Transforming the Civil Service: Building the Workforce of the Future: Results of a GAO-Sponsored Symposium
Published: 1995-12-26T00:00:00

Fast Facts:

Highlights:
section_title: Why GAO Did This Study
paragraphs: Pursuant to a congressional request, GAO sponsored a symposium on transforming the civil service.
section_title: What GAO Found
paragraphs: GAO noted that: (1) the symposium brought together leading private and public sector employers and former federal officials to discuss new human resource management approaches; (2) there were eight overlapping personnel management principles that focused on people as assets, organizational missions, accountability, appropriate organizational structures, integrating personnel management into an organization's mission, continuous learning, integrated information management, and sustained leadership; (3) symposium participants found that a comprehensive rather than a piecemeal approach to human resources management was more effective; (4) although some federal agencies have adopted some of these management principles, attitudinal, political, and structural barriers hamper wider acceptance; (5) although some of the principles could be adopted without changing any laws, others would require congressional action and increased civil service decentralization; (6) recent legislation and the National Performance Review have recognized the value of these management principles; (7) the federal government should retain its merit system core values while allowing federal agencies more flexibility to meet their disparate needs; and (8) Congress must take into consideration the fundamental differences between government and private sector functions in applying these management principles.

section_title: Letter
paragraphs: On April 12 and 13, 1995, we sponsored a symposium, “Transforming the Civil Service: Building the Workforce of the Future.” Held in response to a request from Senator William V. Roth, Jr., then Chairman of the Senate Governmental Affairs Committee, the event brought together representatives of leading private sector firms, public sector employers from both here and abroad, and distinguished former federal officials to discuss new approaches to managing people. This report distills from their discussions a set of emerging human resource management (HRM) principles and points out some of the implications should Congress consider applying these principles to the federal civil service.
Civil service reform is an enormously complex challenge, and last April’s discussions provide a perspective, not a prescription for change. Although the report that follows offers suggestions from a certain viewpoint, it does not resolve this question: Should new HRM approaches that are based largely on private sector experience and that, thus far, have been applied to a relatively limited extent in the public sector now be adapted to the federal civil service? The answer may hinge on the similarities and differences between private sector and public sector realities and, ultimately, on what sort of civil service will best serve the American people. This is a policy judgment that rightfully belongs to Congress.
As Congress deliberates these policy issues, there are some key concepts that it may find useful to keep in mind. If Congress wishes to change the civil service system, it will need to articulate the principles and goals that form the basis for the changes. It will need to set measurable expectations by which to evaluate agencies’ adherence to these systemwide principles and goals. And while it will need to give federal managers the flexibility necessary to get the job done, it will need to establish effective oversight and accountability mechanisms to ensure that agencies are accomplishing the desired results.
We believe that the April symposium offers a useful backdrop against which to consider the future of the federal civil service—a system that has been evolving for more than a century and that, to stay effective, will need to continue evolving.
subsections: section_title: Introduction
paragraphs: To remain viable in today’s demanding environment, public and private sector organizations alike must improve their performance while holding the line on costs. This is nowhere more apparent than among federal agencies, where pressure is mounting for a government that works better, costs less, and employs a smaller and more efficient workforce. The necessity to improve performance in the face of steady or declining resources has led some organizations, both here and in other countries, to make radical changes in the way they manage people.
These organizations have begun changing both their traditional organizational structures and the approaches they have taken to managing their employees. In place of centralized, hierarchical, rule-based systems, they are creating decentralized, flatter, more flexible arrangements. And in place of highly detailed rules to manage their employees, they are relying increasingly on a well-defined mission, a clearly articulated vision, and a coherent organizational culture to form the foundation for the key business systems and processes they use to ensure the successful outcome of their operations. Recognizing that people are central to any organization’s success, these organizations give their managers greater prerogatives to manage and their employees greater opportunities to participate in the decisions that affect them and their work.
section_title: Background: Learning From Others’ Experiences
paragraphs: Senator William V. Roth, Jr., then Chairman of the Senate Governmental Affairs Committee, asked GAO to examine the HRM experiences of successful public and private sector organizations to identify their “lessons learned” and to analyze the applicability of these lessons to civil service reform. To respond to this request, on April 12 and 13, 1995, we convened a 2-day symposium of 32 leaders from public and private sector organizations who discussed their approaches toward managing people—the principles they employ, the changes they have made, and the lessons they have learned. Our focus on “managing people” rather than on “personnel administration” allowed for discussion of broader and more innovative management approaches and for accommodating ideas from such fields as organization theory, public administration, quality improvement, budgeting, and information resource management.
Twelve of the symposium participants were presenters and 20 were panelists. The presenters were current or former senior officials from Xerox; Federal Express; GM Powertrain; AT&T’s Workplace of the Future; IBM’s WorkForce Solutions; Herman Miller, Inc.; the Communications Workers of America; the City of Hampton, Virginia; the State of Minnesota; and the governments of New Zealand, Australia, and Canada (see app. II for the names and affiliations of the presenters). We chose these organizations because of their reputations, which were often bolstered by awards for quality or innovative management.
The 20 panelists—current or former federal officials and academicians—joined the presenters for the symposium’s group discussions. We chose the panelists for their civil service experience and expertise, hoping to gain insights from them into the applicability of the various lessons learned to the symposium theme, “Transforming the Civil Service: Building the Workforce of the Future.” (See app. II for the names and affiliations of the panelists.)
To varying degrees, all of the organizations represented at the symposium differed in character and size from the federal government. Xerox and IBM, for example, are corporations. The governments of New Zealand, Australia, and Canada are parliamentary and much smaller than the government of the United States. Yet notwithstanding these differences or the unique challenges facing the U.S. civil service, the symposium provided a forum in which to explore the experiences of diverse organizations and to highlight new or alternative approaches toward managing people.
