Government Executive - Authors - Howard Risher

Federal reform efforts keep repeating the same pattern. Tennessee offers a different model

Howard Risher — Mon, 01 Jun 2026 08:00:00 -0400

The Pay Agent report released in December may have been missed by the media, but it contained recommendations important to the goal from a June 2025 OPM memo “to establish a high-performance federal workplace culture where excellent performance is celebrated and rewarded.”

It’s an important goal, one that is consistent with the argument in a 2018 National Academy of Public Administration report, “No Time to Wait: Building a Public Service for the 21st Century.”

The NAPA report emphasized that moving to a performance culture is a “fundamental transformation” from “an obsolete human capital system to one tuned to the future.” “Transformation” is the right word. This is culture change. However, the research makes it clear, culture does not change simply because leaders announce new policies.

Federal employees have heard versions of this argument for decades. Presidents of both parties have repeatedly promised stronger performance management, better accountability and improved recognition systems. The underlying challenge has remained consistent across administrations.

It’s not a new argument. Three decades earlier, two reports from commissions chaired by Paul Volcker, “Leadership for America: Rebuilding the Public Service” and “Urgent Business for America: Revitalizing the Federal Government,” argued the civil service system is “a barrier to effective government performance.”

President Carter was the driving force behind the Civil Service Reform Act, but it limited “merit pay” to supervisors (GS-13 through GS-15). President Clinton and the National Performance Review empowered employees and recognized their achievements, but those efforts are still rarely reflected in agency goal-setting systems. The Bush administration described human capital as “a long-standing, government-wide management weakness,” but attempts to introduce change collapsed. The Government Accountability Office first cited human capital management as high risk in 2001, and it remains on the list with “progress needed.” It’s clear – there are "walls" around the civil service system.

There is also an unrecognized problem: the Merit Systems Protection Board, the “guardian of the merit system.” When it has a quorum and the usual staff, its decisions reinforce laws that are outdated. The laws deter change at all levels of government.

Significantly, the walls have not impeded the successful creation of demo projects. When employees are trusted and involved, they readily commit to new management models.

The harder question is what actually produces lasting change inside government workplaces.

Tennessee offers a working example

A state may not be the same as the federal government, but all civil service systems reflect a similar work management paradigm. In the mid-2000s, Tennessee’s civil service system, largely unchanged since the 1930s, was viewed as too process-heavy, too slow to hire and too difficult to remove poor performers.

To change that reputation, HR staff started with training sessions for the highest level of managers, focusing on “what was right for the business of state government.” Their argument was good management has to start at the top.

When newly elected Gov. Bill Haslam took office in 2011, he agreed with the planning and took the lead in promoting civil service reform. His background included years in private-sector management and two terms as mayor of Knoxville. Several of his department heads also had experience managing in large companies.

One of Haslam’s announced goals was to build a “winning” workforce. As he commented in a speech, “Whether it’s in business, government or sports, the team with the best players wins. Unfortunately, in Tennessee state government . . . the rules don’t allow us to go out and recruit great players.”

Haslam’s Cabinet undertook three initiatives that reinforced the need for reform and led to passage in 2012 of the Tennessee Excellence, Accountability and Management Act.

The law rewrote the state’s personnel statute and included a statutory mandate increasing agency flexibility. It retained just-cause termination protections along with grievance and appeal rights. It switched hiring to focus on skills and competencies and established a performance-based pay and evaluation system. It shifted state employment toward a model that emphasizes accountability, competence and recognition.

The planning started with Cabinet members undertaking a top-to-bottom review of each agency, asking first whether services could be provided more effectively and efficiently by the private sector and second whether government was delivering services effectively. Ineffective employment practices repeatedly emerged as barriers to performance.

Second, the deputy governor and human resource commissioner conducted an employee listening tour across the state to understand how to recruit and retain employees. Many of the same themes later appeared in the reform effort. Employees know what’s needed.

In combination, the initiatives sent a clear message — the goal was to improve government performance and civil service reform was a priority.

That was reinforced by specifying in the TEAM Act a requirement that performance management be based on SMART goals and outcomes. The intent was to link individual and team accountability through successive levels of management.

After the act was passed, the state invested three years in training and coaching managers and gathering feedback from employees and managers before transitioning to pay for performance. That sequencing was central to acceptance of the policy and its durability.

At first the Tennessee State Employees Association opposed the law, but negotiations produced amendments that led the organization to support it. Association leaders stood behind Haslam at the signing ceremony.

Another change, promoted by the HR commissioner, was a heightened focus on customers, which “transformed the culture through a statewide training program on customer service . . . written by a former Disney employee.”

Overall, in Haslam’s two terms, the changes transformed the state’s culture through management training, employee engagement and phased implementation.

Federal reform efforts keep returning to the same problems

Looking back, agency performance is not a new problem. To repeat, the civil service system has been “a barrier to effective government performance.”

Furthermore, GAO has repeatedly identified human capital management as a high-risk area since 2001.

Despite repeated reform efforts, structural constraints, legal frameworks and institutional interpretation government needs to find ways to improve performance.

The lessons for federal employees

Looking at Tennessee’s experience alongside federal reform history, several consistent elements emerge.

The state’s focus was improving management. It invested years in developing managers before shifting to performance pay.

The use of SMART goals provided structure for accountability and clarity for employees.

Research consistently shows that perceived fairness and recognition of solid individual performance can be more effective than marginal salary increases in driving motivation.

Tennessee’s approach worked in part because employees were included early and consistently in the process, creating ownership of the changes. That is consistent with the demonstration projects.

The broader lesson is not that one system is superior to another, but that management capacity, employee engagement and implementation strategy determine whether reform efforts succeed.

That remains the central challenge for federal workforce policy today.

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The century-old GS system is 'disintegrating' and government can't agree on how to fix it

Howard Risher — Tue, 19 May 2026 07:00:00 -0400

Both Republicans and Democrats see it as a barrier to better government but for totally different reasons. It is central to the “compliance culture” that impedes better government. It still reflects the way work and workers were managed a century ago. It has not been modified, except for separating the Senior Executive Service and adding locality pay, since it was created in 1923.

It’s more than ironic that in that era the head of the Bureau of Efficiency was prominent in the administration of the civil service system. The buzzword then was “scientific management.” Workers were expected to do what they were told, and managed as a cost. That is still true in smaller, owner-managed companies.

Not surprisingly, Elon Musk is known for top-down control. Quotes attributed to him confirm a very negative view of the federal government: “Regulations are immortal.” “The bureaucracy is the problem.” Musk and his chainsaw created an us-vs-them distrust of management. The workforce was “traumatized,” to quote Max Stier, of the Partnership for Public Service.

Now, the government is moving full-steam ahead with AI. It also threatens job security. What has not been addressed is that jobs will be changing rapidly and that is at odds with job classification. A year or two from now the GS system is likely to be unsupportable. AI is exacerbating the already poor employee morale.

Employee costs are not the problem

By any standard, the costs attributed to building a productive workforce are a small percentage – less than 5% – of what the government spends. The cost to raise GS salaries to market rates would be less than 1%.

A related point highlights the political problem. No administration has been concerned with how much federal contractors pay their people. Added to that are the organizations receiving federal grants. Those organizations are not expected to defend how much they pay their staff. That’s true of the Federal Reserve System and the many independent agencies.

There is an alternative management philosophy. That is employees should be managed not as costs but as valued assets. That emerged in the 1990s. It started a few years earlier with W. Edwards Deming’s book, Out of the Crisis, where he argued the problem was not workers, it was the system they work in. Over the decade Gallup first cited research showing engaged workers are more productive. Fortune's “Great Places to Work” lists first appeared. And research confirmed employees are managed differently in “High Performance Organizations.” Those companies have been high on lists of the best performers.

It’s not coincidental that in the 1990s the Clinton-Gore National Performance Review (NPR) confirmed “empowered” federal workers are fully capable of significantly better performance. That initiative resulted in the deletion of over 350,000 jobs and savings in excess of a billion. In that context employees were committed to improving operations.

But just before President Bush took office, the Heritage Foundation released the report, “Taking Charge of Federal Personnel.” It influenced the new administration to centralize management with OMB, returning day-to-day operational control to appointees. That effectively ended the brief recognition that employees are ready to play a role in improving performance.

The Government Accountability Office, then led by David Walker, initiated reform in the late 1990s when budget cuts and staffing reductions forced a strategic restructuring. Walker is known to be a conservative but his reforms emphasized employee empowerment and deep employee involvement in the planning. GAO has been at or close to the top of the Partnerships’ Best Places to Work in the Federal Government Rankings for mid-size agencies since the list was created.

Strategic human capital management has been consistently on GAO’s High Risk list since 2001.

The Pay Agent’s Recommendations for the GS Framework

In December, the Pay Agent’s “Annual Report” stated it would not “approve of further additions to existing locality pay area boundaries or the creation of new locality pay areas at this time.” It was not like prior federal reports in that it was highly critical of the “antiquated” GS system. From the report:

The locality areas “do not align with geographic realities or labor market conditions.”
“It makes no sense to continue expanding locality pay boundaries – or to tinker with the arcane methodology ... given the need for a better pay system.”
“ ... a methodology that produces implausible results while ignoring occupational realties, mission needs, and performance considerations.”

