Testimony_Jul15-2002_d02940t.txt

United States General Accounting Office
Testimony
GAO

Before the National Commission on the Public Service



GAO-02-940T
Chairman Volcker and Members of the National Commission on the
Public Service:
I am pleased to be here today to discuss the essential actions
that the federal government needs to take in order to manage its
most important asset-its people, or human capital. An
organization's people define its culture, drive its performance,
embody its knowledge base, and are the key to successful merger and
transformation efforts. As such, strategic human capital management
is the critical element to maximizing government's performance and
assuring its accountability for the benefit of the American
people.
The early years of the 21st century are proving to be a period
of profound transition for our world, our country, and our
government. This transition is being driven by a number of key
trends including: global interdependence; diverse, diffuse, and
asymmetrical security threats; rapidly evolving science and
technology; dramatic shifts in the age and composition of the
population; important quality of life issues; the changing nature
of our economy; and evolving government structures and concepts.
These trends present a range of challenges that have no boundaries.
These trends also contribute to a huge, longer-range fiscal and
budgetary challenge facing the United States. Given these trends
and longrange fiscal challenges, the federal government needs to
engage in a comprehensive review, reassessment, and
reprioritization of what the government does, how it does business,
and who does the government's business. We must re-examine a range
of government policies, programs, and operations. The status quo is
simply unacceptable. The long-range numbers do not add up. We must
re-examine the base, including our current human capital policies
and practices. This re-examination will in turn require federal
agencies to transform their cultures and shift their overall
orientation from:


•
processes to results,


•
stovepipes to matrixes,


•
hierarchical to flatter and more horizontal
structures,


•
an inward focus to an external (citizen, customer, and
stakeholder) focus,


•
management control to employee empowerment,


•
reactive behavior to proactive approaches,


•
avoiding new technologies to embracing and leveraging
them,


•
hoarding knowledge to sharing knowledge,


•
avoiding risk to managing risk, and


•
protecting turf to forming partnerships.


Leading public organizations here in the United States and
abroad have found that strategic human capital management must be
the centerpiece of any serious change management initiative and
efforts to transform the cultures of government agencies.
Unfortunately, as the Commission has made clear, the federal
government is not well positioned to make the needed
transformation. GAO designated strategic human capital management
as a governmentwide high-risk area in January 2001 because of a
long-standing lack of a consistent strategic approach to
marshaling, managing, and maintaining the human capital needed for
government to deliver on its promises.1 We reported then and still
find today that serious human capital shortfalls are eroding the
capacity of many agencies, and threatening the ability of others,
to economically, efficiently, and effectively perform their
missions.2 The federal government's human capital weaknesses did
not emerge overnight and will not be quickly or easily addressed.
The enormous human capital and other transformation challenges that
need to be addressed to transform the Federal Bureau of
Investigation (FBI) and create a successful Department of Homeland
Security are instructive of the critical and difficult task ahead.3
Committed, sustained, highly qualified, and inspired leadership,
and persistent attention by all key parties will be essential if
lasting changes are to be made and the challenges we face across
the federal government successfully addressed.
Fortunately, we are now seeing increased attention to strategic
human capital management and a real and growing momentum for change
is now evident since we placed strategic human capital management
on our High-Risk list.



•
In August 2001, President Bush placed human capital at
the top of his management agenda.



U.S.
General Accounting Office, High-Risk Series: An Update,
GAO-01-263 (Washington, D.C.: January 2001).


U.S.
General Accounting Office, Performance and Accountability
Series-Major Management Challenges and Program Risks: A
Governmentwide Perspective, GAO-01-241 (Washington, D.C.: January
2001). In addition, see the accompanying 21 reports (numbered
GAO-01-242 through GAO-01-262) on specific agencies.


U.S.
General Accounting Office, Homeland Security: Proposal
for Cabinet Agency Has Merit, But Implementation Will be Pivotal to
Success, GAO-02-886T (Washington, D.C.: June 25, 2002) and FBI
Reorganization: Initial Steps Encouraging but Broad Transformation
Needed, GAO-02-865T (Washington, D.C.: June 21, 2002).




•
The Office of Management and Budget (OMB) is assessing
agencies' progress in addressing their individual human capital
challenges as part of its management scorecard and mid-point review
process.