This report distills the proceedings of the symposium into a set of basic principles for managing people that differs from the traditional civil service model. The report includes our analysis of some of the implications of these principles for civil service reform, but we express no opinions or recommendations. Rather, our goal in reporting on the symposium was to reflect as accurately as possible the common threads that constituted the participants’ lessons learned and to point out some of the implications should Congress consider applying these lessons to the civil service. The participants themselves were not asked to reach consensus or even to comment on every issue. Nor did they, as a group, offer recommendations for civil service reform. Many of them emphasized that management approaches that prove effective in some organizations may not work in others.
We gave the symposium participants an opportunity to comment on the contents of this report and incorporated their views.
section_title: Eight Principles for Managing People
paragraphs: According to many of the symposium participants, the demand for faster, cheaper, and better service delivery has led their organizations to develop new and more flexible ways of managing people. On the basis of the symposium proceedings, GAO discerned eight interrelated principles common to these organizations: 1. Value people as assets rather than as costs. Recognize that people are crucial to organizational success. Establish a clear organizational mission and treat employees as partners in accomplishing that mission. Invest in them. Encourage them to contribute ideas and allow them to make decisions. Expect them to support the organization’s mission and vision, and reward them for doing so. Treat them with respect and fairness. Even when downsizing is necessary, emphasize fairness and help prepare them for a “soft landing.” 2. Emphasize mission, vision, and organizational culture.  Articulate a clear organizational mission to which employees can contribute and a vision to which they can aspire. Build a strong organizational culture calling for high standards of performance and personal behavior. Use mission, vision, and culture as the underpinnings for rational business systems and processes that ensure the successful outcome of operations. 3. Hold managers responsible for achieving results instead of imposing rigid, process-oriented rules and standards. Give managers the authority to manage their people flexibly and innovatively so they can focus on achieving results rather than doing things “by the book.” Hold them accountable for outcomes and for furthering the mission and vision of the organization rather than for adhering to a set of minutely defined procedures. 4. Choose an organizational structure appropriate to the organization rather than trying to make “one size fit all.”  Design the organization so that its structure supports its mission and takes into account its present and future needs. Use different organizational models as appropriate. The current trend is toward flat, flexible, team-oriented organizational structures, but no single design works best for all organizations. 5. Instead of isolating the “personnel function” organizationally, integrate HRM into the mission of the organization. Tie the organization’s HRM functions into its mission, vision, and culture. Make HRM functions an integral part of the organization’s business activities by decentralizing and deregulating them. 6. Treat continuous learning as an investment in success rather than as a cost to be minimized. Invest in training and professional development to meet changing customer needs, keep skills up to date, and develop new personal and organizational competencies. 7. Pursue an integrated rather than an ad hoc approach to information management.  Develop the integrated information management systems that will ensure individual and unit accountability, open channels for continuous improvement, and encourage and reward accurate measurements of progress, performance, and customer satisfaction. 8. Provide sustained leadership that recognizes change as a permanent condition, not a one-time event. In a continuously changing environment, effective organizations adapt continuously, not crisis-by-crisis. Invest the time and resources necessary to accommodate constant change. Obtain the commitment of everyone involved. Communicate a coherent set of principles to guide the organization over time. “First, we identified the human resource management issues that were of major concern, and then pulled them together into an integrated framework that needed to be addressed.”
It follows, then, that the eight principles emerging from the symposium are overlapping and interdependent and should be read as a coherent, overall approach to managing people in high-performance organizations. Some symposium presenters noted, for example, that valuing people is a central tenet of their organizations’ mission and vision statements. Representatives of Xerox, Herman Miller, Federal Express, and AT&T said that while managers in each of these organizations are expected to manage for results, “results” involves more than the “bottom line”; their managers are rewarded no less for how well they support their companies’ values than for how well they help them make money. Some participants noted that in their organizations, performance management, career development programs, and pay and promotions standards are all tied to organizational mission, vision, and culture. In short, these organizations treat effective HRM and effective business practices as inseparable.
section_title: The Eight Principles’ Implications for the Federal Government
paragraphs: Many of the ideas raised at the symposium are potentially relevant to transforming the civil service. Indeed, some of the principles emerging at the symposium are already being applied within specific agencies or programs. The participants pointed out, however, that some attitudinal or structural barriers exist within the federal government that could prevent these principles from being more widely accepted. Assuming these barriers were overcome, many of the principles could be put into practice without changing any laws. Other principles, if Congress chose to apply them, would require a further decentralization of the civil service system and could require some specific legislative changes, primarily to Title 5, United States Code (U.S.C.), which governs the civil service system.
subsections: section_title: Similar Thinking Is Already Showing Up in the Federal Government
paragraphs: “Many of the things we’re doing now are right in line with the private sector. But federal agencies are such large and complex organizations that, in the course of day-to-day operations, we can lose sight of the fact that we are doing a lot of things right.”
Several participants noted that the goals of the Government Performance and Results Act of 1993 (GPRA) are consistent with the kind of thinking that emerged at the symposium, particularly as those goals relate to the importance of clarifying agency missions, focusing on results, and aligning systems to meet performance goals. For example, GPRA requires all federal agencies, by the end of fiscal year 1997, to develop 5-year strategic plans that include their missions and goals, as well as their strategies for achieving those goals through specific activities and management of people, information, and other resources. GPRA also calls for annual performance plans and reports that include attention to human resource needs and utilization.
In addition, the administration’s National Performance Review (NPR) has identified a number of federal HRM problems and offered 14 recommendations for change, many of them in keeping with the ideas brought forward at the symposium. Frank Thompson, executive director of the National Commission on the State and Local Public Service, said, “A lot of the kinds of reviews that we’ve been talking about here [at the symposium] have already been done, and there’s a lot of consensus already out there that has been translated into specific legislative proposals.”