It went on to state, “It has long been clear what the locality pay system’s flaws are” and referred to the 2002 Office of Personnel Management (OPM) white paper, “A Fresh Start for Federal Pay: The Case for Modernization.” The authors contended the GS system “hinders the performance of the Federal Government.”

As the director of the project in 1990 that led to the Federal Employee Pay Comparability Act, I agree with their critique. It was passed as a rider, and there were too many compromises. The Bureau of Labor Statistics radically changed its survey methodology soon after passage. Over the years BLS has made additional changes. Today it’s so complex it’s doubtful anyone at OPM or involved with the Federal Salary Council meetings could describe the analytic methodology. It is completely different from anything used in other sectors and far more costly.

The Pay Agent’s report briefly discussed three recommendations “for improving the General Schedule:”

“Assess the total compensation gap.” This is not a new idea. It has been the focus of several Congressional Budget Office reports arguing the cost of government provided benefits offsets the lower salaries. The flaw in that argument is clear in the BLS statistics. Smaller companies provide fewer benefits and their numbers distort any comparison with government’s true talent competitors. Moreover, BLS does not include cash incentive income or stock related income. It would have to be an “apples-to-apples” comparison to be meaningful.
“Provide different pay ranges for different occupations.” This could be a practical answer for high demand occupations. Obviously, the Federal Wage System is based on this argument. It’s also the rationale for the Law Enforcement Officer (LEO) pay system. And from the recommendations in our 1990 locality pay report, the Department of Veterans Affairs was successful three years later in establishing a separate pay policy under Title 38 for physicians, dentists, nurses and several other medical care specialists. It is the answer for high demand occupations.
“Eliminate GS steps and create an open range” to shift to pay for performance. While this has been highly controversial, there is a list of pay demos and independent pay systems with successful pay for performance systems. The state of Tennessee transitioned successfully in the years before COVID to a performance based pay policy. The state is a model for how to make the transition. A core point is that this is culture change. Tennessee invested three years in manager training and practice before actually changing the pay policy. Federal managers and employees are far from ready today.

The Pay Agent report is accurate – the GS system is “a legacy framework from the 1950s.” “It is disintegrating.” The government needs to provide better services. The public’s support continues to decline.

The 2020 Rand report, “Federal Civilian Workforce Hiring, Recruitment, and Related Compensation Practices for the Twenty-First Century,” evaluated the many successful initiatives to develop “modern” pay systems. A common thread is that employees were involved in the planning and implementation. The most notable failure was the roll out of the National Security Personnel System (NSPS) covering 226,000 Defense Department employees. It initially had employee support but they were not involved and after three years the system was terminated.

Employees want their organization to be seen as a success, and as the Clinton-Gore NPR made clear, they understand the problems better than outside experts and want to be involved in improving performance.

There have been repeated recommendations to replace the GS system. It will be a substantial undertaking, far more complicated than the study leading to FEPCA. However, the history here and in other countries suggests it is necessary to improve government performance.

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Federal workforce trauma is creating a stumbling block for AI adoption

Howard Risher — Thu, 30 Apr 2026 07:00:00 -0400

The federal government and the U.S. economy is at a crossroad. There are two contrary but seemingly independent developments that have profound implications for the workforce. Both sides cannot be correct but to build support for what’s unfolding the differences need to be understood and resolved.

One is the rapid transformation of jobs and work systems driven by AI. The frequent headlines contend the drive to roll out AI is the future. It’s inevitable. The titles suggest a solidly optimistic view that AI will be:

“a Net Economic Accelerator,”
“a Force for Better Work, Not Job Loss,”
“a Force for Better Work, Not Job Loss,”
“a Driver of Safer, More Efficient Daily Life.”

The contrary argument has made the headlines of the country’s more prominent websites:

CNN — “Tech industry experts warn AI will make us worse ...”
Forbes — “The Real Threat of AI: WEF Global Risks Report 2025”
BBC — “Artificial intelligence could lead to extinction, experts ...”
The New York Times — “The A.I. Prompt That Could End the World”

There have also been reports and columns arguing AI has revealed problems in how government work is organized and managed, and from a GAO report, that the work models are not suited to AI integration.

DOGE made the problems worse

Elon Musk has been very vocal. On one side, he contends AI will create unprecedented abundance, producing goods and services “far in excess” of current levels. He has also argued AI will eliminate most or all human jobs. When that happens, he promoted a form of government-provide “universal high income.”

Musk is relevant of course because of what he and the Department of Government Efficiency (DOGE) did to the federal workforce. Through 2025 DOGE initiated (1) mandatory attrition targets, (2) reductions-in-force plans, (3) a hiring freeze and (4) contract cancellations that removed contractor employees. The actions triggered 348,219 individuals to quit, retire, were laid off or otherwise left federal employment. At the same time, 116,912 people started working for the federal government — a 55.6% decrease from the year before. The net reduction, according to the Pew Research Center, was nearly 238,000.

The impact on the workforce has been pronounced. There has been a loss of institutional knowledge, support functions disappeared, worker shortages have impeded agency performance, and reports contend agencies are struggling to maintain mission delivery. The Brookings Institute expert, Elaine Kamarck, reported the cuts made agencies “scramble to fill critical gaps in services” ... There are time bombs all over the place ... They’ve wreaked havoc across nearly every agency.”

Employees are not open to AI

When the Office of Personnel Management canceled the Federal Employee Viewpoint Survey for 2025, the Partnership for the Public Service created and conducted a similar survey late in the year. It had responses from 11,083 employees across executive branch agencies.

The survey “revealed significant challenges” — read significant declines — in federal employee engagement and morale in 2025. The Partnership’s CEO, Max Stier, made it clear what the decline means:

“We have every red light blinking across the federal government. Morale is as low as imaginable.”

“This workforce has been fundamentally traumatized ... That’s not good for anyone. It’s bad for the workforce, it’s fundamentally bad for the American people, and it will lead to use be less safe, healthy, and prosperous as a society.”

“This loss of expertise directly harms Americans’ access to critical services and will take decades to repair. [The losses leave] dangerous gaps in key federal services, like food safety inspection, Social Security processing, veterans’ health care and disaster response.”

Research in other sectors by Gallup and others shows clearly a demoralized workforce triggers a high cost. In Gallup’s terms, that is when employees are “actively disengaged” or “unhappy and unproductive at work.” There is no direct comparison but the Partnership’s survey shows the “chainsaw” workforce cuts left the workforce “traumatized.” Psychological safety “collapsed.” It could hardly be worse.

The Partnerships analyses show the “reforms to the federal government cost the U.S. economy more than $165.6 billion ...” Possibly more important going forward is the loss of the better performance when employees are fully engaged. Gallup has promoted the value of engaged employees for over three decades. Their research has linked engagement levels to a long list of employee performance metrics.

Gallup “research has repeatedly shown that engaged employees are the lifeblood of successful organizations. They are not just loyal and productive; they the driving force behind innovation and customer satisfaction.” Their research “... reveals a stark contrast between teams with highly engaged employees and those struggling with disengagement.” Companies with an engaged workforce are more productive, more profitable and have higher customer satisfaction.

OPM has reported its measure of employee engagement for years but for unclear reasons has never reported finding a connection between employee engagement and performance. However, it is very clear that is no longer a consideration.

Research also shows clearly disengaged workers are not open and supportive of implementing AI. That point was emphasized in a recent "Forbes" column, “Why You Can’t Lead an AI Revolution Without Engaged Managers.” A column summarizing Glassdoor reviews and social media posts related to AI concluded many “employees are pretending to use AI tools just to comply with internal protocols ... multiple people admitted to exaggerating or fabricating their usage.”

Projected national job losses

From a broader perspective, researchers at Tuft’s Fletcher School of Global Affairs recently released the American AI Jobs Risk Index. It summarized the projected job losses for 784 occupations in 20 industries.

“It is a first-of-its-kind data-driven framework that maps the potential of AI-driven job vulnerability across every major occupation, industry, metropolitan area and state in the United States. ... the Index goes beyond prior studies by measuring actual vulnerability to job loss — not merely exposure — and connecting that vulnerability directly to projected income loss and geography.”

“The Index projects approximately 9.3 million U.S. jobs are at risk of displacement in the next 2–5 years, with a plausible range of 2.7 to 19.5 million depending on alternative adoption scenarios. Associated household income at risk spans $200 billion to $1.5 trillion annually ... equivalent to the economies of Belgium and, under faster AI adoption, approaching that of South Korea.”

“Industry-wide vulnerability averages approximately 6%, but the steepest risks sit in Information (18%), Finance and Insurance (16%) and Professional, Scientific, and Technical Services (16%).”

Based on the Index estimates, the country will lose from the three groups a total of over 3 million jobs. The federal government has an AI estimated 128,500 Information specialists (in 14 job series) and would lose 23,000 specialists.

The biggest losses are projected to be in California, Texas, New York, Florida and Illinois. The losses are also high in the District of Columbia. “Wired Belts” like Ann Arbor and Boulder could become “Rust Belts.” That will have political consequences.

