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97–034 PDF 2005

FIRST YEAR ON THE JOB: CHIEF HUMAN CAPITAL

OFFICERS

HEARING

BEFORE THE

SUBCOMMITTEE ON CIVIL SERVICE

AND AGENCY ORGANIZATION

OF THE

COMMITTEE ON

GOVERNMENT REFORM

HOUSE OF REPRESENTATIVES

ONE HUNDRED EIGHTH CONGRESS

SECOND SESSION

MAY 18, 2004

Serial No. 108–236

Printed for the use of the Committee on Government Reform

(

Available via the World Wide Web: http://www.gpo.gov/congress/house

http://www.house.gov/reform

(II)

COMMITTEE ON GOVERNMENT REFORM

TOM DAVIS, Virginia, Chairman

DAN BURTON, Indiana

CHRISTOPHER SHAYS, Connecticut

ILEANA ROS-LEHTINEN, Florida

JOHN M. MCHUGH, New York

JOHN L. MICA, Florida

MARK E. SOUDER, Indiana

STEVEN C. LATOURETTE, Ohio

DOUG OSE, California

RON LEWIS, Kentucky

JO ANN DAVIS, Virginia

TODD RUSSELL PLATTS, Pennsylvania

CHRIS CANNON, Utah

ADAM H. PUTNAM, Florida

EDWARD L. SCHROCK, Virginia

JOHN J. DUNCAN, JR., Tennessee

NATHAN DEAL, Georgia

CANDICE S. MILLER, Michigan

TIM MURPHY, Pennsylvania

MICHAEL R. TURNER, Ohio

JOHN R. CARTER, Texas

MARSHA BLACKBURN, Tennessee

PATRICK J. TIBERI, Ohio

KATHERINE HARRIS, Florida

HENRY A. WAXMAN, California

TOM LANTOS, California

MAJOR R. OWENS, New York

EDOLPHUS TOWNS, New York

PAUL E. KANJORSKI, Pennsylvania

CAROLYN B. MALONEY, New York

ELIJAH E. CUMMINGS, Maryland

DENNIS J. KUCINICH, Ohio

DANNY K. DAVIS, Illinois

JOHN F. TIERNEY, Massachusetts

WM. LACY CLAY, Missouri

DIANE E. WATSON, California

STEPHEN F. LYNCH, Massachusetts

CHRIS VAN HOLLEN, Maryland

LINDA T. SANCHEZ, California

C.A. ‘‘DUTCH’’ RUPPERSBERGER, Maryland

ELEANOR HOLMES NORTON, District of

Columbia

JIM COOPER, Tennessee

——— ———

———

BERNARD SANDERS, Vermont

(Independent)

MELISSA WOJCIAK, Staff Director

DAVID MARIN, Deputy Staff Director/Communications Director

ROB BORDEN, Parliamentarian

TERESA AUSTIN, Chief Clerk

PHIL BARNETT, Minority Chief of Staff/Chief Counsel

SUBCOMMITTEE ON CIVIL SERVICE AND AGENCY ORGANIZATION

JO ANN DAVIS, Virginia, Chairwoman

TIM MURPHY, Pennsylvania

JOHN L. MICA, Florida

MARK E. SOUDER, Indiana

ADAH H. PUTNAM, Florida

NATHAN DEAL, Georgia

MARSHA BLACKBURN, Tennessee

DANNY K. DAVIS, Illinois

MAJOR R. OWENS, New York

CHRIS VAN HOLLEN, Maryland

ELEANOR HOLMES NORTON, District of

Columbia

JIM COOPER, Tennessee

EX OFFICIO

TOM DAVIS, Virginia HENRY A. WAXMAN, California

RON MARTINSON, Staff Director

B. CHAD BUNGARD, Deputy Staff Director and Chief Counsel

REID VOSS, Clerk

TANIA SHAND, Minority Professional Staff Member

(III)

C O N T E N T S

Page

Hearing held on May 18, 2004 ............................................................................... 1

Statement of:

James, Kay Coles, Director, U.S. Office of Personnel Management ............ 3

Mihm, Chris, Managing Director, Strategic Issues, U.S. General Accounting Office; Reginald Wells, Deputy Commissioner, Human Resources,

Social Security Administration; and Kevin Simpson, executive vice

president and general counsel, Partnership for Public Service ................ 19

Letters, statements, etc., submitted for the record by:

James, Kay Coles, Director, U.S. Office of Personnel Management, prepared statement of ........................................................................................ 7

Mihm, Chris, Managing Director, Strategic Issues, U.S. General Accounting Office, prepared statement of ................................................................ 22

Simpson, Kevin, executive vice president and general counsel, Partnership for Public Service, prepared statement of ........................................... 52

Wells, Reginald, Deputy Commissioner, Human Resources, Social Security Administration, prepared statement of ................................................ 44

(1)

FIRST YEAR ON THE JOB: CHIEF HUMAN

CAPITAL OFFICERS

TUESDAY, MAY 18, 2004

HOUSE OF REPRESENTATIVES, SUBCOMMITTEE ON CIVIL SERVICE AND AGENCY

ORGANIZATION, COMMITTEE ON GOVERNMENT REFORM, Washington, DC.

The subcommittee met, pursuant to notice, at 2:06 p.m., in room

2154, Rayburn House Office Building, Hon. Jo Ann Davis (chairman of the subcommittee) presiding.

Present: Representatives Jo Ann Davis of Virginia, Davis of Illinois, Norton and Van Hollen.

Staff present: Ron Martinson, staff director; B. Chad Bungard,

deputy staff director and chief counsel; John Landers, OPM

detailee; Chris Barkley, professional staff member; Reid Voss,

clerk; Christopher Lu, minority deputy chief counsel; Tania Shand,

minority professional staff member; Earley Green, minority chief

clerk; and Teresa Coufal, minority assistant clerk.

Ms. DAVIS OF VIRGINIA. We have some other Members on their

way but for the sake of time, we are going to go ahead and get

started.

The Civil Service Subcommittee is called to order.

Thank you for being here today. An important provision of the

Homeland Security Act of 2002 created the position of Chief

Human Capital Officer [CHCO], at major Federal agencies to improve the Federal Government’s ability to select, train and manage

a high performing work force. In creating this new position, Congress recognized that Federal employees are the Government’s biggest asset and drive its performance.

I have called this oversight hearing to examine how the Chief

Human Capital Officers Act has been implemented in the Federal

Government’s major departments and agencies since enactment a

year ago and to make sure that the CHCO Council consists of high

quality CHCOs committed to strategically managing the work

force. Congress intends that the CHCO position will make a positive difference in the performance of the Federal Government

bringing the most efficient and most effective service at the best

value to the taxpayers.

CHCOs’ duties include working closely with the agency head to

develop and implement an effective personnel policy. Workers

should be treated fairly and the mission of the agency must become

the top priority of every employee. Balancing both priorities is crucial and requires an official to understand both the needs of emVerDate 11-MAY-2000 12:29 Jan 22, 2005 Jkt 000000 PO 00000 Frm 00005 Fmt 6633 Sfmt 6633 D:\DOCS\97034.TXT HGOVREF1 PsN: HGOVREF1
2

ployees and a broader view of how well an agency is serving the

American public. Because of this, it was Congress’ intent that

CHCOs be placed among agency leadership underscoring the importance of personnel policy. Furthermore, the Homeland Security

Act created the Chief Human Capitol Officers Council to elevate

the importance of personnel policy governmentwide. The Federal

Government is moving toward a personnel system that is increasingly merit-based. With a majority of Federal workers moving to

new pay systems under the Departments of Defense and Homeland

Security, it is imperative to have top level leadership guide this

transition. During this time, it will be essential for the Chief

Human Capital Officers to bridge that crucial gap between agency

heads and human resources departments.

