Established as a department in 1913, Labor carries out its mission by administering and enforcing a variety of federal labor laws guaranteeing workers’ rights to a workplace free from safety and health hazards, a minimum hourly wage and overtime pay, family and medical leave, freedom from employment discrimination, and unemployment insurance. Labor also protects workers’ pension rights; provides job training programs; helps workers find jobs; works to strengthen free collective bargaining; and keeps track of changes in employment, prices, and other national economic measures. About three-fourths of Labor’s almost $35 billion budget is composed of mandatory spending on income maintenance programs, such as the unemployment insurance program. Table 1 shows Labor’s appropriation and authorized staff-year spending for fiscal year 1998. Fiscal year 1998 appropriations (millions) Unemployment insurance and other income maintenance expenses Occupational Safety and Health Administration Mine Safety and Health Administration Pension and Welfare Benefits Administration Office of the Inspector General Included under employment training. Labor’s diverse functions are carried out by different offices in a decentralized organizational structure. Labor has 24 component offices or units and more than 1,000 field offices to support its various functional responsibilities (see fig. 1). However, its many program activities fall into two major categories: enhancing workers’ skills through job training and ensuring worker protection. A third category relates to developing economic statistics, such as the Consumer Price Index (CPI) and unemployment data, which are used by business, labor, and government in formulating fiscal and monetary policy and in making cost-of-living adjustments. reliable information for executive branch and congressional decision-making. The Results Act is aimed at improving program performance. It requires that agencies, in consultation with the Congress and after soliciting the views of other stakeholders, clearly define their missions and articulate comprehensive mission statements that define their basic purposes. It also requires that they establish long-term strategic goals and link annual performance goals to them. Agencies must then measure their performance against the goals they have set and report publicly on how well they are doing. In addition to monitoring ongoing performance, agencies are expected to evaluate their programs and to use the results from these evaluations to improve the programs. The Results Act requires virtually every executive agency to develop a strategic plan covering a period of at least 5 years from the fiscal year in which it is submitted and to submit the plan to the Congress and the Office of Management and Budget (OMB). OMB provided guidance on the preparation and submission of strategic plans as a new part of its Circular No. A-11—the basic instructions for preparing the president’s budget—to underscore the essential link between the Results Act and the budget process. The strategic plans are to include six elements: (1) a mission statement, (2) long-term goals and objectives, (3) approaches or strategies to achieve the goals and objectives, (4) a discussion of the relationship between long-term goals and annual performance goals, (5) key external factors affecting goals and objectives, and (6) evaluations used to establish goals and objectives and a schedule for future evaluations. OMB required agencies to submit major parts of their draft strategic plans during the spring of 1997. The completed strategic plan was due to OMB and the Congress by September 30, 1997. The act requires agencies to submit annual performance plans tied to the agencies’ budget request to reinforce the connections between the long-term strategic goals outlined in the strategic plans and the day-to-day activities of program managers and staff. Labor is expected to submit its first annual performance plan, which covers fiscal year 1999, this week along with its budget request. Labor’s decentralized structure makes it both more important and more difficult to ensure a system of accountability as envisioned in the Results Act. Labor’s September 30, 1997, strategic plan reflects Labor’s decentralized approach and the difficulty it presents for establishing departmentwide goals and monitoring their attainment. Labor has traditionally operated as a set of individual components, each working largely independently with limited central direction and control. This decentralized organizational structure may allow Labor more flexibility to meet a variety of needs and focus resources in the field. However, it also makes adopting the better management practices envisioned by the Results Act more challenging. That is, articulating a comprehensive departmentwide mission statement, which is linked to results-oriented goals, objectives, and performance measures, is difficult because of the historical lack of central planning and the existing decentralized organizational structure. Labor chose to present individual plans for 15 of its 24 component offices along with a strategic plan overview. This option was not inappropriate—it was specifically allowed by OMB. While OMB Circular A-11 strongly encourages agencies to submit a single, agencywide strategic plan, it states that an agency with disparate functions, such as Labor, may prepare several strategic plans for its major components or programs. Circular A-11 further provides that when an agency does prepare multiple strategic plans for component units, these should not