The economic concerns include:

Job displacement and lost income
Wage suppression prompted by reduced labor demand
Increased economic inequality benefiting capital investors
Erosion of human skills and loss of adaptability

Microsoft co-founder Bill Gates’ made a disturbing AI prophecy: “Humans won’t be needed ‘for most things' in 10 years.”

Public policy debate: Regulation needed?

As long ago as 2021, the European Commission, the executive arm of the European Union, proposed the first EU artificial intelligence law, establishing a risk-based AI classification system. It did not pass initially but in 2024 the EU Artificial Intelligence Act became the world’s first comprehensive AI law.

In contrast, President Trump released a promised “AI Action Plan” in July 2025 that outlined “over 90 federal actions focused on three areas of focus: increasing private-sector innovation, expanding AI-related infrastructure and exporting American AI.” He followed that with three Executive Orders promoting American AI products.

In December he signed an EO intended to override certain state laws on AI, with department heads to identify the laws deemed “burdensome.” All 50 states considered AI-related measures in 2025.

A number of prominent scholars and economists have argued legislation is needed. A core issue is — developments in AI are ongoing and it’s not possible to anticipate in advance what may be warranted. Tomorrow’s AI systems could be very different. It is clear that the legal process is slow, incentives are misaligned and the complexity of AI systems is growing faster than governance.

Questions for Elon Musk: When will the economy warrant creating the government-provided universal high income? Does it ride on high unemployment or low family income? How will it be funded?

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Rebuilding federal capacity will require public‑private partnerships

Howard Risher — Tue, 10 Feb 2026 13:26:00 -0500

The federal workforce just experienced possibly the most destabilizing year in a century. The Department of Government Efficiency’s rapid, sweeping personnel cuts removed employees with little analysis or understanding of their roles, performance or mission importance. Institutional knowledge was lost with the surge of retirees, and the gaps are now barriers to agency performance.

Stated White House goals include “eliminate waste, bloat, and insularity;” “large-scale reductions in force;” and “Accelerate AI Adoption in Government.” The Tech Force is central to achieving the goals and the latest public-private partnership.

However, the cuts didn’t just shrink the workforce — they disrupted agency operations. Now AI is triggering widespread workflow redesign and changing or eliminating the need for jobs and occupations. The gap between what agencies need and what the system can deliver isn’t just uncertain - the workforce issues are undercutting agency performance.

The operational fallout is unmeasurable, but reports suggest it’s severe. Federal News Network reported morale at “non-existent” levels, employees describe local operations as “barely running” and widespread fear about job security. Rehiring will help but that does not solve the morale problem. Agency HR offices are or soon will be pressured to address the workforce problems, yet they have to operate within a rigid system that cannot adapt to rapid change.

A proposed answer: Public-private partnerships

The DOGE-driven cuts revealed three structural weaknesses that public private partnerships can help fix.

First, the connection of employee skills to mission analysis and agency performance has never been a priority. It will be important to document essential skills and use this in the redesign of jobs.
Staffing decisions have not accounted for how AI reshapes task, roles and workflows. Now it will be important to identify roles that are mission critical, those that will be redundant and those that will be significantly changed by new technology. That should be a focus of career management.
The analytical capacity to assess the impact of workforce cuts and new technology is new to HR. It’s a new problem for private employers as well but the impact is far more important in government. Companies are accustomed to change and always focused on improving results.

The transition to AI and new technology, and the working connection of IT and employees, is proving to be a problem for all employers. It’s been reported as a global issue. The common need suggests working together will pay off and provide an advantage in achieving White House goals.

Public-private partnerships – P3s – have been used in many ways at all levels of government. The most common are infrastructure creation (e.g., bridges, medical breakthroughs, cloud computing) but the importance of P3s extends to science, engineering, medicine, law enforcement – that is where developing and sharing knowledge is a priority for both sectors.

The P3 format relevant here has been described as “collaborative working relationships between the U.S. government and non-federal actors in which the goals, structures, and roles and responsibilities of each partner are mutually determined.” Memoranda of agreement define what’s involved. Monetary provisions may or may not be included. Examples of P3s include State Department’s Diplomacy Lab and the National Institutes of Health’s Partnership for Accelerating Cancer Therapies.

The problem was captured in a new Harvard Business Review column, “Why Great Innovations Fail to Scale”:

“Scaling innovation today depends on contributions from many partners. Too often, innovations fail not because the ideas are weak, but because teams and organizations struggle to work across boundaries. What’s needed is a particular kind of leader: the bridger.”

The common goal is to effectively and quickly integrate AI into operations. The complications are threefold: 1. agencies have vastly different workforce issues, 2. the applications and impact of AI vary by occupation and 3. the staff cuts and skill shortages also vary by agency, occupation and location. The applications will also vary by the layer of use.

The problem is complicated by the explosion of AI companies – it’s estimated there are 90,000 worldwide – and estimates of 70,000 AI platforms – and the numbers change daily. A recent IBM survey of CEOs found that while leaders are still confident that AI is pivotal to their future, only 25% of their current AI initiatives delivered the returns on investment they had hoped for. (Other estimates are in the same range.)

The partnerships should bring together occupational experts from professional associations, labor economists, technology specialists and private and public HR experts. There are hundreds of professional associations – a search count shows 441 – that support specific occupations. (The Directory of Associations lists 38,000 of all types.)

Involving associations and expert members elevates the new knowledge above political partisan battles, it also makes it more unlikely it will be ignored – as new HR practices have been in the past.

Professionals look to their associations for training, research, best practice information, compensation information, job opportunities, skill requirements, etc. Specialists from the larger employers would be able to document – if it has not already been done – where AI can improve work, new skill requirements, new training needs, projecting talent needs, sequencing AI rollout, measuring AI’s impact.

The planning should have both an immediate and future focus since the changes will continue and cannot be fully anticipated.

The knowledge and assistance generated by the partnerships would also benefit state, county and local public agencies. They may not require the same levels of expertise but many jobs are very similar. Civil engineering jobs, for example, are very similar at every level. Joint private-public initiatives will increase performance along with the trust of government.

An added complication - Talent shortages

The U.S. as well as many developed countries will be confronted by talent shortages for the foreseeable future. It’s demographic trends – fewer young workers and older workers retiring. In the years of the pandemic, many workers left the labor force. Now of course immigration is severely restricted.

The shortages are especially important in healthcare. With the aging population, the shortages threaten the health of millions. Physician shortages are severe in certain specialties, in rural/non-urban areas, and in long-term care and home health. Demand is rising faster than the supply for nurse practitioners, registered nurses and behavioral health fields. The value of enhanced speed is obvious but also important is the enhanced accuracy of the data interpretation. The integration of AI is essential to improving healthcare.

The staff cuts combined with the continuing hiring freeze (with few exceptions) amplified the problems filling vacancies. The recent 1% increase in pay highlights the long recognized problem of below market pay. If AI is unable to substitute for the roles normally held by recent hires, more experienced employees will need to shift time to the routine tasks and either their workload or their performance will be problematic. Government performance will deteriorate further.

When and if the hiring freeze is erased, agencies will need months and more likely years to raise performance levels. Training takes time. And beyond the education and on-the-job training, it takes practice to develop practical skills and integrate employee efforts in the workflow. These are not “system” issues.

The partnerships could be structured to enable agencies to “borrow” talent from private employers. They could also share training facilities and develop rotational programs.

The fact is, however, that many government problems are more complex than in the typical business.

The shortages also affect the skills new managers need to develop. COVID and working remotely changed the skills needed to be a good manager. It also elevated attention to the importance of managers. That has never been given adequate recognition by federal agencies. The practice of simply adding “supervision” to a job description or performance dimension is a badly failed policy.

The AI-supported work environment shifts the focus to the softer skills like problem solving. However, they cannot be mastered in a classroom or on a website. Becoming a “good” supervisor, for example, requires practice and coaching. Identifying essential skills is only the first step.

Government as a testing ground

Government successes implementing AI could enable private employers in all sectors to learn the best strategies for using the new technologies. The hundreds of locations, occupations and variations in local staffing situations provide opportunities to assess how to best integrate technology and worker skills. Local offices could also test how to best handle new tasks. They could also test varying strategies to help employees develop needed skills.

This could be arranged as a typical contract with a consulting firm but the new “answers” will be valuable to all employers relying on the same occupations. No company should gain an advantage; the knowledge should be broadly available. The country would benefit.

Office of Personnel Management analysts could use the experiential data, for example, to predict employee turnover under specific circumstances as well as testing the best recruiting strategies. All employers will need to understand how the rapidly emerging technology is changing occupations and work management practices.

The importance of government performance – that is service quality, measurable improvements in people’s lives, enhanced national security – not simply efficiency and reduced costs – is important to everyone. A prosperous economy, supportive infrastructure and a healthy workforce are important to all employers.

That should make the successful integration of the new technology and workforce management a national priority. All employers need to understand how automation and AI will reshape work tasks and systems, redesign job families and careers, prompt training needs and support employee engagement in the new work environment.

That makes it important to evaluate ongoing agency experience in the rollout of technology. The usual broad studies of commissions take too much time; their recommendations could be outdated before reports are released. With the explosion of workforce issues, federal HR offices do not have the needed time or resources to analyze and develop government-wide recommendations.