•
As one of its many efforts to help agencies with these
issues, the Office of Personnel Management (OPM) released a human
capital scorecard last December to assist agencies in responding to
the OMB scorecard.


•
Finally, Congress has underscored the consequences of
human capital weaknesses in federal agencies and pinpointed
solutions through the oversight process and a wide range of
hearings held over the last few years.


1
2
3
Therefore, the key question today is how do we best seize the
opportunity and build on the current momentum? I have often noted
that the first step toward meeting the government's human capital
challenges is for agency leaders to identify and make use of all
the appropriate administrative authorities available to them to
manage their people for results both effectively and equitably.
Much of the authority agency leaders need to manage human capital
strategically is already available under current laws and
regulations. Agency leaders should not wait for comprehensive human
capital legislative reforms to happen. The use of these authorities
often needs to be undertaken as part of, and consistent with,
proven change management practices. The second step is for
policymakers to pursue incremental legislative reforms to give
agencies additional tools and flexibilities to hire, manage, and
retain the human capital they need, particularly in critical
occupations. Key provisions of legislative proposals under
consideration in Congress represent an important step to helping
agencies address their human capital management challenges. Many of
the provisions contained in the bills are consistent with
authorities we have been urging for other federal agencies.4 The
third step toward meeting the federal government's human capital
challenges is for all interested parties to work together to
identify the kinds of comprehensive legislative reforms in the
human capital area that should be enacted over time. These reforms
should place greater emphasis on knowledge, skills, and performance
in connection with federal employment, promotion, and compensation
decisions, rather than on the passage of time, the rate of
inflation, or geographic location, as is often the case today.
Shockingly, over 80
U.S. General Accounting Office, Managing for Results: Building
on the Momentum for Strategic Human Capital Reform, GAO-02-528T
(Washington, D.C.: Mar. 18, 2002).
Page 3 GAO-02-940T



Using Performance Management Systems to
Help Transform Agencies
percent of the cost associated with the annual increases in
federal salaries is due to cost-of-living and locality pay
adjustment. This must change.
Today, I will discuss three broad human capital reform
opportunities that are instrumental to agency transformation
efforts and that the Commission may want to consider as its work
moves forward. These broad opportunities include: first, aligning
individual and organizational performance; second and directly
related to that, implementing resultsoriented pay reform; and
third, sustaining agency transformation efforts. I will conclude
with some comments on how we in GAO are playing a constructive role
in helping the government address its human capital challenges,
including our efforts to "lead by example" in this critically
important area.
Leading organizations use their performance management systems
as a key tool for aligning institutional, unit, and employee
performance; achieving results; accelerating change; managing the
organization on a day-to-day basis; and facilitating communication
throughout the year so that discussions about individual and
organizational performance are integrated and ongoing.5 Performance
management systems in these leading organizations typically seek to
achieve three key objectives. First, they strive to provide candid
and constructive feedback to help individual employees maximize
their potential in understanding and realizing the goals and
objectives of the agency. Second, they seek to provide management
with the objective and fact-based information it needs to reward
top performers. Third, performance management systems provide the
necessary information and documentation to deal with poor
performers. Most federal performance management systems fail to
achieve these objectives. In addition, many federal agencies are
just beginning to recognize that their performance management
systems can be strategic tools to achieve success. In my opinion,
modernizing agency performance appraisal and management systems and
linking them to agency strategic plans and desired outcomes should
be a top priority.
Results-oriented performance agreements are one mechanism in a
performance management system that creates a "line of sight"
showing
5
U.S. General Accounting Office, Human Capital: Key Principles
From Nine Private Sector Organizations, GAO/GGD-00-28 (Washington,
D.C.: Jan. 31, 2000).
Page 4 GAO-02-940T
how individual employees can contribute to overall
organizational goals. 6 Agencies that effectively implement such
systems must first align agency leaders' performance expectations
with organizational goals and then cascade performance expectations
to other organizational levels. These employees are then held
accountable for their contributions to achieve desired results. Our
work has shown that agencies have benefited from their use of
results-oriented performance agreements for political and senior
career executives. The performance agreements


•
strengthened alignment of results-oriented goals with
daily operations,


•
fostered collaboration across organizational
boundaries,


•
enhanced opportunities to discuss and routinely use
performance information to make program improvements,


•
provided a results-oriented basis for individual
accountability, and


•
maintained continuity of program goals during leadership
transitions.