With all of this in mind, the subcommittee will today look at how

the addition of the CHCO position and the CHCO Council has impacted our Federal agencies. There are certainly lessons to be

learned and successes to be shared since enactment a year ago. Additionally, and maybe more importantly, our witnesses will also

give us a glimpse of what we are to expect in the months and years

to come.

Thank you all for being here today and thank you for your patience while we did the transition from one subcommittee hearing

to another. We look forward to hearing all your testimony.

I will now turn to our ranking member, Danny Davis, for an

opening statement.

Mr. DAVIS OF ILLINOIS. Thank you very much, Madam Chairwoman. I want to thank you for calling this hearing.

As we know, Chief Human Capital Officers will assist agency

heads in carrying out the agency’s responsibilities for selecting and

developing training and managing a high quality, productive work

force in accordance with merit systems principles. The best part of

the Federal Government is the thousands of dedicated men and

women who work on behalf of taxpayers each and every day. All

of the services Americans rely on their Government to provide,

from protecting our homeland to regulating our markets, would be

severely threatened unless we improve the way Government manages its most important assets, its workers.

CHCOs must have the vision and leadership skills to integrate

the agency’s human capital needs with its mission and program

goals while balancing the needs and rights of the work force. Having been engaged in public interest work for more than 30 years,

I believe there is no more fulfilling profession than working for the

Government and helping to improve the lives of all Americans, particularly those who are less fortunate. It is troubling then when I

hear that young people are indifferent to the notion of public service. Young people seeking job stability will continue to be indifferent to Federal employment when they find that their jobs can be

contracted out and the weakening basic Civil Service protections

will certainly not draw young people and highly skilled workers to

Federal Civil Service.

CHCOs will have to confront and overcome these challenges. The

CHCO must help agencies adopt a long term commitment for hiring, implementation, professional development, performance

3

awards and retention approaches that support the agency’s mission

and create a results oriented culture.

I look forward to hearing how we have done so far, how CHCOs

have been developed, organized and put together in order to fulfill

this mission. I seriously believe, Madam Chairwoman, that the notion that Government cannot do its work as well as those outside

of Government is one that needs to be dispelled and the only way

we can do it is to make sure that we recruit, retain and develop

the most highly motivated, most highly prepared and most highly

dedicated work force that we can put together.

I thank you again for calling this hearing and look forward to

hearing the witnesses.

Ms. DAVIS OF VIRGINIA. Thank you, Mr. Davis. I totally concur

with your last couple of statements and appreciate having you on

this committee for that reason.

I ask unanimous consent that all Members have 5 legislative

days to submit written statements and questions for the hearing

record and that any answers to written questions provided by the

witnesses also be included in the record. Without objection, it is so

ordered.

I ask unanimous consent that all exhibits, documents and other

materials referred to by Members and the witnesses be included in

the hearing record and that all Members be permitted to revise and

extend their remarks. Without objection, it is so ordered.

On the first panel, we are going to hear today from the Honorable Kay Coles James, Director, U.S. Office of Personnel Management.

It is standard practice for this committee to administer the oath

to all witnesses and if all the witnesses on both panels could please

stand, I will administer the oath to all of you at one time.

[Witnesses sworn.]

Ms. DAVIS OF VIRGINIA. Let the record reflect that the witnesses

have answered in the affirmative and you may be seated.

Director James, it is a pleasure to have you here today. We look

forward to hearing your testimony. I know you are on a bit of a

time crunch, so with that we will let you get started. You are recognized for 5 minutes.

STATEMENT OF KAY COLES JAMES, DIRECTOR, U.S. OFFICE

OF PERSONNEL MANAGEMENT

Ms. JAMES. Thank you, Madam Chairwoman. I want to thank

you and the other Members for the opportunity to be here today.

I am going to give an abbreviated statement but I would ask that

the full text be entered into the record.

Ms. DAVIS OF VIRGINIA. Without objection, so ordered.

Ms. JAMES. The passage of this important legislation reconfirms

a goal that we all share, providing a Government of service to the

American people envisioned by our President in his management

agenda. The CHCO Act provides additional conduits for advancing

this very important agenda.

First, the statute requires the heads of 24 departments and agencies to appoint a Chief Human Capital Officer. In April 2003, OPM

issued a memo on the designation of these important new positions.

The memo noted that Chief Human Capital Officers will require

4

different competencies from those traditionally found in an agency’s

human resources staff function. We also advised that, although not

required by statute, the spirit of the law would best be fulfilled by

designating individuals as CHCOs who serve as integral members

of the agency’s leadership team.

I am pleased to report that the individuals selected as Chief

Human Capital Officers are talented professionals who bring a

wealth of experience to their positions. Many have served the Federal Government with distinction as career senior executives while

others serve as top level political appointees. Demonstrating a longstanding need for high level attention to be focused on human resources issues, several agencies not listed in the act embraced its

spirit and designated Chief Human Capital Officers as well. These

include the Central Intelligence Agency, Federal Labor Relations

Authority, Internal Revenue Service, and the Peace Corps.

Second, as the act establishes a Chief Human Capital Officer’s

Council, I as the OPM Director am honored to serve as the Chair

of the Council. Under the statute, the Council is composed of Cabinet department Chief Human Capital Officers and others designated by the OPM Director. Employing this authority, I asked

the Chief Human Capital Officers of several large executive agencies and a representative sample of small agencies to serve on the

Council as well.

The Council has had a very active first year. Less than 3 weeks

after the act took effect, I convened its inaugural meeting. To emphasize the importance that the President placed on the strategic

management of human capital, we met for our first meeting in the

Indian Treaty Room at the White House. Calling the meeting to

order, I described the new body as a make stuff happen kind of

council. It has in fact been just that.

Since last June, the Council has met six times, adopted a charter, established an executive committee to help steer the Council

and initiated five subcommittees to address important governmentwide human capital issues. We have conducted a 2-day retreat,

drafted a tactical plan for the current fiscal year, created a Chief

Human Capital Officers Academy and this is a forum for members

to share their best practices and appointed an executive director to

oversee the daily operations of our council. Let me say that probably one of the best things we did was to get Mike Dovilla, who

I think was involved in drafting that legislation, from Senator

Voinovich’s staff. I think he has forgiven me for that but he is serving very well in that capacity and has a vested interest in its success and making sure that it is active.

The Council subcommittees are focused on some of the key areas

for Federal Civil Service modernization. We all know that one of

our biggest issues right now is to fix the hiring process. So that

was one of the first subcommittees we named. To complement

OPM’s efforts to encourage agencies to adopt a 45-day hiring

model, the Subcommittee on the Hiring Process is also exploring

ways to expedite the recruitment, evaluation and appointment of

top talent to Federal positions. Dr. Chu from the Defense Department heads up that particular subcommittee.

We believe that one of the most important issues facing the Federal work force today is our emergency preparedness and the safety

5

of our Federal work force. Gail Lovelace from the Department of

GSA is preparing and helping us to ensure agencies know how to

best protect our Federal work force and she is doing a fantastic job

at that.

Otto Wolfe is heading the Subcommittee on Performance Management, and the full Council has played a very integral role in developing regulations for the new SES Performance. Based Compensation Plan is under the leadership of that particular subcommittee. Bill Leidinger from Education is heading the Subcommittee on Leadership Development and Succession Planning

and is considering individual training and development as a part

of the strategic plans for our work force and is looking at our longterm strategic needs for leadership.

The Subcommittee on Employee Conduct and Poor Performers is

reviewing statutes and regulations for ways to streamline the process needed to counsel and, if necessary, terminate employees who

are not performing at an acceptable level. Pat Pizella from the Department of Labor is working on that subcommittee.

