Human Capital: Practices That Empowered and Involved Employees
Published: 2001-09-14T00:00:00

Fast Facts:

Highlights:
section_title: What GAO Found
paragraphs: People are the federal government's most valuable asset. Studies of private and public sector organizations have shown that high-performing organizations value and invest in their employees--human capital--and align their "people policies" to support organizational performance goals. In the federal government, however, strategic human capital management is a pervasive challenge. GAO has included human capital on its high-risk list. The Administration's emphasis on workforce planning and restructuring will require federal agencies to flatten their organizational hierarchy and improve their work processes. To optimize the services provided to citizens, federal employees must understand the link between their daily work and the results their organization seeks to achieve. For the initiatives GAO reviewed, agencies had to overcome organizational and cultural barriers, including a lack of trust, resistance to change and lack of buy-in from front-line employees and managers, and various implementation issues, such as workload demands. The agencies developed strategies to address these barriers, such as maintaining open communication and reassigning and hiring personnel. In implementing the practices to empower and involve employees, agencies identified a range of examples to demonstrate the performance improvements these efforts have accomplished.

section_title: Letter
paragraphs: People are the federal government’s most valuable asset in managing for  results, and you have emphasized the importance of empowering and  involving employees to help agencies achieve their goals and improve  government operations. As our studies of private and public sector  organizations have shown, high-performing organizations focus on valuing  and investing in their employees--human capital--and on aligning their  “people policies” to support organizational performance goals. However,  strategic human capital management is a pervasive challenge in the federal  government, and is one of the governmentwide areas that we have  identified as high risk.
In addition, the Administration’s emphasis on workforce planning and  restructuring will require federal agencies to examine how they can flatten  their organizational hierarchy and improve their work processes. The  Office of Management and Budget’s May 8, 2001, bulletin called for  agencies to use workforce planning to redistribute higher-level positions to  front-line, service delivery positions that interact with citizens. Effective  workforce planning and restructuring efforts will build upon  implementation of the Government Performance and Results Act of 1993  (GPRA) to address results-oriented goals, improve performance, and  assure accountability. To optimize the provision of services to citizens, it is  crucial that employees understand the connection between their daily  work activities and the results their organizations seek to achieve.
At your request, this report examines selected experiences five agencies  have had in implementing practices that helped empower or involve front- line employees. Our objectives were to (1) identify and provide examples  of the key practices agencies used to empower and involve employees,  (2) identify some of the barriers that these agencies experienced and  strategies they used to address them, and (3) provide examples of reported  performance improvements from empowering and involving employees. As  agreed, we have examined selected employee empowerment and  involvement practices at specific components within the Federal Aviation  Administration (FAA), the Federal Emergency Management Agency  (FEMA), the Internal Revenue Service (IRS), the Office of Personnel  Management (OPM), and the Veteran’s Benefits Administration (VBA). The  practices we examined at specific agency components were selected from  those initiatives agency officials identified that had, in their view,  successfully empowered and involved employees.
subsections: section_title: Background
paragraphs: No management issue facing federal agencies could be more critical to  their ability to serve the American people than their approach to strategic  human capital management, including attracting, retaining, and motivating  their employees. High-performing organizations in the private and public  sectors have long understood the relationship between effective “people  management” and organizational success. However, the federal  government, which has often acted as if federal employees were costs to be  cut rather than assets to be valued, has only recently received its wake-up  call. As our January 2001 Performance and Accountability Series reports  made clear, serious federal human capital shortfalls are now eroding the  ability of many federal agencies—and threatening the ability of others—to  economically, efficiently, and effectively perform their missions. The  problem lies not with federal employees themselves, but with the lack of  effective leadership and management, along with the lack of a strategic  approach to marshaling, managing, and maintaining the human capital  needed for government to discharge its responsibilities and deliver on its  promises.
All five of the agencies we reviewed have experienced challenges in  managing their human capital. Each has implemented management  changes in response to the challenges they face, including implementing  strategies to empower and involve employees.
FAA faces challenges, including the need to enhance communication and  teamwork, and to provide employees with the training and skills they need  to operate effectively. For example, we have reported on FAA’s  implementation of management reforms, including delegating authorities  to teams, to improve its rulemaking processes. In our July 2001 report on  aviation rulemaking we recommended, among other things, that the FAA  Administrator take steps to (1) empower team members by giving them the  authority to coordinate with the associate administrators (which would  eliminate a separate review and approval step), (2) empower team  members by permitting them to set their own schedules and deadlines, and  (3) hold staff and management accountable for ensuring that schedules are  realistic.
At IRS we identified the challenges the organization faces in revamping its  human capital policies to help achieve its congressionally mandated  transformation to an agency that better balances service to the taxpayers  with enforcement of the tax laws. IRS has made major changes to  modernize its organization and operations and comply with the IRS  Restructuring and Reform Act of 1998. These changes present major  management challenges and will require considerable time to successfully  implement them, and IRS managers and employees are still learning how to  work effectively in the new environment. In revamping its performance  management system, for example, we reported that IRS’ new system is  weakest at the front line, where interactions with taxpayers occur.  However, IRS officials told us that IRS is conducting customer satisfaction  surveys to enhance its knowledge about what IRS employees can do to  better meet taxpayers’ needs.
