March 14 marked the fourth anniversary of a Government Accountability Office’s report about serious problems the Department of Veterans Affairs had in scheduling patients for care. GAO reported the failings in detail, a year before CNN's explosive 2014 report that some veterans died while waiting for care set off a full-blown scandal. Four years and multiple investigations later, the department continues to grapple with the fallout. A fundamental issue remains: how to hold federal employees accountable and discipline them appropriately, without protracted delay, when their actions warrant it.
Solving long standing people management problems is never easy. But firing or even threatening to fire employees is not going to result in long term improvement. It will not create a culture of accountability. If anything, it could backfire and trigger broader talent management problems.
It’s likely the critical attention exacerbated VA’s staffing problems. VA Secretary David Shulkin has acknowledged the agency has 45,000 job openings. He reportedly said that the negative attention caused a 78 percent drop in applications.
But it’s not only the numbers. A survey conducted by the Senior Executives Association found that VA executives broadly believe the qualifications of applicants for SES positions has dropped.
The problem is exacerbated by below market compensation levels. (Several years ago I managed the pay and performance system in one of the larger hospital systems.) The gaps contribute to the problem.
Managing a large hospital is one of the more difficult executive jobs. That’s especially true in government, with all the critics. Few organizations are more dynamic; every day promises unexpected events. There are multiple, largely independent units that have to be coordinated and in some cases instantly responsive. This is not at all the same as managing the typical federal agency. It’s unrealistic to expect most GS 14/15 managers to be able to transition easily into a leadership position in a medical center.
Congressman Mike Bost, R-Ill., was correct when he recently stated, “No business or organization can successfully operate under a revolving door of short-term leaders—especially not one tasked with caring for America’s heroes.” However, the bill he introduced, the VA Health Center Management Stability and Improvement Act (H.R. 1131), that would require the VA “to develop and implement a plan to hire a director for each VA medical center without a permanent director,” is not going to solve this problem.
At some point, Congress and the Administration is going to have to bite the bullet and invest in developing the executive cadre government needs. The model for the VA should be based on the policies, systems and practices used to manage executive talent in the country’s best healthcare systems.
For other agencies, government should look to the practices in the larger, more successful companies as well as to the leading business schools. Government will of course never pay its executives like those at IBM or Lockheed Martin but the proven practices for managing executive talent—selection, development, coaching, performance management, and rewards—should be studied to identify the practices to prepare members of the SES for their very difficult jobs.
The assessment should also reconsider the practices associated with selecting, developing and rewarding middle managers so they are ready to move easily into the SES ranks. There is no other sector where managers are separated so distinctly from the executives above them. It may seem superficial but executives and managers always participate together in the “management incentive plan.” They benefit together when their company is successful.
My ties are to Wharton and I would be very surprised if members of the faculty there and in other leading business schools would be disinterested in helping government. That’s also true for the country’s leading consultants.
An added problem for the VA is the state of its human resources management function. A GAO report released in January, “Management Attention Is Needed to Address Systemic, Long-standing Human Capital Challenges” (GAO-17-30), laid out 12 recommendations that together confirm the HR function is not adding much value. One of the most telling signs is that the HR specialists have been bailing out of this sinking ship. The attrition rate has been high. The GAO report highlighted a number of areas where HR needs to improve. Human capital management has been on GAO’s high risk list since 2001.
Hospitals exemplify why human capital management was recognized in a recent Conference Board survey of corporate CEOs as their No. 1 challenge. It’s the reason that HR executives in leading companies are typically paid right behind the top financial executive. If anything, in hospitals the HR function is far more important than in a similar size business.
HR has to play a central role in filling those job vacancies. It also should have the lead in workforce planning so the hospitals and clinics can plan ahead based on expected patient load and avoid or minimize vacancy problems. That undoubtedly contributed to the scheduling problems.
For reasons that are buried in the history of the civil service, federal HR has had a narrowly defined transactional/administrative role. That is far more limited than the emerging role in larger companies. If the VA or any agency is ever going to raise performance levels, the prevailing management philosophy will have to change. HR does not play a direct role in managing performance—that’s strictly a line management responsibility—but the policies and systems administered by HR need to be supportive. Currently they are inadequate.
Every organization has a few employees who fail to meet expectations. No one, however, begins their career expecting to be anything less than accepted as a valued contributor. The problems arise when employees have inadequate training, are assigned to a job for which they are unsuited, have inadequate resources and/or support, ineffective supervision, or respond to poorly planned incentives. Most performance problems can be corrected if performance concerns are addressed early.
Healthcare specialists are highly educated and do not need or want close supervision; they are at their best when they are trusted and supported in caring for patients. They also have good ideas for improving patient care. That was the purpose behind the Magnet and Pathway programs in nursing. Employees want opportunities to contribute their ideas. It’s a simple strategy to improve performance.