Human Capital: Practices That Empowered and Involved Employees
Released: 2001-10-23T00:00:00

Letter

Background

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.

Scope And Methodology

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.

Six Key Practices Helped Empower And Involve Employees

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.

Demonstrating Top Leadership Commitment

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.

Engaging Employee Unions

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.

Training Employees to Enhance Their Knowledge, Skills, and Abilities

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.

Using Employee Teams To Help Accomplish Agency Missions

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.

Involving Employees in Planning and Sharing Performance Information

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.

Delegating Authorities to Front-line Employees

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.

Agencies Addressed Barriers To Efforts That Empowered And Involved Employees

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.

Lack of Trust

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.

Resistance to Change and Lack of Buy-in

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.

Implementation Issues

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.

Agencies Cited Examples Of Performance Improvements

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.

Conclusions

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.

Agency Comments

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.

Related GAO Products

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).