Governmentwide, agencies need to place increased emphasis on
holding senior executives accountable for organizational goals. OPM
amended regulations that change the way agencies evaluate the
members of the Senior Executive Service (SES). While agencies will
need to tailor their performance management systems to their unique
organizational requirements and climates, they nonetheless are to:
hold executives accountable for results; appraise executive
performance on those results balanced against other dimensions,
including customer satisfaction and employee perspective; and use
those results as the basis for performance awards and other
personnel decisions. Agencies were to implement the new policies
for the SES appraisal cycles that began in 2001.
Ultimately, an effective performance management system must link
pay and incentive programs to individual knowledge, skills, and
contributions to achieving organizational results. The affect of
poor performers on agencies' performance and morale can far exceed
their small numbers. Still, while important, dealing with poor
performers is only part of the challenge; agencies need to create
additional incentives and rewards for valuable and high-performing
employees who represent the vast majority of the federal workforce.
Congress and the administration have repeatedly expressed a
commitment to more fully link resources to results. The American
people expect and deserve this linkage as well. However, we
U.S. General Accounting Office, Managing for Results: Emerging
Benefits From Selected Agencies' Use of Performance Agreements,
GAO-01-115 (Washington, D.C.: Oct. 30, 2000).
Page 5 GAO-02-940T
will never achieve this linkage without modern and effective
performance management strategies. Additional information on the
performance management programs in use in agencies and the relative
strengths and weaknesses of those programs, along with best
practice information, would prove very helpful as agencies seek to
link pay to individual knowledge, skills, and performance.
Efforts to link federal pay to knowledge, skills, and
performance should be part of a broader effort to align resource
decisions to results. As I noted, fostered in part by the
Government Performance and Results Act (GPRA), there has been an
increasing interest within the executive branch and the Congress in
linking performance and results to resource allocation and other
decisions. Consistent with that view, we need to continue efforts
to shift agency accountability-with appropriate safeguards and
oversight- to budgeted resources and results and away from other
inputs and processes. The work of the recently completed Commercial
Activities Panel, which I had the privilege of chairing, is
illustrative in this regard.7 One of the sourcing principles
adopted by the Panel was that the federal government's sourcing
policy should avoid arbitrary full-time equivalent (FTE) or other
numerical goals. The principle is based on the unarguable point
that the success of government programs should be measured by the
results achieved in terms of providing value to the taxpayer, not
the size of the in-house or contractor workforce. I believe that
the Panel's principle should also apply to resource allocation
generally. We need to continue- and even augment-efforts to shift
the focus of management, resource allocation, and decisionmaking
from inputs and process to a greater focus on results and outcomes
and to provide management reasonable flexibility while
incorporating appropriate safeguards to prevent abuse. In this
regard, holding managers accountable for results based on a
specific dollar allocation versus FTE caps would be a major step in
the right direction.

As you
know, I believe that a greater emphasis should be placed on
knowledge, skills, and performance in connection with federal
Oriented Approach to employment promotion and compensation
decisions at all levels, rather

than the passage of time, the rate of
inflation, or geographic location, as so often is the case today.
In recent years, widespread concern has been
7
Commercial Activities Panel, Improving the Sourcing Decisions of
the Government: Final Report (Washington, D.C.: April 2002).
Page 6 GAO-02-940T


