deciding how to carry out the
readiness review. For example, it could choose to create assessment teams for de-
tailed data gathering and analysis; forego extensive data collection and instead rely
on the informed conclusions of HR managers and experts based on their in-depth
operational knowledge; or use a combination of data collection and professional
judgment. Guidelines for conducting readiness reviews are contained in the CAHRS
Readiness Review Guide.
Most readiness reviews will uncover areas that need improvement; the HR or-
ganizations will want to take reasonable steps to improve their operations prior to
starting formal self-assessment. This may call for development of detailed action
plans to bring HR operations more in line with the standards. Or it simply may be
a matter of documenting processes that have never been written down or obtaining
necessary information to support a conclusion.
In keeping with the “continuous improvement” focus of CAHRS, sufficient
time should pass between the readiness review and self-assessment in order to
make progress. Experience at the UC pilot locations suggests a four-month in-
terval would provide time to take some remedial steps, yet still keep the CAHRS
process moving forward. Based on their experience during the development
phase, the pilot locations all showed significant improvement from readiness
review to self-assessment.
Self-Assessment
Self-assessment is a process in which an internally selected team compares its own

operations to the HR standards and reaches conclusions about the extent to which
the standards are being achieved. Unlike the readiness review, self-assessment:
• requires support and documentation to back-up conclusions

• results in a formal report
• is subject to external peer review
The CAHRS Assessor Guide contains rules and guidelines for assessing
performance and summarizing results to determine the extent to which the
standards have been met. After the first self-assessment, subsequent assessment
teams will be responsible for following up on the remedial plans resulting from
prior self-assessments, especially those designated as priority improvement
efforts.
An important difference between self-assessment and the readiness review is
the extent of organizational leadership involvement. During the readiness review,
HR departments are encouraged to communicate about review activities and
obtain guidance from leadership on improvement priorities. The leadership role
in self-assessment, however, is more defined, extensive, and formal because the
self-assessment report is an organizational product, not simply an HR exercise. In
self-assessment, a leadership representative is expected to:
• work with HR to define HR challenges and priorities

• assure that the self-assessment report accurately reflects leadership views
• identify the high-priority improvement efforts
• sign the self-assessment report, along with the chief HR officer and self-
assessment team leader
Following self-assessment, CAHRS moves to peer review and certification,

at least during the initial cycle. After an organization has been certified as having
met standards, these steps would be necessary only for recertification or if other
circumstances warrant.
As with the move from readiness review to self-assessment, an organization
has options regarding when to move forward to peer review. For example, if a
self-assessment reveals serious concerns or weaknesses, the organization may
decide to take corrective actions prior to requesting a peer review. The location
then would redo the relevant segments of the self-assessment report, while ensuring
that other parts remain current and accurate. The subsequent peer review would be
based on the revised self-assessment report. As a general guideline, peer review
should commence within two months of the completion of the original or revised
self-assessment report.
Peer Review and Certification
Peer review is a quality assurance process widely used in accounting, auditing,

and other professions. it is also a familiar concept in academic, medical, research,
and evaluation communities. In CAHRS, peer review is a top-level review by
independent experts that:
• ensures the integrity of an organization’s self-assessment by verifying the

adequacy and accuracy of its conclusions
• provides advice and suggestions for improving HR operations
• identifies best practices.
• forms the basis for a certification decision
The end product of the peer review is a formal peer review opinion, which
determines the extent to which an organization meets the CAHRS HR standards.
Certification is based on a peer review opinion’s formal attestation that all appli-
cable standards have been met.
After considering alternatives for performing the peer review and certification
functions, including drawing on a pool of individual HR experts, the panel con-
cluded that the most effective and efficient option would be to have a nationally
recognized organization known for its managerial and HR expertise perform both
roles. The panel believed that an organizational opinion/certification would carry
more weight and be more widely recognized than one rendered by a collection
of individuals. Also, having the same organization perform both the peer review
and certification steps streamlines the process and reduces costs. Further, the
organizational approach avoids the administrative issues involved in scheduling,
compensating, training, and ensuring consistency among individuals.
The selected peer review/certification organization would be responsible for the
composition, leadership, and training of the peer review teams.2 That organiza-
tion would ensure that the team is composed of individuals who understand HR
issues and appreciate the challenges inherent in managing complex organizations.
Capability, credibility, trust, and independence in fact, as well as appearance, are

core requirements.
When a peer review team determines that a location has not met all applicable
standards, the resulting peer review opinion will identify, on a standard-by-standard
basis, those that substantially meet requirements and those that need improvement.
This will encourage continuous improvement and eliminate redundancy because,
to achieve certification, subsequent peer reviews would involve in-depth examina-
tion of only those standards previously found to need improvement. Those that
passed during a previous peer review need only be surveyed and tested to ensure
continued compliance.
Understandably, certification reflects conditions that exist at the time of the peer
review. The organization being certified is responsible for ensuring that it remains in
compliance with the standards. Therefore, if an organizational, functional, or other
major change occurs that could affect compliance with the standards in a material
way, the organization must schedule a peer review to ensure that its certification
remains valid. Absent this or other circumstances warranting a shorter time frame,
recertification should occur every five years.
The Academy has prepared a CAHRS Peer Review and Certification Guide
that provides greater detail, including guidelines for conducting the site visit and
drafting the peer review opinion.
The CAHRS Cycle
There is no predetermined timeline for stipulating how a location will move from
readiness review through self-assessment to peer review and certification. The length
of time will vary by location, and depends primarily on the amount of remedial work
undertaken between the CAHRS phases. However, based on the experiences of the
pilot locations, NAPA estimated that, when first implemented, the entire CAHRS
process will take approximately twelve months from the readiness review to the
issuance of a peer review opinion.
After the initial cycle, locations no longer will do readiness reviews but will
continue to perform self-assessments needed to obtain and sustain certification.
A location will schedule self-assessments and associated peer reviews for those
standards that have not yet received an unqualified peer review opinion. Once all
standards have received an unqualified opinion and the location’s HR operations
have been certified, the location need not seek recertification for five years, un-
less, as previously stated, circumstances warrant a shorter time frame. However, to
retain certification during this five-year window, a location must conduct a formal
self-assessment at the midpoint (two to three years).
Over the course of 2008, the University of California will roll out this model and
process to additional campuses, bringing the total number of locations to seventeen.
The Academy plans to provide assistance and will serve as the peer reviewer and
certifying body for the university.
Notes
1. This chapter was drawn from National Academy of Public Administration, A Model
and Process for the Certified Assessment of Human Resources Systems (Washington, DC:
NAPA, 2007). The Academy panel conducting this study was chaired by Dr. Frank Thompson,
Dean, Nelson A. Rockefeller College of Public Affairs and Policy, and Professor of Public
Administration and Policy, Political Science, and Public Health, State University of New
York at Albany. Other panel members included Dr. Joel D. Aberbach, Distinguished Professor
of Political Science and Public Policy and Director, Center for American Politics and Public
Policy, Institute for Social Science Research, University of California, Los Angeles; Dr. Edie
N.G. Goldenberg, Professor of Political Science and Public Policy, Gerald R. Ford School
of Public Policy, University of Michigan; Dr Jeff T.H. Pon, Chief Human Capital Officer,
U.S. Department of Energy; Dr. Curtis J. Smith, Malcolm R. Meyers Distinguished Chair in
Public Service, Wilson Center for Leadership, Hampden-Sydney College; and the Honorable
David M. Walker, Comptroller General of the United States. Principal authors of the report
were Alethea Long-Green, Patricia Cornwell Johnson, and Joan M. Dodaro.
2. During the pilot project, Academy HR experts not associated with the actual develop-
ment of CAHRS performed the peer review function.
18
Using Data-Driven Human Capital Decisions to
Improve Basic Personnel Functions
Edward H. Stephenson Jr.
Today in the federal government, department and agency human capital (HC) of-
fices are expected to be an integral part of the organization’s strategic planning and
provide assistance to operational managers on how to address their HC challenges.
But to do that, HC offices must first gain credibility by delivering basic HC services
in an efficient and effective way. The HC office will have difficulty convincing
agency leadership that it deserves “a seat at the table” if hiring processes are slow,
basic personnel functions are error-prone, and paychecks are not accurate.
A key to improving basic HC services is developing metrics on the delivery of
such services to improve accountability and oversight. However, many organiza-
tions do not know how much it costs to deliver basic services, how long those pro-
cesses take, or how satisfied its customers are. This chapter discusses the increased
federal emphasis on measuring program results, the importance of data-driven HC
decisions, and how the use of service-level agreements and HR dashboards can
address process inefficiencies.
Increased Focus on Measuring Results
Over the last decade, federal departments and agencies have increasingly measured
the results of their operations. Beginning with the Government Performance and
Results Act (GPRA), continuing with the Program Assessment Rating Tool (PART),
and finally the President’s Management Agenda (PMA), federal managers have been
asked to develop goals and objectives and measure progress of programs and man-
agement (www.whitehouse.gov/results) (see Redburn, Shea, and Buss 2008).
GPRA was enacted in 1993 to provide for the establishment, testing, and evalua-
tion of strategic planning and performance measurement in the federal government,
and other purposes. The act states that “(a) In carrying out the provisions of section
1105(a)(29), the Director of the Office of Management and Budget (OMB) shall
require each agency to prepare an annual performance plan covering each program
activity set forth in the budget of such agency.”
The PART was developed early this decade to assess and improve program
performance so that the federal government can achieve better results. A PART
263
264 Edward H. Stephenson Jr.
review helps identify a program’s strengths and weaknesses and to inform fund-
ing and management decisions in order to make the program more effective. The
PART, therefore, looks at all factors that affect and reflect program performance
including program purpose and design; performance measurement, evaluations,
and strategic planning; program management; and program results. Because the
PART includes a consistent series of analytical questions, it allows programs to
show improvements over time, and allows comparisons between similar programs
(www.whitehouse.gov/omb/mgmt-gpra/gplaw2m.html).
Finally, PMA, established in the summer of 2001, is a strategy to improve the
management of the federal government. It focuses on five areas of management:
• strategic management of HC
• competitive sourcing
• improved financial performance
• expanded electronic government
• budget and performance integration
Criteria have been developed for each management area, and agencies are rated
each quarter on the current status of and progress in implementing each management
agenda by the use of a green (success), yellow (mixed results), red (unsatisfactory)
scoring system. The standards for strategic HC management are briefly discussed
later in this chapter.
These programs have increased emphasis on measuring results and provide an
excellent foundation for a HC office to develop customer service metrics for its
basic personnel functions.
The Importance of Data-Driven Human Capital Decisions
The Government Accountability Office (GAO) noted the importance of data-driven

HC decisions in its model of strategic HC management (GAO 2002). Specifically,
GAO listed data-driven HC decisions as one of eight critical success factors to
improved HC management. GAO noted that “a fact-based, performance-oriented
approach to HC management is crucial for maximizing the value of HC as well
as managing risk.” GAO pointed out that organizations need to identify current
and future HC needs, including the appropriate number of employees and their
deployment across the organization. Such data not only are valuable for assessing
workforce requirements, but also allow agency managers to spotlight areas for
attention before crises develop. GAO points out that the cost of collecting data
may be significant, however the costs of making decisions without the necessary
information can be equally significant. The types of data that can be important to
gather include: the size and shape of the workforce, skills inventory, attrition rates,
projected retirement rates and eligibility, deployment of temporary employees, the
use of contract workers, average period to fill vacancies, data on the use of incen-
Using Data-Driven Human Capital Decisions 265
tives, employee feedback surveys, feedback from exit interviews, grievances, or

acceptance rates of job candidates.
One thing is clear from studies by the National Academy of Public Admin-
istration: the measurement of HC initiatives with solid data is difficult and is
clearly one of the last management areas that agencies and departments have
given attention to. Operational performance monitoring is a common challenge
in public sector organizations as managers find it difficult to know what to mea-
sure. This is compounded by the fact that there is often a lack of appropriate
data for accurate monitoring. The complexity and inherent inefficiency of many
federal agencies’ HR processes cause a focus on completing tactical tasks rather
than designing strategic approaches to organizational problems. Many federal
organizations’ HR processes are paper-intensive, involve multiple exchanges
between offices, and are handicapped by the lack of interoperable systems and
by antiquated technology.
Organizations Need to Develop an Accurate Picture of Their

HR Processes
An important first step for agencies in the move to data-based HC decisions is to

gather information on how HR processes are being carried out, the costs of those
operations, and the effectiveness of the services.
Although there are a number of methodologies that can be used to gather this
information, one is to identify the parts of the organization that are involved in
specific HR processes and then analyze the cost of delivering the services. Such
basic services to be studied include compensation and benefits administration,
performance management, recruiting and staffing, and labor relations. This analy-
sis should not only be focused on the human resource office but also on any other
part of the organization involved in the human resource function. For example,
operational parts of an agency frequently spend time on recruiting. Interviews
should be conducted with key stakeholders across the organization, including
officials responsible for information technology and finance. These interviews
are important to gain an understanding of current service-delivery organizations,
process hand-offs and ownership, costs, and technology.
All costs need to be identified, including personnel costs, contractor costs,
and the cost of space and information technology support. Frequently, staff may
be performing multiple HR tasks. Estimates of time spent on various functions
need to be gathered. One less time-consuming method is to interview individual
unit managers and obtain estimates of their unit’s staff time for various functions.
Obtaining expenses of contractors also is critical to accumulating all costs associ-
ated with the HR function. Some typical examples of HR function contractors in
the federal government include activities involving recruiting, employee change
of station, and payroll. The costs of services provided by the Office of Personnel
Management (OPM), including benefit and retirement processing, also need to be
estimated. It is important to remember that obtaining an exact cost is not necessary

to conduct this analysis.
Once the costs of basic HR functions have been developed, they should be
compared with “best practices” elsewhere in the public and private sector. In-
formation on “best practice” is available from various HR consultants and other
organizations (e.g., Society for Human Resources Management and the Saratoga
Institute). Once the cost of delivering the various HR services has been developed
and compared with “best practices,” the agency can determine which functions
need to be targeted for improvement.
In addition to costs, the agency needs to gather data on the volume, timeliness,
and other information on the various HR function activities, including hiring ef-
ficiencies, personnel action requests, and payroll processing errors. Customer sat-
isfaction gathered from periodic manager and employee surveys is also important
to analyzing the HR function.
Federal agencies also are required to gather and report information on their HR
function in connection with the Human Capital Assessment and Accountability
Framework (HCAAF) (www.opm.gov/hcaaf_resource_center/2–2.asp) (see Table
18.1). The HCAAF consists of five standards with metrics including the merit
system principles. Departments and agencies report this information quarterly,
which is used as a part of the PMA scoring system for the department’s “score”
on HC management.
Having basic cost and effectiveness data for various HR services is invaluable to
better management of the activity and can serve as a basis for decisions about how to
provide the services, including whether private contractors should be considered.
Service Level Agreements and an HR Dashboard
Once HR activities have been analyzed and the costs determined, agencies are
in a better position to develop strategies to improve the service. Two important
components of an improvement strategy are: (1) the establishment of Service Level
Agreements (SLAs), and (2) the establishment of an HR dashboard to monitor HR
activities.
The first component, SLAs, establishes minimum and target service levels for
a specific HR function. For example, an SLA with an HR component could es-
tablish the minimum acceptable correction rate for processing personnel actions,
time frames to hire a new employee, or the time to carry out a specific part of the
hiring process. SLAs establish expectations and promote accountability while
improving overall HR processes. They also provide an opportunity to measure
and report performance.
Service levels should be established for only critical performance indicators and
just a few key performance indicators. The SLA process should not be simply an
administrative exercise in data capture, analysis, and reporting. Service levels should
be designed and carefully selected in connection with processes and activities that:
Table 18.1
Human Capital Assessment and Accountability Framework
Standard Measures
Strategic Alignment • Documented evidence of a current agency human
capital plan that includes human capital goals,
objectives, and strategies; a workforce plan; and
performance measures and milestones.
Leadership and Knowledge • Competency gaps closed for management and
Management leadership
• Leadership and Knowledge Management Index
• Merit-based execution of the Leadership and
Knowledge Management system
Results-Oriented • SES performance/organizational performance
Performance Culture relationship
• Workforce performance appraisals aligned to mission,
goals, and outcomes
• Results-oriented performance culture index
• Merit-based execution of the results-oriented
performance culture system
Talent Management • Competency gaps closed for mission critical
occupations
• Talent Management Index
• Job Satisfaction Index
• Merit-based execution of the talent management system
Accountability • Documented evidence of a human capital accountability
system that provides for annual assessment of agency
human capital management progress and results,
including compliance with relevant laws, rules, and
regulations
• have a financial impact on the organization or employee if performance fails

• can expose the organization to liabilities and litigation from unprocessed
employee actions
• help determine the quality of employee development activities
Other areas to consider are those that significantly impact customer satisfaction.
Table 18.2 lists some key attributes of SLAs.
As these characteristics demonstrate, SLAs allow for negotiation but then set
a service level in addition to defining roles and responsibilities. SLAs promote
accountability as they establish a means to communicate expectations, results,
Table 18.2
Characteristics of Effective Service Level Agreements
Characteristics
• Mutually agreed on and in writing
• Establish two-way accountability for service
• Define specific roles and responsibilities
• Are negotiated and set agreements
• Define clear criteria on which service is evaluated
• Communicate the service expectations, results
• Use for conflict resolution
• Provide a platform to encourage continuous improvement
• a living document
and conflicts in achieving set service levels. SLAs need to be viewed not only as
a mechanism to uphold accountability but also as a means to encourage improve-
ment. Regular monitoring of SLAs and improved communication on results and
problem resolution may help to identify new opportunities for improvement.
Conversely, SLAs can sometimes fail when an organization views the agreement
more as a weapon than a tool. SLAs work because expectations and the criteria for
measuring success are clearly defined for everyone involved. Employees need to
recognize SLAs as a valuable tool rather than a mechanism through which leader-
ship identifies failure.
With the above information in mind, SLAs should be developed for key HR
activities involving personnel actions, staffing, inquiry support, and customer
satisfaction (see Table 18.3).
As with other management data, the data gathered on human capital management
must be linked to agency results. In addition, it is important that data gathered is
current and gathered frequently, if not on a continuous basis.
A complicating factor to obtaining HR metrics is the inadequate technology
that faces many federal agencies. Thus developing information for SLAs and the
monitoring of those agreements may initially require manual data-gathering activi-
ties. These manual data-gathering activities will not only provide the initial data
for the SLA, but also will inform the organization’s technology plans and define
the requirements for new technology when the resources become available. SLAs
provide an informed context within which existing resources can be leveraged and
used in a more strategic way.
Another practice that can help to improve HR service activities is the creation
of a computer-based HR “dashboard” that displays data regarding measures of
critical HR activities. An effective HR dashboard provides an accurate snapshot
of performance measures to enable better monitoring at the leadership level. The
HR dashboard will also leverage the measures and reporting produced through the
SLAs. Dashboards should evolve and change as management priorities change.
Table 18.3
Examples of Hiring Service Levels
Service level Description

