Federal Workforce: Preliminary Observations on Strengthening Employee Engagement During Challenging Times
Published: 2015-04-16T00:00:00

Fast Facts:

Highlights:
section_title: Why GAO Did This Study
paragraphs: A growing body of research on both private- and public-sector organizations has found that increased levels of engagement—generally defined as the sense of purpose and commitment employees feel towards their employer and its mission—can lead to better organizational performance.
This testimony is based on GAO's ongoing work examining the federal government's efforts to improve employee engagement, including (1) trends in employee engagement from 2006 through 2014; (2) practices that could strengthen engagement levels based on the EEI results and the experiences of selected agencies and GAO; and (3) certain limitations of the EEI that will be important for agency managers and leaders to consider as they use this metric to assess and improve engagement within their own organizations.
To identify engagement trends, GAO analyzed responses to FEVS questions from 2006 through 2014 from which the EEI is derived. To identify drivers of the EEI in 2014, GAO conducted a regression analysis. To identify practices that could strengthen engagement, GAO interviewed officials at OPM and three case study agencies (selected for sustained or increased EEI levels) that were responsible for engagement efforts.
section_title: What GAO Found
paragraphs: GAO's ongoing work indicates that the recent government-wide decline in engagement, as measured by the Office of Personnel Management's (OPM) Employee Engagement Index (EEI) masks the fact that the majority of federal agencies either sustained or increased employee engagement levels during the same period. Government-wide, engagement has declined 4 percentage points from an estimated 67 percent in 2011 to an estimated 63 percent in 2014. This decline is attributable to several large agencies—like the Department of Defense and Department of Homeland Security—bringing down the government-wide average. Specifically, 13 out of 47 agencies saw a statistically significant decline in their EEI from 2013 to 2014. While this is 28 percent of agencies, they represent nearly 69 percent of federal workforce. However, the majority of federal agencies either sustained or increased engagement levels during this period. Specifically, from 2013 to 2014, 31 agencies sustained and 3 agencies increased their engagement level.
GAO's preliminary analysis of selected Federal Employee Viewpoint Survey (FEVS) questions indicates that six practices were key drivers of the EEI:
constructive performance conversations,
career development and training opportunities,
work-life balance,
inclusive work environment,
employee involvement, and
communication from management.
Importantly, these practices were generally the consistent drivers of higher EEI levels government-wide, by agency, and by selected employee characteristics (such as federal agency tenure) and therefore could be key starting points for agency efforts to improve engagement. Some agencies that have improved employee engagement, or that already have high levels of engagement, apply these practices.
OPM provides a range of tools and resources to help agencies use EEI data to strengthen employee engagement. They include, for example, an online tool to share OPM-generated survey reports to facilitate agency data analysis. GAO's ongoing work indicates that these resources could provide agencies with needed support. However, OPM does not report whether changes to an agency's EEI are statistically significant—that is, whether an up or down change is not due to random chance. As a result, agency officials may be misinterpreting changes to the EEI and acting on data that may not be meaningful. GAO's preliminary analysis of the FEVS shows that 34 percent of the absolute changes in agency EEI scores from 2013 to 2014 were statistically significant. In smaller agencies and at component or lower levels within larger agencies, large absolute differences are not always significant. GAO's ongoing work has noted that agency officials need to understand and take this (and other limitations) into account so that they properly interpret the information and target corrective actions accordingly.
section_title: What GAO Recommends
paragraphs: Because this statement is based on ongoing work, GAO is not making any recommendations at this time.

section_title: Letter
paragraphs: Thank you for the opportunity to be here today to discuss federal  employee engagement. A growing body of research on both private- and  public-sector organizations has found that increased levels of  engagement—generally defined as the sense of purpose and  commitment employees feel towards their employer and its mission—can   Put another way, if a talented  lead to better organizational performance.workforce is the engine of productivity and mission accomplishment, then  a workplace that fosters high levels of employee engagement helps fuel  that engine.