VBA faces challenges in processing veterans’ benefit claims accurately and  in a timely manner. In its fiscal year 2000 performance report, the Veterans  Administration reported that performance declined with respect to its  rating-related claims-processing timeliness and national accuracy rate.  Among the reasons it cited for this decline was underestimating how long it  would take to realize the impact of initiatives such as increased staffing and  improved training. We reported that many experienced claims-processing  staff are expected to retire and that VBA’s training and recruitment  programs may not be adequate to ensure a sufficient workforce of  competent claims processors. VBA officials told us that, in response to  the concern we raised that many of the training modules might not be  available in time to train new employees, VBA has stepped up  implementation of its plans to use a new Training and Performance Support  System (TPSS). This system is intended to provide standardized training  to new employees who will replace the wave of employees expected to  retire during the next several years. According to VBA officials, they are  currently using TPSS training modules to facilitate the training of some  new employees, but the training modules needed for other newly hired  employees will not be available until November 2001. In the interim, VBA is  using a web-based “field guide” to train those employees. The field guide  uses a variety of delivery mechanisms including satellite broadcasts, video  teleconferencing and centralized and localized classroom instruction.
FEMA also faces special mission-related challenges, including providing  timely responses to disaster aid requests, preventing or reducing harm and  losses from future disasters through cost-effective mitigation efforts, and  working effectively with other federal, state, and local programs. To  address its strategic human capital management challenges, FEMA has  started an initiative to reduce middle management layers and streamline its  organization.
The fifth agency we report on—OPM—downsized significantly during the  1990s. Among its many responsibilities, OPM receives tens of thousands of  federal employee claims for retirement and insurance benefits each year.  Although its processes have not changed significantly since the 1980s, OPM  plans to modernize its retirement systems. This modernization is OPM’s  central strategy to meet the long-term customer service and financial  management objectives for CSRS and FERS. In its fiscal year 2002  performance plan OPM reported that, beginning in fiscal year 2002, it will  phase in a new business model for retirement claims processing.
section_title: Scope And Methodology
paragraphs: To meet our objectives, we asked officials at five agencies to identify  initiatives they had that empowered or involved employees. From the  inventories of the initiatives they developed in response to our request, we  asked agency officials to identify those agency components and initiatives  that, in their view, had successfully involved and empowered employees.  We sought to identify practices that were commonly implemented by the  agencies within the past 5 years. In some cases, agencies focused our  attention on practices that began earlier.
We interviewed agency executives, managers, supervisors, front-line  employees, and union representatives to discuss how agencies had  implemented these practices to empower and involve employees, and we  analyzed related documents and information they provided. We did not  attempt to verify the performance data that agencies provided.
We included FAA in our review because it has certain exemptions from the  Federal Acquisition Regulations designed to facilitate delegating  procurement authorities to lower levels. We included IRS and OPM in our  review, given IRS’ exemption from certain title 5 personnel provisions and  OPM’s human capital leadership role in the federal government. FEMA and  VBA were selected because a literature review of relevant articles indicated  that front-line employees from those agencies had been empowered or  involved in key agency decisions or operations.
Because we were seeking to review initiatives that had successfully  empowered and involved employees, we asked headquarters officials to  identify organizational components for our review. Our FAA work was concentrated at the Mike Monroney Aeronautical Center in Oklahoma City,  OK.  Our FEMA work was done at the National Security Affairs Office, the  Response and Recovery Directorate, and the Operations Support  Directorate within FEMA headquarters in Washington, D.C., and at FEMA’s  U.S. Fire Administration in Emmitsburg, MD.  Our work at IRS was done at  the Wage and Investment Division in IRS’ headquarters in Washington, D.C.,  and at the Accounts Management, Submissions Processing, and  Compliance branches at the Ogden, UT, Service Center.  Our OPM work  was conducted at its Retirement and Insurance Service locations in  Washington, D.C., and Boyers, PA. Our VBA work was conducted at VBA’s  regional offices in Los Angeles, CA; Muskogee, OK; and Phoenix, AZ.  Our  selection process was not designed to provide examples that could be  considered representative of all the employee empowerment and  involvement initiatives at the agencies reviewed or the federal government  in general.
We conducted our work from October 2000 through August 2001 in  accordance with generally accepted government auditing standards.
section_title: Six Key Practices Helped Empower And Involve Employees
paragraphs: The five agencies we reviewed implemented key empowerment and  involvement practices as part of making organizational changes intended to  realign organizations and processes to improve performance.  The  practices were (1) demonstrating top leadership commitment; (2) engaging  employee unions in making changes; (3) training employees to enhance  their knowledge, skills, and abilities; (4) using employee teams to help  accomplish agency missions; (5) involving employees in planning, and  sharing performance information; and (6) delegating authorities to front- line employees.
subsections: section_title: Demonstrating Top Leadership Commitment
paragraphs: Top leadership commitment is crucial in developing a vision, initiating  organizational change, maintaining open communications, and creating an  environment that is receptive to innovation.  In earlier reports and  testimonies, we observed that top leadership must play a critical role in  creating and sustaining high-performing organizations.  Without the clear  and demonstrated commitment of agency top leadership, organizational  cultures will not be transformed, and new visions and ways of doing  business will not take root.
Consistent attention to employee empowerment and involvement issues  helps to ensure that changes are sustained.  Agency leaders need to commit  their organizations to valuing and investing in their employees by  empowering, involving, and providing them the tools to do their best, and  by implementing the modern performance management and incentives  systems needed to focus employees’ efforts on achieving agency missions  and goals.  Top leadership commitment entails time, energy, and  persistence in providing incentives and establishing accountability.  Agency  leaders must commit their organizations to valuing and investing in their  employees and focusing their employees’ efforts on achieving stated  agency missions and goals. While top leadership commitment can be  demonstrated in many ways, the following are examples employees and  managers identified for the selected initiatives we reviewed at these  agencies.
