As

Supervisors 

Retire:

An Opportunity to 

Reshape Organizations

A Report to the President and the Congress of the United States by the U.S. Merit Systems Protection Board
U.S. MERIT SYSTEMS PROTECTION BOARD

1615 M Street, NW

Washington, DC 20419-0001

October 2009

The President

President of the Senate

Speaker of the House of Representatives

Dear Sirs and Madam:

In accordance with the requirements of 5 U.S.C. 1204(a)(3), it is my honor to submit this Merit Systems 

Protection Board report, “As Supervisors Retire: An Opportunity to Reshape Organizations.”

This report details how the coming exodus of supervisors presents opportunities for agencies to shape the future 

supervisory cadre by recognizing and capitalizing on the changing nature of Federal supervision. We explore how the 

role of the Federal supervisor is changing and how leaders can select, develop, and manage supervisors who can function 

effectively in this dynamic environment. 

Our research indicates that the Federal workforce can expect large numbers of supervisors to retire soon, particularly those of the baby boomer era. The emergence of a knowledge-based multi-sector workforce, increasing strategic 

human resources management initiatives, greater supervisory flexibilities, the advent of telework, and the need for 

enhanced supervisory communications have changed the work place dramatically. As supervisors leave, agencies should 

take advantage of this opportunity to cultivate supervisors with the knowledge, skills, and abilities to function effectively 

and even thrive in the modern workplace. 

Considering the increasing losses of supervisors and the changing workplace, we offer several recommendations. 

Agencies should structure work units in light of the job functions, competencies, and the workplace complexities we discuss. Agencies should also consider the mix of supervisors to non-supervisors and give supervisors the time to devote to 

supervision. Finally, agencies should put in place effective procedures to recruit, select, and develop a diverse supervisory 

workforce with the knowledge, skills, and abilities needed to promote engagement and drive performance. 

We hope agency leaders will review these considerations and see positive results from this opportunity for 

organizational change.

 Respectfully,

 Neil A. G. McPhie

THE CHAIRMAN

A Report to the President and the Congress of the United States

by the U.S. Merit Systems Protection Board

As

Supervisors 

Retire:

An Opportunity to 

Reshape Organizations

U.S. Merit Systems Protection Board

Neil A. G. McPhie, Chairman

Mary M. Rose, Vice Chairman

Office of Policy and Evaluation

Director

John Crum, Ph.D.

Project Manager

J. Peter Leeds, Ph.D.

Sharon Roth

Project Analyst

James Tsugawa

Table of 

Contents

Executive Summary i

Background . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . i

Highlights of Findings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ii

Recommendations. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .ii

Introduction 1 

The Changing Demographics 

 of Federal Supervisors 3

Defining Supervisors and Managers. . . . . . . . . . . . . . . . . . . . . . . . .3

The Retirement-Eligible Supervisor Workforce. . . . . . . . . . . . . . . . . . .4

The Increase in Supervisors Over the Past Decade. . . . . . . . . . . . . . . . .6

The Diversity of Supervisors. . . . . . . . . . . . . . . . . . . . . . . . . . . . .7

The Changing Nature of Federal

 Supervisors 11

Shift Toward a Knowledge-Based Workforce. . . . . . . . . . . . . . . . . . . 11

Demands to Strategically Manage Human Resources . . . . . . . . . . . . . 14

Advent of Human Resources Flexibilities and Increased

 Communication Needs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15

Teleworking Initiatives . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18

Outsourcing and Managing a Multi-Sector Workforce. . . . . . . . . . . . . . 19

CONCLUSIONS 21

recommendations 23
VIII
A Report by the U.S. Merit Systems Protection Board i

There has been much discussion of the coming retirement wave, including the 

need for agencies to prepare for a corresponding wave of hiring. However, 

not all types of positions in the Federal Government will be hit equally by this 

predicted mass exodus of skilled employees. The supervisory and managerial cadre are 

likely to experience the most losses, as individuals in those positions tend to be older 

and have more years of service than their non-supervisory counterparts, making more 

of them eligible to retire. While this means that agencies should now consider how 

to hire their future supervisors, it also means that they should be asking some very 

serious questions about how the agencies’ workforces should be structured 5 or 10 

years from now. The predicted retirement wave and subsequent hiring effort presents 

not just an opportunity to change who works for an agency, but also an opportunity 

to change how the organization functions for the better.

Background

The impending wave of Baby Boomers poised to retire from Federal service will 

most likely leave in their wake a serious void in the workforce. This mass exodus 

will disproportionately impact supervisory and managerial ranks, considering their 

typically greater age and time in service. Contributing to this dilemma is the past 

decade’s modest but real increase in the number of supervisors and managers required 

to oversee the modern workplace. 

The nature of supervision is changing, largely because today’s supervisors are faced 

with many challenges that affect the work they and their staffs do and how they 

do it. Supervisors are being called to strategically manage their human resources, 

a complex and time-consuming task, albeit a necessary one. This occurs in an 

increasingly knowledge-based environment where work is no longer about production 

and processing paperwork, but rather about analyzing and synthesizing information. 

The proliferation of human resources flexibilities are increasing supervisors’ authority 

and creating a greater need to spend time communicating with employees. Telework 

initiatives require supervisors to develop strategies to manage employees other than 

through direct observation, and the move to outsourcing creates a multi-sector 

workforce that has its own management challenges. 

For these reasons, the disproportional loss of leadership in the coming years may 

severely impact agencies that have come to rely on their supervisors and managers 

to perform expanded functions in complex work environments, and agencies will 

be called upon to recruit and develop the employees needed to replace much of this 

leadership talent. Maintaining organizational efficiency and effectiveness in the face 

Executive Summary
Executive Summary

ii As Supervisors Retire: An Opportunity to Reshape Organizations

of these changes will be a growing concern for agencies as both administrative 

burdens and supervisory losses mount. However, with this challenge comes 

opportunity. As supervisors retire and replacements are needed, agencies should 

seize this opportunity to create a new supervisory cadre that is better equipped to 

manage in a dynamic, knowledge-based work environment.