Government-wide levels of employee engagement have recently declined  4 percentage points, from an estimated 67 percent in 2011, to an  estimated 63 percent in 2014, as measured by the Office of Personnel  Management (OPM) Federal Employee Viewpoint Survey (FEVS), and a  score derived by OPM from the FEVS— the Employee Engagement  Index (EEI).
The Administration has elevated the importance of strengthening  employee engagement across government. For example, strengthening  employee engagement is now one of three subgoals of the People and  Culture Cross Agency Priority (CAP) goal. Moreover, agency leaders are to be held accountable for making employee engagement a priority, as  well as an integral part of their agency’s performance management  system. The Administration also set a goal for these efforts: by the  issuance of the 2016 FEVS results, the federal government is expected to  increase employee engagement—as measured by the EEI—from 63  percent to 67 percent. In addition, as part of their annual performance  plans and appraisals, each member of the Senior Executive Service  (SES) will be responsible for improving employee engagement within their  organization, and for creating inclusive work environments.
My remarks today will focus on (1) trends in employee engagement from  2006 through 2014; (2) various practices that could strengthen  engagement levels based on the EEI results and the experiences of  selected agencies and GAO; and (3) certain limitations of the EEI that will  be important for agency managers and leaders to consider as they use  this metric to assess and improve engagement within their own  organizations.
My observations on employee engagement represent the preliminary  findings from our ongoing work conducted on this issue. We expect to  complete our study in early-summer and to issue a final report at that  time.
Our preliminary work indicates that improving employee engagement,  especially during challenging times, is a difficult but doable challenge. In  fact, since 2006, the majority of agencies maintained their engagement  levels and a few even improved their scores. Agencies can take steps to  strengthen employee engagement in the face of difficult circumstances  such as constrained budgets. The key is (1) to understand drivers of  engagement, such as constructive performance conversations and  opportunities for career development and training, and (2) to weave those  practices into the everyday fabric of managing staff and leading agencies.
For our ongoing work, among other steps, we analyzed responses to  questions from the FEVS for the years 2006 through 2014, from which the  EEI is derived. We started with 2006 to include recent trends in two  administrations. We calculated the EEI on a scale of zero to 100 at the  individual level, based on the proportion of positive responses to the 15  EEI questions for each individual. For 2006 and 2008, we recreated the  index using the EEI questions that were included in the survey during that  time period. We analyzed this information government-wide, by agency,  and for selected demographic groups. For each analysis, we determined  statistically significant changes in the EEI from 2006 to 2014. When  aggregated to the agency level, our index was almost perfectly correlated  with the OPM EEI in 2014. In addition to analyzing index changes over  time, we used linear multiple regression analysis to assess the  relationship between potential drivers of engagement and the index in  2014, controlling for other factors.
To assess the reliability of the FEVS data, we examined descriptive  statistics, data distribution, and explored missing data. We also reviewed  FEVS technical documentation as well as the statistical code OPM uses  to generate the index and variance estimates. Based on this analysis, we  found the data sufficiently reliable for our purposes.
To identify potential drivers of, and strategies for, improving employee  engagement, we conducted a literature review of recent studies of public-  and private-sector engagement, and interviewed officials from OPM and  members of the Chief Human Capital Officers (CHCO) Council and Labor  Management Relations joint working group on employee engagement. To  identify examples of agency efforts to improve employee engagement, we  also interviewed officials from other federal agencies with sustained or  increased engagement levels—the Department of Education, Federal  Trade Commission and  National Credit Union Administration. We  obtained agency officials’ views on the information contained in this  statement and have incorporated their comments as appropriate.
Our ongoing work is being conducted in accordance with generally  accepted government auditing standards. Those standards require that  we plan and perform the audit to obtain sufficient, appropriate evidence to  provide a reasonable basis for our findings and conclusions based on our  audit objectives. We believe that the evidence obtained provides a  reasonable basis for our findings and conclusions based on our audit  objectives.
subsections: section_title: Background
paragraphs: Engaged employees are more than simply satisfied with their jobs.  Instead, engaged employees are passionate about, and energized by what they do, are committed to the organization, the mission, and their job, and are more likely to put forth extra effort to get the job done.  take pride in their work,  The Merit Systems Protection Board (MSPB) found that higher levels of  employee engagement in federal agencies led to improved agency  performance, less absenteeism, and fewer equal employment opportunity  complaints. Similarly, a number of studies of private- and public-sector  organizations have found that increased levels of engagement result in  improved individual and organizational performance. In addition, studies  of the private sector have established that firms with higher levels of  employee engagement exhibit increased individual employee  performance, increased productivity, and have higher customer service  ratings, while also having fewer safety incidents, and less absenteeism  and turnover.