Time to fill versus standard Days from open requisition to offer accepted divided by
the standard time to fill
Diversity of slate Percentage of candidates presented to manager who
are diverse
Ease of use Rating from customer survey who are satisfied with the
hiring process
Quality of candidates Percentage of candidates sent to manager who are
interviewed
Time to bring selectee Average time to provide notification, conduct in-
on board processing, and enter employee information into
automated systems
Advantages of SLAs and an HR Dashboard
The effective use of SLAs, coupled with a dashboard, has several advantages. For
example, it sets appropriate expectations regarding services and delivery, estab-
lishes accountability for all pieces of the HR service delivery chain, and helps to
pinpoint problem areas/weak links in the delivery chain. This in turn will allow HR
management to make more educated decisions regarding workforce management
and alignment with organization goals and objectives.
Anecdotal evidence does not lend itself to better management decisions. De-
pending on the question or challenge, management may require different types of
performance-related data. A formal performance management system provides the
information necessary to improve decision making and prioritization, and allows
organizations a basis of comparison to peers.
There can be significant challenges in many federal organizations to developing
and implementing SLAs and a dashboard. Many federal agencies have few such
performance measures and little technology to gather such information efficiently.
These metrics can be developed over time.
Summary
Federal agencies are seeking to improve their human capital functions both stra-
tegically and operationally. As a first step, HR departments need to ensure that
the basic delivery of HR services are efficient and effective. Developing data on
the cost and efficiency of these services is critical to improvement. With this data,
SLAs can be established and an HR dashboard can be created. These are important
tools to not only focus management attention on areas that work and those need-
ing improvement, but also to hold HR employees and managers accountable for
effective service delivery.
References
Government Accountability Office (GAO). 2002. A Model of Strategic Human Capital

Management. Washington, DC: GAO, GAO-02-373SP, March.
and Budgeting. Armonk, NY: M.E. Sharpe.
19
Succeeding as a Strategic HR Partner
A Practical Approach
Tom Wimer
The role of today’s human resources professional has evolved into that of a consultant
and trusted advisor, as have the competencies and skills required to be successful.
The term “strategic HR partner” is used frequently by those in the profession
trying to characterize their relationship to their “clients” and the position of their
department on the modern organizational chart. Unfortunately, the term is often
offered with little or no understanding of how to deliver on its implied proposition.
Strategic HR takes on as many meanings as people you ask about it. Yet the focus
on all things “strategic” often dismisses those things that are critical to support-
ing a successful organization, but are viewed as tactical or pedestrian. When that
happens, it leads to the question, “What really is strategic HR?” Our view is that
strategic HR is anything that helps move the organization toward its strategic ob-
jective. That may mean executing basic HR operations flawlessly, or it may mean
working closely with key organization leaders to maximize the value of its human
and intellectual capital. In either case, definitions of what is strategic are based on
situations and real-time challenges rather than a preconceived notion propagated
by the HR profession.
The time has come for HR professionals to do more than try to become a strategic
partner—it’s time to succeed! The following outline will show you how, using a
proven methodology from one of the most successful human resources manage-
ment services and consulting companies in the United States.
First, Seek to Understand
1. Listen more than talk.

2. Empathize; walk a mile in your client’s shoes.
3. Don’t try to solve a problem before you know what it is!
4. Understand the issues from your client’s perspective. Deal with the prob-
lem they present first.
5. Contemplate the customer’s perspective, then respond with a custom
approach.
271
272 Tom Wimer
6. Clarify—be sure that what you think you understand is in fact what your
client has been telling you.
Build a Business Case
7. Keep it simple!
8. Identify strategic elements of the solution and present them in a practical,
easy-to-understand form. Being strategic does not have to be compli-
cated.
9. Know the resources available to you and your customer. Create solutions
that fit within the customer’s realities of money, time, people, and so
forth.
10. Be flexible. Offer alternatives. Few things are absolute black or white.
11. Ensure solutions are actionable, measurable, and have a high probability
of being implemented once accepted.
12. Again, keep it simple!
Embrace Your Client as a Member of Your Team
13. Be first to reach out for help and inclusion from your customer. They like
to be involved!
14. Respect the past. Don’t dismiss existing or previous actions before fully
understanding why they were put in place to begin with. There is usually
a reason.
15. Keep confidences and respect the client’s organizational and cultural
protocol.
16. Everyone knows you’re smart—don’t make your customer feel less smart.
17. Communicate regularly, with the method and timing preferred by your
customer, not just the way you feel most comfortable (that might mean
face-to-face, telephone, e-mail, or some combination).
18. Earn your customer’s trust by acting in their best interest at all times. Remem-
ber, you are there to make them successful. Make sure they know that.
Lead, But Don’t Push
19. Have a plan, but don’t be surprised or upset if it changes. Customers

reserve the right to change direction!
20. Establish clear roles, timing, deliverables for each project and communi-
cate status at all times.
21. Hold yourself, your team, and your customer accountable to your plan.
Communicate the importance of staying on schedule, but understand that
the realities of your customer’s environment may create unforeseen delays
and diversions. It’s OK.
Succeeding as a Strategic HR Partner 273
22. When roadblocks surface, give your primary customer every opportunity
to explain or fix the issue before going over or around them. Never use
threats or name-drops to “motivate” your customer to action.
23. Protect yourself. Monitor progress against your plan and document every
action for future reference, including changes to the plan and delays, who
made them, and why.
24. Help lead your client down the path to the conclusions you are reaching.
Show them how you are arriving at the conclusions, and often they will
feel as though you are reaching these conclusions together.
Deliver
25. Set the expectations—gain acceptance from both yourself and your
client on what to expect of each other throughout. It’s OK to expect
things from your client as long as they see the value in setting those
expectations.
26. Do what you said your were going to do, when you said you were going
to do it, for the price you quoted.
27. Never commit to unrealistic timing or technical deliverables. Don’t “reach”
unless you are sure you have the resources, skills, and knowledge to deliver
the highest-quality product/service.
28. It may be cliché, but surround yourself with the best and the brightest.
If you don’t have the expertise or time to deliver on your customer’s
expectations, find someone who does.
29. Avoid surprises.
a. Communicate frequently with your customer.
b. Monitor progress against your plan at every key milestone. Make
sure your customer knows where you are as well.
c. Give feedback on deliverables to your client in bites, not all at once.
Give them a chance to absorb and digest your ideas. Do a reality check
at every key milestone so as to avoid any surprise upon completion
of the project.
d. Vet a draft of your final deliverables with your customer before final-
izing. Don’t present final recommendations before you have asked
the following questions:
i. Are these recommendations consistent with findings and discus-
sion with our customer throughout our engagement?
ii. Are these recommendations actionable and realistic. Can these
recommendations be implemented with the resources available
or attainable by our customer?
iii. Do these recommendations put anyone or anything at risk?
Political analysis of recommended actions is important.
274 Tom Wimer
30. Present a polished, professional final product in the form and format that
works best for your customer.
Follow Up, and Take Credit for Success, but with Humility!
31. It’s OK to take credit for a job well done, but it is best done with humility.
32. Evaluate whether you have created raving fans. Thrilled customers are
your best marketers.
33. Don’t rest on your last accomplishment. Follow up and keep focused on
new and more creative ways to make your customers more effective.
34. A place at the table is not given to HR professionals, it has to be earned.
Part 6
Legislating Reform
20
Legislating Innovation in Human Capital
Management
Lessons from the Department of Homeland Security
Douglas A. Brook and Cynthia L. King
Legislation creating the Department of Homeland Security (DHS) in December

2002 marked the beginning of a historic innovation in human capital management
(HCM) in federal government. It also provides important lessons for future human
capital modernization efforts.
How does innovation occur in HCM in the federal government? Innovation is
“the alteration of what is established by the introduction of new elements or forms”
(Oxford English Dictionary 1999, 853). Altering the established rules for personnel
management (PM) in the federal government is challenging, but such innovations
have occurred. The history of the civil service tells us that innovation—that is, new
methods for managing civilian personnel—has resulted from structural changes,
new regulations and rules, demonstration projects, management initiatives, and
new government-wide policies. In most cases, opportunities for innovation require
some sort of legislative authority. In enacting the Homeland Security Act of 2002
(HSA), Congress took a great leap forward in authorizing the new DHS to develop
highly innovative approaches to HCM in conjunction with the Office of Person-
nel Management (OPM) and in consultation with its workforce. Although other,
smaller agencies had previously been granted exemptions from provisions of Title
5, DHS was the first cabinet-level department to be granted authority to develop
its own HCM system. HSA represents a departure from the traditional concept of
a standard government-wide personnel system envisioned by the Civil Service
Reform Act of 1978 (CSRA) and an entrance into a new era of HCM, one that
allows department managers more flexibility in HCM. In this case the department
was authorized to design a system that would include changes to compensation
and performance management, adverse actions and appeals, expedited employee
mobility, and new approaches to labor–management issues.
How was the enactment of the DHS personnel system achieved, and what are the
implications of this achievement for the design and implementation of innovative
ways to manage the federal workforce? Our study suggests that legislating innova-
277
278 Douglas A. Brook and Cynthia L. King
tion is made more likely by aligning change with larger public and governmental
objectives, and by controlling access to both the drafting process and the content
of the legislative proposal. However, even though such strategies may enable the
passage of the legislation in the short term, these same strategies may have nega-
tive consequences for the eventual design and implementation of an innovative
HCM system. In this chapter, we describe the case of enactment of the HSA. We
briefly explore the history of earlier attempts at management reforms by the Clinton
and Bush administrations, and then we examine the particular circumstances and
strategies associated with the HSA that led to the greatest civil service reform since
the CSRA in 1978. Finally, we consider what has happened with human capital
innovation since enactment of the HSA and ask whether the conditions that led to
successful congressional enactment created challenges for design and implementa-
tion of human capital innovation at DHS.
Personnel Management Innovation Agendas under

Clinton and Bush
Both Presidents Bill Clinton and George W. Bush came to office with management
agendas that included innovative approaches to PM. President Clinton’s National
Performance Review was critical of the complex, rigid, rules-based federal per-
sonnel system. In 1995, the Clinton White House proposed comprehensive PM
reform legislation. The Personnel Systems Reinvention Act would have given
agencies greater authority to design their own personnel systems. The Omnibus
Civil Service Reform Act would have expanded the use of demonstration projects
to experiment with issues such as paybanding and linking pay to performance.
Neither bill managed to get sufficient support on Capitol Hill. Unsuccessful in
passing this legislation, the Clinton administration then turned to existing authority
for demonstration projects and other administrative means to create performance-
based organizations.1
Similarly, Bush’s President’s Management Agenda (PMA) identified strategic
management of human capital as the first of five government-wide initiatives (see
Redburn, Shea, and Buss 2008). President Bush sought to develop “a meaning-
ful system to measure performance. Create awards for employees who surpass
expectations. Tie pay increases to results,” and promised, “[w]ith a system of
rewards and accountability, we can promote a culture of achievement throughout
the Federal government” (OMB 2002, 11). Initially, the PMA called on agencies
to use existing authorities to create demonstration projects and other innovative
HCM programs.
Subsequently, the Bush administration sent to Congress the Managerial Flex-
ibility Act to make statutory changes in HCM. The proposed act addressed such
detailed matters of personnel administration as incentives for voluntary retirement
and separation; bonuses for recruitment, relocation, and retention; and personal use
of frequent flier miles and other travel promotional programs resulting from official
Legislating Innovation in Human Capital Management 279
travel. It also contained provisions for more demonstration projects and for OPM to
develop innovative alternative personnel systems. The bill drew strong union op-
position. American Federation of Government Employees (AFGE) Union president
Bobby Harnage said, “There are seriously dangerous proposals in this package.
One of the most stunning is a proposal to allow the OPM to bypass Congress by
giving itself the authority to make permanent changes to Title 5. . . . AFGE strongly
objects to OPM’s effort to usurp the authority of Congress in this manner” (AFGE
2001a). The Managerial Flexibility Act was never enacted into law, although many
of its less controversial elements were approved in subsequent legislation.
The PM policy environment, therefore, was one in which small-scale change
was possible, but large-scale innovation failed to be enacted, often due to strong
political opposition from public sector labor unions. That deadlock changed with
enactment of HSA.
The Homeland Security Act of 20022
The Bush administration’s bill, HR 5005, was introduced in the House on June 24,
2002. The House took up the bill on July 26, defeated six amendments on close
party-line votes, and passed HR 5005 on a vote of 295–132. In the Senate, some
tried to bring the bill quickly to the floor; however, it soon became clear that the bill
was controversial, and that the PM provision was at the heart of the controversy.
The primary reason for slow progress of the bill in the Senate was union op-
position, and the PM provision became the central issue in the debate over passage
of the entire HSA. Earlier action by the new Bush administration to revoke the
Clinton-era labor–management partnerships, and to deny organizing rights at the
Justice Department on national security grounds gave labor leaders reason to fear
that the administration was pursuing an agenda to weaken the federal unions. The
fight centered on the question of the president’s authority to abrogate collective
bargaining agreements if he deemed it a national security necessity. Presidents have
had this authority for over thirty years, but union leaders and their supporters feared
its use by this administration in particular. The unions and their supporters tried
to address this question through bill language that would restrict the president’s
authority. In the Senate, a provision was added to limit the president’s ability to
abrogate union agreements on national security grounds. Efforts to amend the
president’s authority ultimately failed, but those arguments fueled debate. This
debate was framed as national security vs. labor rights.
As the Congress moved toward the mid-term elections, the differences between
the administration and the unions became sharper and more difficult to resolve,
notwithstanding claims by each that they were willing to negotiate and compromise.
Both sides campaigned on the issue, and the failed reelection bids of two Democratic
Senators, Max Cleland of Georgia and Jean Carnahan of Missouri, were perceived
to have been significantly influenced by this issue (Brook and King 2007). When
the election was over, the administration had gained a Republican majority in the
Senate and enough support to pass the HSA with the personnel provision intact.
In a post-election “lame duck” session, the Senate took up the bill. Last-minute
compromises were made that required DHS to collaborate with unions before any
rules were changed, required the president to notify Congress and wait ten days
before waiving union agreements for national security reasons, and ensured that
such waivers would be limited to a four-year period. The Senate passed the bill on
a 90–9 vote on November 19, the House passed the amended bill on November
22, and President Bush signed it into law on November 25, 2002.
What explains this enactment of broad authority for large-scale innovation in
HCM when recent previous attempts had failed? Explanations can be found in
the control the administration exercised over access to the drafting process and
the content of the reform. The Bush administration’s proposal had an important
strategic characteristic: control over access and content. Specifically, the proposal
was drafted in secret and it made use of general language. This approach allowed
the White House to control both access to the drafting process and to the full con-
tent of the reform proposal. Another explanation can be found in the alignment
of the proposed innovation with larger and more salient public and governmental
objectives. The administration’s arguments were more aligned with the apparent
post-9/11 policy environment than were the arguments of the unions.
Controlling Access
In the aftermath of 9/11, the Bush administration initially opposed creation of a new
department, but pressure was building for it in Congress. In response, the White
House initially considered creating a new border protection agency by merging the
Coast Guard, Customs Service, and Immigration and Naturalization Service. This
proposal drew turf-conscious resistance from affected cabinet departments and
was abandoned. Bush then instructed his chief of staff, Andrew Card, to develop a
proposal for a homeland security department. Card organized a five-member White
House staff group to develop a proposal for a new agency in secret, without con-
sultations with agency heads or congressional leaders (Moynihan 2005). Meeting
in the Presidential Emergency Operations Center (PEOC), the group developed a
proposal in secret, thus sidestepping potential interference from cabinet members
intent on keeping their departments intact, congressional leaders looking out for
their committee jurisdictional interests, and interest groups like the public sector
labor unions seeking to protect their collective bargaining rights. When the White
House released its proposal to create a DHS by combining 22 existing agencies and
170,000 federal employees into a new cabinet-level department, it was issued as a
concept paper rather than in formal legislative language. It addressed management
issues only in general terms.
A more traditional bill-drafting process might have involved staffing and coor-
dination with affected departments and agencies, consultations with subject matter
experts, careful drafting by legislative counsel, coordination and negotiation on
Capitol Hill, and perhaps even contacts with interest groups. None of this took
place while the White House staff group was drafting the original proposal, and
the hurried effort to draft legislation left little time for extensive coordination and
consultation. One result of this process is that the work of the staff group was easier
and more expeditious. They were able to construct a proposal without the delays
and inevitable negotiations and compromises that come with wider coordination.
Working in secret also meant that potential political opponents were kept in the
dark, unable to mobilize in opposition to a proposal they had not seen or did not
know existed.
Even though the process was less cumbersome in many respects, controlling
access also had some negative implications. First, lack of expertise clearly af-
fected the staff group’s work and raised some controversial issues that might have
been avoided had personnel experts been consulted throughout the process. As
one participant in the White House staff group, Bruce Lawlor, explained in an
interview with the authors in September 2005, “We could not have constructed
the intricacies of a new personnel system. We did not have the skill set to do that,
so our design was to create as much flexibility as we could, so then we could
bring it back and have the professionals finish the bill.” Even when the process
was no longer so secretive and OPM staff was brought into the process to help
draft the legislative language, timing constraints may have limited their ability
to fully apply their expertise to the final product. OPM’s Ed Flynn in a June 7,
2007, e-mail to the authors, however, suggests that OPM was fully engaged and
targeted their efforts to meet what they understood the administration’s objectives
to be. “Director James and I, along with other members of her personal staff and
OPM’s career staff, knew that the Administration desired a flexible approach. . . .
We also knew that time was short, and that the legislative proposal was going to
be developed quickly. For these reasons, we had already set in motion an effort
among members of the OPM group to come up with an approach that would
satisfy those objectives.”
Controlling access and working in secret also invited outsiders to impute motives
on the part of the administration, regardless of whether or not such motives were in
play. Union leaders perceived political motivations in the PM proposal. For example,
Bobby Harnage, in a March 31, 2005, interview with the authors, argued that the
PM reforms were simply part of a larger agenda: “this Administration came into
office . . . with the intent of carrying that extreme right-wing agenda. The American
public was upset and wanted something done about the security of this country and
they were willing to sign almost anything, as long as it would make us safer. So,
it gave them [the Bush Administration] an opening.” But this claim was refuted
in the authors’ September 2005 interview with White House staff group member
Lawlor, who countered that “there was never, for a minute, any political motivation
behind trying to change the civil service system. . . . The only direction he [Card]
ever gave us was ‘Do the right thing. You do what you think is right. We’ll worry
about the politics if it comes to that.’ ”
Controlling Content
When the White House released its proposal to create DHS, the proposal was is-
sued as a concept paper rather than in formal legislative language and it addressed
management issues only in general terms. Republican leaders in the House urged
the White House to draft a DHS bill quickly in order to get the bill enacted before
the one-year anniversary of 9/11. The White House staff group reassembled to
write a bill, and the approach they took was to use simple wording and delegated
authority. That is, rather than specifying the details of the new PM system, the
Congress would delegate the authority for devising a new system to the depart-
ment secretary and the director of OPM. Section (a) of the original PM provision
contained just sixty-eight words:
Notwithstanding any other provision of this title [Title 5], the Secretary of
Homeland Security may, in regulations prescribed jointly with the Director of
the Office of Personnel Management, establish, and from time to time adjust, a
human resources management system for some or all of the organizational units
of the Department of Homeland Security, which shall be flexible, contemporary,
and grounded in the public employment principles of merit and fitness (U.S.
Congress 2002).
Section (b) additionally required that any new PM system at DHS preserve equal
employment or other employee rights and remedies, ensured the right to organize and
bargain collectively, made certain pay provisions non-waivable, and set a five-year
sunset provision on authority to issue new regulations (U.S. Congress 2002).
No additional or more specific language was associated with the announcement
of the homeland security proposal or included in the original draft. The details were
to be left to post-enactment action by the DHS secretary and director of OPM.
Controlling the content of the proposal meant that the administration’s bill, and
even the final law, largely left the design and implementation of an innovative
new HCM system to the secretary of DHS and the director of OPM. This provi-
sion represented an extraordinary delegation of authority that differed greatly
from a central, integrated government-wide PM system. Additionally, the general
language shielded the administration and its supporters from negotiations and
political infighting over specific provisions of a new personnel system. Instead,
they were able to argue in general terms for a flexible and contemporary new
personnel system, leaving the details to be determined later. This approach, from a
management standpoint, was certainly attractive given the complexity of melding
170,000 employees, 22 human resources offices, 77 collective bargaining agree-
ments with 17 different unions, 8 payroll systems, and countless agency-specific
laws regarding PM issues. Trying to write innovative but detailed legislation for
HCM under these circumstances would have been challenging, to say the least.
The rationale for the strategy was explained by OPM’s Ed Flynn in an e-mail of
August 28, 2005, as follows:
This was really an effort to create a framework that was different in both substance
and character from previous efforts. Previous efforts largely were tinkering with
the articles and provisions of Title 5. The legislative proposal for the department
recognized the complexity and attempted, in effect, to set a new framework for
HR management within the department.
In addition to avoiding matters of complexity, the use of general language lim-