Ensuring Leadership and Accountability for
Agencies' Transformation Efforts
expressed about the methodology and results of the procedures to
determine the federal pay gap. These concerns are among the reasons
that the pay gap has never been fully addressed. I believe that
careful study is needed to develop more realistic and workable
methodologies and solutions to federal pay issues. Part of that
assessment should focus on options for moving away from a
compensation system that contains governmentwide pay increases with
locality adjustments, and toward a system that is based to a
greater degree on the knowledge, skills, and performance of the
individuals involved.
I fully appreciate that much work may be needed before agencies'
respective performance management systems are able to support a
more direct link between pay and individual knowledge, skills, and
performance. OPM certainly has a continuing and vital role to play
in connection with these issues. OPM's recently released white
paper on federal pay provides a good foundation for the
results-oriented pay reform discussion that must now take place.8
The greater use of "broadbanding" is one of the options that
deserves to be discussed. In the short term, Congress may wish to
explore the benefits of (1) providing OPM with additional
flexibility that would enable it to grant governmentwide authority
for all agencies (i.e., class exemptions) to use broadbanding for
certain critical occupations and/or (2) allowing agencies to apply
to OPM (i.e., case exemptions) for broadbanding authority for their
specific critical occupations. However, agencies should be required
to demonstrate to OPM's satisfaction that they have modern,
effective, and validated performance management systems before they
are allowed to use broadbanding.
The nature and scope of the cultural transformation that needs
to take place in many agencies across the federal government will
take years to accomplish-easily outrunning the tenures of most
political appointees. At the same time, GAO's work over the years,
most prominently in our High-Risk and Performance and
Accountability Series, has amply documented that many agencies
suffer from a range of long-standing management challenges and a
lack of attention to basic stewardship responsibilities,
8
Office of Personnel Management, A White Paper: A Fresh Start for
Federal Pay: The Case for Modernization (Washington, D.C.: April
2002).
Page 7 GAO-02-940T
requiring concerted action and sustained top-level attention if
they are to be addressed.9
One option for addressing the issues agencies face is to create
a Chief Operating Officer (COO) position for selected agencies that
would provide the sustained management attention essential for
addressing key stewardship responsibilities in an integrated manner
while helping to facilitate the transformation process within an
agency.10 These long-term responsibilities are professional and
nonpartisan in nature. They cover a range of "good government"
responsibilities that are fundamental to effectively executing any
administration's program agenda. Statutory COOs would differ
from-but hopefully complement-the roles often assumed by the
current Deputy Secretaries in assisting the Secretaries in
executing the administration's policy and program agenda and
achieving an agency's mission. The good government responsibilities
that could be led by a COO include:


•
strategic planning, • organizational
alignment,


•
core values stewardship,


•
human capital strategy,


•
performance management (aligning institutional, unit, and
individual measurement and reward systems to achieve overall
organizational goals),


•
communications and information technology
management,


•
financial management,


•
acquisition management,


•
risk management,


•
knowledge management,


•
matrix management, and


•
change management.


9
For example, see U.S. General Accounting Office, Energy Markets:
Concerted Actions Needed by FERC to Confront Challenges That Impede
Effective Oversight, GAO-02-656 (Washington, D.C.: June 14, 2002);
HUD Management: Progress Made on Management Reforms, but Challenges
Remain, GAO-02-45 (Washington, D.C.: Oct. 31, 2001); Major
Management Challenges and Program Risks: Department of Energy,
GAO-01-246 (Washington, D.C.: January 2001); and Medicare: 21st
Century Challenges Prompt Fresh Thinking About Program's
Administrative Structure, GAO/T-HEHS-00-108 (Washington, D.C.: May
4, 2000).
10
See U.S. General Accounting Office, Architect of the Capitol:
Management and Accountability Framework Needed to Lead and Execute
Change, GAO-02-632T (Washington, D.C.: Apr. 17, 2002); and
GAO-02-528T.
While various models for structuring such a position could be
used, one option would be to have a COO who is appointed, subject
to Senate confirmation, to a term of 5 to 7 years (generally
considered to be the minimum time needed for major change
initiatives to provide meaningful and sustainable results). The COO
should be at an organizational level equivalent to the current
deputies in major departments and agencies in order to help assure
the effectiveness of this position. A term appointment would help
to provide continuity that spans the tenure of the political
leadership to ensure that long-term stewardship issues are
addressed and change management initiatives are successfully
completed. The individual would be selected without regard to
political affiliation based on (1) demonstrated leadership skills
in managing large and complex organizations, and (2) experience
achieving results in connection with a number of the above
responsibilities. To further clarify accountability, the COO could
be subject to a clearly defined, results-oriented performance
contract with appropriate incentive, reward, and accountability
mechanisms.
If Congress and the executive branch decide to move forward with
the COO approach, it may make sense to use a pilot in a select
number of agencies using a value and risk-based approach. For
example, an agency that is experiencing particularly significant
challenges in integrating disparate organizational cultures (such
as the proposed Department of Homeland Security) may be an
especially appropriate first phase candidate. Agencies engaged in
major transformation efforts, like the FBI, the Internal Revenue
Service (IRS), and the National Aeronautics and Space
Administration (NASA) could also benefit from such an approach.
Similarly, a "challenged agency''-one that has longstanding
management weaknesses and high-risk operations or functions, such
as the Department of Defense (DOD)-may also be a good first phase
candidate.11 The point would be for the Congress, executive branch
leadership in OMB and OPM, agencies, and others to gain experience
with the COO approach before deciding how and where it should be
applied across the government.
More generally, we need to comprehensively examine opportunities
for better using the federal government's career SES leadership.
This examination should focus on a number of issues that have been
suggested
U.S General Accounting Office, DOD Financial Management:
Integrated Approach, Accountability, Transparency, and Incentives
Are Keys to Effective Reform, GAO-02-497T (Washington, D.C.: Mar.
6, 2002).
Page 9 GAO-02-940T