The CHCO Academy is proving a very productive forum. While

the subcommittees are working, we are also having a monthly

meeting with this particular academy. It is, in fact, discussing

human resource issues, and the forum meets monthly to consider

such topics as current work force flexibilities and compensation reform. Next month, I will be leading a session on some of the potential options being considered for the next wave of reform of the

American Civil Service.

In addition to these accomplishments, the Council already has

become more than a body that simply discusses issues. OPM is actively including the Council in considering and making policy recommendations. Draft regulations to implement the President’s recent Executive order establishing the Presidential Management

Fellows Program includes language that will give an important role

to the Chief Human Capital Officers.

Chief Human Capital Officers are assisting agency heads in enforcing OPM’s policy that there is no place in the Federal employment or in our Government at all for degrees or credentials from

diploma mills. So the Chief Human Capital Officers play an important role in that issue. Our CHCOs are communicating internally

our policies on adjudication of background investigations and security clearances, also a very important function that we have, and

having someone in the agencies at a very high level that has that

as part of their agenda is very important.

CHCOs are playing an integral role in observing veterans preference statutes and regulations as they hire new employees. Next

week, the Council will hold a joint meeting with veteran services

organizations on the important issue of veterans preference in hiring. We thought it was very important to do this in conjunction

with our Governmentwide celebrations of Memorial Day. This

event will take place at Walter Reed Army Medical Center and it

is a very appropriate location to reflect on the valuable contributions many of our Nation’s veterans have made in the service and

after their military service providing them opportunities for the

American Civil Service.

6

With a quick look ahead, next week’s meeting will celebrate the

body’s first anniversary and prominently featured on our agenda is

a dialog with representatives of several Federal employee labor

unions providing the Council valuable input from these important

stakeholders.

Our first annual report to Congress is forthcoming and this document will contain information about the Council’s progress during

the first fiscal year. To enhance our communications among the

Chief Human Capital Officers and with external stakeholders,

OPM will soon launch a Web site containing key information about

the Council.

The Chief Human Capital Officers Council is adding value to the

public policy dialog on the future of America’s Civil Service. The

appointment of CHCOs across the Federal Government has elevated the institutional profile of the strategic management of

human capital as never before. This important law is having a

positive effect on how we manage the Government’s most important resource, people. The members of the Council take seriously

these important responsibilities and with continued attention to

the President’s charge to achieve results, our Civil Service will only

grow stronger as it continues to provide the Nation with critical

services that our citizens expect.

Thank you again for the opportunity to discuss OPM’s progress

in implementing the Chief Human Capital Officers Act and I would

be pleased to respond to any questions you may have.

[The prepared statement of Ms. James follows:]

7

8

9

10

11

Ms. DAVIS OF VIRGINIA. Thank you very much, Director James.

I will turn now to our ranking member, Mr. Davis, for questions.

Mr. DAVIS OF ILLINOIS. Thank you very much.

Madam Director, it is clear that implementation of the Human

Capital Officers’ activity has hit the ground running. You have

done a lot of things. My question is how do internal stakeholders

fit into the scheme of things and how do we make sure they have

input to the processes?

Ms. JAMES. With the strategic management of human capital

Governmentwide, one of the core values and principles of the management of human capital is that you must involve the stakeholders at every level. So it would be incumbent upon each of the individual Chief Human Capital Officers when they come to the meetings, to come prepared with that kind of input to enrich the dialog.

So it would be important that, internally in each of the departments, they are meeting with stakeholders, both inside and outside

of their agencies and bringing that to the table as well.

As I suggested, also the legislation calls for us to be involved at

least on an annual basis in a dialog with our external stakeholders.

We will be doing that next week with what I believe to be a very

important meeting out at Walter Reed, where we will have the representatives of labor as well as the representatives of our veterans

service organizations.

Mr. DAVIS OF ILLINOIS. I guess half of the CHCOs have other

areas of responsibility, significant other areas of responsibility. Are

we finding there is ample time for them to be engaged in the other

work they have to do and still pay the kind of attention to human

capital development that they are charged with the responsibility

for?

Ms. JAMES. In all candor, Congressman, that is not true in every

case. I am concerned that some of our Chief Human Capital Officers are stretched far too thin and I am convinced that as we proceed with this through the year, some of that may be corrected. We

will see, I am sure, that some of our Chief Human Capital Officers

will say their plates are too full, and there will be some adjustments made. I can’t tell you that every Chief Human Capital Officer can focus as much as I would like to see them focus on these

important issues. I think we are going through a shakedown cruise.

Mr. DAVIS OF ILLINOIS. I think it is an absolutely important activity. It has been my experience in life that those things to which

we give the time, energy and attention are where the areas of accomplishment really are. Since we have programmed this in as

something we really want to do, then we will have to find a way

to make sure those individuals have the ample opportunity to do

that.

Ms. JAMES. We have a pretty aggressive schedule that includes

not only the meetings of the Council but the subcommittee meetings, the executive committee meetings, and we never want to meet

for the sake of meeting. If we are meeting, it is because there are

some substantive policy issues to be discussed, decisions to be

made and as a result of that, it is important for people to be there

and engaged and in most cases, that is in fact the case.

12

Mr. DAVIS OF ILLINOIS. Thank you very much. I don’t have any

other questions. I appreciate the implementation that is taking

place and thank you very much for being here.

Ms. JAMES. Thank you.

Ms. DAVIS OF VIRGINIA. Thank you, Mr. Davis.

Let me just followup on what our ranking member was asking.

Based on what you said, that some of them do have too much on

their plate, is it your vision that eventually a the CHCOs will be

exclusively CHCOs or will they always have to have that just as

a part of the title?

Ms. JAMES. I would be less than honest with you if I didn’t admit

that I believe there is sufficient work on the strategic management

of human capital for that to be a full portfolio. Having said that,

I do believe that agency heads and Cabinet Secretaries know best

how to run their departments and what the workload is. We will

continue to press ahead with the important work that we do and

if we hit any snags I will have those conversations with the Chief

Human Capital Officers and with the heads of those agencies and

if we need to make adjustments I am sure we will.

Ms. DAVIS OF VIRGINIA. You referenced in your opening statement, I believe, something regarding the Human Resources Directors. I guess I was along with some of those other people when

CHCOs were developed, what is the head of Human Resources for.

What do you see as the intended relationship between the CHCO

and the Human Resources Director?

Ms. JAMES. I see it as a very close, collaborative working relationship. I would say, however, that when the legislation was

passed, we envisioned a different set of core competencies for those

who serve at the Chief Human Capital Officer level, and I would

say that we envisioned that would be an individual who has leadership, who works closely with and has the trust and respect of the

agency head, is a policy person and who is involved in the longterm strategic planning for that agency and has access to the highest level policymakers in that organization and sits at the table

with those individuals when policy is being made.

The Human Resources Directors in those agencies are vital people. They have technical skills and knowledge that is so important

and so relevant. We have found in our operations that, in many

cases, our meetings consist of both, that the Human Resources Directors as well as the Chief Human Capital Officers attend and are

involved in the important dialog and discussion.

Ms. DAVIS OF VIRGINIA. You just said when you were answering

me that you originally envisioned the CHCOs as being one thing.

Are they something different than what you envisioned?

Ms. JAMES. Not really. We were very pleased at the level of the

skill sets and the individuals that were selected by agency heads.

There were those who were concerned that they were going to all

be political people in the agencies. That is just not the case. We

have a great mix of senior, non-career and career executives who

come together and share a common mission, which is the strategic

management of human capital for our Federal Government. It is an

excellent mix. It is a great body. My only concern at this point is

burnout and wearout because this is such an important issue and

the issues are so overwhelming that it requires a great deal of

13

time. That would be the only note of caution that I would sound

at this time.

Ms. DAVIS OF VIRGINIA. You have been going at it now a year.

What do you see as your biggest success with the Council and

where do you think your challenges remain other than the burnout?