ited the ability of interested parties, including some members of Congress, to write
the specifics of HCM policy and practice. The final bill contained somewhat more
language addressing PM flexibility than the original sixty-eight words, including an
extensive section requiring collaboration with employee representatives. However,
even with these specific provisions, the legislation was very general in its wording,
allowing the secretary of DHS and the director of OPM wide latitude to design and
implement an innovative new system for managing human capital in the newest
cabinet department in the federal government. The “system requirements” section
of the bill provided only that any new personnel system created under the bill “shall
(1) be flexible; (2) be contemporary; (3) not waive, modify or otherwise affect [merit
principles, equal employment opportunity, collective bargaining rights and certain
other provisions of law]” (Public Law 2002, 107–296, November 25).
Aligning with Public Priorities through Effective Argumentation
By many accounts, the contentious battle over the PM reforms was over as soon
as the returns came in on election night 2002, suggesting a general feeling that
the election results signaled a powerful force in public approval for legislation
in support of national security. The arguments, from each side of the debate, are
informative in speculating why the administration was successful in aiding the
defeat of two incumbent Democrats, both of whom opposed the PM changes and
whose votes were critical in defeating the administration’s proposed amendments
to the DHS legislation.
During the 2002 campaign, Republicans specifically challenged some Democrats
on the basis of their opposition to the president’s proposed PM reforms. One argu-
ment that the administration repeatedly made in campaign speeches was that their
strategy for protecting America required them to have more control over federal
personnel. For example, President Bush (2002a) argued that the personnel reforms
were necessary because he needed the freedom “to put the right people at the right
place at the right time to protect the American people.”
However, the unions, particularly AFGE and the National Treasury Employees
Union (NTEU), critiqued the administration’s strategy as disingenuous, and AFGE
president John Gage additionally argued that the administration was anti-union. A
Washington Post editorial endorsing Gage’s views noted: “It would be nice to believe
the administration’s fervent denials of a plot to destroy the mostly Democratic unions.
But before we do, we’d like to see some clearer arguments from the administration
about what the elimination of union bargaining has to do with either the nation’s
safety or civil service performance” (“Civil Service Reform” 2005). Former AFGE
president Bobby Harnage used similar arguments: “Destroying the rights of federal
employees will, in turn, destroy any attempt to provide skilled, well-trained, profes-
sional employees to guard our nation and its citizens” (McCallion 2003). The unions
consistently argued to preserve workers’ rights to organize and collectively bargain.
Additionally, within their argument, they held that the war on terror was being waged
in support of freedoms that federal employees had a right to expect. For example,
Harnage said that the “fight against terrorism, in which federal employees have always
been on the front lines of the homeland, is about preserving our freedoms—including
our right to organize—not destroying them” (Barr 2003).
Thus, each side of the debate presented a strategy for providing national security.
The administration wanted the flexibility to move people quickly where they were
needed, and the unions argued that this strategy was unnecessary and threatened
the rights and freedoms of federal workers. Regardless of the veracity of either
argument, there was one key difference between them to which audiences might
have responded—namely, how each side depicted the object of protection. The
administration primarily focused on protecting the “American people,” and the
unions primarily focused on protecting a subset of the American people, the federal
employees. A further examination of the object of protection sheds additional light
on the persuasiveness of the administration’s argument.
The administration referred to its primary object of protection in several ways. For
example, the administration consistently made references to the “American people”
(Miller and Eilperin 2002), a collective and inclusive reference that applied to everyone.
There were also numerous references to “homeland” (e.g., Friel 2002; Mitchell 2002),
conjuring up a sense of familiarity and safety one associates with one’s home. Finally,
there were several references to the object of protection as “you,” for example: the
“Department [of Homeland Security] . . . is being created to secure you” (Bush 2002a).
By using this personal pronoun, President Bush established a connection that invited
the audience to identify with the object of protection not as an abstract entity, but rather
each of us was the object of concern. Taken together, the administration’s references to
the object of protection were inclusive, emotional, and specific.
The unions, in contrast to the administration, characterized the object of pro-
tection as primarily the federal worker and only secondarily the American public.
Consider these examples from Harnage: “When public employees’ rights and pro-
tections are compromised, so too is the safety and security of the public they serve
. . . ; Homeland security requires a secure work force . . . ; Destroying the rights of
federal employees will, in turn, destroy any attempt to provide skilled, well-trained,
professional employees to guard our nation and its citizens” (McCallion 2003).
In these examples, the federal employees are foregrounded as needing protection
so that they, in turn, can protect the public. The protection they need draws upon
the concept of security, but primarily in the sense of the federal employee’s own
personal security rather than the security of the homeland per se. Their personal
security requires that they ensure the protection of their rights as workers. As the
union argument went, only when the union ensures protection for workers’ rights
can those employees “guard our nation and its citizens.”
In addition to descriptions of the objects of protection, each side also differed
in how it conceived of and portrayed its own power. One key difference was in
how they referred to the holder of power. For example, the administration argued
that “a time of war is the wrong time to weaken the president’s ability to protect
the American people” (Miller and Eilperin 2002), and “I don’t think you’ll ever be
able to say that you’ve done all you can do to enhance security of this country if
you don’t give a new secretary . . . flexibility” (Nakashima and Miller 2002, 15).
In numerous other instances, Bush relied on the use of personal pronouns: “I need
to have the ability to put the right people at the right place at the right time” (Friel
2002), “I would have the capacity . . . to suspend those rules” (Bush 2002b). In
all these cases, the holder of power is an identifiable entity, one who can be held
accountable for the power and subsequent actions the agent takes.
The unions, as reform opponents, portrayed the holder of power primarily as a
system or as abstract collectivities. For example, “the merit system” is held up as
an entity that can ensure “protection for whistleblowers who alert Congress and the
public to fraud, abuse, mismanagement, and threats to national security” (AFGE
2001a). In other examples, systemic collectivities are emphasized as the holders of
power: “Federal employee unions have formally represented the vast majority of the
federal workforce for forty years. Union membership has never been inconsistent
with national security” (AFGE 2001b).
From the perspective of the audience, it is plausible that the administration’s
call for more power, in service to protecting the American people against threats
to national security, was persuasive because of the direct relationship being drawn
between the threat and who, specifically, was taking action to combat that threat.
In the case of the unions, their portrayal of the entity that holds the power added
another level of abstraction.
Arguing for Innovation
The arguments from each side in this debate provide clues as to why the administra-
tion may have been more successful in the fight over the human capital provisions
of the HSA. Organizational change literature has long understood that urgency
is a powerful motivator in changing behavior (e.g., Kotter 1996). September 11
provided the urgency to justify innovation in management reform, and the Bush
administration provided a powerful set of arguments that positioned it as serving
American’s best interests in providing national security. The unions portrayed the
rights of the federal worker as critical to ensuring national security, drawing on
history as evidence of the excellent work being done on the “frontlines” by gov-
ernment workers. But this argument, relying on abstract entities versus concrete
individuals, likely did not align as well with the mood of the country. September
11 stopped us in our tracks: given this unique set of circumstances, innovation,
personal accountability, and decisive (new) action was likely more persuasive than
the status quo, regardless of history. The public, who may have had little or no
previous understanding of PM issues in the federal government, was now view-
ing the issue through a lens colored by a terrorist attack. The Bush administration
directly adjusted to that lens, whereas the union relied on arguments that assumed
and asserted the value of the current system. Urgency opens minds to the idea
of change, and thus the administration’s message of innovation was likely more
palatable to a post-9/11 American public.
Lessons for Legislating Innovation in HCM
In many respects, the Bush administration employed some very effective strategies in its
successful campaign to include HCM innovation in the HSA. At the outset, controlling
both access and content set boundaries on the bill-drafting process and on the breadth
and depth of topics that would be debated. By delegating authority for the design of
an innovative human capital system to the DHS secretary and the director of OPM,
the Congress was largely kept out of the minutia of federal PM. These strategies were
especially useful for seizing the initiative and getting a proposal drafted quickly.
When, eventually, a meaningful political and policy debate over the bill emerged,
the argumentation and communication strategies had a significant impact. As the
argument analysis shows, the administration’s ability to frame PM innovation
in terms that were salient for an audience beyond the human resources policy
community was clearly important to the successful passage of the legislation.
The administration made its argument within the context of 9/11 and framed PM
reform as essential to national security, thus raising a rather arcane issue of public
administration to a higher level of public concern. At the same time, the union
arguments remained bounded by more traditional issues of collective bargaining
rights and PM practices. In this debate, arguments that a post-9/11 audience could
more readily identify with provided the political support for innovation that prior
arguments about PM policy could not accomplish.
The lesson to be drawn from this case has to do with how proposals for change
are presented and argued and the context in which they are debated. It is clear in this
instance that significant change can be achieved when a management proposal is
associated with matters of higher importance and wider support, such as protecting
national security. Left inside the normal community of management policy experts,
innovation is much more likely to be limited and incremental. Achieving legislative
authority for large-scale innovation is made more likely by aligning change with
larger public and governmental objectives in times of actual or perceived crisis.
Implications for Design and Implementation
The case of the HSA might seem to imply a complete formula for innovation in
HCM—control the access and content, make use of delegated authority for design
and implementation and, most importantly, make salient arguments associated

with broader issues of public concern to exert pressure on Congress to pass re-
forms. However, this approach addresses only the question of enacting legislative
authority for innovation; it does not necessarily guarantee successful design and
implementation. The very process of controlling and limiting the debate in the
legislative phase leaves a great deal of the policy work to be done during the de-
sign and implementation phases, by actors who more normally would administer,
rather than make, personnel policy. The negotiations, compromises, and acceptance
of policy outcomes that might be more expected to occur during the enactment
phase are merely postponed rather than avoided altogether. This delayed policy-
making permits the participants to pursue policy objectives that might have been
more difficult to achieve in the more open legislative process, but these objectives
ultimately get debated regardless. A brief look at the design and implementation
of the new DHS HCM system illustrates some of the challenges introduced by the
policy development methods highlighted in this case.
Design and Implementation
In the year following enactment, DHS and OPM worked to design the new HCM
system for DHS. Design teams were formed consisting of eighty people from OPM
and DHS, along with representatives from the three largest unions representing
DHS employees—AFGE, NTEU, and the National Association of Agriculture
Employees (NAEE). The teams worked full-time for nearly six months conducting
research and consulting with subject matter experts, officials from other government
jurisdictions, and public and nonprofit organizations. Sixty focus group and town
hall meetings were held with DHS employees across the country, and two open
public meetings of the DHS-OPM Senior Review Committee were held. During
the formal regulatory review process, 3,800 comments were filed concerning the
proposed regulations, and the design teams met for thirty days in formal “meet
and confer” sessions overseen by the Federal Mediation and Conciliation Service
(Cohen 2007).
Writing and approving the new regulations took fifteen months. The admin-
istration pursued its innovative policy agenda in the design phase, including a
new system for paybanding, a pay-for-performance system for DHS workers, and
greater flexibility to move DHS employees to areas of greatest need. Continuing
the national security versus collective bargaining rights debate, the administration
proposed rules that meant that DHS management would no longer bargain with
unions about the assignment of work, deployment of personnel, and use of new
technology (Zeller 2005). The proposed rules also said that management could
ignore the collective bargaining agreements, without consultation with the unions,
if determined by management to be a matter of national security. The administration
argued, once again, that the special national security character of the DHS required
this extraordinary power to protect the homeland (Cohen 2007).
The unions fought back. Despite all of this consultation and collaboration, the
day after the new regulations were announced on January 27, 2005, the unions filed
suit to prevent implementation of the first phase of the new DHS personnel system.
Once again, the debate centered on questions of national security versus collective
bargaining rights. Invoking national security had been an effective strategy in the
legislation phase and in the design phase, but proved insufficient in the next phase
within the legal arena.
A series of court actions has prevented implementation of the new system for
DHS employees covered by collective bargaining agreements. On August 12, 2005,
the U.S. District Court ruled that the DHS proposed regulations failed to ensure
collective bargaining as required in the HSA, and that the new rules failed to pro-
vide adequate due process for appeals to disciplinary actions. DHS appealed this
decision, and in June 2006, a federal appeals court upheld the ruling of the District
Court. DHS and the solicitor general did not appeal further. The court essentially
ruled in favor of the union’s argument that if DHS management could unilaterally
abrogate labor contracts, then, in fact, there was no effective contract and no real
collective bargaining as required in the HSA. The national security argument that
was so effectively used in the political and policy arenas has not been successful
in the courtroom. Arguments surrounding collective bargaining rights, which did
not resonate in earlier phases, were persuasive in the courts. They were found to
be required by law, notwithstanding other national security authorities. For the
unions, the argument had finally been turned around.
In the wake of these decisions, DHS attempted to implement its new system for
nonunion employees, but encountered significant administrative delays. Its original
plan, called MaxHR, has been replaced by the Human Capital Operations Plan,
which moves more cautiously toward implementation, beginning with a 2008 pilot
program for intelligence workers (Ballenstedt 2007). At the same time, congres-
sional support has been diminishing. For fiscal year 2005, the administration’s
request for $133.5 million for DHS human resources was cut to $70 million in the
House and Senate appropriations committees, and further cut to $43.2 million in
conference committee (Dizard 2004). For FY 2007, Congress cut the administra-
tion’s $71.5 million request to $25 million, nearly $4 million less than appropriated
in FY 2006 (Rutzick 2006). In March 2007, an amendment added in committee to
the annual homeland security authorization bill would repeal the new DHS pay-for-
performance personnel system. That bill would also direct DHS to replace the term
“human capital” with terms such as “workforce,” “personnel,” and “employee,”
and integrate its use throughout the department (U.S. Congress 2007).
The difficulties at DHS have wider implications as well. The similarly innova-
tive National Security Personnel System in the Department of Defense has also
been affected by lawsuits. On November 7, 2005, thirteen labor organizations
representing more than 350,000 employees of the Department of Defense (DoD),
filed a lawsuit challenging labor relations portions of the regulations regarding
requirements for collaboration with employee representatives, collective bargain-
ing rights and independent review. The DoD began implementing NSPS only
for non-bargaining unit employees while it awaited the outcome of the litigation
affecting employees in its collective bargaining units. On February 27, 2006, the
U.S. District Court ruled in part for both the union and DoD on some matters but
permanently enjoined the department from implementing regulations dealing with
adverse actions, appeals, and labor relations (AFGE v. Rumsfeld, 16).
However, in contrast to the DHS case, on May 18, 2007, the U.S. Court of Appeals
for the District of Columbia reversed the judgment of the District Court and upheld
all aspects of the regulations in the appeal. This creates at least mixed policy and legal
situations vis-à-vis the DHS case. Like DHS, NSPS is also being challenged on Capitol
Hill. The FY 2008 Defense Authorization bill, for instance, contained language to repeal
DoD’s authority to establish a new labor relations system under NSPS and require that
any new pay-for-performance system in DoD be consistent with existing federal labor
relations law. The president threatened to veto the bill over this provision.
Additionally, the administration’s hope to expand innovative HCM throughout
the federal government is stalled not only because of the delays and legal issues
described above, but also because there appears to be little interest on Capitol Hill
for taking up the proposed Working for America Act.
Conclusion
The drive for HCM innovation at DHS provides a case study in how such legisla-
tion can be effectively drafted, presented, and argued. The subsequent challenges
for designing and implementing a new personnel system at DHS suggests that in-
novation remains difficult to accomplish. Additionally, the tactics and arguments
that were effective in enacting innovation through legislation may not be equally
effective in the implementation phases of innovation. Is it possible that legislative
enactment strategies are in conflict with implementation success? In this case,
Congress approved PM reform, not because there was broad agreement on a new
policy, but because the political imperatives were strong due to the controls and
argumentation employed by the administration. The HSA was enacted without
achieving true policy consensus about what human capital innovation in DHS really
meant. Therefore, interested parties, including organized opponents, had continued
motivation to sustain the debate into the design and implementation phases, using
(in this case) the courts to support their policy choices and resolve their policy dif-
ferences. Furthermore, in the absence of policy consensus, changes in the political
environment can lead to changes in congressional support.
At this writing, the future of innovative HCM at DHS is very uncertain. Ad-
ministrative difficulties and court cases have delayed implementation for over two
years, and support from Congress is waning while, at the same time, the five-year
deadline for innovation contained in the HSA is fast approaching. Inevitably, the
political imperatives of debate, negotiation, and compromise must ultimately be
confronted in the open for innovation to succeed.
Notes
1. For a more complete discussion, see Thompson (2001) and Ingraham (1997).
2. For a full discussion of enactment of HSA see Brook and King (2007) and Brook
et al. (2002).
References
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Act Does Nothing to Address Human Capital Crisis.” Press release dated October 15.
———. 2001b. “Faulty Premises Make for Bad Amendments: Oppose Anti–Collective
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(February 27, 2006).
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———. 2002b. “Remarks in Savannah, Georgia.” Weekly Compilation of Presidential
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Rules.” Washington Post, July 10: 15.
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21
The Human Capital “Crisis” in the Federal
Government
A Modest Proposal
Alan P. Balutis
The life of a public sector executive is rewarding and challenging. The author knows
this first hand, having served in government—at what was then still the Department of
Health, Education and Welfare (HEW) and then at the Department of Commerce—for
twenty-eight years. We are indeed fortunate to have people in public service today who
are devoting their careers—even their lives—to trying to solve some of the greatest
problems and challenges facing our nation and our society. These professionals work
long hours and are often underpaid when compared to their private sector counterparts.
Their effectiveness is hampered by a fifty-year-old personnel system and antiquated
administrative rules long ago discarded by the private sector.
Most public sector executives are proud of what they do. This does not mean
they are not concerned about the future. They face a growing list of issues and
concerns that are paralyzing their ability to perform.
• A staggering number of public sector employees are eligible for retirement,