In recent years, a number of federal agencies have made substantive quality improvement efforts, some of which have won the Presidential Quality Award (the federal sector equivalent of the Malcolm Baldrige Award for private sector excellence). Other agencies are trying new HRM approaches while serving as NPR reinvention labs.
section_title: Barriers Exist to Putting Some of These Principles Into Practice
paragraphs: Some symposium participants agreed that in the federal government, a number of barriers do exist to the sort of thinking embodied in the eight principles for managing people. Some of these barriers arise out of long-standing attitudes about the limitations that have been placed on agency officials’ HRM prerogatives or about the basic ways in which people ought to be managed. Other barriers, they said, arise out of the difficulty federal agencies commonly experience in arriving at a consensus on their missions or in sustaining the committed, long-term leadership needed to accomplish them.
One attitudinal barrier, according to some participants, stems from agency officials’ belief in their own powerlessness—from a sense, as Marilyn Hay, director of labor relations at the Treasury Board of Canada, portrayed it, that they are at the mercy of those who created or oversee the system and cannot hope to change it. The agencies themselves can be the source of this belief. Former U.S. Forest Service chief Dale Robertson cited a pilot study that found 70 percent of the performance barriers that workers identified involved agency policies and practices. “It wasn’t Congress,” Robertson said the report concluded. “It wasn’t OPM. It wasn’t anybody else but us at the Department of Agriculture and the Forest Service.” “ it takes us, on average, 70 days to fill a job vacancy, and that the process involves 94 separate steps. Through reengineering, we’re taking that down to 15 days, and we’re doing so by cutting out all kinds of things including ones we were never required to do in the first place.” “We were brought up short repeatedly when our teams started talking about the constraints they were facing—the things they assumed OPM would never let us do. And the OPM people said, ‘That is not a requirement of OPM. You do not have to continue doing that’.” “the assumptions on which all of our systems were built: that managers need to be controlled, that none of them have any judgment, that managers and employees alike will cheat the system if you let them. The traditional attitude is that the organization could be run a lot better if you could do it without any people at all. So very naturally, what grew up were a lot of rules to constrain and control people, and what we’re trying to do now is free them up, turn that around.”
Although several of the participants pointed out that successful organizations define their missions clearly and coherently, participants also noted that the task of doing so is a different one for federal agencies than for private companies. Companies define their own lines of business, adjusting as appropriate for the sake of efficiency and profitability; set their own goals in such areas as quality, service delivery, and profit; and are accountable to shareholders. Federal agencies, on the other hand, are shaped by a more political environment in which missions, measures of success, and layers of accountability are frequently ambiguous. Reaching political consensus on agency goals or on the means of achieving them is often difficult and may include rationales that would not be followed in the business world. As Cato Institute Chairman William Niskanen said, the goal of achieving efficiency in federal agencies may be “an insufficiently broad concept” when so many other factors come into play. “One of the common themes we have heard at this symposium is that organizations that have undergone change successfully have done so under sustained, committed, visionary leadership. It’s not that you can’t get that from political appointees, but their half life is relatively short. In the Australian experience, and in Canada’s as well, one of the marked differences has been that career civil servants can rise to levels as high as those of policymakers. They can deal effectively and over sustained periods with issues that aren’t necessarily policy issues, but service delivery issues. Here in the United States, the political appointees have to handle both.”
section_title: Some of the Eight Principles Could Be Applied Without Changing Current Law
paragraphs: Several participants said that many of the eight principles and related ideas and practices discussed at the symposium could be implemented in the federal civil service, and that this could be done without changing current law.
Our analysis suggests this is largely true. For example, current law does not prohibit agencies from creating mission or vision statements, from developing strategic planning and performance measurement processes, or from aligning most human resource activities with their organizational missions and core values. Agencies are not prohibited from setting up performance management systems that assess and reward employee performance in light of organizational goals and values. Agency managers are free to make continuous learning a guiding principle, and they have a variety of formal and informal actions at their disposal to establish trust, respect, and fairness in the workplace. “Ninety percent of what private firms are doing could be done in the federal government today—and be done within existing laws and regulations. The only problem is it’s tougher—it’s a bureaucratic battle. It takes persistence. You have to do it in the face of a lot of interference and a lot of second-guessing.”
section_title: Further Implementing the Eight Principles Would Require Further Decentralizing the Civil Service System
paragraphs: One of the eight principles for managing people that emerged from the symposium was that eliminating the “one-size-fits-all” approach is a key to creating structures and practices best suited to specific organizations and their missions. Within the context of civil service reform, this would require further decentralizing a system in which the “single employer” model now holds true for slightly more than half of the government’s employees. The rationales behind the single employer model are threefold: achieving pay equity across the government, reducing competition among agencies for employees, and gaining efficiency and savings through economies of scale. But some symposium participants considered this approach a barrier to the creation of high-performance organizations for three reasons: it puts constraints on innovation and flexibility; it transfers the real responsibility for managing people from agency managers to agency personnel staff and OPM; and it ignores the differences among federal agencies in their missions, cultures, sizes, and other characteristics. “Basically, the principles and values were that we should have an apolitical public service, that we should continue to have merit-based staffing, that we should maintain high standards of honesty and integrity among public servants, that there should be a very strong focus on efficiency and results, and that  should continue to be accountable to the government of the day while it maintains the capacity to provide it with high quality advice.”
If Congress should decide to comprehensively decentralize the civil service, it could do so by revising Title 5 to articulate guiding values and principles but omit detailed rules of implementation. Each agency might then be allowed to determine how best to implement the guiding values and principles while doing so in the context of its own mission and circumstances. The variety of HRM approaches that might then emerge across government could be reviewed periodically by the various agencies’ congressional oversight committees, by the Senate Committee on Governmental Affairs and the House Committee on Government Reform and Oversight, and/or by the central personnel entities. Several symposium participants made the point that this approach would be in keeping with the intent of GPRA—that in consultation with Congress, each agency could determine the best means of linking its HRM practices to its performance and results.
section_title: The Applicability Issue
paragraphs: In considering the various HRM approaches raised at the symposium and elsewhere, Congress will be dealing with complex policy issues that are fundamental to the current civil service system. One of the core issues is whether the government wants to view its employees in the same manner as private sector organizations do theirs. Should the government, for example, move away from the concept of guaranteed job security? It is clear that in addressing issues such as these, Congress would need to consider the principles distilled from the symposium within the overall context of a basic, unified policy vision, rather than on an ad hoc basis. It is equally clear that any fundamental reversal of traditional concepts would inevitably require political and value judgments from Congress.