GAO's Constructive Efforts to Help
Agencies Address Their Human Capital Challenges
to strengthen the SES and thereby improve federal performance
and foster transformation efforts. These issues include, for
example, concerns over SES compensation and pay compression. I
believe that the issue of whether and how much to increase SES pay
must be discussed within the context of how to make any pay
increases variable and performance-based rather than
across-the-board and fixed. We also must carefully examine the
composition of the SES. It seems to me that, in general, current
members of the SES fill three broad roles: executive leadership,
program management, and senior technical and specialists positions.
We need to look at the implications that these differing roles have
for a range of issues, such as SES core competencies, performance
standards, recruitment sources, mobility, and training and
development programs. We also need to look at whether the number of
levels within the SES (i.e. ES 1 through 6) are necessary and
appropriate.
As the federal government's leading accountability organization,
we have made a concerted effort to identify and encourage the
implementation of human capital practices that improve the
efficiency, effectiveness, and accountability of the federal
government. Over the last few years, we have issued numerous
reports with practical recommendations on the steps individual
agencies can take to address their specific human capital
challenges.12 In addition, we have reported on governmentwide
trends and lessons learned by successful organizations.13 We also
understand that we have a responsibility to "lead by example" and
"practice what we preach" in all key management areas, including
strategic human capital management.
12
For example, see U.S. General Accounting Office, Human Capital:
Practices That Empowered and Involved Employees, GAO-01-1070
(Washington, D.C.: Sept. 14, 2001); Human Capital: The Role of
Ombudsmen in Dispute Resolution, GAO-01-466 (Washington, D.C.: Apr.
13, 2001); Human Capital: A Self-Assessment Checklist for Agency
Leaders, GAO/OCG-00-14G (Washington, D.C.: September 2000); Human
Capital: Design, Implementation, and Evaluation of Training at
Selected Agencies, GAO/T-GGD-00-131 (Washington, D.C.: May 18,
2000); Human Capital: Using Incentives to Motivate and Reward High
Performance, GAO/T-GGD-00-118 (Washington, D.C.: May 2, 2000); and
Management Reform: Elements of Successful Improvement Initiatives,
GAO/T-GGD-00-26 (Washington, D.C.: Oct. 15, 1999).
13
U.S. General Accounting Office, Federal Employee Retirements:
Expected Increase Over the Next 5 Years Illustrates Need for
Workforce Planning, GAO-01-509 (Washington, D.C.: Apr. 27, 2001);
and Senior Executive Service: Retirement Trends Underscore the
Importance of Succession Planning, GAO/GGD-00-113BR (Washington,
D.C.: May 12, 2000).
On March 15, 2002, we released A Model of Strategic Human
Capital Management, the latest in a series of tools designed to
assist agency leaders in effectively managing their people.14 Our
model is designed to help agency leaders effectively lead and
manage their people and integrate human capital considerations into
daily decision making and the program results they seek to achieve.
In so doing, the model highlights the importance of a sustained
commitment by agency leaders to maximize the value of their
agencies' human capital and to manage related risks. Accordingly,
it raises the bar for all of us-those in positions of leadership,
federal managers, employees, unions, and human capital executives
and their teams.
Consistent with OPM's and OMB's views, our model of strategic
human capital management embodies an approach that is fact-based,
focused on strategic results, and incorporates merit principles and
other national goals. As such, the model reflects two principles
central to the human capital idea:


•
People are assets whose value can be enhanced through
investment. As with any investment, the goal is to maximize value
while managing risk.