Highlights of Findings

• The U.S. Office of Personnel Management predicts that of the Federal 

employees eligible to retire through FY 2014, 57 percent will do so. Our analysis 

shows that supervisors are far more likely to retire since they tend to be older with 

greater lengths of service. 

• From 1998 to 2008, the average number of employees supervised by a 

supervisor steadily decreased from about 8 to about 7.5, and data from the Central 

Personnel Data File indicate that supervisors are spending more of their time on 

supervisory, rather than technical, responsibilities.

• Data show that supervisors who oversee more employees tend to report having 

less time for strategic human resources management including personnel hiring, 

development, management, and retention. 

• The representation of minorities and women in supervisory and managerial 

positions has been increasing. The coming retirement wave will provide increased 

opportunities for such persons to move up as many non-minority supervisors retire.

Recommendations

• Agencies should reexamine the work demands placed on supervisors and 

the ratio of employees to supervisors in order to ensure that supervisors have 

the competencies, management support, and the time to devote to the job of 

supervising.

• Agencies should recognize and take into account the changing nature of 

supervision as they build recruitment, assessment, selection, and development 

programs for supervisors. The supervisory competencies required, as well as the 

context in which they are applied, have been changing dramatically in recent years. 

In addition, leading diverse groups of knowledge workers requires a new set of 

knowledge, skills, and abilities that can foster an engaged workforce.

• Agencies should develop valid supervisor assessment methods that measure 

the competencies required of our changing workforce and workplace including 

structured interviews, job simulations, and situational judgment tests.
Executive Summary

A Report by the U.S. Merit Systems Protection Board iii

• Agencies should develop training programs that teach supervisors how to 

engage employees by empowering them, promoting teamwork and cooperation, 

recognizing their contributions, and rewarding employees appropriately.

• As part of the Government’s mandate to have a fully representative workforce, 

agencies should take advantage of the coming retirement wave to recruit and select 

qualified women and minority applicants for supervisory positions by using focused 

recruitment and valid assessments while following the merit principles. 

A Report by the U.S. Merit Systems Protection Board 1

There is often a presumption that when an individual retires, the agency will 

simply hire someone new to perform the exact same duties. This is one 

reason that some agencies have position descriptions that are more than 

a decade old. However, the world changes—quickly. When a supervisor leaves 

an agency, managers should not automatically assume that what was required of 

that position will still be needed. A vacancy in any position is an opportunity for 

agencies to reconsider what duties are required, and how those duties should be 

performed.

In preparation for the coming retirement wave, agencies should be asking questions 

about what their needs will be in 5 or 10 years, particularly their needs regarding 

supervisors. Questions to ask include the following:

• How many supervisors will we need in order to maintain organizational efficiency 

and effectiveness?

 

• How will we prepare to hire the right supervisors when the time comes?

• What skills will our supervisors need in order to supervise employees effectively 

and efficiently? 

• How will we recruit and select new supervisors? 

• How will we train and develop new supervisors?

The time to ask these questions and plan changes in the organizational structure is 

now. Otherwise, when the increase in retirements occurs, agencies may find that 

their staffs are so busy trying to fill the gaps in their organizations that insufficient 

attention is paid to what their organizations actually need.

This report briefly looks at what has happened to the supervisory workforce 

over the past decade, including the ratio of non-supervisors to supervisors and 

the demographic composition of the workforce, and the changing nature of 

supervision due to a number of challenges facing supervisors in how they manage 

their workforce. Because we see the coming retirement wave as an opportunity for 

agencies to reshape their supervisory workforce, we recommend that agencies

Introduction
Introduction

2 As Supervisors Retire: An Opportunity to Reshape Organizations

begin preparations to construct their supervisory workforce of the future. While we 

cannot suggest the nature of the final design, our intent is to alert agencies to the 

questions they should be asking themselves as they plan for the future.

The U.S. Merit Systems Protection Board (MSPB) has conducted this study as part 

of our mission mandate to report on the Federal civil service’s compliance with the 

Federal merit systems principles. 

The data for this study come from the Office of Personnel Management (OPM) 

Central Personnel Data File (CPDF). All data used with this study are for fulltime, permanent employees for fiscal years 1998 through 2008. The non-supervisor 

workforce for purposes of this report refers to “white collar” workers who are not 

team leaders, supervisors, or managers, according to the CPDF. 
A Report by the U.S. Merit Systems Protection Board 3

Over the past decade, the supervisory workforce in the Federal Government 

has undergone significant changes. There have been shifts in the age, 

tenure, race, and gender of the supervisory workforce. These changes 

could impact the composition of the Federal supervisory workforce in the coming 

years. 

Defining Supervisors and Managers

OPM’s Guide to Personnel Data Standards uses three categories to define Federal 

supervisors: supervisor (CSRA), management official (CSRA), and supervisor 

or manager. The first two supervisory categories “supervisor (CSRA)” and 

“management official (CSRA),” were established under the Civil Service Reform 

Act (CSRA). The “supervisor (CSRA)” title includes anyone who meets the legal 

definition of supervisor in the Civil Service Reform Act, but who supervises less 

than 25 percent of the time. Under the Federal-sector labor relations law the term 

“supervisor” means “an individual employed by an agency having authority in the 

interest of the agency to hire, direct, assign, promote, reward, transfer, furlough, 

layoff, recall, suspend, discipline, or remove employees, to adjust their grievances, or 

to effectively recommend such action, if the exercise of the authority is not merely 

routine or clerical in nature but requires the consistent exercise of independent 

judgment....”1 Thus, simply because a person has the power to hire, assign work, 

or remove an employee does not mean he or she has the job title of “supervisor” 

as we use it in this report. The “management official (CSRA)” (the CPDF’s 

second supervisory category) includes anyone who meets the legal definition of 

a management official, but who supervises less than 25 percent of the time. The 

term “management official” under 5 U.S.C. § 7103(a)(11) means “an individual 

employed by an agency in a position the duties and responsibilities of which require 

or authorize the individual to formulate, determine, or influence the policies of the 

agency.”