Think strategically about areas where innovation would make  good business sense.  Leaders conceptualized new approaches to  improve performance and engaged employees and managers in shaping  the implementation of that vision.  For example, the Director at FAA’s  Logistics Center saw the need for operating more like a private sector  business and envisioned the organizational and operational changes that  would be required to do that.  The Logistics Center’s Director helped to  ensure that all employees shared his vision by discussing proposed  changes with his top-level managers and by meeting with front-line  employees and union representatives to obtain their input about  potential changes.
Reorganize and integrate operations.  Leaders implemented their  visions by realigning their organizations to improve performance and  increase the coordination of mission-related activities.  For example, a  Branch Chief in OPM’s Retirement and Insurance Service enabled a new  team to improve claims processing by, among other things, providing  cross-training for the team to handle both CSRS and FERS claims.
Create an environment of trust and honest communication.
Leaders made themselves available to employees and unions, promoted  open and constructive dialog, and were receptive to ideas and  suggestions from employees at all levels.  Following an approach to  change management that is transparent and highly participatory is a key  element in involving and empowering employees.  For example, several  of the agencies held town-hall meetings with employees to discuss  workplace issues and provide a forum for input and feedback.  IRS  employees said that they felt that management used the information  they provided about proposed changes.
Target investments and provide incentives to facilitate change.   Leaders provided funding and created financial and other incentives to  support new ways of working and to encourage employees to attain the  agencies’ goals and objectives.  For example, the FAA Logistics Center  Director committed to providing every Logistics Center employee with a  $500 cash award if the Center met all of its performance targets for  fiscal year 2001.  At the time of our review, the Logistics Center was on  track to meet or exceed its goals.
Participate in efforts to benchmark successful organizations.
Some leaders visited organizations that were models for enhancing  organizational flexibility and maintaining quality standards.  By visiting  and benchmarking model performance practices, leaders demonstrated  to employees their personal commitment to making the changes needed  for their offices or units to become high-performing organizations. For  example, the Director of one VBA regional office visited several private  sector organizations to observe how they processed claims and ensured  accuracy.  The insights gained were factored into the changes made in  regional office claims operations.
Use a 360-degree performance feedback system.  One leader used  input from team members to improve the team’s performance.  An OPM  Branch Chief who supervises the cross-trained claims processing team  implemented a 360-degree feedback system for assessing both her and  her team members’ performance.  Under that system, team members  provide her with input on her performance as a team coach as well as  input on the performance of other team members.  She then uses that  information for self-assessment and in providing performance feedback  to individual team members.
section_title: Engaging Employee Unions
paragraphs: Involving employee unions, as well as involving employees directly, is  crucial to achieving success.  Major changes can involve redesigning work  processes, changing work rules, developing new job descriptions,  establishing new work hours, or making other changes to the work  environment that are of particular concern to employees’ unions.   Obtaining union cooperation and support through effective labor- management relations can help achieve consensus on the planned changes,  avoid misunderstandings, and more expeditiously resolve problems that  occur.  The following are examples of how agencies engaged employee  unions.
Develop and maintain an ongoing working relationship with  unions.  Agencies worked cooperatively with employee unions and  found that an ongoing relationship enhanced communication.  For  example, OPM maintained a continuous dialog through weekly meetings  of management and union representatives to share information and  address workplace issues.  Officials at OPM’s Retirement Operations  Center at Boyers, PA, and the American Federation of Government  Employees (AFGE) said that their excellent working relationship helped  facilitate the adjustments made to incorporate new technology at the  Center.  They said when new technology reduced the Center’s need for  file clerks, union and management officials worked together to ensure  that affected employees received advance notice about upcoming  changes, training in new skills, and information about available job  opportunities.
Document formal agreements.  Agencies had formal agreements to  serve as a foundation setting forth the manner in which labor and  management would work together.  For example, the agreement  between IRS and the National Treasury Employees Union (NTEU) was  designed to ensure that employees are adequately represented and  informed of proposed new policies and have input into the proposals.
The agreement also provides for continuous improvement in IRS  operations in part by providing employees the authority, resources, and  other inputs they need to effect changes and to be accountable for  performing effectively, and provides for NTEU participation in various  forums, such as business process improvement teams and cross-unit  committees.
Build trust over time.  Some agencies have undertaken a long-term  effort to create an environment of trust and openness in working  cooperatively with unions.  For example, both IRS and NTEU officials  credited the excellent working relationship they developed over the last  decade for helping to reorganize IRS.  Officials at IRS stated that the  reorganization has resulted in operating divisions that are focused on  serving taxpayers and flatter decision-making structures with clear end- to-end accountability.  The NTEU President said that the union was  willing to expedite some negotiations on mission-critical issues because  a trusting relationship had developed and IRS employees felt that  management used the information they provided in shaping the new  IRS.