yet there is a shortage of actionable plans to cope with the inevitable.
• Strategic management of human capital is nearly nonexistent. Public sector
compensation, benefits, training, and career development are probably twenty
years behind common private sector practices.
• Recruitment of the “best and brightest” is rare. The public sector simply cannot
compete with the private sector in terms of starting compensation, training,
and career development.
• Not so long ago, the public sector was the best place to be if you wanted to
work with advanced technology. This is no longer true, as the public sector
has failed to keep pace with technological advances.
• The public sector has a reputation for failed technology programs. Seldom
does a week go by that some newspaper does not report the cancellation of
a multimillion-dollar technology program. The public sector simply doesn’t
have the talent base to manage these programs.
292
The Human Capital “Crisis” in the Federal Government 293
• Although the public sector has spent billions on information technology

(IT), there are critical systems that continue to operate with decades-old
technology.
• Often, the “work around” for failed human capital and technology strategies
has been to contract out to private sector companies. This has been great
for those companies doing business with the public sector, but there is little
discernible proof that this approach has benefited the taxpayer.
These issues are only the tip of the iceberg. While the public sector continues to
fall behind its counterparts in the private sector, expectations and demands continue
to grow. Taxpayers, Congress, and the White House continue to place demands on
the public sector to deliver more—often with less. As Professor Donald Kettl put
it recently, “At the core is a fundamental problem. The current conduct of Ameri-
can government is a poor match for the problems its must solve. If government
is to serve the needs of its citizens in the twenty-first century, it must reconfigure
itself—to shift the boundaries of who does what and even more important, how
its work gets done” (Kettl 2007, 5). In her recent book presenting a new way of
governing, Al Gore’s reinventing-government czarina Elaine Kamarck (2007) puts
it even more bluntly:
On September 11, 2001, the United States experienced the largest terrorist attack
on its soil in history, and the obsolescence of the government was put into stark
relief. Organizations that had defeated the Nazis, the Japanese, and then the so-
viet Union were no match for a handful of terrorists. . . . Four Septembers later
the government failed once again. When a massive hurricane hit New Orleans,
the wealthiest government in the world was caught unaware and unprepared.
In the pictures beamed around the world, the U.S. government looked no more
competent than one in the third world when it came to protecting the health and
welfare of its citizens.
The Impending “Crisis”
Over the last few decades each presidential administration has included a program
designed to reform and improve the management of our government: The Grace
Commission and Reform ’88 under Ronald Reagan, A Thousand Points of Light
under George Bush, the National Performance Review and Reinventing Govern-
ment under Bill Clinton and Al Gore, and currently the President’s Management
Agenda under George W. Bush. Invariably, this reform agenda has centered on
similar principles: efficiency, effectiveness, and economy (saving money and/or
people) (see Redburn, Shea, and Buss 2008 for a review of these issues). In recent
years, another common thread has been the power of IT to enable these reform
objectives.
The new president coming into office in January 2009 will face what the cur-
rent head of the Office of Personnel Management (OPM) has called a retirement
294 Alan P. Balutis
tsunami. Baby boomers heading toward retirement from the federal workforce
are a concern not only for human capital planners but also for many government
program managers. OPM projections show that nearly 61,000 full-time permanent
federal employees will retire in FY 2008 and that the number of retirements will
peak between 2008 and 2010—just as an incoming president is seeking to launch
the new administration.
Loss of experienced contracting officers and program/project managers is already
being felt, according to a recent report by the Federal Acquisition Institute (FAI).
Crunch time for the federal acquisition workforce may come a bit later than noted
above; retirement eligibility for contracting officers jumps sharply from 13 percent
becoming eligible this past year to 54 percent in 2015.
For government procurement, a wave of retirements could be especially critical.
Contracting officers oversee about $400 billion a year in spending, and there are
concerns that not enough mid-career professionals will be left to replace retirees
because of budget and staff cuts in the 1990s that thinned those ranks. Ironically,
many of those cuts came as a result of the National Performance Review and its
efforts to streamline and flatten government. Staff shortages in the acquisition
and program management fields have already been pointed to by the Government
Accountability Office (GAO) and various inspectors general as the cause of cost
overruns, schedule delays, and project failures and shortcomings at the Department
of Homeland Security (DHS), the Department of Defense (DoD), and the Federal
Emergency Management Agency (FEMA), among others.
The federal acquisition workforce hardly grew at all during the past year—in
stark contrast to the growth rate in contracting dollars and actions—according to
recent data. OPM data analyzed by FAI showed that the number of procurement
professionals in government rose less than 1 percent in FY 2006. The authors said
new statistics support observations that acquisition workloads have grown larger
and more complex, and agencies need to identify crucial skills, recruit and retain
employees, and plan for change as the nature of acquisition work continues to
evolve. The number of federal acquisition personnel has increased about 3 percent
since FY 1999 while federal contracting dollars more than doubled during that
same period (“Size of Contracting . . .” 2007).
According to many experts, 60 percent of the federal government’s rank-and-
file workforce and 90 percent of its top managers will be eligible to retire in the
next decade. The nation risks losing a huge portion of government’s most precious
asset—its people—along with continuity, important technical expertise, and critical
institutional knowledge. But that is not the entire story. State and local governments
also report a looming talent crisis of even larger proportions. In fact, the entire
U.S. workforce is getting older, with record numbers of baby boomers retiring. At
the same time, the next generation of American workers is a smaller percentage
(16 percent) of the total population when compared to the baby boom generation
that will retire (25 percent).
So, as Tom Shoop noted in a recent opinion piece in Government Executive
magazine, “The Federal government has a problem with its personnel or its work-
force, or its human capital, or whatever term of art you choose . . . agencies face
a crisis of epic proportions as baby boomers begin to retire” (Shoop 2007a, 70).
And this problem is exacerbated by two associated issues—an increased reliance
on the private sector and the challenge of recruiting new talent to the government
workforce.
In 1961, as government’s reliance on contractors grew, President Dwight
Eisenhower cautioned against the concentration of power in the hands of the
military-industrial complex. The warning against blending government and pri-
vate interests remains valid—especially today. Because of efforts to downsize the
federal workforce without similarly reducing its functions, a greater reliance on
the private sector has become inevitable. This problem is especially telling in such
areas as intelligence, defense, and IT.
The Central Intelligence Agency (CIA) and many other intelligence agencies
were downsized and given personnel limits during the 1990s, so they turned to
contractors for staffing surges after the September 11, 2001, attacks. For example,
one new Pentagon agency, the Counterintelligence Field Activity (CIFA), was
established in February 2002 to coordinate Defense Department counterterrorism
and counterintelligence activities. In FY 2007, CIFA was staffed 70 percent by
contractors. The CIA, acting under pressure from Congress, has decided to trim its
contract staffing by 10 percent to “curb what critics have decried as the growing
privatization of U.S. Intelligence work” (“CIA Plans . . .” 2007, A2). Contractors
currently make up about one-third of the CIA workforce.
At DoD, there has been an increase in reliance on contractors to maintain
operations in the past decade because DoD’s personnel have been pulled away
on military duty, according to a report by GAO. DoD officials told GAO that the
federal government policy of relying on the private sector for commercial services
that are not inherently governmental also contributed to this increase (“GAO: DoD
Relying More . . .” 2007). Following relatively constant spending from FY 1995
to FY 2000, monies going to the private sector increased 57 percent from FY 2000
to FY 2005.
In this same period, the federal government’s demand for complex technol-
ogy has soared. But, as the Wall Street Journal noted recently, “Washington often
doesn’t have the expertise to take on new high-tech projects, or the staff to oversee
them. As a result, officials are increasingly turning to contractors . . .” (“Is U.S.
Government Outsourcing . . .” 2007, A1). The Journal goes on to note that while
the government still buys office supplies and furniture, it now relies on others for
much of its sophisticated technology work. So-called “system integrators” now
pull together complex IT networks for the DoD, Homeland Security (DHS), and
most other government entities—managing the project, conducting testing, and so
on. DHS Inspector General Richard Skinner is quoted in the article, saying, “Our
ignorance is their gain,” as he discusses oversight of a $30 billion electronic “fence”
being built along the US-Mexican border (“Is U.S. Government Outsourcing . . .”
296 Alan P. Balutis
2007, A10). Given the growing shortages of government acquisition professionals

and certified project managers, the chances for cost overruns, schedule delays, and
designs that don’t work increase considerably.
As a result of all the above, the number of private federal contractors has grown
to 7.5 million, four times bigger than the federal civilian workforce itself, according
to Paul Light of New York University (“Is U.S. Government Outsourcing . . .” 2007,
A10). The risk of this approach, in the words of Warren Suss, a Pennsylvania-based
IT consultant, is that the government could wind up “outsourcing its brain.”
The federal government is the nation’s largest employer. But over the next five
years it will lose more than 550,000 employees. With this kind of turnover loom-
ing, government needs to expand the search for talent. But the market for recruits
has never been more competitive, and government employers are locked in a fierce
contest with the private sector. The prospect of finding a government job is similar to
looking for pirate treasure: somewhat difficult to believe in, impossible to find, and
hard to acquire (“Wanted: New Talent . . .” 2005, 21). The problems go deep.
Less than half of respondents in recent national surveys express an interest in
working for the federal government, and a much smaller number say they know how
to go about applying. While the number of job applications from outside government
hired at the GS-12 to GS-15 levels is increasing, the percentage of such jobs open
to outside applicants has declined. With the economy strong, more recent college
graduates are attracted to the greater compensation of the private sector. And the
government’s lengthy and difficult job application process, including the amount
of time needed to obtain security clearances, does not inspire college grads to join
the federal workforce. In a recent article in the PA Times, Bob LaVigna recounts
several successes in attracting retiring baby boomers from the private and nonprofit
sectors to public service. One of those successes, a CPA with almost thirty years of
experience in the private sector, had forgotten she had even applied to the Internal
Revenue Service when she was called for an interview—more than a year later
(LaVigna 2007, 7). And this was a success?
Crisis or Opportunity
The Chinese write the word crisis with two characters, one of which means danger
and the other opportunity. Many people share the concerns outlined above about the
unprecedented level of baby boomers heading toward retirement from the federal
workforce. But this pending workforce crisis, this pending retirement tsunami,
must also be viewed as a tremendous opportunity—an opportunity to reshape the
federal government, to flatten hierarchies, to remake the way government interacts
with its citizens and vice versa, and to change the culture of the bureaucracy. It
is an opportunity to make government a high-performance organization, to create
a more resilient workforce and to make government itself more resilient. It is an
opportunity to create a twenty-first-century government driven by a twenty-first-
century workforce. It is an opportunity that hasn’t presented itself since the Hoover
Commission studies of 60+ years ago, and likely won’t present itself again for
another generation.
Consider how the world has changed in the last 25 to 30 years, since the work of
the Grace Commission and the launching of the Reform ’88 initiative in the Reagan
administration. The first microcomputers were just being introduced, and personal
computers were mostly the realm of hobbyists. People came to work at a central
office; a major role of the General Services Administration (GSA) was to manage
or build the multitude of federal buildings and offices to house all those workers.
Most businesses were local or within driving distance. Mobile telephones existed
only as car phones for the well-to-do. Telework was largely unknown. Telework is
no longer just a way to keep up with the private sector and create a flexible work
environment for federal workers. It is the cornerstone of continuity of operations
planning (COOP). In fact, the two terms have become so intertwined that a new
word—TeleCOOP—has entered the management vernacular as the government
looks toward telecommuting as a necessary way of dealing with disasters, particu-
larly long-term emergencies such as pandemic flu, risk mitigation of human assets,
and “social distancing.” Research was conducted through books and libraries.
Contrast that with the world today and what the Gartner group terms “Future
Worker 2015.” Long-distance travel is common. Personal computers and cell
phones are ubiquitous. Telework is routine. Business partners are as likely to live
on different continents as in different cities. Research reports are built with graph-
ics, sound, and multimedia that have been gathered within minutes on the web or
through electronic interactions (Gartner Group 2006).
In a twenty-first-century government, human resource and management policies
could become a differentiator in government’s ability to attract the best workers
(regardless of where these workers live and “when” they work), and to support
workers’ expectations that the same productivity, multitasking, and mobility tools
with which they grew up at home should also be in the workplace. Technology
cannot only be a powerful enabler of such policies, but in the twenty-first century
it has already proven to be the catalyst for new business paradigms.
Technology has enabled revolutionary business models and elevated citizen/
customer expectations. It has affected everything from the availability of secure
communications “anywhere, anytime” (broadband and wireless), to the network
phenomenon changing when, where, and how we collaborate and transact busi-
ness, to rich and social media concepts (video anywhere, presence awareness and
instant messaging, podcasts, wikis, blogs, shared bookmarks, etc.), changing how
we experience each other and transactions.
Governments must now change their business models from those of the last
50+ years to those that will characterize the twenty-first century and beyond.
They must uncouple business processes and workers from their government of-
fices, establish mobility policies, and institute programs and business practices
that incorporate enabling technologies such as those noted above. They must
change paradigms for:
298 Alan P. Balutis
• The workplace, how real estate and facilities are managed, and for reducing
costs
• Citizen and employee productivity
• Human capital management, employee recruitment, retention, career mobility,
and graceful retirement
• Business resiliency and mobility
• Preservation of the natural environment, current fuel and energy consumption,
and reducing congestion on our roads and highways
• Social inclusion—how all citizens, regardless of economic status or locale
(rural or urban), interact, receive services, and voice their rights
• Economic development in the global marketplace and managing innovation
• Healthcare—comprehensive, affordable, effective, and timely for every
citizen
Our next president will have an opportunity to reshape the government, public
service, and the policies that limit our global competitive posture. In January 1961,
President John F. Kennedy, in his inaugural address, inspired a whole generation
of young people to enter public service with his call to “ask not what your country
can do for you—ask what you can do for your country.”
Almost fifty years later, in January 2009, our new president must rally and chal-
lenge a new generation to join him in creating a twenty-first century government.
There is no reason the government cannot operate with as much speed, responsive-
ness, and resiliency as the private sector. In fact, there is no reason government
should not be the leader when it comes to technology adoption, human capital
management, and service delivery. But are such issues beginning to make their
way into our presidential campaign discourse? It is to a discussion of this question
that we now turn.
Current Political Environment
While the 2008 presidential election is still months away, there is increasing
evidence that management of the federal government may actually become a
key issue in the candidates’ debate. And, as Tom Shoop has noted in a recent
article in Government Executive magazine, “the debate is shaping up to be not
just a battle of sound bites, but a genuine discussion about how to improve the
government’s underlying capacity to address the challenges facing the country”
(Shoop 2007b, 50).
At about the same time, John Fund of the Wall Street Journal’s online opinion
journal—interviewing former Republican senator and current television actor Fred
Thompson—wrote that “the Federal government’s ability to function effectively
would likely be a major theme” in a Thompson campaign for the presidency.
Thompson, who headed what was then called the Governmental Affairs Commit-
tee during his term in the Senate, told Fund that the next president needs to “get
down in the weeds and fix a civil service system that makes it too hard to hire good
employees and too hard to fire bad ones” (Shoop 2007b, 50).
On the Democratic side of the spectrum, Senator Hillary Rodham Clinton (D-
NY) has co-sponsored legislation to create a U.S. Public Service Academy—the
equivalent of West Point or the Naval Academy—for civil servants. The measure
would dedicate $205 million to fund a 5,000-student institution aimed at produc-
ing high-quality federal employees. More recently, Senator Clinton delivered what
her staff described as a major policy address at the New Hampshire Institute of
Politics at Saint Anselm College. In that speech she laid out a ten-point agenda for
government reform, including making it possible for virtually every government
service and transaction to be paperless.
So what are some of the characteristics of this new “transformed,” “twenty-first-
century” government? The outlines are becoming clearer—but no real model has
yet to be operationalized. What are some of the elements of such a government?
They have been framed in our own “The Connected Republic 2.0,” as well as by
former Clinton-Gore “re-inventor” Elaine Kamarck in her new book the End of
Government . . . as we know it (2007), by Donald Kettl of the University of Penn-
sylvania in his essay “The Next Government of the United States,” and by several
others—most notably from the IBM Center for the Business of Government. If
one were to summarize these works, here is what one might say:
• Government is being transformed by several trends: (1) the “rules of the