Ms. JAMES. Our biggest successes I think have been identifying

the problems and coming up with the strategic plan to take on

what we believe to be the tough stuff and having highly skilled,

dedicated leaders in the Federal Government now focused on these

issues. I believe the legislation has been a tremendous success as

far as that is concerned. Having a conduit at the very highest levels of these agencies now where these issues are being addressed

and talked about is critical.

Our biggest challenges are producing results in these areas. Yes,

we have a Subcommittee on Hiring, but are we fixing the hiring

process.

Ms. DAVIS OF VIRGINIA. That was one of my biggest questions.

Ms. JAMES. My biggest challenge is not how you develop metrics

but holding them accountable, the agencies accountable to produce

results in these areas. I think a lot of times people are confused

about the actual role of the Office of Personnel Management. We

don’t hire people for the Federal Government. Hiring is done at the

agency level. We can produce workshops, we can put out memos,

we can encourage, we can audit, we can do analysis but at the end

of the day, to fix that will require the agencies to step up to the

plate to do that.

I think having the Council as a conduit to have leadership now

focused on these issues is important. The challenge is going to be

to encourage, motivate, cajole, whatever the word is we can use,

force, we don’t have the authority to do that, agencies to produce

results in these various areas is going to be our toughest mission.

Ms. DAVIS OF VIRGINIA. I certainly hope you are able to correct

the hiring process because that has been a real concern of mine

from what I have heard throughout my district and I know other

members have stressed the same thing, that it takes too long to

hire a Federal employee, so they go somewhere else.

The major issues you are currently discussing in the Council, do

you anticipate any legislative proposals?

Ms. JAMES. Yes, we do. We encourage the Council that this isn’t

just a meeting to attend and check it off your schedule. We really

are hoping that policy will be developed, that legislative proposals

will come out of that. We are getting back reports now from some

of our subcommittees and from that you will see suggestions for

legislation, for policy changes. It is not always legislation that is

required; sometimes it is just a change in policy, sometimes it can

be done by Executive order, but if legislation is required, we will

be back here asking you and the subcommittee for your support to

continue fixing some of these very difficult issues.

Ms. DAVIS OF VIRGINIA. We would probably rather you fix it

yourself but if you can’t we are here.

Thank you, Director James.

We have been joined by Ms. Norton. I will go to you for questions

for 5 minutes.

14

Ms. NORTON. Nice to see you, Director James.

Ms. JAMES. Nice to see you as well.

Ms. NORTON. Some of us have been very concerned about the role

and future of human capital in the Federal Government because of

the competing forces of various kinds, such as many more options

for people about where to work. I am not sure we are getting the

best and the brightest the way we always have. Your work force

could retire on you tomorrow or much of it could, and yet you are

competing with Fortune 500 types who go after the best talent. I

really have a series of questions about the future of the Civil Service, frankly.

I would like to know, the Federal Government had something to

kind of fall into its lap beginning with the Great Depression; with

not a lot of options, the best and the brightest came to the Federal

Government. Then there was a period in the 1960’s when Government was very much appreciated; nobody was telling civil servants

what many of them hear, which is who needs Government, and

whole bunches of young people flocked to the Government. They

weren’t terribly interested in business then. Now they are everywhere.

I am interested in how you are going to replace a work force of

the kind you inherited and that our country inherited as half of

them could retire tomorrow and leave, and what you are doing to

compete with folks who are prepared to pay them more, not do a

whole bunch of reorganization so that they don’t know whether

they will have a job, who will give them full health benefits. What

is your program for maintaining and attracting a work force, not

just a work force, particularly in the era of terrorism when we are

asking things of the work force we never thought we would ask the

civilian work force, how are you going to compete? What are you

doing to compete with the private sector which spends all of its

waking hours looking for precisely the kind of talent we need in the

Federal Government today?

Ms. JAMES. Great question and the answer is very long and convoluted but I will try to be as precise as I can in the time that we

have. There is good news and there is bad news. I tried to explain

this to Congressman Davis when he was holding my feet to the fire

about attracting more minorities, particularly into our Senior Executive Service, which is a very real concern of mine. The bad news

is that we don’t do as well as we would like to do and the good

news is, it is because there are so many opportunities that exist for

minorities outside of the Government that it is no longer adequate

for the Federal Government just to open the doors and people perhaps will come. We have to be more aggressive, we have to be more

competitive and we have to do something that the Federal Government has not done a great deal of which is targeted recruiting,

which is going out and going after those individuals.

If you look at a young student coming out of a graduate school

today that is excellent in their academics, has been involved in volunteerism and community service, and has certain skill sets, they

are a hot commodity and will be sought after by the corporate environment. The good news is that those individuals, one thing we

know about them is that they are attracted to the opportunity to

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cant difference. We also know that those young individuals aren’t

necessarily interested as some of us were in our generation of perhaps coming to work at the Federal Government for 30 years. We

know that they may come, give a portion of their lives, 5 years, 7

years, something like that, if they believe they can do meaningful

work, if they believe they will receive some skill sets, training, if

they believe they will have opportunities they couldn’t have in the

private sector.

I have never been one of those individuals who believed that we

have a hard time attracting people to come to the Federal Government. We have done job fairs all over the country and I invited

some this committee staff to come to New York to observe a phenomena that I believe is incredible. We went to the job fair and we

offered Federal opportunities and I asked them to come over and

look at the sight I saw out of that window. We had 15,000 people

in New York City who were there to apply for jobs within the Federal Government. I hear sometimes, ‘‘That may be nice, Kay, but

those individuals are not the cream of the crop, they are not the

best and brightest, they don’t have the skill sets that we are looking for.’’

We decided to do some analysis of those people to see if in fact

that was the case and that data is coming back but I can tell you

my own experience as I walked those lines. Those were highly talented, skilled people who were there, ready and willing to come to

work. Our problem was——

Ms. NORTON. My time is almost up. I just want to ask because

I certainly would believe that. I just want to ask, for example, to

take the law school where I taught full-time and still teach one

course, the best law school in this region, Georgetown, do you send

folks to Georgetown to interview young people coming out of

Georgetown to try to get them to come to the Federal Government?

Ms. JAMES. OPM does for Governmentwide, but our agencies and

again, you have to remember, OPM doesn’t hire anybody.

Ms. NORTON. I understand that. My question was, do you advise

people.

Ms. JAMES. Yes, we do.

Ms. NORTON. To in fact send people. You are going to get people,

there is unemployment. The reason I asked about lawyers in particular is that it is a market where one can now recruit lawyers

of a rather high rank because it is hard to make partner in a law

firm today because they use so many contract lawyers.

Unless OPM is doing the same kind of recruitment on the ground

that law firms and businesses do, which is not saying here are

some jobs and let us count and see how many people out there will

sign up, you will never know whether you are getting the best. You

know where the best and the brightest are. I would be very interested in seeing an example of what your recruitment programs look

like.

Ms. JAMES. We do, and one particular one that you may be interested in was one that was a little bit controversial, but I was committed to it so I did it and that was for Black History Month. I said

to the folks at OPM, I wasn’t particularly interested in another

program in the auditorium with singing and that sort of thing, why

don’t we go to black colleges and universities and recruit on those

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campuses and do something real which is to tell them about the

opportunities that we have. So we had a job fair at Howard University, we went to Hampton University.

Ms. NORTON. I don’t know whether that would have been controversial, I appreciate that you went.

Ms. JAMES. That is another whole story. We will have that conversation.

Ms. NORTON. Madam Chairwoman, I do have other questions but

I will wait for another round.

Ms. DAVIS OF VIRGINIA. Thank you, Ms. Norton.

We have been joined by Mr. Van Hollen. Mr. Van Hollen, do you

have any questions?

Mr. VAN HOLLEN. Just a few. Thank you for being here again.