The bottom line – the need to rethink the civil service system

Government’s work environment will never be the same. It’s vastly different then when the civil service model was created. Today’s work management paradigm is also wholly different.

The hiring freeze will need to end in the near future – unless AI replaces all workers. The practices controlled by the Classification Act (originally 1923, then revised in 1949) are antiquated, and will be a high barrier to rebuilding the workforce.

The work changes and media reports also affect the federal “brand” as an employer. With the ongoing rollout of AI and work changes, the needed training is hard to document. And federal pay has long been a problem. Aside from tech specialists, who would choose to work in the current work environment?

This would be an ideal time to create a P3 with one or more of the several HR associations to develop recommendations for a new civil service system suited to today’s work environment. The HR functions in high performance organizations is vastly different than government’s century old system.

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OPM’s challenge of creating a high-performance culture

Howard Risher — Mon, 02 Feb 2026 08:00:00 -0500

A Dec. 8 memo from Office of Personnel Management Director Kupor listing the “Management Opportunities Going Forward” states “Creating a high-performance culture across government” is the agency’s leading challenge.

The memo was a response to the report from OPM’s Office of the Inspector General, “Top Management Challenges for Fiscal Year 2026.” The report caps the reports over decades critiquing OPM and the practices included in “Strategic Human Resource Management.” The Government Accountability Office stated in its 2025 High Risk report that “Heightened Attention [to workforce management] Could Save Billions More and Improve Government Efficiency and Effectiveness.” (italics added)

The “challenges” focused on the internal problems OPM needs to address going forward. Those problems include functioning effectively with a reduced staff, administering federal benefit plans, modernizing its IT systems and the need to upgrade the federal HR systems.

OPM has taken steps to change the management of performance – the Senior Executive Service was “overhauled,” performance standards were changed, there is the plan to “limit top ratings,” along with “meaningful bonuses and awards.” Additionally, OPM is implementing “one HR system” – Federal HR 2.0 – to consolidate workforce information. Director Kupor summarized the changes in a recent release to OPM team members, “Changes at OPM: Building a High Performance Culture.”

The “nuts-and-bolts” changes are clearly important. However, missing from the recent releases are important discussions of the “softer” issues like leadership, behavioral change, capability building and psychological safety. There is also no reference to the obvious importance of new technology and the problems building employee capabilities using new IT systems. And perhaps most important is the problem unique to larger organizations – the cultural transformation from compliance to high performance.

For reasons embedded a century ago, the administration of government’s HR system has never been linked to agency performance. That was true in President Clinton’s "reinventing government” – despite the performance gains and the Hammer Awards - and through the years on Performance.gov. The new head of the General Services Administration reinforced that when he referred to his agency as “the engine room that makes the mission run.”

McKinsey, however, has a different perspective as discussed in their report, “Performance through people: Transforming human capital into competitive advantage.” Gallup agrees – when expectations are clear, feedback is frequent and accountability is real, organizations outperform peers. The investment pays off.

Related studies confirm the linkage of the HR practices associated with a “high-performance culture” and an organization’s success. It’s captured by comparisons of the lists of the best places to work and the lists of the best performing organizations. On the Fortune list of the best places to work, the top 10 are or are close to the most successful in their industries.

To transition to a high-performance culture, government will need to understand the emerging issues now influencing performance. Research and experience in other sectors make it clear – workforce management is changing and agencies will need to understand and address the new issues, led by the COVID changes, the unplanned staff reductions and now by new IT systems.

Understanding High Performance Organizations

Government cannot be a High Performance Organization since the phrase refers to organizations that perform better than their peers. Further, the HPO concept is a construct to facilitate understanding and discussion of what enables complex organizations to perform at high levels.

The research by the research/academic HPO Center shows that there is “a direct and positive relationship” between a list of 35 common characteristics, organized into five factors, and an organization’s performance. It’s significant that 28 of the 35 involve human behavior. Their analyses show the five factors are consistently linked across industry sectors and countries.

HPO factor 1: Management Quality – “Managers in an HPO work with integrity and . . . show commitment, enthusiasm and respect. . . HPO managers coach and facilitate employees to achieve better results by being supportive, helping them, protecting them from outside interference and by being available to them.”
HPO factor 2: Openness & Action Orientation – “In an HPO, management values the opinion of employees by frequently having dialogues with them and involving them in all important business and organizational processes. HPO management allows experiments . . . and seeing mistakes as an opportunity to learn.”
HPO factor 3: Long-Term Orientation – “An HPO creates a safe and secure workplace by giving people a sense of safety and job security and by using dismissal as a last resort. They grow new management from their own ranks by encouraging staff to become leaders . . .”
HPO factor 4: Continuous Improvement & Renewal – “It continuously simplifies, improves and aligns all its processes . . . The organization also measures and reports everything that matters . . . People in an HPO feel a moral obligation to continuously strive for the best results.”
HPO factor 5: Employee Quality – “An HPO makes sure it assembles a diverse and complementary workforce and recruits people with maximum flexibility . . . An HPO continuously works on the development of its workforce by training staff to be resilient and flexible, . . . inspiring them to improve their skills . . .”

The 28 characteristics may be “soft” (e.g., “Managers are confident and trusted by employees”) but they are universally understood and intuitively relevant to good performance. The factors capture a work environment that attracts talent and supports effective public service.

The research is consistent with the arguments supporting a related construct, “healthy organizations.” That was the focus of a NAPA report, “Strengthening Organizational Health and Performance in Government.”

McKinsey has also focused on “organizational health”. Its studies show healthy companies show three times the total shareholder return than less-healthy companies. It argues:

“US government agencies also stand to gain considerable benefits from boosting organizational health. Key focus areas for leaders could include instilling a focus on purpose among employees; creating a supportive work environment that encourages innovation, autonomy, and ownership; nurturing talent development and deployment; and motivating staff through recognition and career opportunities.

Further research is not needed – creating “healthy organizations” benefits organizations and their employees. On that point, public sector employees are no different than those working in other sectors.

The barriers to realizing gains

Despite the recommendations over the years, government’s human capital framework has been immutable. In the era when it was conceived, employers expected employees to follow orders. That approach to management is still evident in all but a few state and local government “merit” systems as well.

There are exceptions, however – the long list of demonstration projects and “alternative personnel systems”. They confirm change is possible. The practices loosely aligned with HPOs can gain acceptance in government agencies. GAO is the most prominent. The agency has consistently led the Partnership’s list of the Best Places to Work for mid-size agencies.

The “system” barriers include the General Schedule and its administrative practices, the outdated approach to selecting and training new managers and the inability of the political leaders to agree on the need for reform. Through the years OPM was seen as a roadblock to change. It’s telling that, until recently, the need to improve agency performance was not addressed on OPM’s website.

An unrecognized barrier is the typical background of the individuals who run for election. Few have had successful careers managing or leading large organizations. In owner-managed businesses, the old top-down, “do-as-you’re-told” approach to management is still common. That approach, however, is never successful in government – or in any complex organization, especially in this era of dynamic change.

Notably, Elon Musk epitomizes the top-down approach. He is reported to prefer to personally direct major decisions, move fast and override traditional organizational structures. His tough management style is offset by lucrative stock-related incentives for executives and employees.

Musk’s disdain for government regulation is documented. He was quoted in Politico, “DOGE is the wood chipper for bureaucracy.” The blanket staff reductions added new barriers. There have been reports of skill gaps, inadequate staffing, employee burnout and the loss of operational knowledge. Most important, Federal News Network has reported the job losses have “destroyed workforce morale” – “schedules are slipping” – “trust is . . .at an all-time low.”

The cancellation of the 2025 Federal Employee Viewpoint Survey makes it clear OPM is aware of the problems.

People remain the key to high performance

The unexpected staff reductions affect both those who lost their jobs as well as those who continue working. The latter often suffer from what is close to “survivor syndrome" when they feel a sense of guilt and disengagement having survived the traumatic termination of co-workers. Addressing the “aftershocks” is not damage control; it’s about rebuilding psychological safety and commitment. Cash incentives could help but not when employees have to “compete” for the awards.

Government’s heightened workforce problems are not unique. Research by Korn Ferry shows “Less than half, 48%, of employees trust their senior leaders . . .”

Agencies would do well to conduct a similar survey or rely on Employee Resource Groups to understand how the staffing changes have impacted their commitment to their agency’s mission. Korn Ferry argues employers need “the trust of their employees to roll out massive strategies around AI and successfully execute [organizational changes] . . .” It goes beyond AI of course.

Employees want to use their experience to solve local operational problems but only if they feel their ideas will be valued. The success of the demonstration projects confirms in the “right” work setting employees do not hesitate to commit to their unit’s success. But in the current work climate, significant gains – and the goal of a high-performance culture – are now “a bridge too far.” Consistent with the Korn Ferry point, the level of mutual distrust is a barrier to change.

The heightened emphasis on AI is certainly justified. It can be a performance multiplier when used effectively to accelerate and improve decisions. It also can eliminate low value activities. It’s best seen as a tool to support manager-employee discussions, and raise performance expectations in goal setting.