game” are changing in human capital, financial management, and organiza-
tion structure; (2) there is an increased use of performance management;
(3) governments are taking market-based approaches, such as competition,
choice, and incentives; (4) government is moving from business as usual to
performing on demand; (5) citizens are being more engaged; and (6) govern-
ments are using collaborative networks and partnerships to deliver services
and solutions (Abramson, Breul, and Kamensky 2006).
• These trends—and the deep challenges facing the nation—drive government
to reconfigure itself to serve the needs of its citizens in the twenty-first century.
As Kettl has so ably put it: “At the core is a fundamental problem: the current
conduct of American government is a poor match for the problems it must
solve” (Kettl 2007, 9). Thus, Kettl notes five imperatives for the performance
of government in the twenty-first century: (1) a policy agenda that focuses
more on problems than on structures; (2) political accountability that works
more through results than on processes; (3) public administration that func-
tions more organically, through heterachy, than rigidly through hierarchy;
(4) political leadership that works more by leveraging action than simply by
making decisions; and (5) citizenship that works more through engagements
than remoteness (Kettl 2007, 9).
• This new, transformed, on-demand government has some different charac-
teristics than today’s government. It is responsive, agile, resilient, flexible,
300 Alan P. Balutis
dynamic, flatter, more connected, less hierarchical, dynamic, seamless, more

personalized, and transparent.
• The modern methods of policy implementation fall into three general cat-
egories: reinvented public sector organizations, government by network, and
government by market (Kamarck 2007, 11).
My colleagues in the Business Solutions Group have summarized this well:
All of this will have a major impact on what it is like to work in the public sec-
tor. There will be a gradual evolution of new forms of coordination and control.
Governments will place a premium on the skills of orchestration and facilitation
and the ability to recognize the credibility and authority of sources of policy in-
sight and advice that live outside the formal structures of the public sector. It will
also involve developing new accountability methods that can match the radically
dispersed and collaborative nature of public purpose work. Governments will
need to make their own workplaces flatter, more connected and less hierarchical,
and more in tune with the values and behavior of the talented people that need to
be attracted to the public sector (Stewart-Weeks and Johnston 2007, 12).
What Should We Do?
As noted earlier, the 2008 presidential candidates have begun to lay out their plans
for “reforming government” and “cleaning up Washington.” Many of these ideas,
however, target federal employees. Pondering the implications of a projection that
almost half the civilian workforce would retire during the next two presidential
terms, Rudolph Giuliani suggested in a speech at the Heritage Foundation that he
would “seek to replace only half of them” (Barr 2007, D4), thus saving $70 billion
a year. Others focus on government contractors. Democrat Hillary Clinton would
cut 500,000 government contracting jobs and save $10 to $18 billion a year. Still
others lack specificity at this early stage. Former Republican governor of Mas-
sachusetts Mitt Romney says, “Washington is broken,” and we need to “cut out
the unnecessary and the wasteful” (Barr 2007, D4). Former Senator John Edwards
pledges to root out waste and cronyism, and Senator Barack Obama also vows to
crack down on government waste. But a few have offered up specifics and plans.
As noted earlier, Senator Clinton has laid out a ten-point agenda for government
reform (Clinton 2007). And Republican presidential contender John McCain has
outlined a comprehensive platform for government management reforms, describ-
ing steps he would take to boost federal pay, speed firings, tie program funding to
yearly evaluations, and toughen acquisition rules (McCain 2007). Following are
some proposals for the cast of presidential candidates:
Keep It Moving
The Bush administration deserves recognition for its sustained, high-level attention
to management reform and improving government through the President’s Man-
agement Agenda (PMA). So we should continue to push for clean audits, faster
closing of the government’s books, tying funding decisions to annual evaluations
through the Program Assessment Rating Tool (PART), and the like (this program
is covered in Redburn, Shea, and Buss 2008). Use of a red-yellow-green quarterly
scorecard may have outlived its usefulness, but there should be some mechanism
to monitor, report on, and compare agency performance.
Do Even More
In certain areas, however, we need to step up the pace. The three areas ripe for an in-
coming administration to focus on are e-government, transparency, and mobility.
It has been twelve years since the government went online. Leaving govern-
ment in 2001, the author completed an inventory of e-government initiatives and
proposed where we could be in the next few years, arguing that the primary man-
ner in which client services could be improved is through single points of access
by clients to multiple sources of services, a coherent whole-of-enterprise vision
of client services, electronic delivery of services and public kiosks, and one-stop
shops and agency-to-agency cooperation (Balutis 2001).
Sadly, we haven’t moved to e-invent or transform government and there is much
to be done to make government both more service oriented as well as more citizen
centric. An excellent blueprint for implementing digital government has been laid
out by Robert Atkinson of the Information Technology & Innovation Foundation
(Atkinson 2006); it should be “must reading” for the incoming transition team.
Atkinson says that governments must think of themselves less as direct providers of
e-government services and more as enablers of third-party integrators that package
cross-agency information and services in user-friendly ways.
The Bush administration has taken steps to make government more transparent—
setting up a website to post the PART scores and results, and beginning to put
financial data online. That too should be “turbo-charged” as we require government
agencies to publish their budget, contracts, grants, and performance data online
and in real time.
Finally, agencies need to move out aggressively to make use of telework—to
attract and recruit talented young people (“Mobility . . .” 2007), reduce traffic
congestion and vehicle emissions, increase productivity, and make government
more resilient. As mobile technologies have grown even more capable throughout
recent years and the total cost of ownership of personal computers has dropped,
the government must recognize the potential to benefit both the organization and
the individual employee.
As noted earlier, human resources and management policy could become a dif-
ferentiator in government’s ability to attract the best workers—regardless of where
these workers live and when they work. As the author’s daughter—four years out
of college and employed by a small IT project management software firm—put it:
“Work is something you do, not someplace you go.”
302 Alan P. Balutis
Too Many Chiefs
As Congress has sought to improve government management, and agency functional

communities have sought to enhance their stature, we have seen a proliferation of
“chiefs.” At present most agencies have a chief information officer, a chief tech-
nology officer, a chief human capital officer, a chief information security officer,
a chief acquisition officer, and a chief financial officer. throw in a stray assistant
secretary of administration, a director for policy and planning, and an inspector
general to oversee the whole mess and one has started to slice the administrative
management bologna pretty thin. Perhaps it is time to return all the management
arrows to a single quiver—either beneath an undersecretary for management or
perhaps, as David Walker, head of GAO, has proposed, a term-appointed chief
operating officer whose only role is management operations.
While we’re at it, it might be worthwhile to consider breaking out the manage-
ment side of OMB—linking it up with much of OPM, GSA, the Defense Acquisition
University, and parts of Treasury’s Financial Management Service—and creating
an Office of Federal Management to oversee the needed dramatic reforms.
A Modest Proposal
Finally, there are three things an incoming president and his newly appointed direc-
tor of federal management might do.
First, establish a twenty-first-century Hoover Commission to rethink govern-
ment today. Private sector management is dramatically different than it was 50 or
60 years ago; it’s different than it was even 10 to 15 years ago. But government is
largely the same—wedded to old ways of managing its people and its processes.
It is time for a fundamental rethinking of how government is organized, how it
partners with the private and nonprofit sectors, how it manages its processes and
its people and the like.
The original bipartisan Hoover Commissions, headed by the respected former
president, were appointed from 1947–49 and again from 1953–55 to find ways
to reduce the number of government agencies and increase their efficiency in the
post–World War II and post–Korean War periods. The commissions were composed
equally of Democrats and Republicans; aided by a body of experts, they reviewed
the entire federal government and made recommendations for streamlining and
trimming costs. The challenges today are no less daunting, and there hasn’t been
a similar broad look at our government in over fifty years.
Second, commission a study with the title “Government Worker: 2015”—perhaps
modeled after the excellent Gartner Group report cited earlier. Computerworld
recently published its fourteenth annual “The 100 Best Places to Work in IT 2007”
(Brandel 2007). Fairfax County Public Schools placed tenth, and the U.S. Postal
Service came in at number 83; otherwise, no government agencies made the list.
But government needs to become an employer of choice; one with well-defined
career paths, access to the right tools and technologies, training and development
programs, work/life balance, fair performance evaluation processes, and all the
things that make an organization a desirable place to work.
And last, but not least, provide early-out authority across government, to en-
courage the remaining baby boomers to retire from public service. What? Why do
such a counterintuitive thing—especially given the points raised earlier? Because
despite all the graphs and trend lines promulgated by credible private and public
sources, the average age of government employees continues to increase. And while
employee loyalty and staff retention rates in the federal government can only be
envied by the private sector, a changing of the guard is long overdue.
Again and again, at conference after conference, when we are asked what the
government needs in order to change, the answer is not new legislation, or regula-
tion, better systems, or another presidential initiative—although all are important.
the common answer is, “We need to change the culture.” And to change the cul-
ture, we need to change old thinking, old ways of doing business, old management
styles. We need to change many of the senior people. It is time for them to go. It
is time for them to go so that a new generation can take root and begin to lead the
government to a more mission-oriented, solution-minded, enterprise-wide approach
to current challenges.
This new generation is more open to information sharing and collaboration
through blogs or wikis—more of a Web 2.0 approach. Don Tapscott, co-author of
Wikinomics: How Mass Collaboration Changes Everything (2006) dubs this “the
Net Generation” and “the Wiki Workplace” (“An Interview . . .” 2007). Many of
these new recruits will be first- and second-generation Americans; many will be
women and minorities. Again, this is an opportunity to embrace multiculturalism
in a connected, integrated, federal government community.
Conclusions
The next president will face great challenges: continuing the war on terror, increas-
ing economic competition from emerging world powers like China and India, rising
energy costs, environmental concerns, and the enormous expense of Social Security,
Medicare, and Medicaid for the baby boom generation. The budget pressures will
be immense. But of equal importance is the fact that this will require a twenty-first-
century government, a transformed on-demand government—responsive, resilient,
flatter, more connected, seamless, and more transparent.
References
Abramson, Mark D., Jonathan D. Breul, and John M. Kamensky. 2006. “Six Trends Trans-
forming Government.” Washington, DC: IBM Center for the Business of Government,
Special Report Series.
Atkinson, Robert D. 2006. “Turbo-Charging E-Government.” Public CIO (June/July):
39–45.
304 Alan P. Balutis
Balutis, Alan P. 2001. “E-Government 2001.” Public Manager (Spring and Summer).
Barr, Stephen. 2007. “The Candidates Sound Off on Government Jobs.” Washington Post,
June 4, D4.
Brandel, Mary. 2007. “The 100 Best Places to Work in IT 2007.” Computerworld, June 18.
“CIA Plans Cutbacks, Limits on Contractor Staffing.” 2007. Washington Post, June 11, A2.
Clinton, Hillary. 2007. “Remarks on Government Reform.” At Institute of Politics, St.
Anselm College, New Hampshire, April 13.
“GAO: DoD Relying More on Contractors.” 2007. Federal Computer Week, May 21.
Gartner Group. 2006. “Future Worker 2015: Extreme Individualism.” Washington, DC:
Gartner Group Consultants.
“An interview with ‘Wikinomics’ author Don Tapscott.” 2007. www.fcw.com, May 7.
“Is U.S. Government Outsourcing Its Brain?” 2007. Wall Street Journal, March 30, A1.
Kamarck, Elaine C. 2007. The End of Government . . . As We Know It: Making Public Policy
Work. Boulder, CO: Lynne Reinner.
Kettl, Donald F. 2007. “The Next Government of the United States: Challenges for Perfor-
mance in the 21st Century.” 2008 Presidential Transition Series. Washington, DC: IBM
Center for the Business of Government.
LaVigna, Bob. 2007. “The Search for Talent: Attracting Baby Boomers to Govt.” PA Times,
March 7.
McCain, John. 2007. “Remarks on Government Management Reforms.” In Oklahoma City,
Oklahoma, May 21.
“Mobility Cited as Key to Recruiting Top Science Talent.” 2007. Government Executive,
May 9.
Redburn, F. Stevens, Robert J. Shea, and Terry F. Buss, eds. 2008. Performance Government
Shoop, Tom. 2007a. “People Problem.” Government Executive, May 1, 70.
———. 2007b. “Running Against Dysfunction.” Government Executive, April 15, 50.
“Size of Contracting Workforce Holds Steady.” 2007. Government Executive, June 5.
Stewart-Weeks, Martin, and Paul Johnston. 2007. “The Connected Republic 2.0.” March 12.
“Wanted: New Talent in IT.” 2005. Federal Times, April 4, 21.
Part 7
Concluding Thoughts
22
The Path of Reform
Challenges and Opportunities
Hannah S. Sistare
As with all reform movements, the path for those seeking to impact the public
workforce has been uneven. Progress is hard fought and implementation unsure.
Certainly that has been the case for the implementation of the most recent set of
reforms enacted by Congress. Yet as the chapters in this book demonstrate, despite
setbacks, the reform movement flourishes, ideas flow, and change happens. Today
there is far-reaching understanding of the national security and other demands on
government and also of government’s need to do a better job in meeting them.
The energy, excitement, and creativity that drive today’s government reform
movement are evident in this book. From the grandest concepts to the most de-
tailed execution plan, these authors are clearly committed to fostering workers and
workforces that are motivated and equipped to get the public’s work done. They
have outlined the challenges—global, practical, and political—and their work is
evidence of the opportunity for progress. Perhaps never before has there been such
broad recognition of the importance of the people who do the work of government
and how they are supported and managed. And among our public leaders, there is
now an ongoing heightened interest in the field of human resources.
A New Vision of the Process of Reform
Looking behind the reform efforts described in this book, one can see that the current
efforts to improve the way government accomplishes its work are different from those
that preceded them. In reality, the base of our “modern” civil service system was es-
tablished in 1883 with the adoption of the Pendleton Act. Though that system has been
expanded, enhanced, and prescribed in numerous statutes, regulations, and processes in
the intervening years, its underlying principles were established 125 years ago.
The U.S. Civil Service merit system was established to replace a spoils system
that left the national government with public employees unqualified for their jobs.
Congressional battles with the executive over the right to appoint and remove
government employees resulted in Congress’s attempt to remove President Andrew
Johnson from office. By 1881, public demand for reform—spurred by the newly
formed National Civil Service League, led to the enactment of the Pendleton Act
307
308 Hannah S. Sistare
in 1883. This act established the merit system, competitive examinations, and a
bipartisan Civil Service Commission.
Over the years the concept and reality of a lifetime career in the federal civil service
took hold, greatly enhanced by significant job security, protections against non-merit-
based personnel actions, the right to organize (first legislated in 1912), decent pay,
and, beginning in 1920, a retirement system to provide career government workers
with security in their later years. Postwar reforms made it more attractive for new
college graduates to join the civil service, and in 1961 President John F. Kennedy
issued a call to serve to the nation’s future leaders. The great change from a govern-
ment consisting primarily of clerks to a government of technical experts, managers,
and leaders was under way. Yet despite the significant reforms enacted in 1978, at
the beginning of the twenty-first century civil service policies and practices were still
better suited for a government with predominantly clerical functions.
The Civil Service Act of 1978 was the result of a hard fought reform move-
ment led by individuals who saw the need to make government more responsive
and better equipped to deal with new world challenges. The cold war, emerging
global economic competition, technological and scientific advances all increased
the need for new skills and experience. The 1978 reforms created the Office of
Personnel Management and several new oversight organizations, replacing the
old Civil Service Commission. Many of the more visible reforms increased the
protections of the merit system. Many others aimed to accomplish the same pur-
poses of the reforms enacted in 2002, including a new emphasis on performance
and more flexible, less rule-bound systems. It established the Senior Executive
Service, designed to be an elite group of mobile leaders, motivated by rewards for
performance and results.
As with the Pendleton Act, the 1978 law was followed by a period during which
some of the reforms took hold and were enhanced, and others were more difficult
to implement. But again, once that effort was completed, the job was considered
done and reformers moved on to other issues. Visionaries such as Paul Volcker rec-
ognized from their own experience in government that the job was far from “done.”
He was a member of the federal workforce during the period of the 1978 reforms
and was appointed chairman of the board of the Federal Reserve in 1979. When
he left that position in 1987, one of his first actions was to assemble the bipartisan
National Commission on the Public Service, made up of experienced government
leaders. What became known as the first Volcker Commission undertook a detailed
examination of the federal civil service and issued extensive recommendations.
Yet it was ten years before there was sufficient enthusiasm for the enactment of
far-reaching change.
National Commission on the Public Service 2001–2002
The case for the present-day reform agenda was made by the second Volcker
Commission in its 2002 report, Urgent Business for America: Revitalizing the
The Path of Reform 309
Federal Government for the 21st Century (see the summary of the 2002 National
Commission on the Public Service recommendations below). The commission was
assembled by Paul Volcker and the Center for Public Service at the Brookings In-
stitution in early 2001 because Volcker and the center’s director, Paul Light, sensed
readiness for change—even in the months preceding 9/11—and moved quickly to
capture it. The commissioners who agreed to serve were veteran government and
private sector leaders—Democrats and Republicans—who were united in an effort
that they saw as critical to the ability of government to fulfill its responsibilities.
The commission’s recommendations focused particularly on the importance of the
organization of government, attracting and supporting the necessary leadership,
and improving government operations to allow government to attract, retrain, and
make the optimum use of the talent for the workforce (National Commission on
the Public Service 2003).
A Case Study for Twenty-First-Century Reform
The Department of Homeland Security was created as the commission did its work.
It serves as something of a case study to support the commission’s recommenda-
tions for change and to demonstrate potential pitfalls as reforms are adopted. The
commission’s recommendations for the reorganization of government stemmed
from its conclusion that government performance would be enhanced by an orga-
nizational focus on mission. It envisioned a limited number of mission-centered
departments made up of smaller operating units with considerable independence
of operating authority.
The Department of Homeland Security, created in 2002, embodied several of the
commission’s recommendations: it combined missions then spread across govern-
ment into a single organization; it put a focus on performance; and it elevated the
role of human capital leadership both at the new department and government-wide.
As the commission anticipated, it would take time and considerable effort for such
a major reorganization to bring about performance benefits. The transition to the
new department was stymied by the failure to enact reforms in the appointments
and leadership process. The ratio of political appointees to career employees was
high; the problems with the appointments process grew; and layers separated top
policy leaders from top career leaders. Beyond that, the caution that several dys-
functional agencies do not combine into a high-functioning one was proven many
times over. The performance management and pay system envisioned for the new
department, with its roots in the 1978 reforms, met much resistance, and the degree
to which the system will be implemented is uncertain.
Key Reform Issues Going Forward
Several of the issues described in this book are strong candidates to lead the human
resources reform agenda going forward.
The first is the multisector workforce. Never has such a wide-scale change taken
place in the public workplace with so little understanding of how to do it well.
While more or less of the government’s work may be done by third parties over
time, the multisector workforce is now a permanent part of how government’s work
is done, and its processes are clearly in need of administrative and management
reform. As a first step, policymakers need to develop a consensus as to which core
competencies the federal workforce should retain and which are appropriately
performed by workers in other sectors.
The next is performance management. Despite the uncertain future of the systems
partially developed and implemented at the Department of Homeland Security and
the Department of Defense, the right performance management system will enhance
both the workforce and what it can accomplish.
The third issue of importance, arguably the one on which all else rests, is talent
management, the need to improve how and where government will get the talent
it needs. Despite several years of effort, this problem remains unresolved. The
challenges extend from getting the new college graduate in the door and on the
job, all the way to placing highly qualified individuals in government leadership
posts and treating presidential appointees with respect throughout the appointment
process.
A fourth issue—one that was a key focus of the Volcker Commission’s 2003
recommendations—is the organization of government. Despite a very rocky start
with the Department of Homeland Security, the underlying benefit of identifying
and focusing on key government missions still stands and Homeland Security
has provided reformers with many lessons in how to do it better. The federal
government has daunting tasks and limited resources. It must focus its efforts as
effectively as possible.
Lessons for the Challenges and Opportunities Ahead
The experience and insights of the authors of this book have provided us with les-
sons for reform efforts ahead.
Lessons
First, we must make the reform effort ongoing. Sustain the effort. Creative ap-
proaches and efforts should never rest—the federal government should be a leader,
not a distant follower, in utilizing strategic human resources to improve manage-
ment and results.
Second, it is important that we take the time to understand and work with the
culture of the workforce and workplace. Lay the groundwork with all those affected.
Meaningful change requires it.
Third, meaningful change requires the trust of those affected. They must believe
it is fair, justified on the merits, and motivated by the general good.
Challenges
We must find accommodation between retention of the merit-based system and