These judgments will require consideration of the fundamental differences that exist between private and public sector entities—differences that go beyond the simple question of whether one or the other does or does not operate for profit. There is, for example, a basic difference in roles, the government taking on duties (such as defense) that are prescribed by the Constitution, and taking actions in the public interest that the private sector is neither empowered nor equipped to take (such as securities regulation, environmental protection, and food and drug safety assurance).
There are differences in the nature of accountability as well: private sector firms are disciplined by the marketplace and must meet the fundamental test of financial viability. Government, on the other hand, must meet social, political, or even moral expectations that may or may not coincide with economic efficiencies. Further, a company can choose the business it wishes to pursue and then answer to its stockholders for the choices made, but government is accountable to varied constituencies and often must retain programs because they have strong support from one interest or another.
In addition, those who run private sector organizations often can deliberate in private and reach decisions quickly. Government decisionmakers operate in a fishbowl, often with legal requirements for open deliberations and public involvement that make the decisionmaking process lengthy and inevitably subject to compromise. The decisionmakers themselves—within or across branches of government—are often numerous and at odds with one another. And because the leadership of executive agencies changes frequently, succession planning of the sort frequently found in the private sector is rare in government.
From our many years of work on civil service and management issues, we have identified certain key criteria that would be useful in helping Congress consider its policy judgments within a basic, unified vision, rather than on an ad hoc basis. For example, a proper balance must be struck between flexibility—both at the agency and individual levels—and accountability for actions and outcomes. An integrated approach is necessary, including systemwide principles and goals and measurable expectations by which to evaluate agency and individual adherence to these principles and goals. Rational, mission-based systems and processes must be included to help people work effectively, and information systems must be put in place to give managers the information necessary to track progress and make informed decisions. Effective leadership within the agencies and continuing oversight from Congress will be needed to help determine if new approaches to managing the federal workforce are, in fact, improvements over the old. “Civil service reform is not an end in itself. It’s the means to an end. Eventually, you’re going to need to say, ‘Here are the characteristics that a high-performing organization, public or private, needs to embody if it is to accomplish the mission that has been set out for it. And here’s the kind of civil service that contributes to that model. As the organizations represented here have done, you’re going to need to look 10 or 15 years downstream, and then begin to sketch out a framework that will work best in the federal workplace today and in the years to come’.”
section_title: Transforming the Civil Service Will Be a Major Challenge
paragraphs: Making and maintaining the necessary workforce investments will pose a considerable challenge to civil service reformers, particularly in a period of fiscal constraint and government downsizing. Several symposium participants spoke of the substantial investments in time and money that their organizations found were necessary to change the way people are managed, and they noted as well that changes did not come fast, easy, or cheap.
Some participants said that while the need to reduce costs is a driving force for change in the civil service, any changes must be made with an eye toward the future. Canada’s Marilyn Hay suggested that current downsizing efforts in government, if mishandled, could lead to a “traumatized and cynical workforce that will eventually leave, and we won’t find the people to replace them.”
In 1988, even before current pressures on the civil service had emerged, we stressed the importance of determining how the federal government “can attract, motivate, and retain committed people—people at all levels who can come up with new ideas and innovative approaches and see them through to effective implementation.” Our symposium highlighted various organizations’ efforts to respond to similar challenges—and under the added pressure of steadying or declining resources. By their accounts, radical changes made in response to adversity have had positive results. These changes entailed discomfort and even occasional failure, but some participants said that taking risks was necessary to the process, and that in a turbulent and demanding environment, public and private sector organizations such as theirs have had no other choice.
section_title: Highlights From the Symposium
paragraphs: The 32 symposium participants provided a wealth of insights into the subject of managing people. From the proceedings, we distilled the eight principles for managing people listed earlier in this report. In this appendix, we list the eight principles again and follow each with an example or illustrative highlight drawn from the symposium or from materials provided by the participants. These highlights are not intended to fully define the principles; rather, they reflect some aspects of the discussions surrounding them. As a whole, the highlights have been selected to convey a sense of the variety of ideas brought forward during the 2 days of presentations and discussions.
subsections: section_title: Principle 1: Value People as Assets Rather Than as Costs
paragraphs: According to several participants, this principle is based in large part on the idea that people have an inherent desire to contribute to their organizations and to produce good work. “In the early 1980s, Xerox was in deep trouble. Our patents had run out and competition was fierce. In 1982, David Kearns, who had just become chairman, was giving a speech in a tent outside our Webster manufacturing facility in Rochester, New York. Next to the tent they’d lined up 54 trailer trucks full of defective equipment that had been returned by Xerox customers. Mr. Kearns was trying to get the message across about quality. People kept looking at the trucks and mulling this over. Finally, one of the people from the manufacturing line—a fellow named Frank Enos— said, ‘Sorry, Mr. Chairman, but why didn’t you ask us about all this? We knew we were making faulty equipment, but you guys were in such a rush to bring in a buck, you sent it out anyway. If you had only asked us, we would have told you’.” “The chairman, to his credit, called Frank Enos back the next day. Soon we began to hold employee round tables—began to truly engage the union and the employees in the quality process. The rest is history.” “Before long we’d trained 100,000 people in the quality process, and by 1989 we won the Baldrige Award. And the minute David Kearns found out that we’d won the Baldrige Award, the first person he called was Frank Enos.” “By now we’re certain that motivated, liberated employees will satisfy customers better than unmotivated, unliberated ones. We absolutely believe that involving and capitalizing on our employees is the key to our success, and, in fact, is what turned the company around. Involvement has led to huge increases in productivity, soaring morale, and great results.”
section_title: Principle 2: Emphasize Mission, Vision, and Organizational Culture
paragraphs: This principle includes the idea that an organization should articulate its mission explicitly, have a clear vision for itself, and work to create a strong organizational culture to achieve results and guide behavior. Australia’s Public Service Commission, for example, is developing legislation that would reflect this principle. The commission’s Jenni Colwill told the symposium that the challenge facing the steering committee that is now developing the legislation is “to create a culture which doesn’t rely on rules.” The committee’s philosophy, she said, is that “the Federal Public Service Act should provide a framework built on principles and values, rather than on detailed prescription.”