AI supports improved performance but employee “soft” skills – collaboration, communication, judgement, adaptability, etc. – explain why certain employees are high performers. Investing in training pays off. The essential soft skills depend on the mission (e.g., medical care, law enforcement) and the nature of the operating problems. Those skills also enhance manager coaching and mentoring.

The investment needed to improve performance is discussed in the ebook, “Preparing Managers for Tomorrow’s Government”. My co-author, Dr. Trish Holliday, was the Chief Learning Officer when Tennessee successfully completed reform.

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Research confirms it: Happy workers are more productive

Howard Risher — Wed, 31 Dec 2025 10:00:00 -0500

It should not be surprising, but when people love their jobs, and are empowered to address problems, they are more productive. They may work late, go home exhausted, but are anxious to return the next day. Research confirms they have better, happier lives and that carries over to their families and daily contacts.

That is the focus of the research and writing of Harvard’s Arthur Brooks. He argues “To get the best out of people, treat them as people.” Multiple studies show investing in employee “well-being . . . not only raises employees’ quality of life – it significantly increases productivity and profitability as well.”

An added performance factor is an employer’s purpose. A Harvard Business Impact column reports, “Only 7% of Fortune 500 CEOs believe their company should ‘mainly focus on making profits and not be distracted by social goals.’” “Purpose-oriented companies . . . achieve 30% higher levels of innovation and better performance overall when leaders and employees believe in and act upon its purpose.”

Once the purpose is defined, “The next step is building authentic commitment from leaders at every level of the organization. That requires each leader, down to front line supervisors, to internalize the purpose and find ways to integrate it into the everyday work they and their teams do.”

“Research supports . . . having a sense of purpose has been linked to better health, increased longevity, and higher overall well-being.” When its shared by leaders and co-workers, it strengthens working relationships, mutual trust, and the team raises performance levels.

Factors that drive employee happiness at work

A Forbes column, “Happiness At Work: The New Competitive Advantage,” builds on research in the field of positive psychology. As a business journal, the author was writing for business leaders, but the argument is relevant to leaders in every sector.

A key point from the column is,

“Leaders have a significant impact on employee happiness. They set the tone for the workplace culture and can either inspire their teams or contribute to a toxic environment. Leaders who are . . . supportive create an atmosphere where employees are more likely to feel safe and valued.”

The drivers of happiness are:

Purpose and meaning: Employees who feel connected to their company’s mission are more likely to be motivated and satisfied.
Recognition and appreciation: “A simple ‘thank you’ can go a long way.” It’s more than a pay increase or bonus. “Creating a culture of appreciation can boost morale and a sense of belonging.”
Autonomy and flexibility: “Most employees thrive when they have . . . the freedom to manage their time. Autonomy empowers employees to take ownership of their tasks . . .”
Positive work environment: A supportive work culture that prioritizes respect, inclusivity and collaboration is crucial for employee happiness. Leaders play a pivotal role in setting the tone . . .”
Growth and development opportunities: “ . . . employees want to feel that they are growing and advancing in their careers.”

A search found a related column in Insurance Journal lists: supportive work environment, fair compensation and benefits, meaningful work, work-life balance and recognition and support. It’s also consistent with the annual Fortune list, “The Best Companies to Work For”.

The Fortune companies highlight a point relevant to government. The top 10 are in very different industries: finance, technology, hotels, consulting and supermarkets. Wegmans is the supermarket and the company has made the list annually for 26 years – and they has also ranked as one of the country’s best supermarkets. Clearly high salaries are not the reason Wegmans is one of the best.

Mistakes business leaders make

Another Forbes column highlights the mistakes business leaders make that can undermine efforts to build an engaged, high-performing workforce.

Four mistakes stand out as relevant in large organizations:

Lack of concern for employee wellbeing: In a survey, 63% of people left an employer “because they didn’t feel a connection with leadership.” Leaders “are not responsible people’s wellbeing” but they “are responsible to create the conditions for wellbeing” and “a culture of respect, appreciation and growth.”
Lack of empowerment: “Failing to empower people or failing to provide autonomy, choice or control are mistakes of leadership.” When employees have the “power of choice” [to tackle job-related problems], they “develop greater skills and capabilities.” People want to feel like they are trusted.
Lack of accountability or follow through: “ . . . failure [of leaders] to admit mistakes or take responsibility for their actions that had a negative effect on the culture.”
Lack of attention to employee opinions: By prioritizing employee feedback and demonstrating a commitment to continuous improvement, organizations can cultivate a culture of openness and trust.

Business leaders make mistakes of course as everyone does, but all companies have the common goal of making a profit. Employees understand that. Everyone wants their organization to be successful or at worst to avoid failure. That’s true as well in healthcare, education and not-for-profits. Disregarding the importance of employee engagement guarantees poor results.

Government should have an advantage

Government more than any business is intended to serve a purpose, actually multiple purposes, important to the public. That has been central to the attraction of government careers. It should make government on paper the best of employers.

The shift to goal-based management under the Government Performance and Results Act and related laws was intended to shift management’s focus to achieving agency purpose. The management “framework” is the subject of Performance.gov. Leaders are “held accountable for establishing organizational routines and management processes for setting performance goals and objectives that deliver results for the American taxpayer.”

Missing from that website is any reference to employees. Government may never become a “high performance organization” – that possibility is never discussed on federal websites – but the silence on practices known to affirm the importance of employee “well-being” or value stands out.

If hotels and supermarkets see the value in being a “great place to work”, it’s clearly reasonable to think that would benefit government as well. The value of worker satisfaction was documented decades ago. “Happiness” may be a “goal too far” but leaders should focus on what enhances employee performance.

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Government transformation is badly needed

Howard Risher — Tue, 02 Dec 2025 10:13:00 -0500

Government’s performance problems go back a long way. In 2017, the National Academy of Public Administration posted, “No Time to Wait: Building a Public Service for the 21st Century,” that argued:

“What government most needs is a fundamental transformation, from the culture of compliance to a focus on performance … the single most important challenge: investing in and improving the performance of the two million professional civil servants …”

The problem is not the workforce; it’s the failure to invest in the workforce along with the culture created by outdated civil service laws, regulations and practices. It flows from work environments with mutual distrust between leaders and employees.

The distrust is a barrier to transformation. It explains the often-repeated headline, “70% of business transformations fail.” That’s why a Harvard Business Review headline reads, “Your Transformation Can’t Succeed Without a Talent Strategy.” Government has no talent strategy.

Clinton’s reinventing government showed the payoff for transforming government

The Clinton/Gore “reinventing government” initiative – the National Performance Review – enabled agencies to realize significant performance gains. The goal was “to make the entire federal government less expensive and more efficient, and to change the culture of our national bureaucracy away from complacency and entitlement toward initiative and empowerment.” One of the initiatives four operating principles was, “Empowering Employees to Get Results.”

The first report was released six months after the initial announcement and already there were 384 recommendations promising to save about $108 billion. The initiative continued and eventually eliminated around 426,000 jobs and cut “thousands of pages of regulations.” The reward for employee suggestions was a $6 Hammer award, a symbolic award highlighting the $420 absurd accounting cost in Defense Department reports.

John Kamensky, who was a deputy director leading the reforms, summarized the reason for the broad success: Enabling “civil servants to see themselves as part of the reform can be a huge force-multiplier in getting action from all corners of the government.” To emphasize the point, the intent was to “invent a government that puts people first.”

The savings, along with a tax increase, enabled government to realize a budget surplus in each year of Clinton’s second term. In fiscal 2000, the surplus was a record $237 billion. (The inflated savings were $445 billion.) That’s only the second time the budget was balanced since 1960. It was accomplished with the enthusiastic involvement of employees.

The business culture transformation

The private sector started a transformation in the 1990s. It started with the 1990-91 recession that prompted companies to downsize and delayer – eliminating layers of management – to enable them to respond quickly to market developments. That increases a manager’s span-of-control, giving workers more autonomy and more discretion to make job-related decisions.

The decade also saw the rapid growth of knowledge workers who are most productive when they are trusted and empowered. That’s always been true in fields like medicine and the law but in government there are hundreds of job families where employee decision making is critical to agency performance.

The decade also marked the beginning of three important workforce trends – high performance organizations, great places to work and employee engagement linked to performance. A key point is that each trend contributes to better organization performance. Each trend confirms that in a supportive environment workers are fully capable of improving results. Each is associated with supervisory practices very different than the typical government work environment.

Recently, the COVID crisis and working from home heightened the attention to employee empowerment. Now the uncertain economy and the mushrooming importance of AI has triggered renewed interest in controlling costs, but in government that in no way obviates the role of workers serving the public.

Looking back, we’ve learned what’s needed to create a workplace culture “that engages, develops, and inspires a diverse, high-performing workforce by creating, implementing, and maintaining effective management strategies, practices, and activities . . .” It’s a holistic approach to management that supports employee aspirations and well-being. It depends on mutual trust. “Both workers and customers benefit” – and in government the public. The DOGE initiatives took government in the opposite direction.

A missing element – psychological safety

This problem is not new. It’s when employees are afraid of retribution if they voice concerns or suggest unsolicited ideas. This month the problem warranted an HBR column, “In Tough Times, Psychological Safety Is a Requirement, Not a Luxury.”