the imperative to have the workforce in place at the time necessary to do the job.
Procedures instituted over the last 125 years to assure a merit-based system today
make the system too process-bound to be responsive or attractive to today’s work-
ers. This is one of many reforms that will benefit tremendously from a reduction
in political partisanship. Today, partisanship is so intense that federal workers and
the public at large find it difficult to trust the motivations of those championing
change.
Opportunities
As Paul Volcker said in opening the second National Commission on the public
Service, “there is an excitement in the air” created by the knowledge that the tools
and means to improve public service are at hand and that the desire to continue in
that great tradition has captured the imagination and energy of academics, prac-
titioners, and policymakers. The chapters in this book are strong evidence of this
trend and the opportunity it provides for positive change.
Appendix: Recommendations of the National Commission on the

Public Service,1 2001–2002
The Organization of Government
Fundamental reorganization of the federal government is urgently needed to improve

its capacity for coherent design and efficient implementation of public policy.
1. The federal government should be reorganized into a limited number of

mission-related executive departments.
2. the operating agencies in these new executive departments should be run by
managers chosen for their operational skills and given the authority to develop
management and personnel systems appropriate to their missions.
3. The President should be given expedited authority to recommend structural
reorganization of federal agencies and departments.
4. The House and Senate should realign their committee oversight to match
the mission-driven reorganization of the executive branch.
Leadership for Government
Effective government leadership requires immediate changes in the entry process

for top leaders and the long-term development of a highly skilled federal manage-
ment corps.
5. The President and Congress should develop a cooperative approach to

speeding and streamlining the presidential appointments process.
6. Congress and the President should work together to significantly reduce
the number of executive branch political positions.
7. The Senior Executive Service should be divided into an Executive Man-
agement Corps and a Professional and Technical Corps.
8. Congress should undertake a critical examination of “ethics” regulations
imposed on federal employees, modifying those with little demonstrated
public benefit.
9. Congress should grant an immediate and significant increase in judicial,
executive, and legislative salaries to ensure a reasonable relationship to
other professional opportunities.
10. Congress should break the statutory link between the salaries of members
of Congress and those of judges and senior political appointees.
Operational Effectiveness in Government
The federal workforce must be reshaped, and the systems that support it must be
rooted in new personnel management principles that ensure much higher levels of
government performance.
11. More flexible personnel management systems should be developed by

operating agencies to meet their special needs.
12. Congress and the Office of Personnel Management should continue their
efforts to simplify and accelerate the recruitment of federal employees.
13. Congress should establish policies that permit agencies to set compensa-
tion related to current market comparisons.
14. Competitive outsourcing should follow clear preset standards and goals
that advance the public interest and do not undermine core competencies
of the government.
Note
1. The commission members are:
Paul A. Volcker, Chairman, and former Chairman U.S. Federal Reserve Board
Charles Bowsher, former Comptroller General of the United States
Bill Bradley, former U.S. Senator from New Jersey
Frank C. Carlucci, former Secretary of the U.S. Departments of Defense and Health,
Education and Welfare
Kenneth M. Duberstein, former White House Chief of Staff
Constance Horner, former Director, U.S. Office of Personnel Management
Franklin D. Raines, former Director, U.S. Office of Management and Budget
Richard Ravitch, former Chair, New York State Urban Development Corporation and
Chair New York Metropolitan Transportation Authority
Robert E. Rubin, former Secretary of the U.S. Treasury

Donna E. Shalala, former Secretary of U.S. Department of Health and Human Services
Vin Weber, former Member U.S. House of Representatives
References
National Commission on the Public Service. 2003. Urgent Business for America: Revital-
izing the Federal Government for the 21st Century. Washington, DC: National Com-
mission on the Public Service. Available at www.napawash.org/si/PDFs/VolckerJan03.
pdf (accessed 1/15/08).
About the Editors and Contributors
Alan P. Balutis is a Distinguished Fellow and Director, North American Public Sec-
tor for Cisco Systems’ Business Solutions Group. Most recently, he was President
and Chief Executive Officer, Government Strategies, of a leading market research
firm, INPUT. Before that, he served as COO of a small minority-owned firm.
From 2001 to 2003, he headed a major public sector IT industry association, the
Industry Advisory Council (IAC), as well as its parent group, now known as the
American Council for Technology. Balutis is a founding member of the Federal
CIO Council. He spent his twenty-eight-year federal career at the Department of
Commerce, where he headed its management and budget office and was its first
chief information officer, and at the Department of Health, Education and Welfare
(now the Department of Health and Human Services). Balutis is a five-time Federal
Computer Week FED 100 winner, and a member of both the Government Computer
News and Federal Computer Week halls of fame. He is also an Academy Fellow.
Douglas A. Brook is professor of public policy and director of the Center for
Defense Management Reform in the Graduate School of Business and Public
Policy at the Naval Postgraduate School. In the George H.W. Bush administra-
tion, he served as Assistant Secretary of the Army (Financial Management) and
as Acting Director of the Office of Personnel Management. Brook holds a PhD in
Public Policy from George Mason University and MPA and BA degrees from the
University of Michigan.
Terry F. Buss, PhD, is distinguished professor of public policy at the Heinz School
of Public Policy and Management at Carnegie Mellon University in Australia and
immediate past program director at the National Academy of Public Administra-
tion (NAPA). He has held positions as: Dean, School of Policy and Management,
Florida International University; Policy Director, Community Development and
Planning, U.S. Department of Housing and Urban Development; Senior Policy
Analyst, Congressional Research Service; Senior Strategy Advisor, World Bank;
Senior Policy Advisor, Council of Governors’ Policy Advisors; project director
for U.S. Information Service and U.S. Agency for International Development
in ten countries; director of policy research centers at Ohio State, Youngstown
State, and University of Akron; director of public management departments at
315
316 About the Editors and Contributors
University of Akron and Suffolk University. He was also a two-time Fulbright

Scholar in Hungary.
Joan M. Dodaro is a senior advisor at the Academy. She has served in the Senior
Executive Service; and as Assistant Comptroller General for Operations, and
Deputy Assistant Comptroller General for Human Resources at the Government
Accountability Office.
Elwood F. “Ed” Holton III, EdD, MBA, is the Jones S. Davis Distinguished
Professor of Human Resource, Leadership and Organization Development in the
School of Human Resource Education and Workforce Development at Louisiana
State University where he coordinates their BS, MS, and PhD degree programs
in Human Resource and Leadership Development. In 2004, he was inducted into
the International Adult and Continuing Education Hall of Fame in recognition of
his career-long contributions to the field. In 2002, he was named the Outstanding
HRD Scholar by Academy of Human Resource Development, one of the most
prestigious scholarly awards in the field. His research focuses on strategic human
capital development, workforce development policy, analysis and evaluation of
organizational learning and performance systems, improving learning transfer sys-
tems, management and leadership development, and HRD policy and strategy.
Patricia Cornwell Johnson is a project director at the National Academy of Public

Administration. She served in the Senior Executive Service; and as Director, Office
of Human Resources, U.S. Equal Employment Opportunity Commission. John-
son has also held positions with Washington Metropolitan Area Transit Authority
(WMATA); Labor Relations Counsel, McDonald’s Corporation; Regional Field
Attorney, National Labor Relations Board.
Cynthia L. King is assistant professor of management communications and associ-

ate director of the Center for Defense Management Reform in the Graduate School
of Business and Public Policy at the Naval Postgraduate School. She studies the
interaction between language and influence in public and private organizations.
Prior to obtaining her PhD, she held positions in operations and sales manage-
ment in high-tech consulting firms in Seattle, Washington. King holds a PhD in
communications and an MS in technical communications from the University of
Washington.
Alethea Long-Green is a program area director of human capital studies at the

Academy. She is a former Director of Human Capital Planning and Management,
U.S. Department of Commerce; Director of Human Resources, Chief of the
Workforce Effectiveness Division, U.S. Patent and Trademark Office; President,
Strategic Technical Resources, Inc.; Vice President, Tech International, Inc.; and
a consultant with various contractors to the Department of Defense.
Sharon H. Mastracci is an assistant professor in the College of Urban Planning

and Public Affairs’ program in public administration at the University of Illinois
in Chicago. She studies occupational segregation by gender, gendered dynamics
in the workplace including public and nonprofit workforce diversity initiatives,
personnel management strategies involving nonstandard working arrangements,
and emotional labor in public sector jobs. She is the author of Breaking Out of the
Pink Collar Ghetto: Policy Solutions for Non-College-Educated Women (2004).
She is also co-author of Emotional Labor: Putting the Service in Public Service
(2008), a theoretical and empirical examination of the demands placed upon public
servants to do their jobs through management, control, or influence over their own
and others’ emotive states.
Laurie J. May is a project director at the Academy. She previously served as

the Director of the Organizational Management and Integrity Staff at the U.S.
Environmental Protection Agency. As the Program Management Officer for the
Superfund, solid waste, Brownfields, chemical emergency preparedness and pre-
vention, oil spill, and underground storage tank programs, May directed a staff
and provided organizational leadership and policy direction for the full range of
management issues, including financial integrity, fraud prevention, organizational
and management improvement, human resources management, audits, and ethics.
She has served as a confidential management advisor to numerous presidential
appointees across the Environmental Protection Agency and is the recipient of
EPA’s Excellence in Management Award. May is a Phi Beta Kappa graduate of
Duke University.
Bruce D. McDowell PhD, is a project director and Fellow at the Academy. He is

also president of Intergovernmental Management Associates. He has held former
positions with the U.S. Advisory Commission on Intergovernmental Relations,
including director of government policy research. He was former director of
governmental studies at the National Council on Public Works Improvement. He
was director of the regional management information service at the Metropolitan
Council of Governments and senior planner at the Maryland National Capital Park
and Planning Commission.
J. Christopher Mihm is the Managing Director for Strategic Issues at the U.S.
Government Accountability Office. He leads GAO’s work on government-
wide issues designed to support the transition to a more results-oriented and
accountable federal government. Strategic Issues addresses such topics as
governance and federal agency transformations, budgeting and the nation’s
long-term fiscal outlook, human capital management, intergovernmental
issues, regulatory policy, the decennial census, and federal tax policy and
administration. He is the Chair of the Board of Directors of NAPA and a Fel-
low at the Academy.
Vicki A. Novak joined the Partnership for Public Service in 2006 as a Senior
Consultant after working for the federal government for thirty-five years. Novak
spent the last half of her career at NASA Headquarters in human resources leader-
ship positions, the last being Chief Human Capital Officer. She served in human
resources positions at the Departments of Commerce, Housing and Urban Develop-
ment, and Transportation. Novak received many awards, most notably Presidential
Rank Awards for Distinguished and Meritorious Executive Service, three NASA
Outstanding Leadership Medals, several NASA Exceptional Achievement Medals,
and the Department of Transportation’s Secretarial Award for Meritorious Achieve-
ment. She received her BA from the University of Tennessee.
Sean C. O’Keefe is Chancellor of Louisiana State University. He has held posi-

tions as Administrator, National Aeronautics and Space Administration; Deputy
Director, U.S. Office of Management and Budget; Louis A. Bantle Chair in Busi-
ness and Government Policy, Maxwell School of Citizenship and Public Affairs,
Syracuse University; Special Assistant to the Senior Vice President for Research,
Dean of Graduate School, Professor of Business Administration, Pennsylvania
State University; Secretary of the Navy; Comptroller and Chief Financial Officer,
U.S. Department of Defense; and Staff Director, Senate Defense Appropriations
Subcommittee.
Tim Rutledge, PhD, is the owner and publisher of Mattanie Press. He is a consul-
tant, trainer, and speaker in all aspects of Human Resource Development. He is the
author of the book Getting Engaged: The New Workplace Loyalty (2005).
Rob Seidner is a Public Administration PhD student at the University of Illinois–

Chicago. He earned his MBA from Brandeis University’s Heller School for Social
Policy and Management, as well his BA from Brandeis. He entered federal ser-
vice as a Presidential Management Fellow, where he specializes in human capital
management. He has lectured extensively on public service careers and serves on
the boards of multiple interagency committees. His previous background was in
nonprofit communications and fund-raising.
Myra Howze Shiplett is President of RandolphMorgan Consulting LLC. Prior to form-

ing her own consulting firm, Ms. Shiplett was the Director of the National Academy
of Public Administration’s Center for Human Resources Management. Before joining
the Academy in 1999, Ms. Shiplett spent more than thirty years as a federal executive
working for both the executive and judicial branches of the federal service.
Michael Simpson, a service-oriented science policy integrator with thirty years’ ex-
perience in the legislative, federal, private sector, and academic arenas, is dedicated
to informing policy-making by working with policymakers, the public, educators,
and students. He is a Senior Analyst at Computer Sciences Corporation. As a profes-

sional staff member of the Congressional Research Service (a nonpartisan support
agency of the U.S. Congress), a staff member of the U.S. House of Representatives,
and as an American Association for the Advancement of Science Congressional
Science Fellow, he has worked with members of Congress, staff, and the public,
informing and facilitating the process of making and implementing science policy.
Simpson received a Doctor of Environmental Sciences and Engineering from the
University of California at Los Angeles.
Hannah S. Sistare is a student and practitioner of public policy formation and

implementation, focusing particularly on government reform. She served as Vice
President of Academy Affairs at the National Academy of Public Administration,
where she worked with Academy Fellows on governance projects and on outreach
to the human resources community. She also managed the Volcker Commission
Implementation Initiative at the Academy, a project designed to advance the goals
of the National Commission on the Public Service (Volcker Commission) following
the release of its 2003 report, Urgent Business for America: Revitalizing the Federal
Government for the 21st Century. In 2002 she was the commission’s Executive
Director, overseeing its work at the Brookings Institution Center for Public Service.
Sistare is a veteran of Capitol Hill, serving from 1997–2001 as Staff Director and
Counsel to the Governmental Affairs Committee for its Chairman, Senator Fred
Thompson. Previously she was Chief of Staff and Legislative Director for Senator
Charles H. Percy and Legislative Director to Senate Minority Leader Hugh Scott.
Her Executive Branch service includes Special Council to the Secretary of Health
and Human Services in 1995 and Economist at the Bureau of Labor Statistics,
U.S. Department of Labor. She has taught courses in public policy and politics at
American University and George Washington University.
Sydney Smith-Heimbrock is a doctoral candidate in political science at Miami