Participate jointly in making decisions.  Agencies involved unions  and incorporated their input into proposals before finalizing decisions.  For example, several unions provided suggestions about how agencies  should share performance information with employees.  In another  instance, OPM’s Operations Center and AFGE worked jointly on pre- decisional matters, such as the hiring of a new director of the  Operations Center.
section_title: Training Employees to Enhance Their Knowledge, Skills, and Abilities
paragraphs: Both employees and managers viewed training as a critical factor in  learning how to work in new and different ways.  To improve customer  service, employees may need new skills, such as the ability to analyze and  improve work processes or the ability to work effectively together on  teams.  In addition to job-specific skills and work processes, training in  teamwork and communications and encouragement and coaching through  mentoring and networking can help employees adapt to new ways of  working that involve changes in their roles and job expectations.  VBA  officials, for instance, told us that, along with providing various training  modules, employees also need on-the-job training, coaching and mentoring  to enhance their expertise through actual experience in processing claims.  The following are examples of how agencies trained employees in new  processes.
Provide a mix of on-the-job and formal training.  Agencies used a  variety of training techniques to help employees adjust to organizational  and operational changes.  For example, OPM provided on-the-job cross  training so that a claims processing team could adjudicate both CSRS  and FERS claims.  According to the Branch Chief, because the team  received cross-training, it was able to help another division reduce its  backlog of FERS cases.  OPM also provided formal training to teams in  how to make decisions in setting goals, planning and assigning work,  and scheduling overtime and training.
Provide training on building team relationships and new ways of  working.  When making significant changes to their operations,  agencies provided training to help facilitate change.  For example, when  IRS undertook a major reorganization, its Ogden, UT, Service Center  trained its employees in the new ways of conducting business.  The  training workshops included (1) learning how effective teams function; (2) improving working relationships among peers, managers and  employees, and managers and union stewards; (3) enhancing effective  communications among employees, union stewards, and managers;  (4) increasing discussions about ways to improve work processes and  meet customers’ needs; and (5) creating a more positive workplace  environment.  The employees we interviewed said that training on  effective working relationships was especially beneficial because they  got to know their co-workers and gained an appreciation for each  others’ views.
Commit sufficient funding and time to training.  Agencies  considered training needs in budget decisions and their workforce  planning. For example, as FAA’s Logistics Center was being reorganized  to operate in a more businesslike manner, it trained employees about  the need for, as well as on how to develop, quality work processes.  This  enabled employees to document information that was required for the  Logistics Center to receive International Organization for  Standardization (ISO) 9000 certification for quality work processes. To  receive this certification, an organization must show that it has  standardized, high-quality processes that result in products and services  that are provided in a timely manner.
section_title: Using Employee Teams To Help Accomplish Agency Missions
paragraphs: Adopting a teams-based approach to operations can improve employee  morale and job satisfaction by creating an environment characterized by  open communication, enhanced flexibility in meeting job demands, and a  sense of shared responsibility for accomplishing agency goals and  objectives.  Using teams can also assist in integrating different  perspectives, flattening organizational structure, and streamlining  operations.  In a prior GAO report on best practices, we said that  commercial firms began using integrated product teams in the 1980s as a  way to get better results faster. An integrated product team is a  concentration of product expertise within a team of employees who,  together, have the authority to design, develop, test, manufacture, and  deliver a product. In examining FAA’s efforts to modernize its air traffic  control systems, we stated that although FAA has identified an integrated  team approach as key to the agency’s efforts to deploy systems that meet  performance goals, major offices still tended to function in stovepipes that  inhibit an integrated team approach.
The following are examples of how teams were used in the agency  initiatives we reviewed.
Create teams of employees who represent multiple  organizational functions and different grade levels.  Agencies  flattened their organizational structures by including employees from  various organizational functions and grade levels on teams.  For  example, VBA consolidated regional office operations by merging two  divisions and creating teams with members from both functions who  could process claims from beginning to end.  In some cases, forming  teams provided opportunities for front-line employees to assume  leadership roles.  FEMA’s teams at the U.S. Fire Administration provided  opportunities for front-line employees to lead teams whose members  included a mix of employees and supervisors.  Agencies also took steps  to streamline their processes by using a team approach.  For example,  VBA streamlined its claims process by allowing one employee to handle  all aspects of a claim, instead of requiring employees to write referrals  and wait for responses from other divisions.  VBA’s team approach also  enhanced accountability to veterans because team members were  responsible for handling specific claims.
Establish an integrated working environment with common  goals.  When agencies established teams, this provided an environment  in which individual team members were encouraged to work together  toward achieving team goals.  For example, FEMA’s U.S. Fire  Administration teams had members from units throughout the  organization.  The teams met on a weekly basis and identified ways to  implement over 170 Board of Visitors recommendations for improving  the Fire Administration’s operations.  These teams facilitated  communications and employee involvement by maintaining a focal  point for the organization, working toward consensus, and posting  performance data showing progress toward addressing these  recommendations.
Assign team responsibilities and provide an environment for  learning.  Agencies assigned a broad range of responsibilities to teams  and allowed members to help each other and learn new skills.  For  example, VBA’s claims-processing teams were responsible for  controlling claims from when first received until finally adjudicated.   That required the team to conduct a full range of claims functions,  including receiving and controlling the claims, contacting veterans and  hospitals to obtain information, and making benefit decisions.  Team  members were able to assist other team members when needed, which  helped develop team members’ skills in functions they did not  previously perform.  To enable the team to efficiently meet their  objectives, the teams were also responsible for setting their work  schedules and managing their workload.