The problem held back innovation in industry for decades but the changes in the 1990s highlighted the importance of employee empowerment. The worst era was when scientific management dictated how employees worked. Decades later, owner/leaders in small businesses continue to believe they need to make all decisions. But top-down management denies what employees can contribute.

Unfortunately, candidates for public office often have no experience managing in large, successful organizations. In today’s fast-changing environment, front line workers have the best understanding of emerging operational problems.

Recent research, again from HBR, shows where there is mutual trust, employees have significantly “higher productivity, more energy, less stress and burnout.” They are happier with their lives. “Ultimately, you cultivate trust by setting a clear direction, giving people what they need to see it through and getting out of their way.”

For government, mutual trust has to include the public. “Giving people what they need” is the key to continued support.

Tennessee shows the payoff for reform

The Tennessee approach to civil service reform should be the model for reform. The state’s success is attributed to leadership and a multi-year commitment to building broad employee support.

When Gov. Bill Haslam, a Republican, took office in 2011, he initiated civil service reform. The state’s civil service law dated to 1939. The aging workforce was beginning to show emerging workforce problems. Population trends portended the problems would get worse.

Significantly, Haslam had years of relevant prior experience, first as an executive in business and then two terms as mayor of Knoxville. Several of the state’s department heads previously were business executives.

Haslam’s cabinet undertook two initiatives that reinforced the need for reform and led to passage in 2012 of the Tennessee Excellence, Accountability and Management (TEAM) Act.

First, each cabinet member undertook a top to bottom review of his or her agency, asking first if there were services that could be provided more effectively and efficiently by the private sector and second, if government should be providing the service, is it being provided effectively and efficiently? In each agency there was agreement that workforce practices were barriers to improved performance.

Second, the deputy governor and human resource commissioner went on an employee listening tour, traveling work sites to hear how to improve employment practices. Many of the practices addressed in the reform surfaced in these meetings.

In combination the initiatives sent an important message – in Tennessee, civil service reform was a priority and the goal was to improve agency performance. That was reinforced by specifying in the TEAM Act a requirement that performance management be based on S.M.A.R.T. goals and outcomes – and pay for performance.

With knowledge workers, the goals are best defined for teams or offices. Their value is their knowledge, skills and competencies and the strength of their engagement. Their expertise is essential.

When workers understand how their efforts contribute to their agency’s success, it reinforces employee engagement. Goal-based management creates a shared focus on improved results.

After the act was passed in 2012, the state invested three years in training and coaching managers, and in securing feedback from managers and employees to build support for the transition to pay for performance. That recognized the importance of developing acceptance of the new performance paradigm. The investment succeeded in creating a culture or performance.

The alternative to DOGE

The mass layoffs and buyouts have largely ended. A total of 317,000 were reported to have lost their jobs although many mistakenly and are being rehired. The savings are claimed to be $214 million. It’s clear NPR and employee empowerment led to greater savings.

Agencies need to rebuild and reinvigorate the workforce. NPR shows employees are good at eliminating waste. The loss of talent now impedes improved performance. Tennessee shows that investing in talent management is good government.

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Managers are the linchpins to improved performance

Howard Risher — Fri, 25 Jul 2025 09:00:00 -0400

The recently issued mandate, “Performance Management for Federal Employees,” requires agencies to “provide a firm benchmark towards which employees must aim their performance.” It’s on point but fails to address what is likely to be problematic – manager and employee behavior patterns are deeply rooted.

The opening paragraph refers to “a workplace culture where excellent performance is celebrated and rewarded” but then it states to be “fully successful . . . the employee is achieving all expectations for their position.” The emphatic references to “standards” that tell employees “how well they have to do it” send a very different message then in the many books and reports on improving performance.

The reports include several released by the Government Accountability Office along with a 2006 report, “Performance Leadership: 11 Better Practices That Can Ratchet Up Performance,” by Robert Behn, a prominent senior lecturer at the Kennedy School of Government. The need to improve performance has been a concern for decades.

Behn opens his report with a chapter, “Helping Managers Manage” – an issue forgotten in the OPM memo. The helping now is the support to redefine manager/employee working relationships. Behn’s report was released almost 20 years ago. Today’s experts add the understanding that leaders play an important role in broad change initiatives.

GAO has discussed the core problem in several reports: agencies “lack organizational cultures that promote high performance and accountability … that are critical to successful organizations.”

Two levels of performance management

It’s not clear when or why it started but the passage of the Government Performance and Results Act in 1993 created a new focus for performance management at the agency level, with reporting of agency goals and results. The traditional focus, going back decades, was on front-line workers, which historically were administered under Office of Personnel Management policies.

Both arguments focus on improving performance, but the approaches are different and that affects how agencies address performance problems. GPRA focuses on agency-level results, using metrics and data to monitor progress. It’s a “system” focus consistent with the approach to management that emerged decades ago, “scientific management,” where industrial engineers define performance “standards” for workers. The discussions of GPRA and GPRA modernization are silent on the role of front-line managers and workers.

In contrast, the focus of “best” practices in workforce management is on creating a work environment where workers are empowered to use their knowledge and skills to address operating problems. Gallup’s research introduced the construct “engagement” and over time made employee engagement the “answer” for improved performance. It makes a manager’s supervisory skills a priority.

Behn alludes to the distinction, “Traditionally we have asked the systems question. Rather than develop public managers with the leadership capacity … we have sought to create government-wide schemes that will somehow require performance …” He goes on to state, “This systems approach is unlikely to prove very effective.” He concludes in the introduction that “Administrative requirements are not designed to elicit discernment and adaptation. They are created to impose obedience and conformity.” That bureaucratic work environment has resisted change efforts for decades.

Managers and employee performance

Gallup’s analyses show that “engaged” employees perform at significantly higher levels. That’s documented in a series of performance metrics, including productivity, absenteeism, customer satisfaction, safety and wellbeing.

The key point from their research: “managers account for at least 70% of the variance in employee engagement scores.” The key is the way employees are managed.

Significantly, Gallup has documented the impact at higher management levels as well. When managers are engaged, it’s far more likely their team will be engaged. The evidence also shows that engaged executives boost the engagement of everyone in the organization.

But in government, raising performance levels requires change – and change, especially by front line employees, is contrary to the culture in bureaucratic organizations. A 2017 survey found even members of the Senior Executive Service feel they lack the autonomy and support to drive meaningful change. The problem is compounded by the multiple layers of management.

Notably, Clinton’s “reinventing government” initiative focused on what needed to change. The NPR principle, “Empowering Employees to Get Results,” inspired more than 1,200 Hammer Awards to recognize employee-initiated changes. The “equivalent of 640,000 pages of internal agency rules” were eliminated. In the traditional environment, however, workers know where problems exist but too often are reluctant to voice their ideas.

The COVID crisis and working remotely triggered new interest in the role of managers. A recent McKinsey column focused on “creating the right atmosphere for middle managers to be the ‘force multipliers’ they are meant to be . . .” They argue for categorizing manager tasks “based on whether they add value or not” so managers can spend time on what matters. Every employer should eliminate unproductive tasks.

McKinsey contends that the performance management system, “from goal setting to continuous feedback to consequence management,” is the “greatest formal mechanism.” At its best, it prompts ongoing feedback and coaching. It also reinforces the linkage to an employer’s mission and goals. The idea of “standards” is contrary to driving for improved performance.

Companies, large and small, now rely on S.M.A.R.T. goals to link executives and managers to their business plans. The practice gained prominence when workers started working remotely but for years it’s been widely used by leading companies.

Pay is a problem

It’s a serious problem. The cap on SES salaries, $225,700 for 2025, compresses pay at all levels of management. Plus, President Carter and the Civil Service Reform Act was right – both pay increases and cash awards should be linked to improved performance. In business, incentives start for the managers of white-collar workers at 20% of salary and increase at higher executive levels.

The cap holds federal executive salaries well below private sector levels. Salary.com reports top engineering executives earn on average $294,919. Top financial executives average $296,378. Many corporate executives gain added income from stock ownership. In larger companies – those similar to federal agencies – managers two or three levels down are paid more than SESrs.

The compression is known to deter workers from applying for manager vacancies. The pay increases do not offset the stress of being a manager. Sometimes less inexperienced, lower paid workers are the only applicants. The problem was discussed as far back as 1990 in planning meetings for pay reform but it’s locked in the GS system grade structure.

The argument that federal executives are badly underpaid is obviously not new. It was last studied almost 40 years ago when Reagan appointed a commission to address the problem. In light of Reagan’s commitment to reduce costs, the report’s conclusion stands out:

“The Federal Government needs to be competitive for the best talent available, and compensation plays a significant role in that competition…. An SES beset by retention and recruitment problems results in the will of the people …being seriously impaired…. It is clear the SES compensation system provides neither the reward for performance nor the flexibility for competitively recruiting and retaining the best quality talent available…”

Implicit in the commission’s report is the recognition that the quality of SES talent is important to agency performance.

The SES salary system is practically the same today as created under the Civil Service Reform Act of 1978. Then a stated goal was “To hold executives accountable for individual and organizational performance.” However, possibly the last presidential statement on the subject, Obama’s 2015 “Strengthening the Senior Executive Service,” is silent on the subject.