Colwill said the framework of principles that the steering committee will include in its forthcoming legislative proposal will probably be similar to the one advanced by Australia’s Management Advisory Board in its June 1993 report entitled Building a Better Public Service: “Responsiveness to governments: serving Ministers and the government loyally and impartially; and providing frank, honest, and comprehensive advice.
A close focus on results: pursuing efficiency and effectiveness at all levels; and delivering services to clients conscientiously and courteously.
Merit as the basis for staffing: ensuring equality of opportunity; and providing fair and reasonable rewards as an incentive to high performance.
The highest standards of probity, integrity, and conduct: acting in accordance with the letter and spirit of the law; dealing equitably, honestly, and responsively with the public; and avoiding real or apparent conflicts of interest.
A strong commitment to accountability: contributing fully to the accountability of the agency to the Government, of the Government to the Parliament, and of the Parliament to the people; fully supporting the administrative and legal measures established to enhance accountability; and recognizing that those delegating responsibility for performance do not abuse responsibility and may be called to account.
Continuous improvement through teams and individuals: striving for creativity and innovation; and making individual and team performance count.”
section_title: Principle 3: Hold Managers Responsible for Achieving Results Instead Of Imposing Rigid, Process-Oriented Rules and Standards
paragraphs: Where this principle has been implemented, line managers are held accountable for performance rather than for compliance with rules and procedures. In some instances, line managers, rather than central personnel staff, now have the authority to hire, fire, promote, evaluate, develop, and reward employees.
New Zealand has installed chief executive officers (CEOs) in its departments, each with full responsibility for managing the agency. A CEO reports to a Minister in Cabinet, who makes policy decisions. A CEO, engaged under a fixed-term, performance-based contract, manages the staff and the work. New Zealand’s CEOs are given fixed budgets under which to operate, with relatively few restrictions on how they spend the money so long as they do so within broad guiding principles and achieve the results specified in their contracts. “Whereas we had been ‘permanent’ heads of our departments, we were now ‘impermanent’ heads, called ‘Chief executives.’ And rather than being given lifetime tenure, we were put on fixed-end, 5-year contracts with performance-based criteria. If we did not perform, we could be sacked. So now I have a performance agreement with my minister, one that lays out what I’m going to deliver—or what the department is going to deliver—according to specific standards of quality, timeliness, and cost.” “As chief executives, we became accountable for employing the staff. This was another radical change. Instead of having everything controlled from the center through the public service agency, we chief executives became the employers of our staff. We were now responsible for all things related to the staff, including recruitment and selection, systems of pay and remuneration, and hiring and firing people.” “There were worries at the start that this would lead to some sort of blow-out of basic salaries, as the independent agencies somehow competed against each other and revved up the price they would be willing to pay for people’s labor. But it hasn’t worked that way, and I think that’s partly because, although the centralized control has been removed, we chief executives still have strong incentives to make sure we control our budgets. We actually now tend to work in a more cooperative way with other government departments than we might have done in the past. I think it has created far better incentives for good management and organization. Almost universally, I think, people would say it’s been a success.”
section_title: Principle 4: Choose an Organizational Structure Appropriate to the Organization, Rather Than Trying to Make “One Size Fit All”
paragraphs: Several presenters explained that their organizations have designed new structures to fit their particular missions and circumstances. Some of the reasons, they said, for moving to more flexible and adaptive organizational structures have been to (1) reduce the time it takes to get a product or service to the customer; (2) respond more quickly to changes in the environment, including new technology; (3) cut costs; (4) improve communication and information flow; and (5) make better use of employees’ skills, ideas, and creativity. “Our department used to be structured along the same specialized lines as traditional personnel offices, with branches of recruitment, placement, employee relations, training, and so forth, with branch chiefs and technicians and secretaries assigned to those branches. That system served us well enough, but over the years we found we had to make it more flexible. So we took out a level of supervision—the branch chief level—and we collapsed the organization into two self-directed work teams. The professional teams are fully cross-trained in all human resource functions and offer one-stop shopping to a set of customers. All the work comes into one place, the team members decide how it will get done, and the team manages its resources to see the job through.” “We had 18 people in our office when we started this transformation 10 years ago, and now we do just as much work—probably a lot more work and more effectively—with 9 people. We attribute that to the reengineering of work, the elimination of the mid-manager level of supervision, and the reduction of hand-offs from one branch to another. We’ve eliminated the overhead costs associated with the extra layer of supervision and shortened cycle time by eliminating hand-offs.” “Elsewhere in the city government, we have gone more and more to self-directed work teams, organizing work around the customer and omitting layers of supervision. We have about 200 employees now in various teams. We came up with a pay philosophy that was adopted by our city council, which provides for an array of awards and incentives that pay high performers above market. For people in self-directed teams, we have a model for pay based on results, demonstrated skills, what the group accomplishes collectively, customer satisfaction ratings, and budget performance.”