OPM has conducted the FEVS—a survey that measures employees’  perceptions of whether, and to what extent, conditions characterizing  successful organizations are present in their agencies—every year since  2010. The EEI was started in 2010 when FEVS became an annual survey  and is composed of 15 FEVS questions covering the following areas:
Leaders lead, which surveys employees’ perceptions of the integrity of  leadership, as well as employees’ perception of leadership behaviors  such as communication and workforce motivation.
Supervisors, which surveys employees’ perceptions of the  interpersonal relationship between worker and supervisor, including  trust, respect, and support. Intrinsic work experience, which surveys employees’ feelings of  motivation and competency relating to their role in the workplace.
According to OPM, the EEI does not directly measure employee  engagement, but it does cover most of the conditions likely to lead to  employee engagement.
Sometimes the EEI is discussed in the same context as another  workforce metric known as the Best Places to Work rankings. Although  the Best Places to Work scores are also derived from the FEVS, it differs  from the EEI in that the Partnership for Public Service (Partnership)  created the rankings as a way of rating employee satisfaction and  commitment across federal agencies. The rankings are calculated using a  weighted formula of three different questions from OPM’s FEVS: (1) I  recommend my organization as a good place to work, (2) considering  everything, how satisfied are you with your job, and (3) considering  everything, how satisfied are you with your organization.
section_title: Most Agencies Defied Government-wide Downward Trend and Maintained or Improved Engagement Levels
paragraphs: Our ongoing work indicates that the recent government-wide average  decline in the EEI masks the fact that the majority of federal agencies  either sustained or increased employee engagement levels during the  same period. From 2006 through 2014, government-wide employee  engagement levels initially increased—reaching a high of 67 percent in  2011—and then declined to 63 percent in 2014, as shown in figure 1.  However, the decline in engagement is the result of several large  agencies bringing down the government-wide average. Specifically, our  preliminary work indicates that 13 out of 47 agencies saw a statistically  significant decline in their EEI from 2013 to 2014; while this is only 28  percent of agencies, nearly 69 percent of federal employees are at one of  those agencies, including the Department of Defense, Department of  Homeland Security, and Department of Veterans Affairs.majority of agencies sustained or improved engagement, as shown in  figure 2. Between 2013 and 2014, of 47 agencies included in our analysis  of the EEI, three increased their scores; 31 held steady; and 13 declined.
subsections: section_title: Leadership Component of the EEI Consistently Scores the Lowest
paragraphs: Based on our preliminary analysis, of the three components that comprise  the EEI—employees’ perceptions of agency leaders, supervisors, and  their intrinsic work experience—employees’ perceptions of leaders  consistently received the lowest score, and at times was about 20  percentage points lower than other components. Moreover, from a high- point in 2011, leadership scores saw the greatest decrease and  accounted for much of the government-wide average decline in the EEI,  as figure 3 shows.
The questions comprising the EEI leadership component focus on  integrity of leadership and on leadership behaviors such as  communication and workforce motivation. Three of the five questions are  specific to senior leaders—department or agency heads and their  immediate leadership team, responsible for directing policies and  priorities and typically members of the Senior Executive Service or  equivalent (career or political). Two are specific to managers—those in  management positions who typically supervise one or more supervisors.  We have previously reported that leaders are the key to organizational  change—they must set the direction, pace, and tone, and provide a clear,  consistent rationale that brings everyone together behind a single  mission.
Federal Employee Viewpoint Survey Questions that Comprise the  In my organization, senior leaders generate high levels of motivation  and commitment in the workforce.
My organization’s senior leaders maintain high standards of honesty  and integrity.
Managers communicate the goals and priorities of the organization.