In business, executives and managers are rewarded as a team. Incentives are universal, with awards based on a combination of company performance and individual goal achievement. That’s the practice in health care as well. The new Senior Executive Service Performance Appraisal System and Performance Plan is not remotely similar.

Investing in government’s management corps

McKinsey’s research reinforces the argument Gallup has repeated for years – “Investing in middle managers pays off - literally.” But in government, the argument would quickly become political.

An idea that would serve to minimize resistance would be to create an independent commission to assess best management practices. That was the thinking when Congress created the Commission on Executive, Legislative and Judicial Salaries in 1967. Two years earlier, Congress also created the Quadrennial Review of Military Compensation. This past January, the Defense Department released the 14th Commission report. Several states and cities also form groups periodically to study similar problems.

Here, the problems affecting federal executives and managers are broader than pay. The current focus on government performance makes this an ideal time to initiate a review and make recommendations on the steps to create a high performing cadre of executives and managers. A new commission could go further and consider broader civil service issues. It’s badly needed.

An alternative is the Baldrige Performance Excellence Program promoted for years by NIST. It’s produced multiple success stories across the spectrum of employers, including state and local government. Their approach could benefit federal agencies.

If not a new commission or the Baldrige program, to maintain independence, the review could be undertaken by one (or a combination) of experts in management from the leading business schools. They maintain relationships with the best managed companies.

However structured, the recommendations would benefit all public employers. The cost – the investment – would be nominal but the payoff in improved performance could be substantial.

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Investing in knowledge workers is important

Howard Risher — Fri, 11 Jul 2025 09:15:00 -0400

Management consulting firm McKinsey argues, “Effective performance management systems [are] designed to help people get better in their work, and they offer clarity in career development and professional performance … companies that focus on their people’s performance are 4.2 times more likely to outperform their peers. Companies that focus on … organizational health also reap dividends in culture, collaboration, and innovation ...”

Acting OPM Director Charles Ezell’s June 17 memo, “Performance Management for Federal Employees” focuses on the best approach for the majority of government’s white collar employees. That is relying on performance goals but the memo is silent on a core issue. To be fully successful, employees need to be involved in the goal setting process; that creates a sense of commitment. Goals need to be “challenging but realistic”. When managed effectively, the new policy should trigger better results.

However, the work of thousands is not suited to relying on annual performance goals. There are two large groups – highly educated knowledge workers and a related group where work assignments are based on proven individual skills. The latter group developed their unique skills through their job experience. With both groups it’s not possible to rely on performance goals.

Knowledge workers

The idea of knowledge workers is not new. Management guru Peter Drucker coined the phrase in a book published over six decades ago. He described them as “high-level workers who apply theoretical and analytical knowledge, acquired through formal training.” He noted they “would be the most valuable assets of a 21st-century organization because of their high level of productivity and creativity.”

Most have graduate degrees, although that was not true when Drucker coined the phrase. The traditional list of knowledge jobs includes physicians, scientists, engineers, economists, psychologists and lawyers. The common characteristics – they “think for a living” and address complex problems where the facts are often uncertain.

That makes it impractical to hold knowledge workers accountable for producing better results. Many devote their careers working, for example, to solve a societal problem like lung cancer without finding a solution. That makes it difficult at year end to confirm their work was productive. Often, it’s difficult to confirm, in the absence of breakthroughs, the best are more productive than the least qualified.

Imagine what life in the U.S. would be like if government had not supported the best “thinkers” in solving society’s most difficult problems. Government’s role in developing computers and the internet is well documented. The military would not have had the nuclear bombs that ended World War II. Today, immunotherapy would not be available to fight cancer. The National Cancer Institute might not exist. The Federal Reserve System might not exist.

At the end of FY 2024, the FedScope website shows federal agencies employed over 38,000 medical officers, 5,000 economists, 144,000 engineers, 43,000 physical scientists and 44,000 general attorneys. Virtually all are paid significantly less than their counterparts in other sectors.

A broader definition of knowledge jobs

There are additional jobs where defining performance goals is impractical. One that stands out is nursing. Degree requirements are now common for nurses; many have graduate degrees. But experience is important in skill development. In hospitals, the best nurses are often assigned to care for more acute and difficult patients. Federal agencies employ 110,000 Nurses (GS-0610).

Another, based on my experience, are the Community Supervision Officers (formerly parole and probation officers) at the Court Services and Offender Supervision Agency. The best are assigned to work with the most difficult offenders.

That’s also true in the many rapidly emerging IT fields. With those jobs and others where job assignments ride on proven expertise, performance cannot be assessed or managed with performance metrics or S.M.A.R.T goals. Federal agencies employ 101,000 information technology specialists.

There no doubt are other job series where goals are not feasible. Public health and criminal investigation are two possibilities. Senior incumbents in a series can address the question.

Historically, accounting principles have treated workers as a cost rather than assets, and that continues to be the basis for civil service systems at all levels of government. It’s a view shared by many politicians. The Reagan administration at one point proposed reducing the funding for the National Institutes of Health. Researchers would have had to shift their work to other research centers where they would have hired staff, probably at higher salaries, and invested in equipment and workspace, significantly increasing the costs. Fortunately, the plan was dropped.

Government is competing in very different labor markets

Pay survey data illustrate why the civil service system makes it difficult to compete for top talent. The example of nursing illustrates the point. A partial list of the nurse specialties includes Clinical Nurse, Psychiatric Nurse, Occupational Health Nurse, Community Health Nurse and Nurse Midwife. Certified Nurse Midwifes earn an average of $128,110 while Community Health Nurses earn $78,995.

Engineers are a similar example. The average Civil Engineer earns $99,590 while an Aeronautical Engineer earns $158,772.

In both job series, along with all knowledge jobs, the best qualified – experts – can and do command significantly higher salaries. That’s ignored in administering General Schedule system salaries.

The GS system is based in theory on average market salaries. Moreover, the Federal Employment Pay Comparability Act, drafted 45 years ago, requires the Bureau of Labor Statistics to report average pay levels by GS grade level, ignoring occupational and industry-specific differentials, as well as local market factors (e.g., commuting patterns). The data fail to show which, if any jobs are paid competitively.

The pay differentials across labor markets drive home a key point – the rigidity and political caps on pay make the General Schedule badly out of sync with what’s necessary to compete for talent. Agencies have reported losing talent to employers offering more than double their GS salary.

Managing pay and competency models

The first time I saw competencies in use was a meeting with the nursing leaders at the NIH Clinical Center in 1990. Today, the idea is widely used and growing as employers switch from hiring based on degrees to key knowledge and skills. A proven model is based on developing a profile of the important competencies at each career stage, with the salaries at each level defined by salary bands.

The NIH website defines competencies to include:

“Knowledge: Information developed or learned through experience, study or investigation”
“Skills: The result of repeatedly applying knowledge or ability”
“Abilities: An innate potential to perform mental and physical actions or tasks” and
“Behaviors: The observable reaction of an individual to a certain situation.

As discussed on the website, “Competencies are not only about what you know, but how you apply what you know. [Competencies] define expectations of your position (not tasks). Identify measurable and/or observable knowledge, skills, abilities, and behaviors, and provide flexibility to respond as job functions and technology evolve.” The idea “fits” managing knowledge specialists far better than the GS system.

The argument for relying on salary bands, instead of traditional ranges, is that the careers of knowledge specialists progress steadily as incumbents develop their competence. Their daily work activities may not change but at each career stage new knowledge and skills – new competencies – are important. At each stage, they are expected to address more difficult problems. Promotions from one stage to the next depend on demonstrated competence. Salary survey data are used to define the bands.

Competencies and salary bands are the proven basis for managing salaries in the demonstration projects. It’s not a new program model. The Navy’s China Lake demo created the model 45 years ago to emulate college faculty salary systems (Professor, Associate Professor, Assistant Professor, Instructor).

The proven planning strategy

My first federal client, where the focus was on defining salary bands and competencies, was CSOSA, now 25 years ago. At the time, CSOSA was transitioning from being part of the District of Columbia government to becoming a federal agency. Unfortunately, after months of meetings, the then head of the agency had problems and was forced to resign by OPM’s director. OPM rejected what we had developed and imposed the General Schedule pay system.

With the key job, Court Supervision Officer, a team of experienced CSOs identified and defined the important competencies. An important competency for recent hires, for example, is “writing skills” since they have to draft reports for judges. For senior CSOs, a key competency is the ability to switch instantaneously between the roles of “social worker” and “law enforcement” to be effective in meetings with offenders.

The strategy of relying on teams of agency people for planning is essentially the approach used when the National Geospatial-Intelligence Agency was formed years ago. It was also important in planning China Lake and the other demonstration pay systems.

Relying on employee teams is a common practice in planning workforce programs in universities. It follows from the collegial culture. Employees understand their organization, its culture and employee issues better than any outside “expert”. They also know what competencies are key to good performance at each career stage. With guidance, they are fully able to develop solid programs that meet their organization’s needs and will be accepted by their co-workers.