section_title: Principle 5: Instead of Isolating the “Personnel Function” Organizationally, Integrate HRM Into the Mission of the Organization
paragraphs: Where this principle has been implemented, HRM practices are aligned with organizational goals and objectives and are designed to reinforce organizational culture and enhance change efforts. In some cases, to achieve this integration of people management with business goals, new roles and responsibilities have been established for human resource professionals and line managers alike. Some presenters portrayed the new role of human resource professionals in their organizations as more consultative and collaborative than in the past. Among the companies represented at the symposium, vice presidents for human resources have become part of the senior management teams, ensuring that “people management” is linked to corporate goals and objectives. “In 1991, facing adverse economic conditions, IBM looked to Human Resources to help reduce costs. At first, cutting costs was seen primarily as a head-count equation. However, we soon realized that what we really needed was to deliver satisfactory services to the company at a fair price, so that human resources would not be seen as a burden on the cost of doing business. To do this, we needed to develop a new model for delivering human resources services.” “This new model, WorkForce Solutions (WFS), was created in May 1992. WFS developed a marketplace perspective, establishing a customer-driven focus in which services are based on business needs and performance is measured by customer satisfaction. It uses technology and work process reengineering to deliver quality services at low prices. We organized ourselves around processes, not functions, and have developed customer-oriented services. Technology-enabled service centers provide technology interface, human resource expert systems, case management, work flow management, and customer satisfaction assessment. Employees and managers have access to human resource information through an on-line voice-response system and smart computers.” “Initially, 450 Human Resources staff remained in the line organizations to serve in a strategic ‘advise and counsel’ capacity. The remaining 1,700 Human Resources staff members were transferred into WFS.” “This has not been an easy journey so far. WFS is now down to about 900 people. But all along, reducing the size of the staff was something that had to be done. The system now in operation efficiently serves a customer base of over 700,000 IBM employees, dependents, and retirees (down less than 10 percent from 1992 levels). Despite the fact that more than 28,000 calls are received each month, the average caller waits less than 30 seconds for service. Customer satisfaction is currently at over 89 percent.”
section_title: Principle 6: Treat Continuous Learning as an Investment in Success Rather Than as a Cost to Be Minimized
paragraphs: The participants gave several reasons why their organizations invest in continuous learning for employees, among them: (1) developing the new skills needed for managing change; (2) developing the skills and modes of behavior needed in flatter, more participatory, customer-focused, results-oriented work environments; (3) maintaining marketable skills; and (4) teaching new skills to employees who are likely to leave due to downsizing, as well as to those who remain. “When it comes to employee development, I think that many businesses have traditionally trained their people to be fairly passive. There is a learned response at work here: Employees believe that if they simply work hard, the system will take care of them. Someone will tap you on the shoulder, tell you what skills you need to develop, and promote you to the next level. I think we need to encourage people to play a far more active role in their own professional development.” “At GM Powertrain, the system encourages people to take greater responsibility for their own learning. It’s a system that was intentionally organized into components, so that employees could opt for whatever components made sense for them. The model is built around a feedback system that puts the employee at the center of the process. The employees determine their sources of feedback and are given a number of support mechanisms through which they can gather that information and do something with it. The employees themselves drive the process in terms of timing and need.” “Employees are given a whole day for self-assessment, with the idea of tooling them up to represent themselves, instead of having the organization make assumptions about them regarding their needs for growth and development. Again, employees drive the process, because they know their values, their interests, their skills, and what turns them on at work.” “The aim is to put people into jobs that are aligned with what they love to do. This, too, is a different model from that of traditional systems. Traditional systems conjure up a ledger in our minds of what we do well and what we don’t do well, then put all the development efforts into what we don’t do well. The return on investment is very small.” “This new system, on the other hand, is based on what you do well, how we can take better advantage of that, and how we can give you more of that in your working life so you will love what you’re doing and also be more productive. Clearly, there’s a different set of assumptions being applied here than in traditional models.”
section_title: Principle 7: Pursue an Integrated Rather Than an Ad Hoc Approach to Information Management
paragraphs: Several participants emphasized how crucial measurement is to results-oriented organizations. More things must be measured, they said, than the “bottom line.” They said results-oriented organizations must also track performance against mission-related goals in such areas as product quality, service delivery, and customer satisfaction. “If you remember two things from what I say, it will probably be technology and measurement. We have a strategy. We have a mission. But what keeps us focused and working on those issues of importance to us? Our corporate goals and our measurement thereof.” “In 1988, our corporate goals came out, consisting of only three numbers. On the people side, we had our leadership average—a measure of how well our employees say the management of Federal Express was providing leadership for the organization. There was one number. Then we had our service quality index—a measure of the ten things our customers thought were most important. That was another number. And finally, there was our profit number, based on global pre-tax income. What was really exciting was the news that we had to reach our corporate goals for all three of these numbers, or there would not be a cent of incentive compensation for anyone in the company.” “One strength of our information management system is that, with the exception of the leadership average—which is an annual measure—you can track these corporate goals in real time. You can measure your service at Federal Express on a daily basis. You can measure it companywide or you can measure it at any location in the company. You can measure how your profits are doing, you can track profit and loss, you can track against the budget. And you can tie all this to every management level in the company, to every employee. Our management-by-objective system aligns us with these goals, and it’s tied as well to the incentive compensation system for our managers.”