Overall, how good a job do you feel is being done by the manager  directly above your immediate supervisor?  I have a high level of respect for my organization’s senior leaders.
Supervisors in my work unit support employee development.
My supervisor listens to what I have to say.
My supervisor treats me with respect.
I have trust and confidence in my supervisor.
Overall, how good a job do you feel is being done by your immediate  supervisor?
I feel encouraged to come up with new and better ways of doing  things.
My work gives me a feeling of personal accomplishment.  I know what is expected of me on the job.
My talents are used well in the workplace.
I know how my work relates to the agency’s goals and priorities.
The strength of the EEI supervisors component suggests that the  employee-supervisor relationship is an important aspect of employee  engagement. These questions focus on the interpersonal relationship  between worker and supervisor and concern supervisors’ support for  employee development, employees’ respect, trust, and confidence in their  supervisor, and employee perceptions of an immediate supervisor’s  performance.
Intrinsic work experience was the strongest EEI component prior to 2011,  but fell during the period of government-wide decline in engagement  levels. These questions reflect employees’ feelings of motivation and  competency related to their role in the workplace, such as their sense of  accomplishment and their perception of utilization of their skills.
section_title: Pay Category and Supervisory Status Had the Widest Range of Engagement Levels
paragraphs: Our ongoing work has found that government-wide, the demographic  groups with the widest gap between most engaged and least engaged  were pay category and supervisory status. For example, respondents in  progressively lower General Schedule (GS) pay categories had  progressively lower levels of engagement government-wide. In contrast,  employees in the SES pay category reported consistently higher  engagement levels—at least 10 percent more than any lower pay  category. According to our preliminary analysis, while there was less  difference between the engagement levels of other pay categories,  employees in the GS 13-15 categories were consistently higher than all  other lower GS pay categories. Employees in the Federal Wage System  consistently reported the lowest levels of engagement.
Similarly, respondents with fewer supervisory responsibilities had  progressively lower levels of engagement government-wide. Generally,  employees with higher supervisory status have more autonomy in how  they do their work. Employees in higher pay categories are likely to have  more supervisory responsibilities, so it is not surprising that the trends for  each are similar. Variations in engagement by supervisory status are  shown in figure 4.
With respect to other demographic cohorts, our preliminary analysis  shows that engagement levels tended to be similar, regardless of the  respondents’ gender, ethnicity (Hispanic or non-Hispanic), or work  location (agency headquarters or field).
section_title: Key Practices Found to Strengthen Employee Engagement
subsections: section_title: Performance Conversations Are the Strongest Driver of Employee Engagement Levels
paragraphs: For our ongoing work we used regression analysis to test which selected  FEVS questions best predicted levels of employee engagement as  measured by our index, after controlling for other factors such as  demographic characteristics and agency. Of the various topics covered  by the FEVS that we analyzed, we identified six that had the strongest  association with higher EEI levels compared to others, including (1)  having constructive performance conversations, (2) career development  and training, (3) work-life balance, (4) inclusive work environment, (5)  employee involvement, and (6) communication from management (see  table 1).
In many ways, these and similar practices are not simply steps  to better engage employees; they are also consistent with the key  attributes of high performing organizations.
Our preliminary results show that having constructive performance  conversations was the strongest driver of employee engagement. For the  question “My supervisor provides me with constructive suggestions to  improve my job performance,” we found that, controlling for other factors,  someone who answered “strongly agree” on that FEVS question would  have on average a 20 percentage point higher engagement score,  compared to someone who answered “strongly disagree” on the 5-point  response scale. As we found in our March 2003 report on performance  management, candid and constructive feedback helps individuals  maximize their contribution and potential for understanding and realizing  the goals and objectives of the organization.
Our preliminary results also show that after constructive performance  conversations, career development and training was the strongest driver.  For the question, “I am given a real opportunity to improve my skills in my  organization,” we found that someone who answered strongly agree to  that question would have on average a 16 percentage point higher  engagement score, controlling for other factors, compared to someone  who answered strongly disagree. As we found in our earlier work on this  topic, the essential aim of training and development programs is to assist  the agency in achieving its mission and goals by improving individual and,  ultimately, organizational performance.
