During the 1980s and 1990s, the composition of the U.S. workforce, as documented in demographic statistics, became increasingly diverse. In 1987, a landmark report entitled Workforce 2000, written by researchers with the Hudson Institute for the Department of Labor, described the increasing diversity of the American workforce by the year 2000. Among the demographic changes the report projected was a rise in the average age of the workforce and an increase in the number of women and minorities entering the workforce. Against this backdrop of expectations for an increasingly diverse workforce, by the 1990s, an industry of consultants had developed, offering books, videos, and training to sensitize workplaces “to the different perspectives and needs of a more diverse workforce.” Dr. R. Roosevelt Thomas, Jr. is generally credited with originating the term “managing diversity” in 1990. The concept of managing diversity includes everyone and therefore serves as a complement to equal employment opportunity (EEO). EEO focuses on those groups protected by law from employment discrimination. By law, employment actions are to be free from prohibited discrimination on such bases as race, color, religion, gender, national origin, age, or disability. For purposes of this review, workforce diversity refers to ways in which people in a workforce are similar and different from one another. In addition to the characteristics protected by law, other similarities and differences commonly cited by the literature include but are not limited to background, education, language skills, personality, sexual orientation, and work role. OPM includes workforce diversity as a critical success factor for one of the six elements of human capital leadership—results-oriented performance culture—in its Human Capital Assessment and Accountability Framework. OPM uses the critical success factors in this framework when scoring a federal agency’s implementation of Strategic Human Capital under the President’s Management Agenda. Among other things, OPM examines whether an agency maintains an environment characterized by inclusiveness of individual differences and is responsive to the diverse needs of employees as a critical success factor. Of the experts in the field of diversity management we spoke with or whose publications we reviewed, the majority cited nine practices as leading. These practices are (1) commitment to diversity as demonstrated and communicated by an organization’s top leadership; (2) the inclusion of diversity management in an organization’s strategic plan; (3) diversity linked to performance, making the case that a more diverse and inclusive work environment could help improve productivity and individual and organizational performance; (4) measurement of the impact of various aspects of a diversity program; (5) management accountability for the progress of diversity initiatives; (6) succession planning; (7) recruitment; (8) employee involvement in an organization’s diversity management; and (9) training for management and staff about diversity management. Experts and the literature generally agree that some combination of these identified practices should be considered when an organization is developing and implementing diversity management. We met with officials from the 10 agencies selected for our review, and these officials provided examples of diversity management practices that their respective agencies had implemented and considered to be leading practices. We judgmentally chose from the examples agencies provided to illustrate the implementation of the nine practices that a majority of experts cited as leading. The following sections of this report further describe the nine practices as well as provide examples of how the selected agencies have implemented them. As we testified in 1999, perhaps the single most important element of successful management improvement initiatives is the demonstrated commitment of top leaders to change. Similarly, top management commitment is a fundamental element in the implementation of diversity management initiatives. According to the literature, leaders and managers within organizations are primarily responsible for the success of diversity management because they must provide the visibility and commit the time and necessary resources. A leader committed to diversity management communicates the organization’s support for diversity in newsletters, policy statements, speeches, meetings, and Web sites. Communication of this commitment from senior management throughout the organization sends a clear message to others in the organization about the seriousness and business relevance of diversity management. Because successful change management initiatives in large public and private sector organizations suggest that it can often take 5 to 7 years to substantially complete such initiatives, it is important to institutionalize them by integrating the initiatives into agencies’ strategic planning efforts. As we have said, sustaining top leadership commitment to improvement is particularly challenging in the federal government because of the turnover of senior agency political officials. In 2003, we reported that governmentwide, the average tenure of political appointees for 1990 through 2001 was just under 3 years. Integrating diversity management into an organization’s strategic plan fosters a culture change that supports and values differences. One recognized expert we talked with also pointed out that an organization must link diversity to its overall strategic plan to ensure that diversity initiatives are not viewed as an “extra,” which could make them vulnerable to cuts, for example, when funds are tight. By focusing on diversity management and looking for more ways to be truly inclusive, leading organizations have recognized that diversity can contribute to the achievement of improved individual and organizational performance. According to the literature