section_title: Principle 8: Provide Sustained Leadership That Recognizes Change as a Permanent Condition, Not a One-Time Event
paragraphs: One recurrent theme at the symposium was that change appears to be a permanent condition, and the successful organizations will be the ones that deal with it best. Some participants said that in a continuously changing environment, organizations must strike a balance between adhering to their visions and remaining flexible enough to adapt to new and demanding conditions. Two qualities were mentioned most often as crucial for organizations hoping to deal successfully with change: sustained, committed leadership and a long-term, strategic approach. “Listening at this symposium to these discussions about congressional and agency issues, I can assure you that we have had similar debates in Canada. Just as you have been, we are looking at how to become more effective and more efficient. And we, too, have a complex government agenda. We don’t have any clear bottom lines by which to measure our success. We lack a political focus on public service renewal. We have a crisis orientation—a lot of it driven by the media. We have this great sense of urgency, but we also have no money. We hear a lot of rhetoric about devolution, delegation, empowerment, and innovation, but we haven’t removed the structural or systemic barriers to these things. And we have a high level of risk aversion.” “Not long ago, the directors of personnel in Canada—as a community—finally decided that somebody had to lead, that it wasn’t good enough just to wait around for permission to act. Since we believed fundamentally in those core statements about people being essential to success, and that we simply have to pay greater attention to the business of managing them, we decided that we would have to be the ones to move the agenda forward as best we could. This was an interesting thing for us to try, because if ever there was a powerless group in the Canadian Government, it was the directors of personnel.” “From our perspective, we see the issue of people management as twofold. It’s a matter of the interactive leadership issues—the human dynamic, if you will—and the structural, systemic issues—how the business is done. Both ends have to be driven by core values and principles, with a focus on mission achievement—mission being the business of a given department or agency. That mission has to be achieved affordably, and in a way that is resilient in the face of change.” “You have to invest if you want to respond in new ways to change. It doesn’t happen by accident, it doesn’t happen on somebody else’s agenda, and it doesn’t happen for nothing. That means spending training dollars, supporting champions, getting barriers out of the way, and driving coherently toward a resilient organization that copes with change as a permanent reality. It’s unreasonable, of course, to think that it’s going to happen overnight. You’re in for the long haul, and you need boundless patience and persistence.”
section_title: Presenters and Panelists of the GAO Symposium on the Workforce of the Future
subsections: section_title: Presenters
paragraphs: Roger Blakeley, Chief Executive Department of Internal Affairs Government of New Zealand William F. Buehler Senior Vice President and Chief Staff Officer Xerox Corporation T. Larry Cabler, Director Human Resource Services ISSC, IBM J. Kermit Campbell, former President and CEO Herman Miller, Inc.
section_title: Panelists
section_title: GAO Contacts and Staff Acknowledgments
subsections: section_title: GAO Contacts
section_title: Acknowledgments
paragraphs: The following individuals were responsible for this report: Evaluator-in-Charge Gail Johnson, Senior Evaluator Michael J. O’Donnell, and Evaluator Annette Hartenstein planned and produced the symposium and analyzed the symposium results; Assistant General Counsel Alan Belkin provided legal advice and comments on the draft; Donna Leiss edited the draft; Barbara I. Keller reviewed the draft for consistency with GAO policies and standards; Senior Evaluator Gary V. Lawson and Evaluator Brenda J. Lindsey prepared the final text for publication. Intern Abby Clapp helped plan and produce the symposium. Ernestine Burt and Darlene Shelton provided administrative support during the symposium and during preparation of the report.
section_title: Bibliography
subsections: section_title: Nongovernment Publications
paragraphs: Ban, Carolyn. How Do Public Managers Manage?: Bureaucratic Constraints, Organizational Culture, and the Potential for Reform. San Francisco: Jossey-Bass, 1995.
Blackburn, Richard and Benson Rosen. “Total Quality and Human Resources Management: Lessons Learned from Baldrige Award-winning Companies,” Academy of Management Executive, Vol 7(3) 49-66, 1993.
Boyett, Joseph H. and Henry P. Conn. Workplace 2000: The Revolution Reshaping American Business. NY: Plume, 1992.
Conference Board. Closing the Human Performance Gap, Report #1065-94-RR, 1994.
Conference Board. The Changing Human Resources Function, Report #950, 1990.
Ingraham, Patricia W. and Barbara S. Romzek (eds). New Paradigms for Government: Issues for the Changing Public Service. San Francisco: Jossey-Bass, 1994.
Ingraham, Patricia W. and David H. Rosenbloom (eds). The Promise and Paradox of Civil Service Reform. Pittsburgh: University of Pittsburgh Press, 1992.
Ingraham, Patricia W. and Carolyn Ban, (eds). Legislating Bureaucratic Change: The Civil Service Reform Act of 1978. Albany: SUNY Press, 1984.
Johnson, Gail. Recruiting, Retaining and Motivating the Federal Workforce. NY: Quorum, 1991.
Johnson, Ronald N. and Gary D. Libecap. The Federal Civil Service System and the Problem of Bureaucracy: The Economics and Politics of Institutional Change. Chicago University Press, 1994.
Klinger, Donald. “Reinventing Public Personnel Administration as Strategic Human Resource Management,” Public Personnel Management, Vol 22 (4): 565-578, Winter 1993.
Levering, Robert and Milton Moskowitz. The 100 Best Companies to Work For in America. New York: Doubleday, 1993.
National Academy of Public Administration. Strategies and Alternatives for Transforming Human Resources Management, August 1995.
National Academy of Public Administration. Innovative Approaches to Human Resources Management, August 1995.
National Academy of Public Administration. Effective Downsizing: A Compendium of Lessons Learned for Government Organizations, August 1995.
National Academy of Public Administration. Innovative Approaches to Human Resources Management, March 1995.
National Academy of Public Administration. Leading People in Change: Empowerment, Commitment, Accountability, Washington, DC, April 1993.
Perry, James L. “Transforming Federal Civil Service: Strategic Human Resource Management”, Review of Public Personnel Administration, Vol. 13(4): 59-71, Fall 1993.
Thompson, Frank J. (ed.). Revitalizing State and Local Public Service: Strengthening Performance, Accountability, and Citizen Confidence. San Francisco: Jossey-Bass. 1993.
Thor, Carl G. The Measures of Success: Creating a High Performance Organization. New York: Wiley, 1995.
Wheatley, Margaret J. Leadership and the New Science: Learning About Organization from an Orderly Universe. San Francisco: Berrett-Koehler, 1992.
Weisbord, Marvin R. Productive Workplaces: Organizing and Managing for Dignity, Meaning, and Community. San Francisco: Jossey-Bass, 1991.
section_title: Government Publications
paragraphs: “Report of the Public Service Act Review Group”, R.N. McLeod, Chair. December 22, 1994.
Building a Better Public Service, Management Advisory Board, June 1993.
Public Service 2000: The Renewal of the Public Service of Canada, December 1990.