For the present study, however, we will only use the third supervisory category, 

which is titled “supervisor or manager.” People in this category are individuals 

whose job title indicates supervisory responsibilities, either explicitly (Supervisor, 

Information Technology) or implicitly (e.g., Director, Information Services), and 

they supervise employees at least 25 percent of the time according to the CPDF. 

1 5 U.S.C. § 7103(a)(10).

The Changing 

Demographics of 

Federal Supervisors
The Changing Demographics of Federal Supervisors

4 As Supervisors Retire: An Opportunity to Reshape Organizations

The word “supervisor” as used in this report will refer only to an individual who 

meets the criteria for supervisor under this third supervisory category. For purposes 

of supervisor ratio calculation, we define non-supervisors as those having CPDF 

designations of “All others,” “leaders,” “team leaders,” and “management officials.”

The Retirement-Eligible Supervisor Workforce

Because the composition of the supervisor workforce is not the same as that of the 

non-supervisor workforce, the coming retirement wave will not have the same effect 

on each of these groups. Importantly, because the supervisory workforce tends to 

be older with more years of service, it has more retirement eligible employees. The 

trend lines from 1998 to 2008 in Figures 1 and 2 show supervisors as older and 

with more Government service, but they also reveal a recent tapering off of the 

average age and the average number of years of service. These two changes are due 

to the influx of new hires to replace senior employees who have already retired.

Figure 1: Average Age of Federal Employees by Supervisory Status

42

43

44

45

46

47

48

49

50

51

1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008

Average Ag

e

Supervisor or Manager Non-Supervisors

Fiscal Years
A Report by the U.S. Merit Systems Protection Board

The Changing Demographics of Federal Supervisors

5

Figure 2: Average Length of Service of Federal Employees by Supervisory Status

In a 2008 report, OPM estimated that as of 2009, about 31 percent of the 

1,572,855 permanent full-time Federal employees will be eligible for voluntary 

retirement.2 This report also estimates that by the year 2014, about 53 percent of 

the permanent full-time Federal employees will be eligible to retire and 57 percent 

of this eligible group is expected to actually do so. Therefore, by the year 2014, 

the data predict that approximately 483,000 employees will be retiring. While the 

OPM report did not distinguish supervisors from non-supervisors, based on our 

data showing that supervisors tend to be older with more years of service, we believe 

they are poised to retire at even faster rates than are non-supervisors. With over 

30 percent of current Federal employees predicted to retire by 2014, agencies will 

need to plan to replace those workers. However, the anticipated loss of so many 

supervisors calls for even more immediate action, as supervisors can take longer 

to train and develop than employees in many non-supervisory positions and their 

performance may be more critical to agency operations.

2 U.S. Office of Personnel Management, “An Analysis of Federal Employee Retirement Data: Predicting Future 

Retirements and Examining Factors Relevant to Retiring from the Federal Service”, Washington, DC, March 2008.

0

5

10

15

20

25

1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008

A

ver

a

g

e Le

n

gth of Servic

e

Supervisor or Manager Non-Supervisors

Fiscal Years
The Changing Demographics of Federal Supervisors

6 As Supervisors Retire: An Opportunity to Reshape Organizations

The Increase in Supervisors Over the Past Decade

The proportion of supervisors has increased from 12.33 percent of the Federal 

workforce in 1998 to 13.26 percent in 2008, as shown in Figure 3 below. This 

makes the supervisory ratio of non-supervisors to “supervisors or managers” 

8.11 to 1 in 1998, compared to 7.54 to 1 in 2008. There could be a number of 

explanations as to why there appear to be slightly more supervisors overseeing 

smaller staffs. 

The data indicates that one explanation may be that supervisory responsibilities are 

increasing, leading agencies to increase the number of conversions to the “supervisor 

or manager” category defined by OPM. At first glance, Figure 3 shows supervisor 

proportions rising about 1 percent from 1998 to 2008. However, as can be seen 

in Figure 3, the increase in the “supervisor or manager” category may have largely 

come from the “supervisor (CSRA)” and “management official (CSRA)” categories. 

This means that much of the apparent increase in the number of “supervisors or 

managers” may not necessarily indicate that more supervisors have been hired, 

but rather that more people have assumed supervisor or manager roles at least 25 

percent of the time and, thus, have been reclassified as supervisors or managers.

12.33% 12.26% 12.35% 12.31% 12.26% 12.27% 12.35% 12.48% 12.70%

13.05% 13.26%

0.74% 0.77% 0.74% 0.71% 0.69% 0.66% 0.64% 0.64%

0.64%

0.65%

0.63%

1.55% 1.48% 1.39% 1.24% 1.11% 1.01% 0.95% 0.89% 0.79%

0.73%

0.71%

11.00%

11.50%

12.00%

12.50%

13.00%

13.50%

14.00%

14.50%

15.00%

1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008

Supervisor or Manager Supervisor (CSRA) Management Official (CSRA)

Figure 3: Supervisors and Managers as a Portion of the Total Employee Workforce

Fiscal Years
A Report by the U.S. Merit Systems Protection Board

The Changing Demographics of Federal Supervisors

7

This explanation is further suggested by Figure 3 data showing that in 1998, 14.6 

percent of the workforce was in some category of supervisor or manager, and in 

2008, the number was nearly the same at 14.6 percent. Again, it appears that the 

1998-2008 change may not necessarily be the result of an increase in “supervisors or 

managers,” but rather a change in how much time the people engaged in this type of 

work are spending on their subordinates.

Another potential explanation for the increase in supervisory positions is a form 

of “grade-creep.” Under the General Schedule Supervisory Guide (GSSG), those 

who spend at least 25 percent of the time on supervisory functions can have their 

grade, and thus their pay, determined based upon the grades of those they supervise. 

Supervisors or managers are thus usually one grade higher than the bulk of their 

workforce.3 Those who are not graded under the Supervisory Guide, on the other 

hand, have a grade based upon their technical responsibilities. Thus, if the work in 

an office has a complexity no greater than the GS-13 level, one way to raise a person 

to meet the legal definition of a GS-14 supervisor is to certify that the person 

supervises GS-13s at least 25 percent of the time. This may be a method agencies 

use to retain higher performing employees effectively working as supervisors whom 

they might otherwise lose to other agencies or the private sector.