I apologize if I am going over territory already covered but in

terms of the recruitment tools that were provided under the legislation we are reviewing, do you believe the tools available to you

have been adequate and successful in attracting new talented people to the Federal Government in areas where we have pressing

needs or are there additional tools that you need to accomplish that

mission?

Ms. JAMES. Congressman, I really truly believe that we needed

the legislation, we needed those flexibilities in order to attract

America’s best and brightest and get them hired quickly in a reasonable length of time. My biggest challenge, however, is getting

our agencies to use those tools. So we are encouraging them, we

are monitoring, we are training and we are doing everything that

we can. I would suggest that it will take a little bit more time before I can answer fully for you whether or not those tools are being

used to the best of the agencies’ abilities.

It is discouraging to me that when we have the authority for direct hire, that it is not being used as much as it could and should

be. As an example, before we do a hiring fair, we bring those individuals together and say at the hiring fairs, we call them hiring

fairs for a reason. We want people to get hired. Make sure you

send people who have the authority to hire people and who will use

the flexibilities that Congress has given us.

One of the pushbacks that I have said to the agencies is do not

send hostesses to hiring fairs, people to pass out keychains and

brochures. Send people to hiring fairs who have the authority to

make job offers, to evaluate and to interview candidates. Those are

some of the kinds of things we are working with, so I can’t answer

your question just yet about how effective and what more we need.

We are struggling to get people to use the flexibilities that you

have granted us and given us.

Mr. VAN HOLLEN. Let me just ask. There were a couple stories.

I am sure you know yesterday in the Washington Post and I don’t

know if this issue has been raised but there was a front page article about Federal pay and then another article about the DOD new

reorganization plan. On the first issue, the pay question, first of

all, it was a long article and I don’t know if you have any general

response. I would be interested in your general response. The second issue that sort of comes to mind is it talked about bonuses and

a whole spectrum of bonuses from small bonuses to large bonuses

and given our whole debate with respect to performance pay and

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whether or not that bonus system is in some ways serving that

purpose now and what the distinctions are between performance

pay and rewarding through the bonus systems and the authorities

that already exist.

Ms. JAMES. My general comment would be that I have always

been concerned about how awards are used in our Government

with our work force. I think that the systems are good, the various

awards programs and systems. I am concerned about how they are

administered. I think if you look at the performance of some of the

agencies and look at how freely they expend bonuses and compare

the two, it begs the question, is it really performance-based and

what are you basing that performance on. So I think there is a lot

of work to be done there.

Should we have performance-based pay? Yes. Is it being effectively administered at this point? I have some concerns.

Mr. VAN HOLLEN. It obviously is a longer discussion to get into

all those issues. Let me ask while we have you here, in terms of

the DOD reorganization effort, I know there has been a question

about to what extent your office has been able to be involved and

have input in that process. Are you satisfied with the level of input

that you have had? Can you give us an update on what you see

as the challenge?

Ms. JAMES. I thought that the article was fairly accurate. The

only thing that was wrong was the headline because it talked

about Rumsfeld’s plan. Rumsfeld was the solution, he was not the

problem, because when it got to his level in the organization, he

and Secretary England were very quick to act. We are very pleased

about where we are in the process right now, the level of input, the

ability for OPM to be involved, and I think, as a result of that, we

are going to see a far better product. Stakeholders are and will continue to be included, and the employees in that department deserve

an excellent personnel system, and I think at the end of that process, that is what they are going to have.

Mr. VAN HOLLEN. Thank you.

Ms. DAVIS OF VIRGINIA. Thank you, Mr. Van Hollen.

Director James, I want to thank you for being here. I am going

to assume the complete response you weren’t able to give to Ms.

Norton when you said the problem up in New York was the fact

that you couldn’t get the agencies to do the hiring?

Ms. JAMES. That is a part of the problem, yes. They are actually

doing better because after the first two hiring fairs when we had

hostesses and we said no, we want real people that can explain

programs and actually make job offers, some of the agencies are

stepping up to the plate. What we want to do is say we are even

considering not allowing them to participate in the hiring fair unless they have real jobs they are interviewing for because those

people who stood in line for 4 hours for the opportunity to work for

our Government deserve better. They didn’t come for keychains,

they came for jobs.

Ms. DAVIS OF VIRGINIA. Thank you, Director James. I just want

to ask you one question for the record. What is the status of the

law enforcement officers report that was due to this committee on

April 30th?

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Ms. JAMES. That report is in review. I understand they are waiting on comments. It is currently at OMB and when they receive the

comments from all the various agencies, I am sure it will be released to the committee.

Ms. DAVIS OF VIRGINIA. Thank you, Director James. I know you

have another commitment, so we are going to allow you to go.

Ms. JAMES. We are going to go train some Foreign Service executives.

Ms. NORTON. Could I ask her another?

Ms. DAVIS OF VIRGINIA. Actually she has to go give a speech, so

if you could take your questions for the record for Director James.

Ms. JAMES. If it is a quick one, I am happy to answer.

Ms. DAVIS OF VIRGINIA. If you could answer quickly because we

do have four votes coming up and a mark up, plus we have another

panel.

Ms. NORTON. I would like to ask the question. You mentioned apparently in your testimony something about the diploma mills. I

appreciate that you raised this yourself. I also appreciate when you

are dealing with huge numbers of employees what it would take to

somehow do an investigation. Is it possible that one could have a

list of accredited colleges and that is all you need and you would

never have to worry?

Ms. JAMES. The quick answer, no. The reason that is a no and

the reason it is a sticky problem is by the very nature of the diploma mills, they pop up and go down, change the names, and so

you can’t have one quick list of accredited schools. You also have

schools that for whatever philosophical or ideological reason have

decided not to go through the accreditation process. So it may be

a very valid learning institution, but for some reason did not want

to go through that process. So, it isn’t quite that easy. We have

looked at several different categories. We are going after this one

aggressively, but if you put a name on the list and say this is a

diploma mill, they drop off the list because they change their name,

and they are back.

Ms. NORTON. The kind of list I am talking about would be a list

of bona fide universities. You start there and then you have to

watch out for the offenders.

Ms. JAMES. Yes, we have that. That is not where our problem is.

We have that, and we currently use that, but that is not what is

causing the problem.

Ms. NORTON. Are you saying that you can’t get a hold of this or

that you are going to get a hold of it? I understand the complexity

that you have described.

Ms. JAMES. We are going to get a hold of it and are working with

Congress for some potential solutions on how we are going to get

that done. I am not sure that we have all of the tools right now

that we need to make that happen but we want to work with you

to come up with some ideas and suggestions for getting that done.

Ms. NORTON. I think we have it now everywhere in the United

States at the State level and city levels as well. One of the things

we might look to is to see whether or not any jurisdiction has found

a way to get a hold of this problem. Perhaps that could be a model

for all of us.

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Ms. DAVIS OF VIRGINIA. Thank you so much, Director James, and

thank you, Ms. Norton, for bringing up that important subject.

Ms. JAMES. Thank you.

Ms. DAVIS OF VIRGINIA. I will now ask our second panel of witnesses to come forth. We have already sworn you in, so we will first

hear from Mr. Chris Mihm, Managing Director, Strategic Issues,

U.S. General Accounting Office. Then we will hear from Dr. Reginald Wells, Chief Human Capital Officer and Deputy Commissioner, Human Resources, Social Security Administration and Mr.

Kevin Simpson, executive vice president and general counsel, Partnership for Public Service.

Again, thank you all for joining us here today. I am going to recognize the panel for an opening statement in the order I called you

but I would ask that you summarize your testimony in 5 minutes

and any more complete statement you have, we will enter into the

record.

We will begin first with you, Mr. Mihm.