Hold teams accountable for results.  The agencies held teams  accountable for accomplishing their work, and working together in a  team environment encouraged team members to share accountability.   When teams made decisions about how to do their work, employees told  us they felt greater accountability for the teams’ overall performance.   For example, members of the FAA Logistics Center’s integrated product  teams were accountable for all aspects of the Center’s products,  including maintenance, repair, storage, and shipping.  The teams’  performance was measured on a regular basis, providing direct  feedback to the teams.
Physically collocate team members when appropriate.  Agencies  collocated team members when the employees had been working in the  same building or facility.  Although technology is being used to help  bring teams that are geographically dispersed together in a virtual  environment, to the extent that team members are already located  nearby, moving team members to a shared location improved  communication and enhanced efficiency. For example, collocating  OPM’s retirement team members facilitated the sharing of information  among members and led to improved work processes and customer  satisfaction.
section_title: Involving Employees in Planning and Sharing Performance Information
paragraphs: Involving employees in planning and sharing performance information can  help employees understand what the organization is trying to accomplish  and how it is progressing in that direction.  Involving employees in the  planning process helps to develop agency goals and objectives that  incorporate insights about operations from a front-line perspective, as well  as increases employees’ understanding and acceptance of organizational  goals and objectives.  Involving front-line employees in the goal-setting  process also helps create a clear “line of sight” throughout the organization  so that everyone understands what the organization is trying to achieve and  the goals it seeks to reach.  Employees we met with appeared committed to  working toward the goals of their agencies and to providing high quality  service.
Sharing performance information can provide employees with a more  meaningful perspective about how their day-to-day activities contribute  toward the organization’s goals and objectives.  Sharing performance  information also allows supervisors to provide clearer and more specific  feedback to teams and front-line employees on their expectations,  progress, and performance.  Agencies’ use of performance information can  be improved. In May 2001, we reported that, based on a survey of federal  managers at 28 agencies, at no more than 7 of the 28 agencies surveyed did  50 percent or more of the managers respond that they used performance  information to a great or very great extent. However, at the agencies we  visited, managers used performance information and shared this  information with front-line employees through various mechanisms.  Some  of these agencies, such as VBA and IRS, used a balanced scorecard  approach, which is intended to provide a balanced perspective regarding  agency results, customer satisfaction, and employee feedback.  At one of  VBA’s regional offices, for example, computerized information is  continuously displayed on video screens providing employees with current  performance information.
The employees we met with were aware of their agencies’ and their units’  performance goals and objectives, and they said that sharing performance  information had enhanced communications across all levels of the  organization.  Employees told us that sharing performance information  provided everyone with a focus to work toward and a status report on their  progress.  They also said that sharing performance information generated  more performance-related discussions, including at town-hall meetings,  other meetings with managers, and during team meetings.
The following are examples of how agencies involved employees in  planning and sharing performance information.
Create mechanisms to involve employees in the planning process.
Agencies used various mechanisms to develop strategic plans, gather  feedback from internal stakeholders for identifying gaps in existing  strategic plans, and obtain employee input and feedback.  For example,  one IRS division used an employee team to help to develop its strategic  plan.  The team ensured that all division employees had opportunities to  provide input, and the agency used that input as part of its efforts to  develop a balanced set of goals and objectives for the division.
Post performance information throughout the workplace.
Agencies shared performance information with employees by posting it  through a variety of means, including charts, graphs, newsletters, and  agency intranet postings.  For example, FAA’s Logistics Center posted  performance charts and graphs in the entry foyers of its buildings and at  the entrances to its organizational units. Such postings permitted  employees to easily see how their units’ performance was contributing  to agency goals and objectives.  The Logistics Center also had a monthly  newsletter for sharing organizational performance information and  providing an arena for employees to share information.
Share performance information in meetings.  Agencies frequently  held town-hall and other meetings to discuss program performance and  organizational issues. Agencies used town-hall meetings to help  employees better understand how their work efforts contributed to  overall organizational success.  The town-hall meetings also provided a  forum in which employees and managers could discuss organizational  changes and suggest operational improvements. For example, IRS’  Ogden, UT, Service Center employees we interviewed said that for the  first time regular and effective communications between Center  managers and employees was occurring.  They said that, in addition to  listening, managers were taking action on employees’ suggestions,  which made the employees see that their input was valued. Frequent  team meetings provided employees an opportunity to obtain feedback  about agency performance.  For example, VBA teams shared  performance information at weekly meetings, information that helped  the teams assess their progress in meeting performance goals.
Survey employees on their views regarding organizational  direction.  Agencies used surveys to obtain employees’ views, such as  input regarding the direction of organizational changes.  IRS’ Wage and  Investment Operating Division surveyed employees on the strengths,  opportunities, and priorities for each of the division’s branches, shared  survey results with employees, and implemented changes as a result.
section_title: Delegating Authorities to Front-line Employees
paragraphs: Delegating authorities to front-line employees involves the transfer of  authorities from managers to those employees who are closer to citizens  and provide services and information as part of their day-to-day activities.   Providing delegated authorities can enable employees to control their own  work processes and schedules.  Delegating authorities also gives  employees the opportunity to look at customer needs in an integrated way  and effectively respond to those needs.  Delegating authorities can benefit  agency operations by streamlining processes.  Furthermore, delegating  authorities to front-line employees gives managers greater opportunities to  concentrate on problems or policy-level issues.  If employees believe they  have the authority to tackle goals and objectives beyond their formal job  descriptions and assigned units, then when customers have legitimate  complaints, empowered front-line employees can “make it right”  immediately rather than having to wait for management to get involved.