It is also possible that in some situations the agency did not understand that there 

was another supervisory category that would be better applied, i.e., Supervisor 

(CSRA).4 For example, a veterinary doctor who is only supervising one 

receptionist is likely to have a grade based on the doctor’s medical skills and not the 

receptionist’s grade. Classifying such an employee as “supervisor or manager” may 

not accurately reflect the actual supervisory and managerial role, and thus, such 

a classification should be reevaluated. The anticipated exodus of supervisors will 

allow agencies to examine and optimize the organization’s structure, including the 

amount and type of supervision necessary to oversee operations. 

The Diversity of Supervisors

The Nation’s workforce—both the Federal and private sector labor force—has 

become increasingly diverse in terms of its proportions of both minorities and 

women in recent years. In the Federal Government, however, this diversity has not 

been equally reflected across all grade levels. In particular, Federal supervisors have 

historically been disproportionately white and male compared to the overall Federal 

3U.S. Office of Personnel Management, General Schedule Supervisory Guide, Washington, DC, June 1988, 

http://www.opm.gov/fedclass/html/gsfunctn.asp.

4 Supervisors (CSRA) defined under 5 U.S.C. § 7103(a)(10).
The Changing Demographics of Federal Supervisors

8 As Supervisors Retire: An Opportunity to Reshape Organizations

workforce.5 Fortunately, some progress has been made in achieving a more diverse 

workforce at both the supervisory and the non-supervisory levels, as can be seen 

in Figures 4 and 5. Minorities and women now make up a larger percentage of 

both the supervisory workforce than a decade ago. However, with the anticipated 

retirement wave and resulting supervisor losses will be an opportunity for increasing 

the representation of women and minorities in the supervisory ranks.

Figure 4: Minorities in the Federal Workforce

5 For a discussion of the current role of ethnicity and gender in the Federal workforce, see our upcoming report: 

“Fair and Equitable Treatment: A Review of the Progress Made and the Challenges Remaining”. For a discussion of 

more historical data, see these MSPB reports: “A Question of Equity: Women and the Glass Ceiling in the Federal 

Government”, October 1992; “Fair and Equitable Treatment: A Progress Report on Minority Employment in the Federal 

Governmen”, August 1996; and “Achieving a Representative Federal Workforce: Addressing the Barriers to Hispanic 

Participation”, 1997. These reports are available at www.mspb.gov.

0%

5%

10%

15%

20%

25%

30%

35%

40%

1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008

Supervisor or Manager

Fiscal Years
A Report by the U.S. Merit Systems Protection Board

The Changing Demographics of Federal Supervisors

9

20%

25%

30%

35%

40%

45%

50%

1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008

Supervisor or Manager

Fiscal Year

Figure 5: Women in the Federal Workforce
The Changing Demographics of Federal Supervisors

10 As Supervisors Retire: An Opportunity to Reshape Organizations

 The merit system principles state that “[a]ll employees and applicants for 

employment should receive fair and equitable treatment in all aspects of personnel 

management without regard to political affiliation, race, color, religion, national 

origin, sex, marital status, age, or handicapping condition[.]”6 This means that 

it is inappropriate to select, promote, or otherwise reward someone based on 

their race, ethnicity, gender, or any other non-job-related criteria. However, it 

is also a merit system principle directive that when recruiting, an agency should 

“endeavor to achieve a work force from all segments of society[.]”7 Thus, agencies 

should carefully plan their supervisory recruitment strategies to balance the two 

merit system principles by seeking to attract a well-qualified and diverse candidate 

pool for their supervisory positions. It is important for agencies to recognize that 

because they may be replacing many supervisors in a relatively brief period, using a 

poorly-designed supervisory recruitment strategy could have a long-term effect on 

this crucial group of supervisors.

The pool of existing GS-14 supervisors is a likely source from which new GS-15 

supervisors will be hired. Similarly, today’s GS-13 non-supervisor may be 

tomorrow’s GS-14 supervisor. Thus, having a diverse pool of qualified individuals 

in “feeder” positions will be crucial to creating a diverse candidate pool from which 

to select the best-qualified new supervisors. Shaping that pool is not something 

that can be done at the last minute.

65 U.S.C. § 2301(b)(2).

7 5 U.S.C. § 2301(b)(1).
A Report by the U.S. Merit Systems Protection Board 11

As the Federal Government focuses on replacing retiring supervisors, it 

faces an opportunity to change how we think about the overall nature 

of supervision. The retirement wave will disproportionately impact 

supervisory and managerial ranks, considering their typically greater age and time 

in service. Contributing to this dilemma is the past decade’s modest but real 

increase in the number of supervisors and managers required to oversee the modern 

workplace. Agencies have already begun looking at some of these issues. As 

discussed in the previous chapter, they have provided more opportunities for women 

and minorities to be supervisors. Also, changes in the number of supervisors and 

the supervisory ratio reflects shifts in the amount of time that some agencies expect 

supervisors to spend in managing the workforce versus doing technical work. 

In addition to these demographic issues, the nature of supervision itself is changing. 

As we will see in this chapter, the workforce is changing; and the way work is 

accomplished is becoming more complex. These changes will present supervisors 

with new and difficult challenges in terms of how they supervise the work of 

their staffs. These challenges could result in an altered view of what supervisors 

should be doing, which would then call for different duties, skills, training, and/

or recruitment strategies to ensure the Federal Government maintains a qualified 

supervisory workforce. Below, we present a number of the challenges that will likely 

affect the nature of supervision over the next decade. 

Shift Toward a Knowledge-Based Workforce

More Federal jobs are becoming knowledge-based in this information age. 

Therefore, the work and the worker have been changing in profound ways. 

Knowledge workers are information processors who add to an organization’s 

products and services by applying their knowledge.8 Examples of knowledge 

workers may include doctors, lawyers, scientists, and information technology 

workers. These workers gather data and information from many sources, add value 

to the information, and distribute value-added products or services to others. 