reviewed, diversity management makes good business sense that enhances productivity and innovation. For example, promoting diversity might help an organization expand services to meet the needs of a more diverse customer base. The literature also stated that fostering a diverse and inclusive workplace could help organizations reduce costs by reducing turnover, increasing employee retention across demographic groups, and improving morale. Quantitative and qualitative performance measures “help organizations translate their diversity aspirations into tangible practice.” For example, an organization can track data on its workforce to evaluate the effectiveness of the organization’s diversity management efforts and the progress it is making in those efforts. Organizations also can track the return they receive on investments in such areas as diversity training and recruitment to evaluate the progress they are making in those efforts. In addition to analyzing quantitative workforce data, organizations can use qualitative data derived from interviews, focus groups, and surveys for identifying employee perceptions—including available opportunities and work environment/culture—among various segments of their workforces. For example, organizations can ask employees a series of general organizational questions in such areas as climate, organizational commitment, promotions, job satisfaction, supervision, and performance evaluations. Over time, trends in responses are the types of qualitative information that can help organizations assess how their diversity initiatives are progressing in achieving organizational goals and objectives. Finally, in a 2001 report on human capital and workforce diversity, the National Academy of Public Administration stated that good performance measurements shared some common traits regardless of the environment in which they were used, including being based on reliable and accurate data that are consistent and compatible with existing business systems and processes. VA, for example, provides data on its workforce, including data on those in the leadership pipeline (i.e., employees in grades 13, 14, and 15), to all managers through their personal computers. We have previously pointed to the importance of holding managers accountable for contributing to the achievement of an organization’s strategic goals through performance management and rewards systems. According to diversity management literature, accountability is also a key element for organizations to ensure the success of a diversity management effort by providing a means for ensuring that managers at all levels are made responsible for diversity in their organizations and evaluated on their progress toward achieving their diversity goals and their ability to manage a diverse group of employees. An organization may make managers’ performance ratings and compensation dependent, in part, on their success in achieving diversity-related goals. For federal senior executives, such accountability is consistent with section 4313 of title 5, which provides performance appraisal criteria for those in the Senior Executive Service (SES), including the achievement of EEO requirements. This accountability also is consistent with EEOC’s recent instructions to federal agencies for implementing EEO Management Directive 715. The instructions describe the requirement that agencies inform managers and supervisors that success and a positive evaluation will include an assessment of how that manager contributes to the agency’s EEO program by emphasizing to managers and supervisors that equality of opportunity is essential to attracting, developing, and retaining the most qualified workforce, with such a workforce being essential to ensuring the agency’s achievement of its strategic mission. Recognizing that an agency’s people are vital assets and people achieve organizational goals and results, OPM’s regulations on SES performance management call for appraisal of executives using measures that balance organizational results with employee perspectives. In 2002, we reported that senior executives can foster fairness and diversity by protecting the rights of all employees, providing a fair dispute resolution system, and working to prevent discrimination through equality of employment and opportunity. We found examples of senior executive performance expectations included (1) taking steps to implement EEO requirements; (2) requiring all subordinate managers and supervisors to receive diversity awareness and EEO training; and (3) establishing a zero tolerance standard for discrimination, harassment, and hostile work environments. Succession planning is a comprehensive, ongoing strategic process that provides for forecasting an organization’s senior leadership needs; identifying and developing candidates who have the potential to be future leaders; and selecting individuals from among a diverse pool of qualified candidates to meet executive resource needs. Succession planning and management can help an organization become what it needs to be, rather than simply recreate the existing organization. Leading organizations go beyond a “replacement” approach that focuses on identifying particular individuals as possible successors for specific top-ranking positions and engage in broad, integrated succession planning and management efforts that focus on strengthening both current and future capacity. They anticipate the need for leaders and other key employees with the necessary competencies to successfully meet the complex challenges of the 21st century. Succession planning also is tied to the federal government’s opportunity to change the diversity of the executive corps through new appointments. As we testified in October 2003, the federal government faces large losses in its SES, primarily through retirement but also because of other normal attrition. The SES generally represents the most experienced and senior segment of the federal workforce.