Leadership for America: Rebuilding the Public Service, Paul A. Volcker, Chairman. Washington, 1989.
Department of Labor, Road to High-Performance Workplaces: A Guide to Better Jobs and Better Business Results, 1994.
Merit Systems Protection Board, To Meet the Needs of the Nations: Staffing the U.S. Civil Service and the Public Service of Canada, January 1992.
National Performance Review, Common Sense Government: Works Better and Costs Less, September 1995.
National Performance Review, Creating a Government that Works Better and Costs Less - 1994 Status Report, September 1994.
National Performance Review, From Red Tape to Results: Creating a Government that Works Better and Costs Less, September 1993. [United States] National Performance Review, From Red Tape to Results: Creating a Government that Works Better and Costs Less - Accompanying Report on Reinventing Human Resource Management, September 1993. [United States] National Performance Review, From Red Tape to Results: Creating a Government that Works Better and Costs Less - Accompanying Report on the Office of Personnel Management, September 1993.
Office of Personnel Management, Partners for Change: Conference Proceedings, June 1994.
Office of Personnel Management, Towards Reinvention: A Guide to HRM Reform, December 1994.
section_title: Related GAO Products
paragraphs: Civil Service Reform: Changing Times Demand New Approaches (GAO/T-GGD-96-31, October 12, 1995).
Schools and Workplaces: An Overview of Successful and Unsuccessful Practices (GAO/PEMD-95-28, August 31, 1995).
Managing for Results: Status of GPRA (GAO/T-GGD-95-193, June 27, 1995).
Managing For Results: Critical Actions for Measuring Performance (GAO/T-GGD/AIMD-95-187, June 20, 1995).
Federal Hiring: Reconciling Managerial Flexibility with Veterans’ Preference (GAO/GGD-95-102, June 16, 1995).
Government Restructuring: Identifying Potential Duplication in Federal Missions and Approaches (GAO/T-AIMD-95-161, June 7, 1995).
Government Reorganization: Issues and Principles (GAO/T-GGD/AIMD-95-166, May 17, 1995).
Managing for Results: Steps for Strengthening Federal Management (GAO/T-GGD/AIMD-95-158, May 9, 1995).
Managing for Results: Experiences Abroad Suggest Insights for Federal Management Reforms (GAO/GGD-95-120, May 2, 1995).
Best Practices Methodology: A New Approach for Improving Government Operations (GAO/NSIAD-95-154, May 1995).
Federal Quality Management: Strategies for Involving Employees (GAO/GGD-95-79, April 18, 1995).
Workforce Reductions: Downsizing Strategies Used in Selected Organizations (GAO/GGD-95-54, March 13, 1995).
Federal Downsizing: The Administration’s Management of Workforce Reductions (GAO/T-GGD-95-108, March 2, 1995).
Management Reform: Implementation of the National Performance Review’s Recommendations (GAO/OCG-95-1, December 5, 1994).
Managing for Results: State Experiences Provide Insights for Federal Management Reforms (GAO/GGD-95-22, December 1994).
Reengineering Organizations: Results of a GAO Symposium (GAO/NSIAD-95-34, December 1994).
Government Contractors: Contracting Out Implications of Streamlining Agency Operations (GAO/T-GGD-95-4, October 5, 1994).
Executive Guide: Improving Mission Performance Through Strategic Information Management and Technology (GAO/AIMD-94-115, May 1994).
Improving Government: Measuring Performance and Acting on Proposals for Change (GAO/T-GGD-93-14, March 23, 1993).
Management of VA: Improved Human Resource Planning Needed to Achieve Strategic Goals (GAO/HRD-93-10, March 18, 1993).
Improving Government: Need To Reexamine Organization and Performance (GAO/T-GGD-93-9, March 11, 1993).
Federal Performance Management: Agencies Need Greater Flexibility in Designing Their Systems (GAO/GGD-93-57, February 24, 1993).
Federal Personnel Management: OPM Reliance on Agency Oversight of Personnel System Not Fully Justified (GAO/GGD-93-24, December 8, 1992).
The Public Service (GAO/OCG-93-7TR, December 1992).
Government Management Issues (GAO/OCG-93-3TR, December 1992).
Quality Management: Survey of Federal Organizations (GAO/GGD-93-9BR, October 1, 1992).
Organizational Culture: Techniques Companies Use to Perpetuate or Change Beliefs and Values (GAO/NSIAD-92-105, February 1992).
Meeting the Government’s Technology Challenge: Results of A GAO Symposium (GAO/IMTEC-90-23, February 1990).
Managing Human Resources: Greater OPM Leadership Needed to Address Critical Challenges (GAO/GGD-89-19, January 19, 1989).
The Public Service (GAO/OCG-89-2TR, November 1988).
Civil Service Reform: Development of 1978 Civil Service Reform Proposals, (GAO/GGD-89-18, November 1988).
Description of Selected Systems for Classifying Federal Civilian Positions and Personnel (GAO/GGD-84-90, July 13, 1984).
Improving the Credibility and Management of the Federal Work Force Through Better Planning and Budgetary Controls (GAO/FPCD-81-54, July 17, 1981).
The first copy of each GAO report and testimony is free. Additional copies are $2 each. Orders should be sent to the following address, accompanied by a check or money order made out to the Superintendent of Documents, when necessary. Orders for 100 or more copies to be mailed to a single address are discounted 25 percent.
U.S. General Accounting Office P.O. Box 6015 Gaithersburg, MD 20884-6015 Room 1100 700 4th St. NW (corner of 4th and G Sts. NW) U.S. General Accounting Office Washington, DC Orders may also be placed by calling (202) 512-6000  or by using fax number (301) 258-4066, or TDD (301) 413-0006.
Each day, GAO issues a list of newly available reports and testimony.  To receive facsimile copies of the daily list or any list from the past 30 days, please call (202) 512-6000 using a touchtone phone.  A recorded menu will provide information on how to obtain these lists.