STATEMENTS OF CHRIS MIHM, MANAGING DIRECTOR, STRATEGIC ISSUES, U.S. GENERAL ACCOUNTING OFFICE; REGINALD WELLS, DEPUTY COMMISSIONER, HUMAN RESOURCES, SOCIAL SECURITY ADMINISTRATION; AND KEVIN

SIMPSON, EXECUTIVE VICE PRESIDENT AND GENERAL

COUNSEL, PARTNERSHIP FOR PUBLIC SERVICE

Mr. MIHM. Thank you, Madam Chairwoman. It is always an

honor and a pleasure to appear before you and the subcommittee.

I am pleased to be here to discuss the progress in implementing

the Chief Human Capital Officers Act. As you know and as you

have discussed with Director James, Congress recently sought to

modernize Federal human capital policies by allowing certain agencies, most notably Defense and Homeland Security, to adopt more

flexible approaches to their human capital management. At the

same time, Congress has provided agencies across the executive

branch with additional tools and authorities needed to strategically

manage their work forces. The success of these and related initiatives will depend in large measure on the existence of high quality

Human Capital Officers and a strategic and effective Human Capital Officers Council.

My written statement describes the different approaches that

agencies used in selecting their officers, creating the position and

the key responsibilities of those officials. In the interest of time this

afternoon, I will focus my comments on the third issue covered in

my written statement, the initial steps taken by the Chief Human

Capital Officers Council and some suggested next steps.

As you observed in your opening statement, Madam Chairwoman, an effective and strategic Human Capital Officers Council

is vital to meeting Congress’ goals under the CHCO Act as well as

addressing the Federal Government’s human capital challenges.

Recent experience has shown us that interagency councils can be

important leadership strategies in both developing policies that are

sensitive to implementation concerns and gaining consensus and

consistent follow through within the executive branch.

The Chief Financial Officers and Chief Information Officers

Councils have been particularly effective in this regard. The Chief

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Human Capital Officers Council can play an equally useful role. Director James discussed many of the Council’s activities over the

last year. However, the Council does not yet have a strategic plan

to help guide its work and to serve as a benchmark for measuring

progress, although we understand that there is a draft. The shared

understandings that can be developed as part of the planning process are particularly important to councils since they play a vital

leadership and coordination role. This I believe is exactly the point

that Mr. Davis was making when he discussed with the Director

the importance of stakeholder involvement.

Thus, the timely completion of the Council’s strategic plan is important to provide a sense of direction for the Council as well as

to communicate to Congress and other stakeholders the role the

Council will play and how it will meet its responsibilities. The

Council has created five subcommittees as Director James discussed covering the hiring process, performance management, leadership development, succession planning, employee conduct and

poor performers and finally emergency preparedness.

We understand that three of those five subcommittees, those

dealing with hiring process, leadership development and succession

planning and employee conduct and poor performers have drafted

their first reports for review by the Council’s executive committee.

However, these reports have not released to the public. At the request of the chairwoman, Mr. Davis and others in Congress, we

have undertaken a large body of work in recent years that should

prove helpful to the council and its subcommittees as they develop

their initiatives. This work which includes the five areas covered

by the Council’s subcommittees, is detailed in my written statement along with suggestions on the specific issues for the subcommittee to pursue.

In addition to the important areas covered by the Council’s subcommittees, our work in GAO suggests the Council should ensure

that its efforts address agencies’ need for guidance, assistance,

knowledge and leading practice in other key, cross-cutting areas including developing the capabilities for successful use of the flexibilities that were discussed earlier, strategic human capital planning,

looking into the future and making sure we win the war on talent

as Ms. Norton was discussing, and transforming human capital or

HR offices to be able to be true strategic partners with business

with program managers rather than just transactional organizations.

In conclusion, the need to transform the way the Government

does business will only increase the importance of integrating

human capital or people approaches with agencies program plans

and strategies. While the initial steps taken over this first year

have shown important progress, this coming year will be especially

critical to leveraging the progress that has already been made and

achieving significant accomplishments and facilitating lasting

change. A strong and effective Chief Human Capital Officers Council can serve an instrumental role in helping Federal agencies

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transform their operations and dramatically improve their performance.

This concludes my statement. I will be happy to take any questions you may have.

[The prepared statement of Mr. Mihm follows:]

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Ms. DAVIS OF VIRGINIA. Thank you very much, Mr. Mihm.

Dr. Wells, it is good to have you before our committee again. You

are recognized for 5 minutes.

Mr. WELLS. Thank you, very much, Madam Chairwoman.

Thank you for the opportunity to appear before you today to discuss my role as SSA’s Chief Human Capital Officer, and how the

Chief Human Capital Officers Act, enacted as an act that is part

of the Homeland Security Act, provides valuable assistance in

meeting some of the human capital challenges that the Social Security Administration faces.

As you know, the Chief Human Capital Officers Act of 2002 was

signed into law with the promulgation of the Homeland Security

Act of 2002. This act established the Chief Human Capital Officer

and the Chief Human Capital Officers Council. I am proud to serve

as SSA’s Chief Human Capital Officer and as a member of the

Chief Human Capital Officers Council. The Chief Human Capital

Officer position and the formation of a national Chief Human Capital Officers Council have renewed focus on management of human

resources as a form of capital investment and accountability for the

use of that investment.

As SSA’s Deputy Commissioner for Human Resources and

CHCO, I am responsible for providing leadership on the agency’s

work force development strategies, recruiting, succession planning,

diversity strategies and other human capital initiatives. I am actively engaged in those activities on a daily basis. In this dual role,

I advise the Commissioner and senior staff in carrying out SSA’s

responsibilities for selecting, developing, training and managing a

high-quality, productive work force in accordance with merit system principles. As such, I have a seat at the table that allows me

to discuss human capital goals at the executive level.

The CHCO position and the formation of a National Chief

Human Capital Officers Council are important to our agency because of our mission at SSA. Our mission is to ensure that Social

Security and Supplemental Security Income claims are processed

quickly and accurately and that over 45 million Social Security

beneficiaries and Supplemental Security Income recipients receive

their benefits in correct amounts and on time every month of the

year. As of January 2004, over 64,000 SSA employees were delivering services through a network of over 1,500 district and hearing

offices throughout the country in 10 regions.

SSA recognizes that it is the dedication and hard work of its employees that enables this agency to meet its commitments to the

public. These commitments require that we continue effective

human capital planning to ensure that we are successful in our

mission. The Chief Human Capital Officers Act of 2002 is an important tool in our efforts to fulfill our goals. Effective human capital planning in our environment presents unique challenges. We

face increasing retirement and disability claims, workloads resulting from our aging national population. As the baby boomers reach

their peak retirement years, we must plan carefully to ensure that

trained employees will be in place to do the work, and at the same

time, maintain our quality standards.

The same time as our agency faces dramatically increasing workloads, we also face the fact that many of our dedicated employees

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are baby boomers themselves. SSA’s employee retirement wave will

not only affect our ability to deliver service to the American public

but it will also result in a significant drain of institutional knowledge. SSA will be faced with the continuing challenge of hiring and

retaining a highly-skilled and diverse work force in what is expected to be a very competitive job market.

At SSA, we are fortunate that we have been planning for quite

some time how to address many of these human capital challenges.

The Chief Human Capital Officers Act is Congress’ recognition of

the fact that human resources are another form of capital investment that we make in order to carry out our mission. I am confident that SSA will meet the challenges we face through effective

human capital planning. To this end, I am pleased to report that

SSA has implemented a comprehensive human capital plan which

provides a high-level focus for human planning efforts. It is directly

linked to the SSA strategic plan. The human capital plan closely

tracks outcomes and helps us to focus on the results of our human

capital initiatives.

I would also like to point out the importance of the Chief Human

Capital Officers Council which provides a valuable forum for our

agency to discuss a wide range of human resources issues, such as

modernization of human resources systems, the impact of legislation affecting human resources operations and organizations, recruitment and retention strategies, emergency preparedness guidelines and safety measures, work force flexibilities and competitive

sourcing. Collectively, the members of the Council use their insights and experiences to address government-wide work force

issues.