University of Ohio. She served with the National Academy of Public Administra-
tion during her candidate development program for the Senior Executive Service.
She is currently with the Office of Personnel Management.
Daniel Spikes was a Foreign Service Officer for twenty-five years. His assignments
included Rome, Poznan, Budapest, Naples, and Washington, D.C.
Edward H. Stephenson, Jr., is a project director with the National Academy of

Public Administration, focusing on strategic human capital management. He has
led and worked on Academy engagements involving human capital management at
the Department of Homeland Security, the U.S. Agency for International Develop-
ment, the Federal Bureau of Investigation, and the National Aeronautics and Space
Administration. Prior to his work with NAPA he spent more than thirty years with
the Government Accountability Office assisting federal agencies on topics including

management and human capital. He led the development of a model of strategic
human capital management—which has been used as the basic framework for
several federal agencies and was a key document used by the Office of Personnel
Management to develop the human capital standards of success. Stephenson also
spent three years on the staff of the District of Columbia Control Board where he
worked with D.C.’s Human Resource Director to revise personnel policy related
to mid- and senior-level District employees. Stephenson has a BS in Industrial
Management from Purdue University and an MBA in Quantitative Analysis from
George Washington University.
John Stroup is a Research Fellow at the Federal Executive Institute. He is com-

pleting a doctoral dissertation at the University of Virginia.
James R. Thompson is Associate Professor in the Graduate Program in Public

Administration at the University of Illinois–Chicago, where he teaches courses in
public personnel management, information technology, and public management.
Prior to obtaining his PhD at the Maxwell School of Citizenship and Public Affairs
at Syracuse University in 1996, he worked in local government in New York State
at the city and county levels. At UIC, his research has focused on organizational
change and bureaucratic reform in the public sector. He has also done extensive
research and writing on the modernization of human resource management prac-
tices in government.
Joseph Thompson is a project director at the Academy and President, Aequus, Inc.,
a management consulting firm. He is former Under Secretary for Benefits, U.S.
Department of Veterans Affairs; Director, VA Regional Office, NY; and Chairman,
Federal Executive Board, NY.
Paul A. Volcker served in the federal government for almost thirty years during five
presidential administrations. Appointed as Chairman of the Board of Governors of
the Federal Reserve System by President Jimmy Carter in 1979, he was re-appointed
by President Ronald Reagan in 1983. After leaving the Federal Reserve in 1987, he
became Professor of International Economic Policy (now emeritus) at Princeton
University and served as Chairman of the firm of James D. Wolfensohn & Co. until
his retirement in 1996. Recently he has been called upon to lead an independent
investigation into the Iraqi Oil for Food Program of the United Nations and a review
of the World Bank’s anti-corruption efforts. He is Chairman of the Board of Trustees
of the Group of 30 (G30), an international organization that examines the impact of
economic and financial decisions by the public and private sectors. As Chairman of
the first National Commission on the Public Service (the “Volcker Commission”) in
1988 and the second Volcker Commission in 2002, he established himself as one of
the nation’s strongest advocates for the revitalization of the public service.
David M. Walker became the seventh Comptroller General of the United States
and began his fifteen-year term when he took his oath of office on November 9,
1998. As Comptroller General, Mr. Walker is the nation’s chief accountability of-
ficer and head of the U.S. Government Accountability Office (GAO). Prior to his
appointment Mr. Walker had extensive executive-level experience in both govern-
ment and private industry. He served as a Public Trustee for Social Security and
Medicare from 1990 to 1995 and was Assistant Secretary of Labor for Pension and
Welfare Benefit Programs from 1987 to 1989. Mr. Walker is the author of Retire-
ment Security: Understanding and Planning Your Financial Future (1996) and a
co-author, with Brian Friedman and James Hatch, of Delivering on the Promise:
How to Attract, Manage and Retain Human Capital (1998). He is certified public
accountant with a BS degree in accounting from Jacksonville University and a
Senior Management in Government Certificate in public policy from the John F.
Kennedy School of Government at Harvard University. He has received honorary
doctorate degrees from several colleges and universities, including his alma mater.
He is a Fellow of the National Academy of Public Administration.
Tom Wimer is the founder, President, and CEO of KnowledgeBank, Inc., one of
the fastest growing providers of human resources management outsourcing and
consulting services in the United States. KnowledgeBank has successfully served
clients in every major industry, including commercial/private sector, not-for-profit,
and state and federal government agencies. Wimer’s relentless quest for HR business
process improvement ultimately led him to form KnowledgeBank and was also the
driving force in his successful career as human resources leader in industry. Prior
to forming KnowledgeBank, Wimer spent nearly twenty years with Exxon Mobil,
General Electric, and The Dial Corporation. He was recognized as an innovator and
champion of the business-oriented HR organizational model, focused on exceptional
customer support, service delivery excellence, and value. Wimer holds an MS in
Human Resources Management from LaRoche College in Pittsburgh, PA, and a
BS in Business Management from Marshall University.
Kitty Wooley completed the Council for Excellence in Government’s leadership

development program in 2002. After graduation, she served two years on the Senior
Fellows Board, where she helped design and implement the Senior Fellows Award
Program. At the U.S. Department of Education, she co-founded Conversations With
Leaders, a monthly 90-minute session that brings all interested employees into
contact with effective senior leaders. In 2003, with a DHS colleague, she planned
a dinner that inaugurated “Senior Fellows and Friends,” a cross-sector leadership
dinner experiment that is focused on improving government. A variety of projects
have enabled Wooley to hone skills in crosscutting analysis, the communication of
complicated subjects to nonexperts, the connection of colleagues across agencies,
leadership, and followership. During the past two years, she was privileged to assist
in the development of Young Government Leaders, an interagency network that
seeks to “educate, inspire, and transform the future leaders of the Federal Govern-
ment.” It is her hope that this talented incoming group, in partnership with motivated
mid-career professionals, will apply the best of themselves to the transformation
of government to meet twenty-first-century challenges.
Ruth T. Zaplin is president of The Zaplin Group, an international organization

that specializes in leader and organization development. She was a senior advisor
with the National Academy of Public Administration in Washington, D.C. Prior to
joining the Academy, Zaplin was a senior manager with BearingPoint’s International
Public Services. Before joining BearingPoint, she served as the Executive Director
of The Program for Women and Families, an organization whose mission is the
reintegration of female offenders and other at-risk populations into society. She has
developed and led enterprise-wide transformation plans, large-scale government
reform, workforce restructuring, and work redesign initiatives in both the public
and private sectors. Her background includes executive leadership of a nation-
ally known nongovernmental organization, university-level teaching, and social
science research in criminal justice. Zaplin authored Female Offenders: Critical
Perspectives and Effective Interventions (1998; second edition 2007). She holds a
doctorate in public administration, and is an executive coach and a member of the
International Coach Federation.
Index
A Best practices (continued)

multisector workforce challenges, 31–35,
Accountability 39–43
most efficient organization (MEO), 49, organizational transformation, 127–29
50t, 51 strategic human capital management
multisector workforce challenges, 26, (SHCM), 90–91
39–40 Bush, George W., 67, 94–95, 278–80, 286,
See also U.S. Government Accountability 293, 300–301
Office (GAO) Buyer’s job market, 171, 172–73
Acquisition
Federal Acquisition Regulations (FAR), C
26–27, 46–47, 53
multisector workforce challenges, 26–27, California earthquake (1994), 59, 60t, 67
33–34, 40 Card, Andrew, 280
staff training, 33–34 CareerBuilder, 190
American Federation of Government Career Development Program for Foreign
Employees (AFGE), 214–15, 279, Service, 203–4
283–84, 287 Central Intelligence Agency (CIA), 295
Armed Forces Communications and Certified Assessment of Human Resources
Electronics Association, 134 Systems (CAHRS)
Ash, Elizabeth, 135 assessment cycle, 261
Assistance for Individuals Delivering for certification, 246, 247f, 260–61
America Act (2005), 71 employee compensation, 248, 249f,
Atlantic Monthly, 203 255–56
employee training, 248, 249f, 256
B Employment and Talent Management
Standard, 248, 249f, 250t
Baby boomers, 217–18, 294–95, 303 employment management, 248, 249f,
Baker, Susie, 134 254–55
Base Realignment and Closure (BRAC), human resource standards, 247–48, 249f,
42 250t, 251–57
Best practices labor relations, 248, 249f, 256–57
most efficient organization (MEO), model overview, 249f
53–54 model process, 246, 247f
323
324 Index
Certified Assessment of Human Resources Cooperative Environmental Study Unit
Systems (CAHRS) (continued) (CESU), 31
operations, 249f, 253–54 Council for Excellence in Government,
peer review, 246, 247f, 260–61 134, 138
readiness review, 246, 247f, 258–59 Counterintelligence Field Activity (CIFA),
research overview, 81, 245–46 295
self-assessment, 246, 247f, 259–60 Customer contact, 180
standards validation, 246, 247f, 257–58
strategic management, 248, 249f, D
252–53
system-wide management, 248, 249f, Data-driven human capital decisions
251–52 human resource “dashboard,” 268–69
work environment, 248, 249f, 256–57 importance of, 264–65
Chief Human Capital Officer (CHCO), 99, organizational processes, 265–66
100, 108, 142 program evaluation, 263–64
Chief Human Capital Officer (CHCO) research overview, 8, 263
Council, 16, 18, 142 service level agreement (SLA), 266–68,
Chief Human Capital Officers Act (2002), 269
97, 127 Defense Special Weapons Agency, 234
Civil Rights Act, Title VII, 80 Defense Technology Security
Civil Service Commission, 307–8 Administration, 234
Civil Service Reform Act (CSRA) (1883), Defense Threat Reduction Agency
3–4 (DTRA)
Civil Service Reform Act (CSRA) (1978), agency background, 234–35
4, 147, 148, 277, 308 agency challenges, 235–36
Clinton, Bill, 3, 278, 293 Blue Ribbon Panel (BRP), 236–37
Clinton, Hillary Rodham, 299, 300 Computer Sciences Corporation (CSC),
Columbia Accident Investigation Board 234, 236–37
(CAIB), 108–9 organization chart, 235f
Columbia space shuttle, 108–9 Points of Contact (POC), 236–37
Communication strategy, 35 programming, planning, budgeting, and
Community Security Act (2004), 71 execution (PPBE) system, 237,
Comptroller General, 17 241n5
Computer Sciences Corporation (CSC), program objectives memorandum
234, 236–37 (POM), 237, 241n5
Concession employees, 31 research overview, 7–8, 234
Contingency theory, 90–91 strategic workforce plan (SWP), 236–41
Contingent work arrangements. See Director General of the Foreign Service,
Nonstandard work arrangements 204
(NSWA) Director of National Intelligence (DNI),
Contracting officer (CO), 46, 47, 48 132, 133, 203–4
Contracting officer technical representative Disaster Credit Management System
(COTR), 40 (DCMS), 58, 67, 68
Contract workers, 29, 31 Disaster Loan Program (SBA)
Conversations About Leading (CAL), California earthquake (1994), 59, 60t, 67
138–139, 142 economic injury loan, 55
Cooperating associations, 31 Florida hurricanes, 56–57, 59, 60t
Index 325
Disaster Loan Program (SBA) (continued) Employee retention/engagement

Gulf Coast hurricanes (2005), 55–67 achievement recognition, 182–83
loan process buyer’s job market, 171, 172–73
application costs, 63 differentiated workforce, 173–75
closing, 59 employee compensation, 175–76
collection, 59 employee exit, 170
disbursement, 59, 65 engagement defined, 172
intake, 57–58 engagement elements, 178–79
loan servicing, 59 flexible working conditions, 179–80
loss verification, 58–59, 63, 64f individual learning, 179–80
outreach, 57–58 customer contact, 180
underwriting, 59 mentors, 180
loan provisions, 55, 73n3 showcases/displays, 180
mitigating circumstances skunk works, 180
agency reorganization, 66–67 key-employee criteria, 174–75
disaster preparation, 67 loyalty, 171
information system capacity, 67 managerial role, 176–77
loss verification restructurization, 67 mission statement, 178–79
physical disaster loan, 55 older workers, 183
policy options performance differentiation, 180–81
National Guard model, 72, 73n13 research overview, 170
privatization, 67, 69 retention interviews, 181–82
process automation, 68–69 seller’s job market, 171, 184
process reengineering, 69 tracking talent, 175
reserve corps, 69–70 vision statement, 179
tax incentives, 70–72, 73n11 Employee support, 51–52
policy recommendations, 72–73 End of Government, The (Kamarck), 299
research overview, 5–6, 55–57 Environmental Protection Agency (EPA),
surge capacity, 59–61, 62t, 63, 64f, 65–67 133
productivity, 63, 64f, 65–66 Equal Employment Opportunity
staffing, 60–61, 62t, 63 Commission (EEOC), 16
Disaster Recovery Center (DRC), 56–58, Europe. See International leadership
61, 63, 65–66, 68, 73n7 competency
Diversity Advisory Council, 135 Executive coaching, 124–27
Dow Jones Industrial Average, 77 Executive core qualifications (ECQs), 206,
211, 212n4
E
F
Earned Income Tax Credit (EITC), 71
Edwards, John, 300 Facebook Marketplace, 239, 242n9
E-government, 301 Federal Acquisition Institute (FAI), 294
Eisenhower, Dwight, 295 Federal Acquisition Regulations (FAR),
Employee Advisory Council (EAC), 85 26–27, 46–47, 53
Employee compensation, 175–76, 248, Federal Activities Inventory Reform
249f, 255–56 (FAIR) Act (1998), 45, 48, 52–53
See also Paybanding demonstration Federal Aviation Administration (FAA),
projects 139
326 Index
Federal Career Intern Program (FCIP), 197 Hiring trends, 218–19
Federal Emergency Management Agency Hispanic Americans, 18–19
(FEMA), 56–57, 58, 69, 72, 78, 194, Homeland Security Act (2002)
294 access control, 280–81
Federal Executive Institute, 207 content control, 282–83
Federal Human Capital Scorecard (FHCS), enactment, 279–80
15, 20 human capital management innovation,
Federal Mediation and Conciliation 279–89
Service (FMCS), 172, 287 labor unions, 280, 281, 282–85, 287–89
Federal Vacancies Reform Act (1998), 192 public-priority alignment, 283–85
Florida hurricanes, 56–57, 59, 60t Hoover Commission, 296–97, 302
Foundations, 31 Human capital, 27, 41
Frenz, Mike, 140 Human Capital Assessment and
Friel, Brian, 140 Accountability Framework (HCAAF),
Full-time equivalent (FTE) employees, 38 96, 240–41, 266, 267t
Human capital challenges
G leadership, 14–16
organizational culture, 14, 19–20
GAO Human Capital Reform Act (2004), recruitment, 14, 18–19
81 research overview, 4–5, 13–14
GAO Personnel Act (1980), 80 strategic human capital planning (SHCP),
General Schedule (GS), 20, 79, 80, 147, 14, 16–17
148, 150, 153, 168, 168n2 Human capital crisis
General Services Administration (GSA), e-government, 301
297 employment issues, 292–93
Giuliani, Rudolph, 300 government transparency, 301
Governance structure, 27, 42–43 impending crisis, 293–96
Government College Relations Council political environment, 298–300
(GCRC), 185, 193–99 reform opportunity, 296–98
Government Ethics Reform Act (1989), reform recommendations, 300–303
192 research overview, 9, 292–93
Government Executive, 132, 140, 294–95, retirement trends, 293–95, 303
298 telework, 297, 301
Government Performance and Results Act Human Capital Operations Plan, 288
(GPRA) (1993), 3–4, 91, 263 Human capital reform
Government transparency, 301 case study, 309
Green rating, 86, 98 challenges, 311
Gulf Coast hurricanes (2005), 55–67, government organization, 310
77–78 key reform issues, 309–10
lessons, 310
H multisector workforce, 310
new vision, 307–8
Hallett, Stephanie, 135 opportunities, 311
High-performance work systems (HPWS), performance management, 310
87–88 recommendations, 308–9, 311–12
Hiring process, 186–93 talent management, 310
Hiring Tool Kit, 18 Human capital theory, 78, 88–89
Index 327
Human resources assessment. See Certified Labor unions (continued)