For the remaining four drivers, our preliminary results indicate that  someone who answered strongly agree to those questions would have on  average a 12 percentage point higher engagement score, controlling for  other factors, compared to someone who answered strongly disagree.
Importantly, our ongoing work suggests that these six practices were  generally the consistent drivers of higher EEI levels when we analyzed  them government-wide, by agency, and by selected demographic groups  (such as agency tenure and supervisory status).practices are the strongest predictors of engagement, this suggests they  could be key starting points for all agencies embarking on efforts to  improve engagement.
section_title: Agencies Are Taking Specific Steps to Strengthen Engagement
paragraphs: During our ongoing work, we have found that agencies that have  improved employee engagement, or that already have high levels of  engagement, apply the drivers noted above. Their experience with what  works can provide practical guidance for other agencies as they attempt  to improve their own engagement scores. For example, at GAO—which  has consistently placed among the top five agencies on the Partnership  for Public Service’s Best Places to Work list since 2005—we have a  number of initiatives related to the drivers of engagement. With respect to  constructive performance conversations, at GAO, effective performance  management is a priority. Performance conversations—including ongoing  feedback and coaching—are expected to occur on a regular basis and  not just as part of the annual appraisal process. Moreover, at all levels of  the agency, supervisors are expected to create a “line of sight”  connecting individual performance to organizational results. Likewise,  with respect to an inclusive work environment, with involvement and  support of top management, our Human Capital Office and our Office of  Opportunity and Inclusiveness lead the agency through several  continuous efforts, including (1) communicating the importance of  diversity and inclusiveness from senior leaders, (2) linking SES/Senior  Leader performance expectations to emphasize diversity, and (3)  attracting and retaining a diverse workforce by, among other things,  recruiting at historically black colleges and universities.
Actions taken by other agencies can also provide insights about  implementing key engagement drivers. For example, during our ongoing  work, Education’s Office of the General Counsel (OGC) officials told us  that they convened an office-wide meeting with employees at all levels to  discuss the FEVS results—both to identify areas in which they could  continue to build on positive trends, and also to identify opportunities for  taking constructive steps to improve in other specific areas of the EEI  scores. The focus of the conversation included steps that they could take  to enhance and strengthen communication throughout the office,  employee training and professional development, performance evaluation  processes, and employee empowerment overall; as a result, Education’s  OGC management introduced additional training and professional  development opportunities and improved employee on-boarding through  a new handbook and mentoring program. Education’s OGC officials said  these opportunities—and the permanent, staff-driven Workforce  Improvement Team (WIT) that formed as a result—have created feelings  of stronger ownership, engagement, and influence in office decision  making. Education’s OGC officials said that OGC’s management relies on  the WIT for feedback to evaluate the effectiveness of improvement  efforts. This strengthens two-way communication, which improves  employee engagement and organizational performance.
In another example, National Credit Union Administration (NCUA) officials  told us that the head of the agency and its senior leaders communicate  with line employees (who are mostly in the field) through quarterly  webinar meetings. The meetings are scheduled to accommodate the field  employees’ frequent travel schedule and generally start with any “hot  topics” and continue with discussion of agency efforts to meet mission  goals. The agency head takes questions in advance and during the  webinar and, when needed, participants research and share responses  with agency employees. According to NCUA officials, these regular,  substantive conversations demonstrate top leadership’s commitment to  line workers as valued business partners.