The following are examples of how agencies delegated authorities to front- line employees.
Empower on-site staff with authority to make decisions.  Agencies  delegated authorities and empowered front-line employees to exercise  responsibilities to more fully address customer needs.  For example,  FEMA public assistance coordinators are on-site at the disaster or  emergency to observe the conditions and to coordinate public  assistance.  They were delegated the authority to determine applicants’  eligibility, to approve up to $100,000 in public financial assistance, and  to help to ensure that applicants are kept fully informed throughout the  public assistance process.
Eliminate layers of review.  Agencies reduced the number of  approvals needed for various activities and delegated greater authority  to front-line employees to make decisions.  For example, FAA’s  Aeronautical Center delegated authorities to its audiovisual teams to  make decisions while on location, such as the need to visit locations in  addition to those originally planned and approved.  This allowed the  audiovisual teams to more efficiently meet customer needs.  At FEMA,  delegating authority to the Public Assistance Coordinators eliminated  two additional state reviews of applications for assistance and two other  reviews by FEMA.
Provide more time for managers to focus on problem areas or  policy matters.  Agencies targeted managers’ skills on more difficult  problems or policy areas by delegating some authorities to front-line  employees.  For example, VBA managers said they were able to use their  time more efficiently after delegating day-to-day claims-processing  authorities to the teams.  They said that by delegating these authorities,  they could concentrate on policy matters and more difficult problems  that the teams were unable to handle.
Establish a new position with appropriate authority.  Some  agencies identified situations in which new positions of authority could  help benefit operations.  For example, VBA, as part of its efforts to  reengineer its claims processing, established a new decision review  officer position and provided employees in those positions the authority  to review and change claims decisions that veterans appealed.  Prior to  this, veterans’ appeals were addressed under a formal hearing process.   Because decision review officers have more flexibility to address  appeals informally, creating this new position provided the opportunity  to streamline the process and save time.
section_title: Agencies Addressed Barriers To Efforts That Empowered And Involved Employees
paragraphs: The agencies we reviewed undertook changes that represented a  significant shift from their traditional operations and, as such, encountered  organizational and cultural barriers that needed to be overcome as they  sought to empower and involve employees.  Some of the barriers included  a lack of trust, resistance to change and a lack of buy-in, and  implementation issues.  Despite encountering these barriers, the  employees and managers we met at each of the five agencies perceived  benefits from the employee empowerment and involvement practices that  their agencies had implemented.  To address the barriers, the agencies used  such strategies as open communication, a commitment to change, and  providing performance feedback.
All of these efforts entailed cultural transformations, and therefore there  was some natural resistance that took time and effort to overcome.   Nevertheless, the experiences of these agencies demonstrate that  organizations can make progress in addressing barriers to empower and  involve their employees. The following are some examples of the barriers  encountered and the strategies used to address them.
subsections: section_title: Lack of Trust
paragraphs: The agencies identified a lack of trust as a barrier they experienced in their  efforts to empower and involve employees.  A lack of trust can frustrate  agency attempts to implement major changes in employees’ day-to-day  working environment. Throughout our review, managers, unions, and  employees continuously emphasized the importance of trust in gaining  acceptance for changes.  For example, some employees feared for their job  security as FAA’s Logistics Center began to implement more business like  operations.  However, they told us that they learned to trust the Logistics  Center’s Director as they recognized the need for the changes.
Some employees were skeptical that managers would listen to their input  for planning purposes.  They were also concerned that performance data  would be used to justify punitive actions, rather than to increase  employees’ understanding about the direction of the agency’s performance.   In addition, working in a more open environment requires employees to  trust and help each other, which some employees said initially was a  barrier to working as a team.  Maintaining an open door policy that  encouraged employees to share their views and demonstrating a vision and  commitment to change were two approaches that agencies used to develop  trust.
section_title: Resistance to Change and Lack of Buy-in
paragraphs: Another barrier that agencies experienced was resistance to change and a  lack of buy-in.  Employees and managers resisted making changes because  they had to work in new and unfamiliar ways.  Some employees found it  difficult to transition from working under direct supervision to working on  a team with little direct supervision.  For example, according to FEMA  officials, some team members continued to seek leadership and guidance  from management, did not trust other team members, and were reluctant to  speak out in the team environment until they eventually adjusted to  working in a team environment.
According to officials from the five agencies, some managers found it  difficult to operate in a new environment of more open communication and  feedback. Some FEMA managers and supervisors were reluctant to allow  employees to have delegated authorities in areas such as budgeting,  procurement, and time and attendance report approval.  At FAA’s  Aeronautical Center, some employees with contracting responsibilities  were initially uncomfortable exercising newly delegated procurement  authority to purchase goods or services up to a certain dollar amount  without supervisory approval.  The employees said that they gained  confidence as they became more experienced in exercising the new  authority, and some of the employees and managers who initially resisted  changes adjusted to them gradually over time. In some cases, the offices we  visited made managerial and supervisory changes when individuals were  unable to adjust to a more open work environment.