•
An organization's human capital approaches should be
designed, implemented, and assessed by the standard of how well
they help the organization pursue its mission and achieve desired
results or outcomes.


The model highlights the kinds of thinking that agencies should
apply, as well as some of the steps they can take, to make progress
in managing human capital strategically. The concepts presented in
the model are arranged around eight critical success factors, which
are organized in pairs to correspond with four cornerstones of
effective strategic human capital management. (See Fig. 1.)
U.S. General Accounting Office, A Model of Strategic Human
Capital Management, GAO-02-373SP (Washington, D.C.: Mar. 15,
2002).
Page 11 GAO-02-940T

Figure 1: Critical Success Factors Organized by Human Capital
Cornerstones

4 Human Capital
Cornerstones 8 Critical Success Factors

As I noted before, OPM and OMB also have developed tools that
are being used to assess human capital management efforts. We
provided drafts of our human capital model to OPM and OMB for their
review prior to publication to help ensure that the three efforts
are conceptually consistent. We hope that the perspective and
information provided in our
Page 12 GAO-02-940T




GAO's Efforts to Lead by Example
model will help inform agencies' efforts to respond to the
administration's management initiatives, such as "getting to green"
on OMB's management scorecard and using the tools developed by OPM.
While we remain sensitive of the need to maintain our institutional
independence, we are working constructively with OPM, OMB, and
others to explore opportunities to develop a more fully integrated
set of guidance and tools for agencies to address their human
capital challenges.15
In addition to providing tools to help agencies help themselves,
we believe it is our responsibility to lead by example. We are in
the vanguard of the federal government's efforts to modernize
existing human capital strategies and we are committed to staying
in this position. Our people are our most valuable asset and it is
only through their combined efforts that we can effectively serve
our clients and our country. By managing our workforce
strategically and focusing on results, we are helping to maximize
our own performance and ensure our own accountability. By doing so,
we also hope to demonstrate to other federal agencies that they can
make similar improvements in the way they manage their people.
We have identified and made use of a variety of tools and
flexibilities, some of which were made available to us through the
GAO Personnel Act of 1980 and our 2000 legislation, but most of
which are available to federal agencies.
The most prominent change in human capital management that we
implemented as a result of the GAO Personnel Act of 1980 was a
broadbanded pay-for-performance system. The primary goal of this
system is to base employee compensation primarily on the knowledge,
skills, and performance of individual employees. It provides
managers flexibility to assign employees in a manner that is more
suitable to multi-tasking and the full use of staff. Under our
current broadbanded system, analyst and analyst-related staff in
Grades 7 through 15 were placed in three bands. We expect to modify
our banded system in the future based on our experience to
date.
15
U.S. General Accounting Office, Managing for Results: Next Steps
to Improve the Federal Government's Management and Performance,
GAO-02-439T (Washington, D.C.: Feb. 15, 2002).
Page 13 GAO-02-940T
In January 2002, we implemented a new competency-based
performance management system that is intended to create a clear
linkage between employee performance and our strategic plan and
core values. It includes 12 competencies that our employees
overwhelmingly validated as the keys to meaningful performance at
GAO. (See Fig. 2.)
Figure 2: GAO's Competency-Based Model