Thank you again, for holding this hearing. The enactment of the

Chief Human Capital Officers Act will support SSA and other participating Government agencies as we face the human resource

challenges presented in the 21st Century.

I would be happy to answer any of your questions.

[The prepared statement of Mr. Wells follows:]

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Ms. DAVIS OF VIRGINIA. Thank you very much, Dr. Wells.

Mr. Simpson, thank you for being here with us today and you are

recognized for 5 minutes.

Mr. SIMPSON. Thank you very much for the opportunity to appear before your subcommittee today.

I serve as the executive vice president and general counsel of the

Partnership for Public Service, a non-partisan, non-profit organization dedicated to revitalizing the Federal Civil Service.

Since the position of the Chief Human Capital Officer was created, the Partnership has had many opportunities to work closely

with those officers, with the community of Federal HR directors,

with OPM Director, Kay Coles James, and her team and with the

executive director of the Council, Mike Dovilla. We applaud their

accomplishments to date and we are especially heartened by the

continued commitment to effective congressional oversight that this

hearing represents.

In our work with the Federal Government agencies, we have

noted many positive developments in connection with the Chief

Human Capital Officers. The level of discourse about human capital management issues in the Federal space has increased. Agency

managers are being integrated more tightly into the discussion.

There is greater collaboration among agencies and more energy

around the issues of strategic planning. NASA has become the first

agency to go to green on OMB’s human capital management score

card followed by Labor. OPM Director James has rightly and consistently championed the successes of those two agencies and encouraged other agencies to model their best practices. More importantly, I can report to you that the Chief Human Capital Officers

feel well supported by this committee and its staff.

As the committee considers its oversight role going forward, it is

worth recalling two of the key underlying goals of the original legislation, one, to improve strategic planning and two, to encourage

the development of metrics to gauge progress on work force management issues. On the first issue, strategic human capital planning, the Chief Human Capital Officers should be responsible for

identifying the talent needs that exist now as well as those that

will predictively arise in the future, given attrition and other factors. Once those needs have been identified, then proactive strategies have to be developed by the Chief Human Capital Officers to

meet those needs.

On this topic I would commend to your attention the Partnership’s recent report on bioterrorism which outlines some of the serious work force challenges being faced by agencies responsible for

our bioterror defense. The basic conclusion of the report was that

we can’t get the people we need and we can’t keep the people we

have. One reason for that was a lack of adequate work force planning.

In the face of increasing difficulties in recruiting the technical expertise they needed, agencies did not necessarily have plans in

place to overcome these difficulties. I would suggest this subcommittee should look for the CHCOs to be proactive in responding

to work force challenges, especially where the data is showing a

downward trend. The Chief Human Capital Officer Council in particular is an institution that is well suited to coordinate a strategic

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response across agencies in situations like these where several

agencies are pursuing the talent pool.

The second goal was to try to develop a series of metrics that

gave progress on human capital goals. If you measure it, it can

change. This is an explicit charge of the Chief Human Capital Officer legislation and it is central to the effectiveness of your own congressional oversight. The Chief Human Capital Officers should be

able to explain to Congress which measures they regularly track

and most importantly, how that information is then used to shape

agency policy, planning and results. In our view, the administration’s Presidential management agenda and the accompanying balanced score card have already laid the groundwork for the HR

metrics that should be adopted by the Government. Having established this important conceptual framework, the priority for the

next year should be to safeguard the consistency of these benchmarks to ensure their interpretation is consistent and transparent

to the agencies that will be required to live by them and to show

progress by them.

The other crucial aspect of the Chief Human Capital Officer legislation was the creation of the Chief Human Capital Officer Council, which really represented a profound congressional commitment

to a collaborative approach to work force issues across government

agencies. To date, as described by Director James, the Chief

Human Capital Officer Council has begun to fulfill that promise by

forming subcommittees and developing responses to the major challenges all of the offices face, such as the need for transformation

of the HR function and performance management. The Chief

Human Capital Officer for the Department of Education, for example, leads one subcommittee that has done some great work on

leadership development.

This progress, however, could be undermined by changes in agency leadership that invariably accompany every Presidential transition, regardless of who is elected. The Partnership would make two

suggestions in this regard. First, the subcommittee might consider

asking the Council to develop a point of view on the continuity

issue and to offer its own recommended solutions. It would be instructive, for example, to learn how the CFO and the CIO communities deal with transition issues.

Second, it may be appropriate to review the staffing resources

available to the Director of OPM for the Council. The Executive Director of the Council, for example, could benefit from dedicated

staff that would allow him to expand his coordinating function. The

committee might also examine where the newly appointed officers

are receiving consistent guidance and orientation about how to fulfill the responsibilities of their position. I would also humbly suggest that good government groups such as the Partnership have a

considerable interest in this issue that could be leveraged to support the Council’s planning and transition efforts.

In closing, there is no doubt in my mind that the creation of the

Chief Human Capital Officers was an important pre-condition to

the broader transformations that will be necessary to improve the

Government’s ability to deliver results. Congress has signaled the

seriousness of its intent by demanding accountability, measures of

progress and increased collaboration. You have the ingredients to

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drive organizational change on an incredibly large scale and you

and the Chief Human Capital Officers have our support in that enterprise.

[The prepared statement of Mr. Simpson follows:]

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Ms. DAVIS OF VIRGINIA. Thank you very much, Mr. Simpson.

Mr. Wells, I want to ask you a question. In the November 2002

law that President Bush signed into legislation for the Department

of Homeland Security, it contained several resource reforms including the ability for agencies to use category ranking hiring method

instead of the rule of three. It also provided governmentwide authority for voluntary separation incentive payments and voluntary

early retirement. More recently, we in Congress enacted the Student Loan Repayment Program. Is the Social Security Administration using these flexibilities and are there any other personnel

flexibilities that you need to help transform your work force? I

know you are having a bit of a difficult time there.

Mr. WELLS. Yes, Madam Chairwoman, we are using a number of

those flexibilities, however, not all. There are reasons why we have

decided not to use them all. I think where flexibilities are concerned, you really do have to consider the particular culture, institutional aspects of the organization, size, a lot of dimensions and

variables.

With regard to early retirement, that is something we have actually used very strategically to help flatten the retirement wave. We

analyzed some 6 to 7 years ago that we would in fact have a certain number of retirements hitting us in the beginning of the decade and we started using early retirement as a mechanism for having those retirements happen at a little more steady pace than

might have happened had we not offered it as an option.

With regard to tuition reimbursement, that is not a flexibility we

are currently using. The ability to administer that in a way that

would not create other issues for us and given the resource limitations, it makes it very difficult to consider that one as we have

looked at it from various angles. It has not been one of the things

we have had to resort to for purposes of recruitment. I will knock

on wood here that we have actually done quite well. We have had,

I guess, last year something like 3,500–3,700 retirements or people

leaving the agency and we were able to replenish without a tremendous amount of difficulty at this stage.

One of the other flexibilities you mentioned, categorical ranking,

is something we are studying right now. We have to think through

all the nuances of it as it relates to how we are accustomed to

doing business and we should have some results on how we are

going to use it very shortly. I can report back to the committee on

its use. I think we are certainly viewing it as a very favorable option over the rule of three.

Ms. DAVIS OF VIRGINIA. Are there other personnel flexibilities

you can think of that you need we might be able to help you with?

Mr. WELLS. There are a number that we have put together and

we would be more than happy to submit those to the committee as

well.

Ms. DAVIS OF VIRGINIA. If you would do that, we would certainly

appreciate it. I am going to ask one more quick question and go to

my colleagues.