The emerging knowledge-based workforce places additional burdens on the 

supervisors and managers who must recruit, select, train, and manage the 

performance of knowledge workers. For example, managing the performance 

8P.F. Drucker, “Managing Knowledge Means Managing Oneself. Leader to Leader”, 16, 2000, pp. 8–10.

The Changing 

Nature of Federal 

Supervisors
The Changing Nature of Federal Supervisors

12 As Supervisors Retire: An Opportunity to Reshape Organizations

of knowledge workers must take into account the changing motivations of such 

employees, such as their tendency to be more internally versus externally motivated, 

requiring supervisors to be more sensitive to this motivation.9 Internally motivated 

employees are those who exert effort for reasons such as their need for achievement, 

self-satisfaction, and personal fulfillment. Externally motivated employees are 

driven more by pay and awards. Monetary awards and salary increases will still be 

valuable to internally motivated persons, but the opportunity to be innovative may 

take on greater motivational value. Also, research shows that knowledge workers are 

frequently motivated by having an interesting and challenging work environment 

that provides the opportunity for personal growth.10

Because managing personnel in a knowledge-based environment presents challenges 

to supervisors and managers,11 we discuss here some of the steps agencies can take 

to accommodate the changing demands of the knowledge-based workplace. For 

one thing, supervisors and managers of knowledge workers are being increasingly 

called on to organize communication networks rather than hierarchies. Knowledge 

managers and supervisors must adapt to environments where they are more of 

a teammate and coach than a traditional boss, as they balance oversight with 

fostering empowerment when interacting with subordinates. It is not difficult to 

see how this shift in traditional supervisor-subordinate roles increases the demands 

upon supervisors and managers, and might necessitate lower supervisory ratios. 

As supervisors retire, agencies will have the opportunity to shape the incoming 

supervisor cadre into a force that can thrive in a knowledge-based environment. 

However, some changes in the way agencies select and develop supervisors may be in 

order. 

When developing supervisor and manager selection systems, agencies should 

consider a candidate’s skill, ability, and comfort with changing supervisorsubordinate dynamics and the shift to knowledge-based work. Agencies should also 

develop leadership training programs that address changes needed to lead effectively 

in more professional knowledge-based work environments. As indicated above, 

leaders of the future will have to possess or develop the knowledge, skills, and 

abilities needed to supervise increasingly independent, professional, educated, and 

internally motivated knowledge-based workers.

Because engaging knowledge workers is an increasingly important part of a 

supervisor’s job and will be even more so in the future, we suggest that the 

conclusions from the MSPB report, The Power of Federal Employee Engagement, 

can help agencies effectively deal with this trend. This report notes that engaged 

9 F.M. Horwitz, C.T. Heng, & H.A. Quazi. “Finders, keepers? Attracting, motivating and retaining knowledge 

workers,” Human Resource Management Journal, 13(4), 2003, pp. 23-44.

10M. Tampoe, “Motivating knowledge workers – the challenge for the 1990s,” Long Range Planning, 26(3), 

1993, pp. 49-55.

11T.H. Davenport, S.L. Jarvenpaa, & M.C. Beers, “Improving Knowledge Work Processes,” Sloan Management 

Review, 37(4), 1996, pp. 53-65.
The Changing Nature of federal Supervisors

A Report by the U.S. Merit Systems Protection Board 13

employees take pride in their work, are satisfied with their leaders and the 

recognition they receive, desire the opportunity to grow and perform, and prefer 

work in a positive team-driven environment. While engaging a higher percentage of 

the workforce will require supervisors who can instill pride in work by emphasizing 

the importance of assigned projects and showing how the work is important and 

relates to organizational goals, supervisors of knowledge workers must also create 

challenging opportunities for these autonomous and independent employees to be 

innovative and demonstrate creativity. They must foster team spirit and a sense 

of goal-focused group membership that facilitates engaged performance among 

these more independent-minded workers. In addition, supervisors should try to 

meet engaged knowledge workers’ desire for life-long learning opportunities that 

allow them to achieve excellence. Although knowledge workers tend to be more 

internally motivated, they also desire the recognition that drives performance 

– another challenge for supervisors to try to meet. While The Power of Federal 

Employee Engagement report details many specific ways in which agencies can 

foster engagement in the workforce, several stand out as particularly relevant for 

knowledge workers.

For instance, supervisors should emphasize the importance, relevance, and value of 

the employees’ contribution to the mission. Knowledge workers who see their role 

in the broader context tend to be more engaged. Supervisors in this environment 

should monitor performance and provide feedback to employees whose work 

products and performance tend to be measured more by quality than by quantity. 

To do this more effectively, knowledge worker supervisors will often need to gather 

more information in order to evaluate and provide feedback. These supervisors 

may also need to put forth increased effort to determine training needs and ensure 

that relevant performance-enhancing training is provided. Knowledge work tends 

to be dynamic and often involves information with a limited “shelf life,” thus it 

may require continuous learning. The opportunity to acquire more skills and 

improve existing skills is particularly important to knowledge workers and these 

opportunities foster further engagement. Because knowledge workers require more 

reinforcement and feedback, supervisors must stand ready to reward and recognize 

performance consistently, fairly, and in a way befitting the effort exerted by these 

employees.12 Agencies should take advantage of the coming supervisory exodus 

to recruit, select, appraise, and train new supervisors on their ability to engage 

knowledge workers in our increasingly information-based, technology-oriented, and 

collaborative work environment. To do this, they should begin now to prepare the 

enhanced recruitment, selection, assessment, and development tools that are needed. 

12 S. Ashford, “Reflections on the looking glass: A review of research on feedback-seeking behavior in 

organizations,” Journal of Management, 29 (6), 2003, pp. 773-799.
The Changing Nature of Federal Supervisors

14 As Supervisors Retire: An Opportunity to Reshape Organizations

Demands to Strategically Manage Human Resources

Under former President George W. Bush’s Performance Management Agenda, the 

Strategic Management of Human Capital was prescribed for all Federal agencies. 