Assessment of Human Resources human resources assessment, 248, 249f,
Systems (CAHRS) 256–57
most efficient organization (MEO),
I 52
nonstandard work arrangements
Information technology (IT) (NSWA), 214–15
human capital crisis, 295, 297, 301 See also specific labor union
most efficient organization (MEO), 46, Leadership
49 executive coaching, 124–27
U.S. Government Accountability Office human capital challenges, 14–16
(GAO), 82 organizational transformation, 114,
Intellectual capital, 89 115–18, 124–27
Intergovernmental Personnel Act (IPA) See also International leadership
(1970), 237, 241n6 competency; Networked leadership
Internal Revenue Service (IRS) models
Disaster Loan Program (SBA), 58 Legal structure, 27, 42–43
networked leadership models, 139 Letter of obligation (LOO), 46, 48, 54
nonstandard work arrangements Line of sight, 19
(NSWA), 216, 224–25 Lowey, Nita, 71
recruitment, 187, 190
International Association of Fire Chiefs, 71 M
International leadership competency
competency theories, 202–6 Managerial role, 34–35
consortium research, 206–12 Managerial training, 32–33
research overview, 7, 202 McBride, Christian, 139
International Time Recorder Company, McCain, John, 300
Ltd., 181–82 Megatrends (Naisbitt), 133
Mentors, 180
J Merit System Principles, 188
Merit System Protection Board (MSPB),
Jacobson, Don, 139 192
Johnson, Andrew, 307–8 Microsoft Corporation, 214
Mihm, Chris, 140
K Miriam’s Kitchen, 135
Mission statement, 178–79
Kamarck, E., 299 Most efficient organization (MEO)
Kennedy, John F., 308 accountability, 49, 50t, 51
Kleeman, Roz, 140 agency challenges, 46–53
agency modification, 52–53
L best practices, 53–54
employee support, 51–52
Labor’s Effective Advocates for establishment, 46–49
Development (LEAD), 133 labor unions, 52
Labor unions letter of obligation (LOO), 46, 48, 54
Homeland Security Act (2002), 280, 281, organizational structure, 45–46
282–85, 287–89 research overview, 5
328 Index
Multisector workforce challenges National Aeronautics and Space
accountability, 26 Administration (NASA)
acquisition, 26–27 multisector workforce challenges
acquisition staff training, 33–34 (continued)
best practices, 31–35 governance structure, 42–43
communication strategy, 35 human capital, 41
governance structure, 27 legal structure, 42–43
human capital, 27 management, 37–39
legal structure, 27 organizational culture, 43
management models, 28–31 recommendations, 43–44
managerial role, 34–35 social equity, 41–42
managerial training, 32–33 values, 41–42
organizational culture, 28 nonstandard work arrangements
research overview, 5, 25–26 (NSWA), 224
social equity, 27–28 strategic human capital management
values, 27–28 (SHCM)
See also National Aeronautics and Space green rating, 86, 98
Administration (NASA) human resource transformation, 108
implementation events, 108–9
N Strategic Human Capital
Implementation Plan (SHCIP),
Naisbitt, J., 133 100–101, 105, 106–7t
National Academy of Public strategic human capital planning
Administration (NAPA) (SHCP), 99–101, 102–4t, 105,
Center for Human Resources 106–7t, 108
Management (HRM) Center, 4 success factors, 109–10
data-driven human capital decisions, 265 National Association of Agriculture
Disaster Loan Program (SBA), 56–57, Employees (NAAE), 287
68, 73n6 National Association of Colleges and
international leadership, 207 Recruitment, 194
most efficient organization (MEO), 46, National Civil Service League, 307–8
52 National Commission on the Public Service
multisector workforce challenges, 25–28, 2001–2002, 192, 308–9, 311–12
37–44 National Defense Authorization Act
networked leadership models, 134 (1995), 148
nonstandard work arrangements National Guard, 72, 73n13
(NSWA), 215 National Institute for Standards and
publications, 37–39 Technology (NIST), 148, 149t, 151t,
strategic human capital management 154, 155t, 156t, 157, 158t, 159t, 160,
(SHCM), 92t, 93 161t, 162–67
National Aeronautics and Space National Institutes of Health (NIH), 46,
Administration (NASA) 48, 49
human capital challenges, 18–19 National Journal, 140
multisector workforce challenges National Labor Relations Board (NLRB), 52
accountability, 39–40 National Leadership Council, 34
acquisition, 40 National Oceanographic and Atmospheric
best practices, 39–43 Administration, 148
Index 329
National Park Service (NPS), 26, 28, 29t, Organizational transformation (continued)
30–35 strategic human capital management
National Performance Review, 278, 294 (SHCM), 114, 118–20
National Security Personnel System strategic succession management, 114,
(NSPS), 147, 148, 238, 242n7, 120, 121f, 122–24, 127–29
288–89
National Treasury Employees Union P
(NTEU), 283, 287
National Volunteer Fire Council (NVFC), Partnership for Public Service, 83
71–72 Parzych, Tracy, 181–82
Naval Air Warfare Center Weapons Paybanding demonstration projects
Division (China Lake, California), employee satisfaction, 161t, 162
148, 149t, 151t, 154, 155t, 156t, 157, evaluation measures, 150, 153
158t, 159t, 160, 161–67 organizational impact, 162–63, 164f,
Networked leadership models 165–67
current trends, 133 project costs, 162, 163t
leader recommendations, 141–42 project lessons, 168
networked groups, 133–41 project objectives, 150, 151–52t
networking generation, 132–33 project origins, 148, 168n1
networking value, 131–32 project outcomes, 153, 154, 155t, 156t,
research overview, 6, 131 157, 158t, 159
Nonstandard work arrangements (NSWA) project overview, 149t
contingent work arrangements, 219–20, research overview, 6, 147–48
221f, 222 supervisor perceptions, 159–62
hiring trends, 218–19 Pendleton Act (1883), 307–8
labor unions, 214–15 Performance-based pay system, 19–20
personnel costs, 225–28, 229f, 230, 231f Presidential Emergency Operations Center
policy recommendations, 232 (PEOC), 280
research overview, 7, 214–17 Presidential Management Fellows Program
retirement trends, 217–18 (PMF), 197
succession planning, 215–19 Presidential Transition Act (2000), 192
workforce changes, 222–31 President’s Management Agenda (PMA)
workforce characteristics, 217–19 data-driven human capital decisions, 263,
Nuclear Regulatory Commission (NRC), 17 264, 266
human capital challenges, 15
O human capital crisis, 300–301
strategic human capital management
Office of Capital Access (OCA), 59 (SHCM), 86, 94t, 95, 99, 278
Older workers, 183 Principle of Scientific Management
On-Site Inspection Agency, 234 (Taylor), 203
Organizational culture, 14, 19–20, 28, 43 Privatization, 67, 69
Organizational transformation Processing and Disbursement Center
best practices, 127–29 (PDC) (Texas), 57–58, 61, 66
executive coaching, 124–27 Program Assessment Rating Tool (PART),
leadership development, 114, 115–18, 263–64, 301
124–27 Prohibited Personnel Practices, 188
research overview, 6, 114–15 Public Manager, 133–34
330 Index
Q–R Social equity, 27–28, 41–42
Social Security Administration (SSA), 128,
Quinn, Megan, 133, 134 186, 187, 216
Society for Human Resources
Reagan, Ronald, 293, 297 Management, 266
Recruitment Spahr, Adrienne, 134
employee retirement rate, 185–86 Strategic human capital management
Government College Relations Council (SHCM)
(GCRC), 185, 193–99 best practices, 90–91
hiring process, 186–93 contingency theory, 90–91
human capital challenges, 14, 18–19 empirical research, 87–88
research overview, 7, 185 government evolution
talent pipeline, 187 agency models, 95–98
Red Cross, 57 origins, 91, 92t, 93–95
Reduction-in-force (RIF), 38, 42 human capital theory, 88–89
Request for proposal (RFP), 47 intellectual capital, 89
Ressler, Steve, 133, 134 National Aeronautics and Space
Retirement trends, 185–86, 217–218, Administration (NASA), 98–110
293–295, 303 organizational transformation, 114, 118–20
Rockefeller, Jay, 71 origins, 86–87
Romney, Mitt, 300 professional competency, 98
Royal Canadian Mounted Police (RCMP), public sector research, 89–90
123 research overview, 6, 86
Royal Dutch/Shell Group, 122 theoretical foundations, 86–91
Strategic human capital planning (SHCP)
S human capital challenges, 14, 16–17
National Aeronautics and Space
Saratoga Institute, 266 Administration (NASA), 99–101,
School for Public Affairs (Columbia 102–4t, 105, 106–7t, 108
University), 191 U.S. Government Accountability Office
Second Life, 239, 242n8 (GAO), 84
Seller’s job market, 171, 184 Strategic human resource partnership
Senior Executive Service (SES), 19–20, defined, 271
206, 207, 308 guidelines, 271–74
Senior Fellows and Friends (SFF), 139–41 research overview, 8–9
Service level agreement (SLA) Strategic succession management, 114,
data-driven human capital decisions, 120, 121f, 122–24, 127–29
266–68, 269 Student Educational Employment Program
most efficient organization (MEO), 49, (SEEP), 239, 242n10
50t, 51 Succession planning
Showcases/displays, 180 nonstandard work arrangements
Skelly, Thomas P., 139 (NSWA), 215–19
Skunk works, 180 organizational transformation, 114, 120,
Small Business Administration (SBA). See 121f, 122–24, 127–29
Disaster Loan Program (SBA) Supporting Emergency Responders
Small Business Development Centers Volunteer Efforts (SERVE) Act
(SBDC), 70 (2005), 71–72
Index 331
T U.S. Department of Defense (DOD)

(continued)
Tapscott, D., 303 paybanding demonstration project, 147,
Tax incentives, 70–72, 73n11 148, 149t, 152t, 154, 155t, 156t,
Taylor, F. W., 203 157, 158t, 159t, 160–61, 162–67,
TeleCOOP, 297 168n4
Telework, 297, 301 recruitment, 188
Transportation Security Administration See also Defense Threat Reduction
(TSA), 224–25 Agency (DTRA)
Trinka, Jim, 139 U.S. Department of Education (DOE)
multisector workforce, 26, 28, 29t, 30,
U 31–35
networked leadership models, 138, 139
University of California (UC). See U.S. Department of Energy (DOE), 222
Certified Assessment of Human U.S. Department of Health and Human
Resources Systems (CAHRS) Services (HHS)
U.S. Agency for International networked leadership models, 138–39
Development (USAID), 135, 205 nonstandard work arrangements
U.S. Air Force, 19 (NSWA), 221f, 222, 228, 229f, 230
U.S. Bureau of Labor Statistics (BLS), U.S. Department of Homeland Security
219–20 (DHS)
U.S. Civil Service, 206, 207 human capital challenges, 14
U.S. Coast Guard, 26, 29–30, 31–35 human capital crisis, 294, 295
U.S. Department of Agriculture (USDA) human capital management
Executive Potential Program, 26 innovation guidelines, 286–89
international leadership, 205 legislating innovation, 277–78, 279–86
nonstandard work arrangements human capital reform, 309
(NSWA), 221f, 222, 224 networked leadership models, 133, 139
U.S. Department of Commerce (DOC) nonstandard work arrangements
international leadership, 205 (NSWA), 220, 221f, 222
nonstandard work arrangements recruitment, 188
(NSWA), 221f, 222 See also Homeland Security Act (2002)
paybanding demonstration project, U.S. Department of Housing and Urban
148, 149t, 150, 151–52t, 154, 155t, Development (HUD), 220, 221f, 227,
156t, 157, 158t, 159t, 160, 161t, 230, 231f
162–67 U.S. Department of Interior (DOI)
U.S. Department of Defense (DOD) multisector workforce challenges, 30
Homeland Security Act (2002), nonstandard work arrangements
288–89 (NSWA), 221f, 222
human capital challenges, 14 publications, 122
human capital crisis, 294, 295 strategic succession management, 122
National Security Personnel System U.S. Department of Justice (DOJ), 216,
(NSPS), 147, 148, 238, 242n7, 220, 221f, 224, 228, 229f, 230, 232
288–89 U.S. Department of Labor (DOL)
nonstandard work arrangements networked leadership models, 133
(NSWA), 220, 221f, 222, 227, nonstandard work arrangements
228 (NSWA), 221f, 222
332 Index
U.S. Department of State U.S. Office of Management and Budget
human capital challenges, 17 (OMB) (continued)
international leadership, 203, 205 Circular A-76, 45, 46–47, 53, 67
networked leadership models, 134, 135, data-driven human capital decisions, 263
136–37f, 138, 139, 142 most efficient organization (MEO), 45,
nonstandard work arrangements 46–47, 53
(NSWA), 221f, 222 strategic human capital management
Senior Foreign Service, 203 (SHCM), 86, 92t, 95, 98, 99, 100,
State Department Affinity Group, 101
135–36 U.S. Office of Personnel Management
U.S. Department of the Treasury (OPM)
networked leadership models, 138–39 Central Personnel Data File (CPDF),
nonstandard work arrangements 220, 221f, 223f, 227, 228f, 229f,
(NSWA), 220, 221f, 222, 230 230f, 231f
U.S. Department of Transportation (DOT), data-driven human capital decisions,
221f, 222 265–66
U.S. Federal Executive Board (FEB), 185, Disaster Loan Program (SBA), 60, 67
195–96, 199 establishment, 308
U.S. Foreign Service, 203–5 executive core qualifications (ECQs),
U.S. Forest Service, 46, 48, 49 206, 211, 212n4
U.S. Government Accountability Office Homeland Security Act (2002), 14,
(GAO) 15–16, 17, 18, 277, 281, 282, 283,
data-driven human capital decisions, 286, 287
264–65 Human Capital Assessment and
Disaster Loan Program (SBA), 55, 67, Accountability Framework
77–78 (HCAAF), 96, 240–41, 266, 267t
human capital challenges, 13–20 human capital challenges, 14, 15–16,
human capital crisis, 294, 302 17, 18
human capital reform human capital crisis, 293–94
initiatives, 80–85 international leadership, 206, 211
leadership, 84–85 networked leadership models, 134
organizational challenges, 77–80 nonstandard work arrangements
networked leadership models, 134, 140 (NSWA), 215, 216, 220, 224, 227
nonstandard work arrangements paybanding demonstration projects,
(NSWA), 220 148
paybanding, 80 publications, 227
strategic human capital management recruitment, 186, 188–89
(SHCM), 92t, 93, 94, 95, 96t, 97t, strategic human capital management
99, 100–101 (SHCM), 92t, 95, 96, 97–98, 99,
U.S. Office of Civil Rights, 135 100, 101, 105
U.S. Office of Disaster Assistance (ODA), U.S. Public Service Academy, 299
55–70, 73n2 USAJOBS, 18
U.S. Office of Federal Student Aid (FSA),
26, 28, 29t, 30, 31–35 V
U.S. Office of Management and Budget
(OMB) Values, 27–28, 41–42
agency oversight, 3 Veterans Affairs (VA), 221f, 222, 230, 231f
Index 333
Veterans Health Administration (VHA), Woodrow Wilson School of Public and

124 International Affairs (Princeton
Veterans’ Preference Act, 188 University), 191
Vision statement, 179 World Bank, 135
Volcker, Paul, 308–9
Y–Z
W
Young Government Leaders (YGL),
Walker, Katherine, 134 133–35, 141
Wall Street Journal, 140, 295, Young Professionals Society (YPro), 135,
298–99 136–37f, 138, 142
Washington Post, 191, 192, 283–84
Wikinomics (Tapscott), 303 Zimmermann, Jackye, 138

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Transformational Trends in

Governance and Democracy

Meeting the Challenge of 9/11:

Foreign Aid and Foreign Policy:

Transforming Public Leadership for the 21st Century

Performance Management and Budgeting:

Innovations in Public Leadership Development

Reengineering Community Development for the 21st Century

Innovations in Human Resource Management:

The National Academy of Public Administration is an independent, nonprofit

Edited by Hannah S. Sistare,

Library of Congress Cataloging-in-Publication Data

Printed in the United States of America

The paper used in this publication meets the minimum requirements of

Preface and Acknowledgments

Part 1. The Challenge Ahead

2. Human Capital: Federal Workforce Challenges in the

Part 2. Understanding the Twenty-First Century Multisector Workforce

3. Challenges and Effective Practices in Managing the

4. Multisector Workforce Lessons Learned: The National Aeronautics

5. Getting the Best from “Most Efficient Organizations”

6. Building Surge Capacity in the Disaster Workforce: Improving

Part 3. Transforming Organizational Culture

7. The U.S. Government Accountability Office: A Case Study in

8. Strategic Human Capital Management in Federal Government:

9. Organizational Transformation: Strategic Succession

10. Four New Models of Networked Leadership Development

Part 4. Innovation in Action

11. A New Look at Paybanding and Pay for Performance: The

12. Employee Retention and Engagement

13. Building Relationships to Fix the Federal Talent Pipeline:

14. Competencies for Success in International Leadership in

15. An Agency-Level Look at Alternative Working Arrangements

16. Strategic Workforce Management: Innovation and Improvement

Part 5. Managing the Management of People

17. A Certified Assessment of Human Resources Systems:

18. Using Data-Driven Human Capital Decisions to Improve

19. Succeeding as a Strategic HR Partner: A Practical Approach

Part 6. Legislating Reform

20. Legislating Innovation in Human Capital Management:

21. The Human Capital “Crisis” in the Federal Government:

Part 7. Concluding Thoughts

22. The Path of Reform: Challenges and Opportunities

About the Editors and Contributors 315

required. Problems of design and obstacles to implementation are evident. Plainly,

Treating Public Sector Workers as Human Capital Rather

Requiring Performance and Accountability in Getting the

Understanding the New Public Service Arena

Myra Howze Shiplett

Transformation is about creating the future, not perfecting the past.

anticipated transformation strategy for government. His chapter serves to organize

• First, seek to understand

• Establish a twenty-first-century Hoover Commission to “rethink government

We end this journey of examination with observations from NAPA Fellow

The Challenge Ahead

Driven by long-term fiscal constraints, changing demographics, evolving gover-

Leadership in agencies across the federal government is essential to providing the

1. ensure internal OPM capacity to lead and implement reform,

3. collaborate with the Chief Human Capital Officer (CHCO) council,

Strategic Human Capital Planning

Strategic human capital planning is a central element of federal agencies’ efforts

In 2006, OPM reported that approximately 60 percent of the government’s 1.6

Acquiring, Developing, and Retaining Talent

• Having skilled acquisition staff is key to successful implementation of multi