section_title: Agencies Need to be Sensitive to Limitations with EEI Data and Use Supplemental Information to Identify and Address Engagement Issues
paragraphs: OPM provides a range of different tools and resources to help agencies  use EEI data to strengthen employee engagement. They include, for  example, an online mechanism to share OPM-generated survey reports  (at government-wide, agency specific, and sub-agency levels) to facilitate  data analysis. OPM has also created an online community of practice to  help share best practices. Our ongoing work indicates that these  resources could provide agencies with needed support. However, when  analyzing the information, it is critical that OPM highlight (and for  agencies to be aware of) various limitations in the EEI data that could  affect agencies’ analyses. Our preliminary results found that these  limitations include, for example, the following:
The EEI Does Not Show Whether Changes Are Statistically  Significant. OPM does not report whether changes to an agency’s EEI  are statistically significant—that is, whether an up or down change is  not due to random chance. As a result, agency officials may be  misinterpreting changes to the EEI and acting on data that may not be  meaningful. Although OPM provides agencies with absolute changes  in the EEI, those increases and decreases are not always statistically  significant. Our preliminary analysis of the FEVS showed that 34  percent (16 of 47) of the absolute changes in agency EEI scores from  2013 to 2014 were actually statistically significant. In smaller agencies  and at component or lower levels within larger agencies, large  absolute differences are less likely to be significant.
The EEI Calculation Does Not Allow for Analysis of Engagement  Drivers. Research on employee engagement emphasizes the  importance of identifying the drivers of an engagement score as an  initial step in improving employee engagement. For example, the  Partnership for Public Service’s Best Places to Work guidance lists a  driver analysis as a key element in determining where agencies  should focus their action planning efforts. However, we found that the  way OPM calculates the EEI precludes a driver analysis because  individual level data are needed to assess correlates of engagement,  controlling for other factors.
The Short Cycle Time Between Surveys Presents Analytical  Challenges. According to some agency officials we spoke with, the  short cycle time between one annual survey and the next and the  amount of time it takes for organizational change to take effect could  be problematic. For example, because the FEVS survey cycle begins  around May and agencies receive results in September or October, it  may be late-winter or early-spring before an agency will have  designed an action plan. By this time, the next survey cycle is on the  horizon, allowing little time for agencies to analyze, interpret, and  implement their action plans. Moreover, the annual survey cycle may  not allow enough time for employees’ perceptions to change before  the next cycle begins. According to agency officials we interviewed, it  can take at least few years, sometimes more, for a particular  organizational change to have an impact on employee engagement.  As a result, when examining a particular change in engagement level,  it could be unclear whether that change is due to an action  implemented the previous year or a different action implemented  several years earlier. Thus, determining what works and what does  not could be challenging.
While acknowledging the issues with short survey cycle time, OPM  stated that agencies are increasingly using the FEVS as a  management tool to help them understand issues at all levels of an  organization and to take specific action to improve employee  engagement and performance. An annual survey such as FEVS can  help ensure that newly appointed agency officials (or a new  administration) can maintain momentum for change, as the surveys  suggest employees are expecting their voices to be heard. Further,  OPM noted if agencies, managers, and supervisors know that their  employees will have the opportunity to provide feedback each year,  they are more likely to take responsibility for influencing positive  change.
Given these limitations and agencies’ current uses of FEVS data, our  preliminary results suggest that agencies will need to supplement FEVS  data with other sources of information. For example, some agencies use  facilitated discussions to better understand their EEI scores and to  identify and implement strategies for improvement. Other quantitative  data—such as turnover rates, equal employment opportunity complaints,  and sick leave use—may provide insights as well.
In conclusion, research on both private firms and government agencies  has demonstrated the linkage between high levels of employee  engagement and improved organizational performance. Given the  complex and challenging missions agencies face as well as the myriad  number of routine actions and services they perform on a daily basis—all  within a constrained fiscal environment—agencies must make  strengthening and sustaining employee engagement an integral part of  their organizational culture and not simply a set of isolated practices.
OPM recognizes this and has taken a variety of actions that, in concept,  show promise for improving employee engagement government-wide.  They include (1) focusing agencies’ attention on strengthening  engagement by leading efforts to implement the CAP goal; (2)  establishing a performance target; (3) providing a variety of tools and  resources to help agencies analyze FEVS data and share best practices;  and (4) holding agencies and senior leaders accountable for specific  efforts and achieving key results.
At the same time, our ongoing work has shown that the EEI has  limitations and the short time between survey cycles could be  problematic. Agencies need to understand and address these limitations  so that they properly interpret the information and target corrective  actions accordingly.
Chairman Meadows, Ranking Member Connolly, and Members of the  Subcommittee, this completes my prepared statement. I would be  pleased to respond to any questions you may have.