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

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