This initiative called for agencies to improve their management practices to ensure 

they are aligned with the agency’s mission, assuring continuity of leadership, 

creating a results-oriented performance culture, addressing gaps in leadership, 

addressing workforce competency gaps, and ensuring accountability. Agency 

actions under this agenda resulted in changes to the way many agencies staff, 

develop, and evaluate their workforce. Strategically managing the workforce can be 

complex and require more time and a different supervisory skill set to implement 

effectively. For instance, supervisors need to be well versed in strategic planning, 

performance management, training and development, and recruitment and 

selection. Unfortunately, MSPB research has shown that many Federal supervisors 

have not received sufficient training to carry out these responsibilities. Therefore, 

as agencies consider the changing nature of their supervisory workforce, they need 

to evaluate how to ensure supervisors have the skills necessary to carry out these 

responsibilities.

Strategically managing the workforce may also require more supervisors. Based on 

our Merit Principles Survey 2007 data, we found that supervisors and managers 

oversee more employees (higher supervisor ratios), tend to report having less time 

to engage in strategic personnel hiring, development, management, and retention. 

Instead, supervisors who have a greater span of control, that is, more employees to 

supervise, tend to spend more time on day-to-day operational concerns, and less 

time on strategic issues and workforce development. In essence, the amount of 

time available for supervisors to spend on strategic human resources management is 

constrained by the number of employees that they must supervise.

The 2007 Merit Principles Survey item from which we drew this conclusion read: 

“What percentage of your time is devoted to the following activity: Creating a 

work unit or organization equipped to successfully meet the challenges of today 

and tomorrow through strategic hiring, development, management, and retention?” 

We found that as the supervisor ratio decreases (fewer employees to supervise), the 

amount of time the average supervisor has for strategic human resources increases.13 

This inverse relationship has implications for supervisory workload and the 

allocation of supervisory time. Not surprisingly, the more employees there are per 

supervisor, the less time a supervisor tends to feel he or she has to invest in strategic 

hiring, development, management, and retention efforts.

13 The negative correlation (degree of inverse relationship) between supervisor ratio and this survey question was 

statistically significant with r = -.44 (p < .05).
The Changing Nature of federal Supervisors

A Report by the U.S. Merit Systems Protection Board 15

Because of the importance of strategic planning to human capital, we recommend 

that agencies bear in mind the hidden “cost” of assigning more employees to 

a supervisor than can be effectively managed. Because the “right” number of 

employees per supervisor will vary based on the workforce, agencies should 

determine the “right” balance based on an analysis of what is needed, and not on an 

assumption that all workforces need the same supervisory ratio.

Advent of Human Resources Flexibilities and Increased 

Communication Needs

More agencies are moving to the use of new human resources flexibilities that grant 

supervisors more authority while trying to ensure more accountability. The intent 

of these flexibilities is often to help supervisors tailor their management strategies 

to the specific needs of the organization in areas such as staffing, compensation, 

and performance management. However, these new roles often result in greater 

administrative burden and prescribed structure. They also frequently require 

increased communication with employees. Take for instance pay for performance 

concepts. 

Pay for performance systems can increase supervisors’ administrative burdens and 

prescribe complicated systems for setting objectives and standards that are then used 

to appraise employees. In order to accomplish these tasks, supervisors must devote 

increased time to employee communication as they design and develop performance 

plans and follow the often substantial approval processes for assigning and justifying 

performance appraisal ratings. Also, new systems require more training, compelling 

supervisors to frequently attend pay for performance and performance management 

training as they develop skills in setting well-defined expectations and monitoring 

employee performance. Clearly, more supervisory effort and attention are required 

where pay for performance systems are being utilized. If the use of pay for 

performance systems increases, as some Federal executives and some in Congress 

desire, the need for highly effective and efficient supervisors will be felt more 

acutely by Government agencies and the anticipated retirement wave will further 

increase this urgency.

An example of how pay for performance systems may change the role of the 

supervisor by increasing the time spent on workforce issues can perhaps be found 

in the implementation of the National Security Personnel System (NSPS) at the 

Department of Defense (DoD). The NSPS was initially implemented in 2006 

and by 2009 almost 30 percent of DoD employees were converted to the system. 
The Changing Nature of Federal Supervisors

16 As Supervisors Retire: An Opportunity to Reshape Organizations

Hearings held by the Defense Business Board in July 2009 found that the NSPS pay 

for performance system greatly increased the workload of supervisors. The report 

of these hearings noted that the pay for performance system under NSPS increased 

the work required in managing performance and created significant demands 

on supervisors to learn and implement responsibilities such as setting pay and 

participating in “pay pools” without relief from their day-to-day workload.14 

In addition to the findings in the Defense Business Board’s report, we found 

that although only one-third of people in DoD were converted to the pay for 

performance system under NSPS, these changes may have contributed to a change 

in the supervisory ratios in DoD over the past few years. As shown in Figure 6, the 

supervisor ratio in DoD has declined more steeply than in other Federal agencies, 

a change that coincides with the increasing implementation of NSPS in DoD. 

Although we can not definitively say that these decreases in the supervisory ratio 

seen in DoD are the result of the pay for performance system, agencies considering 

a move to such a system should be aware of the possible effect on supervisors’ time 

and resources when estimating their future need for supervisors. 

Figure 6: Supervisor Ratio for DoD versus Non-DoD

While pay for performance systems and the use of other human resources 

flexibilities certainly require supervisors to spend more time communicating 

with employees, all agencies, regardless of their human resources system, need to 

recognize the value of providing their supervisors with sufficient time to dedicate 

to their employees. With this in mind, we include in this section a discussion on 

supervisory communication and the need for agencies to ensure that they have 

supervisors with good communication skills. 

14 Defense Business Board, “Report to the Secretary of Defense, Review of the National Security Personnel System”, 

Washington DC, July 2009, p.15.