be merely packaged together and submitted as a single strategic plan because the size and detail of such a compilation would reduce the plan’s usefulness. Moreover, the agency is to prepare an agencywide strategic overview that will link individual plans by giving an overall statement of the agency’s mission and goals. Labor’s overview contains six departmentwide goals. Five of these are results-oriented, and the sixth describes the process that will support the achievement of the other goals: lifelong learning and skill development; promoting welfare to work; enhancing pension and health benefits security; safe, healthy, and equal opportunity workplaces; helping working Americans balance work and family; and maintaining a departmental strategic management process. The strategic plan Labor submitted to OMB and to the Congress on September 30, 1997, addressed many of the concerns we raised in our review of the draft plan submitted to OMB and provided to the Congress for consultation 4 months earlier, and it incorporated many improvements that made it more responsive to the Results Act. Labor’s revised strategic overview and all but one of the 15 component unit plans include all six elements required by the act. Further, the overview’s mission statement provides a more complete description of Labor’s basic purpose. Moreover, discussions of strategies to achieve goals and external factors that could affect the achievement of goals are discussed alongside individual goals, which facilitates the understanding of how particular strategies and external factors are linked to each goal. The overview also attempts to address Labor’s traditionally decentralized management approach, which has posed numerous management challenges for Labor in the past. For example, the sixth departmentwide goal, maintaining a departmental strategic management process, was added to the formally submitted plan. This may be an indication of a renewed emphasis by Labor to develop a more strategic approach to departmental management, an improvement that we have recommended in the past. Other indications of this renewed approach to departmentwide leadership are evident in the similar organizational style of each of the component plans and the clear links between the strategic overview and the plans. For example, in the revised overview, the strategic goals of each of the units are highlighted under the appropriate departmentwide goal. Similarly, in the plans for each of the component units, the unit strategic goals are categorized according to the departmentwide goal to which they correspond. 15 agency goals listed under departmental goal 4—safe, healthy, and equal opportunity workplaces—are organization-specific rather than reflective of goals necessary to achieve the overall mission regardless of where the responsibility is placed organizationally. For example, there is no single stated goal of reducing workplace fatalities, injuries, and illnesses. Instead, four separate goals reflect that intended result in different kinds of workplaces where the Occupational Safety and Health Administration (OSHA), the Mine Safety and Health Administration (MSHA), the Employment and Training Administration (ETA), or the Office of the Assistant Secretary for Administration and Management (OASAM) has responsibility. A fifth goal reflects the responsibility of yet another component unit—the Employment Standards Administration (ESA)—to “minimize the human, social, and financial costs of work-related injuries” by encouraging the prompt return to work after injury in federal workplaces. Establishing goals that reflect organizational units is useful for traditional accountability purposes, such as monitoring resources, processes, and outputs, but less useful for results-oriented planning. A mission-focused rather than organizationally focused planning process would improve Labor’s ability to examine its operations to find a less costly, more effective means of meeting its mission. In past work, we have traced the management problems of many federal agencies to obsolete organizational structures that are inadequate for modern demands. For example, our work has shown that the effectiveness of federal program areas as diverse as employment assistance and training, rural development, early childhood development, and food safety has been plagued by fragmented or overlapping efforts. A frequently cited example of overlap and ineffectiveness is the federal food safety system, which took shape under as many as 35 laws and was administered by 12 different agencies, yet had not effectively protected the public from major foodborne illnesses. As federal agencies become more outcome-oriented, they sometimes find that outmoded organizations must be changed to better meet customer needs and address the interests of stakeholders. develop the plan, nor does it specify how future evaluations will help assess Labor’s success in achieving its stated goals. Instead, the overview discusses how evaluations in the regulatory agencies have lagged behind those in the employment and training area. In that respect, it is even more important that Labor provide schedules or timelines for future evaluations, identify the evaluations that will be done, and highlight how future program evaluations will be used to improve performance. Along those lines, we reported earlier that the experiences of OSHA as a pilot project could provide insight into how evaluations can be managed. OSHA has been involved in a number of activities geared toward making the management improvements intended by the Results Act.