A lack of buy-in resulted in some employees and managers being reluctant  to fully participate in training.  They tended to view the changes being  made as another “flavor-of-the-month” initiative.  Thus, they were not as  open to receiving new information or adopting new ways of working.  IRS  provided an example of a solution to this barrier.  To encourage managers  to buy into team concept training, IRS has decided to train section chiefs  who will then train employees in their work units.
section_title: Implementation Issues
paragraphs: Implementation issues, such as workload demands and performance  incentive issues, also presented barriers to change.  Although employees  generally appreciated the changes made to work in a team environment,  high workload demands affected some team members’ ability to exercise  their delegated authority.  VBA, for example, has a large, and growing,  backlog of compensation and pension claims. Although team members  had the authority to set their schedules and determine their day-to-day  work priorities, heavy workload demands prevented them from being able  to plan and manage their work.  Some of VBA’s decision review officers  also told us that their ability to exercise their delegated authorities had  been limited by the claims-processing backlogs.
Another implementation issue that affected teams involved the incentives  that agencies provided to teams to encourage performance.  For example,  some employees said that working on teams was demotivating when poor  performers obtained an equal share of team rewards. Some employees and  managers said that not enough money was available for rewarding  employees and teams that met their goals and objectives.  Such issues were  commonly addressed in team meetings and in individual performance  feedback.
The timing of training was another implementation issue that agencies  cited as a barrier.  For example, some team members told us that it would  have been helpful if they had received training before being reorganized  into teams, rather than after.  Because training was not provided prior to  moving to a team environment, the teams were immediately faced with the  need for team members to take time off of the front lines for training and  skill building.  Providing training at the appropriate time for an employee  can achieve better results.
section_title: Agencies Cited Examples Of Performance Improvements
paragraphs: Agencies identified a range of examples to demonstrate the different ways  performance can be improved in implementing the practices to empower  and involve employees.  As we have reported before when looking at  management reform efforts, it is difficult to disentangle the effects of  numerous initiatives and external factors that affect each agency’s  environment. For example, external factors such as legislative changes  that resulted in reopening nearly 100,000 veterans’ claims and the  increasing complexity of these claims have affected VBA’s results in  addressing its claims backlog.
Officials from the five agencies attributed improved operations to the  employee empowerment and involvement initiatives they had  implemented, and the specific offices we visited had achieved successes in  implementing the practices we reviewed in this report. Therefore, these  examples are presented to illustrate how performance can improve  through the contributions of empowered and involved employees.
FAA’s Logistics Center Radar Product Division team addressed  emergencies, as well as routine tasks, more quickly.  Established in  1998, this Division is an integrated product team of experts such as  engineers and electronic technicians, who perform all of the functions  required to repair ground-based radar systems.  In April 2000, the airport  surveillance radar at Boston’s Logan Airport was ripped from its  mounting pedestal during severe weather conditions, severely reducing  the number of flights in and out of Logan Airport.  Working together, the  team, along with other FAA and non-FAA organizations, made extensive  repairs and restored radar service within 58 hours after the incident.  In  December 2000, a similar problem occurred at New York’s JFK airport,  and the team restored service within 56 hours.
According to Logistics Center officials, prior to working as an integrated  product team, it required longer for FAA to coordinate a response to  similar emergencies and fully restore service. FAA said that collocating  all of the logistics functions including Engineers, Items Managers,  Technicians, Equipment Specialists, etc, allowed the team to work  together on priority areas. Collocation also eliminated communication  barriers, such as the need to write memos or leave voice mail messages  to request services and wait for responses. Forming the team also  allowed FAA to reduce overlapping roles and responsibilities. Logistics  Center officials said that the Radar Product Division team’s coordinated  operations saved time, including reducing the average number of days  required to obtain research assistance from 45 days to 1 day.
FEMA’s customer surveys show improved satisfaction.  According to  FEMA, one of its goals was to transform the public assistance program  into a customer-driven and performance-based program, thereby  improving the quality and delivery of service to state and local  applicants.  Customer surveys conducted by FEMA after each disaster  where public assistance was provided showed that customer  satisfaction has improved.  Fiscal year 2000 survey results showed that  85.6 percent of the respondents were satisfied with the assistance FEMA  provided, an increase from the 81.4 percent customer satisfaction level  FEMA achieved in fiscal year 1999.  FEMA’s fiscal year 2001 target is to  increase its customer satisfaction results up to 87 percent.  FEMA  officials we met with said that delegating authority to the employees in  Public Assistance Coordinator positions had contributed to this  improvement.
OPM’s retirement claims processing team helped another Division in the  Retirement and Insurance Service reduce a backlog of retirement  claims.  In February 2000, there was a backlog of about 12,000 FERS  retirement claims, and OPM’s management instituted a seven-point plan  to address this problem. One of the components of the plan was to  provide an existing group of CSRS benefits specialists with cross  training in FERS claims adjudication. OPM said that the team’s  flexibility, attitude, and work ethic played a significant role in the  success of this effort, which was OPM’s first cross-training initiative.  According to OPM, the team’s contribution, along with reallocating staff,  hiring, and improved automation, led to a 7,000 case reduction in the  backlog by March 2001.
IRS’ Substitute for Return Authority has expedited taxpayer compliance.
In some cases, IRS employees are authorized to prepare substitute tax  returns for taxpayers that did not file or filed a false return.  Instead of  referring requests to a different office as was done in the past, IRS has  delegated this authority to revenue officers.  This allows one-stop case  resolution, because the revenue officers now maintain complete control  of the case through collection of any balance due.  By streamlining IRS’  processes, additional taxes are being assessed within 5 to 8 months,  much faster than the 30 months it usually took before.  This also benefits  taxpayers, because the amount of penalties and interest added to  taxpayer accounts is reduced when assessments are more timely.  IRS  reported that during a fiscal year 2000 pilot program, revenue officers  with delegated authorities prepared 257 non-filer cases involving tax  assessments of about $3.5 million.