6

6.5

7

7.5

8

8.5

1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008

DoD Non-DoD

 Fiscal Years
The Changing Nature of federal Supervisors

A Report by the U.S. Merit Systems Protection Board 17

For example, according to Figure 7, employees vary greatly in their perceptions 

and expressed attitudes about supervisor behavior, and the data suggest that 

these perceptions are affected by whether they themselves are supervisors or nonsupervisors. While non-supervisory employees were less likely than supervisors 

to feel that their supervisors and managers are communicating high performance 

expectations, talking with them when they need help, and explaining reasons for 

work changes, the difference was especially pronounced in the category of openly 

and honestly sharing information. We believe agencies should attend more to the 

different perspectives of supervisors and non-supervisors because these differences 

in attitude can be useful gauges of how well supervisors are doing their fundamental 

job of communicating to their employees.

Figure 7: Quality of Communication With Supervisors

Source: Merit Principles Survey 2007

66%

74%

57%

32%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

My supervisor 

communicates high 

performance 

employees.

My supervisor talks 

with me or assists

me when I need

help.

My supervisor 

explains the

reasons for work

changes before

they take place.

Managers and

and honest in 

with employees.

Percent Favorable Agreement 

Non-Supervisor

Supervisor
The Changing Nature of Federal Supervisors

18 As Supervisors Retire: An Opportunity to Reshape Organizations

Although improving communication between a supervisor and an employee 

may take time, it is critical in fostering employee engagement and improving 

organizational productivity. When determining supervisory roles in an organization, 

particularly how much time is expected of supervisors to spend on workforce 

management (as opposed to technical tasks), agencies should consider the return 

on investment when a supervisor takes the time to constructively communicate 

with subordinates.15 The anticipated loss of retiring supervisors could reduce 

the agencies’ ability to provide this needed communication, but it also affords an 

opportunity to select and develop supervisors with strong communication skills. In 

essence, the opportunity to appoint large numbers of supervisors can offer agencies 

fertile ground for cultivating a communicative performance culture.

In a recent study of Federal performance management,16 the MSPB obtained 

data regarding Federal employees’ perceptions concerning supervisor feedback 

and involvement in the workplace. The MSPB report also offered suggestions 

for improving supervisors’ communication skills. For example, it suggested that 

agencies are likely to hire more supervisors with better communication skills 

by using skill-focused recruitment, realistic job previews illustrating the desired 

communications competence, and the exercise of the probationary period as an 

opportunity to demonstrate communication competence. Other MSPB reports note 

the critical part that using better selection strategies have in hiring people with the 

desired skills.17 

Once they are on board, new supervisors should be encouraged to involve 

employees in building high performance work environments and establishing trust 

through frequent open communication. We hope that as agencies replace the 

many supervisors who are expected to retire, they will also take the opportunity 

to provide new supervisors with the training, resources, and support needed 

to improve effective communication with their employees. As our research on 

employee engagement has shown, such action can have a profound effect on agency 

performance over time.

Teleworking Initiatives

Another factor that may be changing the nature of supervision in the Federal 

Government in recent years is the increase in the number of employees working 

under telework arrangements. This push towards teleworking is expected to 

become even more common in the future. Telework supervisors will need all of 

the knowledge, skills, and abilities of non-telework supervisors but may also require 

15 For more on the role of supervisory communication with employees in the creation of an engaged workforce, 

see our recent report, “Managing for Engagement – Communication, Connection, and Courage”, 2009 and “The Power 

of Federal Employee Engagement”, 2008 available on the studies page of MSPB’s website, www.MSPB.gov.

16U.S. Merit Systems Protection Board, “Managing for Engagement–Communication, Connection, and Courage”, 

Washington, DC, 2009.

17 U.S. Merit Systems Protection Board, “The Federal Selection Interview: Unrealized Potential”, Washington DC, 

February 2003; and “Job Simulations: Trying Out for a Federal Job”, Washington, DC, 2009.
The Changing Nature of federal Supervisors

A Report by the U.S. Merit Systems Protection Board 19

additional competencies. While all supervisors need the courage to hold employees 

accountable for their performance by communicating high expectations and taking 

action when employees are not performing, supervisors of teleworking employees 

will also need to distinguish between those employees who would be successful 

under telework arrangements and those who would have difficulty working in this 

type of environment. To be successful with telework, employees will need to be 

self-disciplined, conscientious, and willing to perform under a telework scenario. 

The supervisors will also need to develop mechanisms for tracking and monitoring 

progress under conditions where daily direct observation is difficult. 

As with any employee, a teleworker’s need for a supervisor’s time will likely vary 

based upon the type of work and the employee. Leaders of teleworkers should put 

processes in place to effectively communicate with their teleworkers, to accurately 

monitor and measure their performance, and to provide frequent and regular 

communication. Of course, supervisors should establish such processes for all 

of their employees. However, leaders of teleworkers may face more challenges in 

fostering team cohesion and integration depending on the number of teleworkers 

they supervise and the frequency with which the telework occurs. 

The move to telework environments will require new skills from supervisors, 

who must be selected, trained, and evaluated on their ability to manage telework 

performance and maintain the engagement of increasing numbers of teleworking 

employees. The expected loss of supervisors can provide agencies with opportunities 

to select and develop new supervisors with the skills and attitudes supportive of 

telework environments.

Outsourcing and Managing a Multi-Sector Workforce

Another factor that is changing the nature of supervision is the trend toward using 

outsourced or contract personnel to perform work previously done by Government 

employees. As noted by the Economic Policy Institute,18 Federal agencies 

have experienced pressure to cut costs and reduce the size of their workforce, a 

development that has prompted them to contract out work to the private industry 

for goods and services. The Economic Policy Institute estimates that from 2000 

to 2006, Federal spending on outsourcing increased from $256 billion to $415 

billion, a 69.1 percent increase. The movement to outsource Government jobs was 

driven by the Competitive Sourcing Initiative19 which was introduced in 2003 

by Congress and moved forward under President George W. Bush’s Management 

Agenda. Opening competition between the public and private sectors had the effect 

18Economic Policy Institute, Outsourcing Poverty: Federal Contracting Pushes Down Wages and Benefits, 

(Issue Brief No .250), Washington, DC, February 11, 2009.