Our October 2000 legislation gave us additional tools to:
realign our workforce in light of mission needs and overall
budgetary constraints; correct skills imbalances; and reduce
high-grade, managerial, or supervisory positions without reducing
the overall number of GAO employees. This legislation allowed us to
create a technical and scientific career track at a compensation
level consistent to the SES. It also allowed us to give greater
consideration to performance and employee skills and knowledge in
any Reduction-in-Force actions. We believe that other agencies
could benefit from these additional authorities.
Since the legislation was enacted, we have established agency
regulations and conducted and completed our first offering of
voluntary early retirement opportunities. Once employees registered
their interest in participating in the program, we considered a
number of factors including: employee knowledge, skills,
performance, and competencies; the organizational unit or subunit
in which an employee worked; an employee's occupational series,
grade, or band level, as appropriate; and the geographic location
of the employee. As authorized by the 2000 legislation, employee
performance was just one of many factors we considered when
deciding which employees would be allowed to receive the
incentives. However, let me assure you, we did not use performance
to target certain individuals.
We are also using many recruiting flexibilities that are
available to most agencies, including an extensive campaign to
increase our competitiveness on college campuses and extending
offers of employment during the fall semester to prospective
employees who will come on board the following spring and summer.
We are also using our internship program in a strategic fashion and
we often offer permanent positions to GAO interns with at least 10
weeks of highly successful work experience. Moreover, we are
building and maintaining a strong presence of both senior
executives and recent graduates on targeted college campuses. We
have also taken steps to streamline and expedite our hiring
process. In this regard, the current length of time that it takes
to hire a person in most other federal agencies is much too long
and must be addressed.
Even after we hire good people, we need to take steps to retain
them. We have taken a number of steps to empower and invest in our
employees. For example, we have active employee feedback and
suggestion programs. In addition, we are in the midst of
implementing our first student loan repayment assistance program
for about 200 employees who have indicated interest and are willing
to make a three-year commitment to staying with the agency.
Overall, we have implemented the following initiatives and
targeted investments, some of which are relatively recent and some
of which are longstanding:16


•
Prepared a human capital profile and needs assessment to
understand employee demographics and distribution.


•
Conducted an employee survey in 1999 and 2002 to
understand the status and progress of the agency and the areas in
which we need to improve.


•
Completed a knowledge and skills inventory for all
employees.


•
Conducted an employee preference survey so that employees
could be given the opportunity to work in the areas that interest
and energize them in light of our institutional needs.


•
Implemented an Executive Candidate Development Program to
prepare candidates for assignments in the SES.


•
Initiated a Professional Development Program for newly
hired GAO analysts to help them transition and progress.


•
Initiated a redesign of our training curriculum to
directly link and support our validated core
competencies.


•
Established an Employee Advisory Council to facilitate
open communication and direct input from line employees to the
Comptroller General and other GAO senior leadership.


•
Provided an on-site child care center called "Tiny
Findings" and the Wellness and Fitness Center.


•
Implemented additional employee-friendly benefits such as
business casual dress, flextime, and public transportation
subsidies.


•
Used recruitment bonuses, retention allowances, and
student loan repayment assistance to attract and retain employees
with specialized skills.


•
Implemented a new "state of the art" performance
appraisal system that is linked to our strategic plan and based on
key competencies.


As we engage in these changes, we also know that we are not
perfect and we never will be. This is a work-in-progress for us as
it is for others. Our approaches are not the only way for agencies
to proceed, but they can help others identify ways to address their
individual human capital challenges. In this regard, we have shared
our lessons and experiences with others, and are happy to do
so.
16 For more information on these efforts, see Human Capital:
Taking Steps to Meet Current and Emerging Human Capital Challenges,
GAO-01-965T (Washington, D.C.: July 17, 2001).
Page 16 GAO-02-940T
In summary, Mr. Chairman, I believe that there is no more
important management reform than for agencies to transform their
cultures to respond to the transition that is taking place in the
role of government in the 21st century. Strategic human capital
management must be at the center of this transformation effort. We
all need to seize the momentum that has recently emerged-agencies
must use existing authorities to strategically manage their people;
Congress needs to consider some statutory changes in the short
term; and all interested parties need to work together toward
enactment of more comprehensive civil service reform over time. I
look forward to continuing to work with Congress, OPM, OMB,
agencies, the National Commission on the Public Service, and other
interested parties as we jointly seek to ensure that the federal
government modernizes its human capital strategies in order to
maximize performance, assure accountability, transform itself, and
prepare for the future.
Chairman Volcker and members of the Commission, this concludes
my statement. I would be pleased to respond to any questions that
you may have.
For further information regarding this
statement, please contact J.


Contact and
Christopher Mihm, Director, Strategic Issues, on [phone]
or at
Acknowledgments [email protected]. Individuals making key
contributions to this testimony included Amy Choi, Rebecka Derr,
Judith Kordahl, Ellen Rubin, Lisa Shames, and Ed Stephenson.
(450140)