When VBA established its decision review officer position, it first used a  pilot program to test the new operational approach at 12 locations. VBA  found that during the pilot phase, which ended December 31, 2000, the  number of appeals resolved at the regional office level increased by 10  percent. By implementing this position nationwide, VBA projects there  will be a 45 percent increase in the number of appeals resolved at the  regional offices during fiscal year 2001. VBA attributes the increased  number of appeals resolved at the regional office level to the efforts of  its decision review officers.
section_title: Conclusions
paragraphs: As agencies plan and implement the President’s initiative to restructure  their workforces and streamline their organizations, they need to recognize  how human capital contributes to achieving missions and goals.  Effective  changes can only be made and sustained through the cooperation of  leaders, union representatives, and employees throughout the organization.   All members of an organization must understand the rationale for making  organizational and cultural changes because everyone has a stake in  helping to shape and implement initiatives as part of agencies’ efforts to  meet current and future challenges.  Agencies can improve their  performance by the way they treat and manage their people.
In this report we have identified six key practices used in selected  initiatives to help to empower and involve employees in identifying and  implementing needed changes.  These practices are   providing sustained leadership commitment to open communications  and support culture change,  engaging unions to include all perspectives in achieving consensus   using a variety of formal and on-the-job training approaches to facilitate  the development of new skills,  encouraging employees to combine their resources and talents by  working together in teams,   involving employees in planning and sharing performance information  so that employees help shape agencies’ goals and better understand how  their day-to-day activities contribute to results, and  empowering staff by giving them the authority they need to make  decisions and effectively conduct agency operations.
Each federal agency will need to consider the applicability of these  practices within the context of its own mission, needs, and culture.   Nevertheless, we believe that agencies can improve their performance,  enhance employees’ morale and job satisfaction, and provide a working  environment where employees have a better understanding of the goals  and objectives of their organizations and how they are contributing to the  results that American citizens want.  We believe that the practices we  identified should be considered by other agencies as they seek to improve  their unique operations and respond to the challenges they are facing.
section_title: Agency Comments
paragraphs: We provided drafts of this report in August 2001 to the Secretary of  Veterans Affairs, the Secretary of Transportation, the Commissioner of  Internal Revenue, the Director of the Office of Personnel Management, and  the Administrator of the Federal Emergency Management Agency, or their  designees, for their review. Cognizant agency officials from DOT, IRS, OPM,  and FAA responded orally and agreed with the contents of the draft report.  In some cases, they also provided written technical comments to clarify  specific points regarding the information presented. Where appropriate, we  have made changes to this report that reflect these technical comments.  FEMA did not provide comments on this report.
As agreed with your office, unless you announce the contents of this report  earlier, we plan no further distribution until 30 days after its issue date.  At  that time, we will send copies of the report to the Chairman, Subcommittee  on Oversight of Government Management, Restructuring, and the District  of Columbia, Senate Committee on Governmental Affairs; the Chairman  and Ranking Member, Senate Committee on Governmental Affairs; and the  Chairman and Ranking Member, Subcommittee on Security, Proliferation,  and Federal Services, Senate Committee on Governmental Affairs.  We will  also send copies to the Secretary of Veterans Affairs, the Secretary of  Transportation, the Commissioner of Internal Revenue, the Director of the  Office of Personnel Management, and the Administrator of FEMA.  In  addition, we will make copies available to others upon request.
If you have any questions about this report, please contact me or Susan  Ragland on (202) 512-6806.  Others who contributed to this report were  N. Scott Einhorn, Shirley Bates, Tom Beall, Gerard Burke, Renee Chafitz,  Sharon Hogan, Cassandra Joseph, John Lesser, Michelle Sager, and Greg  Whitney.
section_title: Related GAO Products
paragraphs: Managing For Results: Federal Managers’ Views Show Need for Ensuring  Top Leadership Skills (GAO-01-127, Oct. 20, 2001).
Veterans Affairs: Status in Achieving Key Outcomes and in Addressing  Major Management Challenges (GAO-01-752, June 15, 2001).
Veterans Benefits: Training for Claims Processors Needs Evaluation  (GAO-01-601, May 31, 2001).
Managing For Results: Federal Managers’ Views on Key Management  Issues Vary Widely Across Agencies (GAO-01-592, May 25, 2001).
Best Practices: DOD Teaming Practices Not Achieving Potential Results  (GAO-01-510, Apr. 10, 2001).
High-Risk Series: An Update (GAO-01-263, Jan. 2001).
Major Management Challenges and Program Risks: Department of  Transportation (GAO-01-253, Jan. 2001).
Major Management Challenges and Program Risks: Department of the  Treasury (GAO-01-254, Jan. 2001).
Major Management Challenges and Program Risks: Department of  Veteran Affairs (GAO-01-255, Jan. 2001).
Major Management Challenges and Program Risks: Department of  Veterans Affairs (GAO-01-255, Jan. 2001).
Veterans Benefits Administration: Problems and Challenges Facing  Disability Claims Processing (GAO/T-HEHS/AIMD-00-146, May 18, 2000).
Veterans Benefits: Promising Claims-Processing Practices Need to be  Evaluated (GAO/HEHS-00-65, Apr. 7, 2000).
Veterans Benefits Administration: Progress Encouraging, but Challenges  Still Remain (GAO/T-HEHS-99-77, Mar. 25, 1999).