19 Executive Office of the President, Office of Management and Budget, Competitive Sourcing: Conducting 

Public-Private Competition in a Reasoned and Responsible Manner, Washington, DC, July 2003.
The Changing Nature of Federal Supervisors

20 As Supervisors Retire: An Opportunity to Reshape Organizations

of converting many previously designated Federal jobs to non-Federal governmental 

contract positions. It is now relatively common to have Federal employees working 

side-by-side with non-Federal employees, primarily contractor employees. 

This multi-sector workforce presents supervisors with many issues in terms of 

managing how the work is accomplished. Supervisors often have limited authority 

to oversee the work of the contractor. They cannot directly supervise contractors 

and therefore have to work through an intermediary to hold the contractor 

accountable for the work. The Office of Management and Budget (OMB) recently 

pointed out that agency supervisors often lack the knowledge of how contractors 

are deployed in the organization and integrated with Federal employees.20 Morale 

problems can result if contractors are viewed by Federal employees (or vice versa) as 

having higher salaries, better benefits, or better employee perks for the same work. 

Also, the OMB recently expressed concerns that overreliance on contractors can lead 

to the long-term erosion of in-house capacity as well as result in agencies neglecting 

necessary human capital investments.21 All of these issues could require supervisors 

to have a different skill set, a different role in the organization, and different 

training for that role. 

20 Peter R. Orszag, Director, Office of Management and Budget, Memorandum for the Heads of Departments 

and Agencies, “Managing the Multi-Sector Workforce,” July 29, 2009.

21 Ibid.
A Report by the U.S. Merit Systems Protection Board 21

As this report has emphasized, the role of Federal supervisors is changing. 

The anticipated increase in the number of Federal supervisors leaving the 

workforce presents the Government with a significant challenge and a 

significant opportunity. Agencies have the advantage of knowing that large numbers 

of supervisors will be retiring in the near future and that supervisory roles are 

changing because of the changing nature of the Government’s work and how it is 

performed. The convergence of these two events places agencies in a position to 

capitalize on this “changing of the guard.” Specifically, good supervisors must be 

developed and trained, which can take substantial time and resources, even for those 

who exhibit innate leadership abilities. Advance planning will help agencies to have 

in place, and in queue, supervisors who have the right competencies. This planning 

should include a strategy for how the agency will hire and develop more supervisors, 

but it may also mean reorganizing work units in a manner that frees supervisors to 

spend more time supervising.

In some organizations, having supervisors with both heavy technical and supervisory 

workloads may be inefficient because it may require supervisors to develop and 

maintain a high level of skill and knowledge in both the technical and supervisory 

areas. While supervisors may need to be technically capable, the role of supervision 

should not be neglected. An agency may find (with respect to some kinds of work) 

that supervisors who spend their time effectively engaging their subordinates are 

more valuable than those who are involved in primarily technical, rather than 

supervisory, activities. Getting the Federal workforce to be more productive, and 

thus better serve the public, may depend more on a person’s abilities as a supervisor 

than it does has on his/her technical competence.

The need for capable supervisors is likely to become increasingly important as 

agencies transition to a knowledge-based workforce with many complex and timeconsuming human resources and management initiatives. Thus, the coming losses 

in both the supervisor ranks and the pools from which new supervisors may be 

drawn raises the urgency for agencies to develop plans that include a focus on the 

quality of those whom they hope to hire. This means that agencies should consider 

not only the number of supervisors they will require, but also the skill sets that will 

be of greatest value to those supervisors as the demands of the job change. This, in 

turn, should influence how agencies go about recruiting and selecting such people.

CONCLUSIONS

A Report by the U.S. Merit Systems Protection Board 23

recommendations

To help agencies meet the challenge of replacing large numbers of supervisors 

while taking advantage of the opportunity to improve the quality of 

supervisors in the Government, we offer the following recommendations:

• Agencies should consider how their work units should be organized in the 

future to function as effectively and efficiently as possible in performing all the 

work of the organization.

• Agencies should reevaluate the best mix of supervisor to non-supervisor, taking 

into account the nature of the work and the worker, the management initiatives 

(e.g., pay for performance, telework) and the human resource management 

initiatives under which the supervisor must operate, and the competencies that 

they expect will be possessed by the needed pool of new supervisors. Agencies 

should also think carefully about the job functions they want their supervisors to 

perform and the competencies needed to perform these functions. In order to 

engage employees, their supervisors must have not only the relevant supervisory 

competencies but also strong management support and the time to devote to their 

task of supervision.

• After completing the suggested foundational work, agencies should put in place 

procedures to recruit and select new supervisors who have the knowledge, skills, and 

abilities to lead in an increasingly diverse, knowledge-based, and performance-driven 

environment. Competency in supervising independent, professional, educated, and 

internally motivated workers should be foremost among the competencies assessed 

when selecting supervisors for such environments.

• To this end, agencies should develop valid assessment procedures that can be 

used to select new supervisors who will be effective in the changing knowledgebased workforce. Structured interviews, job simulations, situational judgment tests, 

and other forms of job-related assessments determined to be more effective may be 

developed with a focus on measuring the competencies required in the workplace of 

tomorrow.

• Agencies should develop supervisory training programs that emphasize 

supervisory behaviors that promote and foster engagement of the employees they 

supervise. Such training programs will equip supervisors with the skills to empower 

employees, promote teamwork and cooperation, help employees grow, and recognize 

their contributions.
Recommendations

24 As Supervisors Retire: An Opportunity to Reshape Organizations

• Agencies should plan now to use the exodus of supervisors as an opportunity to 

recruit from diverse sources and use valid assessment tools as a basis for selections 

that will contribute to a diverse and representative workforce. Qualified minority 

employees should be identified, groomed, and placed in the pipeline for supervisory 

roles using the same valid selection methods.

PRSRT STD

U.S. POSTAGE PAID

WASHINGTON DC

PERMIT NO. G-113

As Supervisors Retire:

An Opportunity to 

Reshape Organizations

U.S. Merit Systems Protection Board

1616 M Street, N.W.

Washington, DC 20419

Official Business

Penalty or Private Use $300