Mr. Simpson, it is going to be you because my ears perked up

when Director James said that some of the CHCOs were political

appointees. I know that the Partnership for Public Service has said

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that shouldn’t be, something to that effect. Could you elaborate on

that?

Mr. SIMPSON. Early on during the initial legislative debate about

the Chief Human Capital Officer legislation, I believe we did express a preference that perhaps the Chief Human Capital Officers

should all be career but we are very sensitive to the other side of

the argument and it really was important to us that the Officers

have a seat at the table as it were and sometimes a political appointee is really the best candidate for the job for that reason.

I think actually the way it is working right now as Director

James described, it is a good mix from everything that I have

heard, from my understanding. There is a lot of synergy and give

and take between the different experiences these two different categories of officers bring. I would not suggest what we have heard

and the input we have received means that we ought to revise the

act itself to require career officers. It is a little too soon for that

but I do think Director James was quite candid and forthright in

suggesting that even some of the political appointees need to focus

their attention and energies on the substantial responsibilities of

the position itself.

Ms. DAVIS OF VIRGINIA. Thank you.

I am going to yield back my time and go to our Ranking Member,

Mr. Davis.

Mr. DAVIS OF ILLINOIS. Mr. Simpson and Mr. Mihm, how important do you think it is for the CHCOs to report directly to their

agency heads? They must directly to the agency director. How important do you think that is?

Mr. SIMPSON. To my mind, it is very important. It signals a commitment from the very top of the agency to the importance of

human capital as a matter of critical importance to the agency.

Your agency mission is not going to be accomplished unless you

have your human capital shop in order. Jack Welch, the head of

GE, used to say we spend 70 percent of our time on the people

thing and the day we get the people thing wrong, we have really

messed up. I think that is a model that should be emulated in the

Government space.

Mr. MIHM. I would agree Mr. Davis. It is important that they report to the highest level of the organization. The thing we need to

keep in mind is that a number of management positions now report

to the head of the agency, CFO, CIO, CHCOs. This fact has been

given some impetus of the notion of creating Chief Operating Officers within agencies often at the deputy level or an equivalent

through which the various management functions could report up

so they are able to have the high level of attention they deserve

but it is not necessarily all going into the Office of the Secretary.

My understanding is the Select Committee on Homeland Security

is considering that model with the Department of Homeland Security creating a Chief Operating Officer, basically elevating the entire management function up to the next level.

Mr. DAVIS OF ILLINOIS. Let me ask each of you do you think one

can do this effectively on a part-time basis, that is with other duties and responsibilities as well? I will start with you, Mr. Mihm.

Mr. MIHM. I would take Director James’ point that I think it will

be exceedingly difficult over time to devote the necessary time and

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attention if it is dual-headed or even triple-headed with other functions. The key differences she was pointing out between a HR Director and a Chief Human Capital Officer and it is characterized

by Dr. Wells’ comments about a seat at the table is that it is much

more than responsibility for the traditional HR categories which

are important enough. It is being able to be a real leader in much

of the transformation that is going on within an organization. If we

are vesting with these top officials technology, financial management, administration, other management functions, it gets exceedingly difficult to see when they are going to be able to sleep.

Mr. WELLS. Mr. Davis, I am very happy that I wear both hats,

that is I am the Deputy Commissioner for Human Resources and

the Chief Human Capital Officer, so I am probably a little biased.

I struggle with doing a really good job at it with that full responsibility. I think it is a full-time job. I appreciated the Director’s

forthright remarks about some of the challenges that some of my

colleagues face, and from talking to some of them, I can certainly

appreciate that they do.

I think some of it depends, frankly, on the agency. I can see

where that may play a role and the amount of support a particular

executive may have surrounding them, but I certainly feel that

having direct access to the head of the agency is critical. If you

don’t have the seat at the table, if you are not able to have that

direct access, it would strike me, as you indicated earlier in your

remarks, that we do things well, that we pay attention to and put

effort into. I would certainly agree with that.

Mr. SIMPSON. My own sense, Congressman Davis, is it is a big

portfolio, it is a substantial portfolio of responsibility that each

Chief Human Capital Officers needs to focus on. If you look into

the private sector and look at comparable positions, a chief people

officer at a large corporation for example, I doubt you would find

many models where those responsibilities are shared, one person

has those responsibilities as well as significant other portfolios.

Mr. DAVIS OF ILLINOIS. I have no further questions. Thank you,

Madam Chairwoman.

Ms. DAVIS OF VIRGINIA. Thank you, Mr. Davis.

We have four votes but I believe we have time for 5 minutes for

Ms. Norton to ask questions.

Ms. NORTON. Let me quickly ask Mr. Mihm a question. You have

indicated that in addition to essential operations, there should be

some focus on border agency operations. I wonder if you saw any

indication that the Emergency Preparedness Subcommittee or any

part of CHCOs is looking beyond emergency matters? I ask that in

light of what happened here. When anthrax occurred here in the

Senate, there were many, many employees who simply couldn’t

work at all. Nobody had arranged for them to work from home, a

lot of government waste occurred during that time. How will we

avoid that under the present CHCO situation?

Mr. MIHM. In fact we have done quite a bit of work on this. The

issue first arose in the mind of members here in Congress in terms

of requesting our work, is that they had been noticing a lot of the

work on continuity of operations and there had been discussions of

critical infrastructure and the need to protect critical infrastructure

and they noted their chiefs were not considering people as part of

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our critical infrastructure. We are worried about protecting technology, desks and office buildings but we are not so much worried

about people. So we were asked to look at the people considerations

within continuity of operations plans. Here is the essential issue.

Emergency preparedness and response at the Federal level with

both FEMA guidance and the existing OPM guidance is actually

pretty good from the standpoint of worrying about immediate

health and safety issues of employees. That is obviously our overriding immediate concern. We were identifying a large set of issues

that I think are exactly on point of what you are suggesting. Once

we have had an incident and we have an emergency response team

that is kind of restanding up the agency, how do we reengage the

broader group of employees that may be out there whether through

distributed workplaces or technology or alternative work locations

or all the rest? We don’t really know yet what the Emergency Preparedness Subcommittee and the CHCO Council is coming up with,

although as I mentioned in my statement we are making available

to them our work and our suggestions on what they should look at.

We have been working with OPM in terms of giving them the earlier report and have been working very closely with FEMA and

FEMA did accept our recommendations about the need to expand

guidance on continuity of operations plans.

Ms. NORTON. I certainly would like to see people able to work

from home. Talking about backup, we really do need particularly

since essential is very narrowly defined.

Mr. MIHM. Yes, Ma’am.

Ms. NORTON. You say in your testimony, Mr. Simpson, you humbly suggest a good government group such as your own be considered in this issue and could be leverage to support. Are you saying

you haven’t been consulted?

Mr. SIMPSON. We were just trying to make it clear that we were

willing to be helpful to the administration.

Ms. NORTON. I am asking, have you been consulted? Have you

had any input?

Mr. SIMPSON. We feel that we have had input into the process,

yes. We consult regularly with the Chief Human Capital Officers

and with the HR community. We think it is a very free and open

exchange. One of the reasons we formed our perspective is that in

fact transition is going to present some real challenges, and we

wanted to offer to be helpful if somebody thought we could be helpful in that way.

Ms. NORTON. It looks like it is already happening, Mr. Simpson.

Thank you very much.

Ms. DAVIS OF VIRGINIA. Thank you, Ms. Norton.

We are going to have to break for four votes, so rather than holding the panel, if members have additional questions for our witnesses, they can submit them for the record and we will get the

witnesses to agree to get them back to us for the record.

I would like again to thank each and every one of you for being

here and for your patience.

With that, the hearing is now adjourned.

[Whereupon, at 3:20 p.m., the subcommittee was adjourned, to

reconvene at the call of the chair.]

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