Unfortunately, federal hiring, career management and pay policies continue to focus on degrees and job seniority, not expertise. Too often individual expertise is not recognized or rewarded. Seniority overrides performance. The goal should be to bring out the best in employees, to recognize their value and to engage them in improving agency results. It’s an investment that pays off.

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No better way to manage performance

Howard Risher — Mon, 30 Jun 2025 11:00:00 -0400

The June 17 memo from the Office of Personnel Management’s acting Director Charles Ezell, “Performance Management for Federal Employees”, reflects an important development for managing employee performance. The new approach is the use of S.M.A.R.T – Specific, Measurable, Achievable, Relevant and Time-bound – goals to plan and monitor employee performance. The goal is building “a high-performance Federal workplace culture.”

Management textbooks include exhibits showing interlinked level-by-level individual goals aligned with agency goals. Everyone can understand how their work efforts are expected to contribute to their department’s and their employer’s success. It’s a common practice in successful companies.

The new policy also provides for rewarding high performers with “meaningful bonuses and awards.” It’s unlikely the promise of small, year-end awards will drive employee motivation throughout the year but there is definitely a sense of accomplishment followed by recognition when they receive the awards. That is if the process is not tainted by favoritism and distrust.

The memo was silent on a core issue – employees need to be empowered to tackle problems. If employees are to be accountable for achieving goals, they need to have the discretion to act as needed to tackle problems. In the NPR “reinventing government” years one of operating principles was: “Empowering employees to get results.” It contributed to the largest performance gains in decades. In moving to goal-based management, agencies should start by assessing the culture to learn if managers are ready.

As a caution, where there is little trust and workers are expected to comply with established principles, the transition will not be quick or easy.

Agencies will also need to assess how this will change manager/employee relationships. Where the use of employee goals is new, it will redefine their relationship and both require new skills and behaviors. That makes it important to approach this as culture change and provide adequate training.

Goal-based management is proven

This is essentially the same strategy the state of Tennessee initiated in 2011 as the basis for civil service reform. It was a solid success. The state went further and adopted a pay-for-performance salary increase policy. Agencies realized notable performance gains and today state agencies are recognized as “best places to work.” Writers have posted articles wondering if “…Other states can tap Tennessee’s secret sauce for government efficiency?”

Several years ago, Steve Goodrich brought Tennessee’s human resource commissioner, Rebecca Hunter, to Washington and had her meet with several groups to discuss what they accomplished. Unfortunately, the COVID crisis intervened, and her story was quickly forgotten. (The ebook I co-authored with Tennessee’s Chief Learning Officer, Trish Holliday, “Preparing Managers for Tomorrow's Government”, may be useful. It’s available here.)

If the transition is managed effectively, “fully successful” ratings should be limited to managers and employees who achieve their goals. Generally, goals represent improved performance over the prior year. If all employees perform at that level, it should be seen as a good year.

For reasons that again are not clear, goal-based management has a long history in government – the Government Performance and Results Act introduced the practice two decades ago – but the focus was and has been on agency goals. In contrast to business, agency leaders along with senior executives were not accountable for agency performance. In business, when a company’s results do not satisfy the stockholders, they are quickly replaced.

Again, in business as well as health care, year-end incentive awards are based by formula on achieving a combination of organization and individual goals. The executives as a “team” are accountable and rewarded for their company’s success.

Defining goals that are mutually accepted

In a traditional management environment, employees were told what to do and supervised closely to see they satisfy expectations. Performance expectations or standards were dictated.

Goal-based management requires a very different philosophy. Engaged employees are known to perform at higher levels, and managers are the keys to creating a supportive environment that builds employee commitment. Managers and employees need to work closely in defining goals and reacting to developments that affect goal achievement. That requires a good working relationship.

It also requires a relationship where employees are not afraid to fail, knowing they can look for advice or help to tackle problems.

Employees always know what they can expect to accomplish, the barriers that are likely to affect their performance and what for them is unacceptable performance. There is research showing in setting personal goals, many set high expectations. Here they want to make a contribution, but they also want to be treated fairly. That means goal setting works best when employees are involved in the goal setting process.

Performance goals define accountability

The word “accountability” seems to be omnipresent today. Interestingly, it’s rare to see the word “accountable” in discussions of business results. It’s understood, of course. It’s apparently never been studied – a search failed to find studies – but in agreeing to performance goals, employees in business understand they are expected to achieve the goals.

In their year-end evaluations, managers evaluate employee performance relative to goals. But more importantly, throughout the year, the goals and metrics provide a basis for managers and employees to discuss what’s unfolding. That information enables managers to provide ongoing coaching and advice. As circumstances change, goals often need to be revised. If that’s accountability, it works.

That’s true for team goals as well. Working to achieve team goals builds camaraderie.

Performance goals do not fit every occupation

Managing with SMART goals does not reflect the nature of work in the so-called knowledge occupations. A “knowledge worker is a professional who generates value for the organization with their expertise, critical thinking and in some cases interpersonal skills.” “They think for a living.” Many have graduate degrees although there are many exceptions.

They include the specialists in technology fields, engineers, architects, lawyers, physicians and scientists, along with occupations where individual work assignments and year end goals cannot be planned. An example would be nurses where daily activities cannot be anticipated. Often the best are assigned to deal with the toughest problems. It’s their knowledge and skills that determine their value. Seniority or years of experience are not relevant although that may be difficult to accept.

The alternative for knowledge jobs is competency-based pay where pay increases are based on an assessment of an employee’s progress in developing their knowledge and skills.

The first demonstration project, China Lake in 1980, was based on what was then an innovative program model – salary banding – that is now proven and accepted as the basis for managing knowledge worker salaries. The success of the “demos” confirms the acceptance of the program model.

Managers play a vital role

Studies going back more than two decades show managers play a vital role in supporting good performance. Government, unfortunately, has a history of promoting senior workers or those with good technical skills to manager positions. That may have been OK when workers were only expected to do what they were told. Now, however, the experts recognize that workers are capable of performing at much higher levels when they are empowered and coached with feedback to improve performance.

That is a very different role for managers. In fact, it can be argued that when employee performance is unacceptable, its very likely poor supervision played a role.

It’s particularly important for effective management to start at the highest levels. That was an advantage in Tennessee where the governor and several agency heads had been executives in large companies. Too often appointees are “experts” but do not have experience managing large employee groups. A fallback is the appointment of a chief operating officer supported by executives with program management experience.

The key point is that managers are too important. They need adequate training. In Tennessee, the rollout took place over three years; the first two were “practice”. It was not until the third year that managers and their performance ratings were linked to salary increases.

Today several companies market software to record goals and metrics to help managers and employees track progress over the year. Goal management is more powerful when everyone can follow progress.

It’s not an HR problem; it’s a leadership problem. Agencies have very different management problems, making one-size-fits-all edicts on how to proceed suspect. Culture change takes time. There are likely to be setbacks and resistance. But after decades of announced plans to raise performance levels, focusing on the management of employee performance has the best chance of succeeding.

Looking back over the history of the civil service system, this is the first broad scale attempt to transform the work culture of federal agencies. The demos and agencies with "alternative personnel systems" successfully transitioned away from the traditional civil service rules and regulations. But this will be the largest attempt at organizational change ever undertaken.

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Managing in the federal government requires new and different strategies

Howard Risher — Wed, 12 Feb 2025 12:00:00 -0500

In Certainty, a new book by retired CIA Chief of HR Mike Mears, the preface includes a brief story about a call from the agency’s deputy director, who asked, “Mike, why is it that when I pull the levers, nothing happens?” The “levers” are the actions or tools available to government managers that too often fail to drive performance. The question is central to the criticism of the federal government.

The need to improve performance has been addressed by presidents as far back as Truman and his Hoover Commission. The current focus on efficiency is not new. That was the answer when Reagan created the Grace Commission: "We want your team to work like tireless bloodhounds. Don't leave any stone unturned in your search to root out inefficiency." Criticism of federal workers has a long history.

The answer over the years has been adopting business practices – 5-year strategic plans, use of performance goals and metrics, and reporting of results. That was the mandate behind the Government Performance and Results Act, followed by the GPRA Modernization Act – but the laws have failed to solve the problem. The “levers” are not enough.

The Football Analogy

Mears observed the CIA had “a mix of highly effective, energized units, alongside units with low morale and poor productivity. If red tape was to blame . . . it should affect all units equally.”

That’s similar to pro football. The rules are the same for all teams; there is minimal variation in the running and passing plays; the physical size and strength of players are not significantly different, but still some teams win while others lose repeatedly

Mear argues the difference is “inside the human mind.” It is leadership at all levels, coaching to improve, recognition and appreciation, fair treatment. Trust of coaches and team leaders is important. Winning teams feel a sense of momentum. Each player has a defined role; in combination that’s team play. When team morale is low, it’s evident in interviews and on the field.

That’s very similar to the culture in successful, high performance organizations. Sports are not unique. Everyone wants to be seen as valuable. They like the feeling their work efforts are contributing to success and want their contribution to be recognized. They like the camaraderie that flows from team success.

Managing in Business is Simpler

In a January Wall Street Journal op-ed, Robert Rubin, Treasury secretary under President Clinton, cited three reasons as Limits of ‘Running Government Like a Business’:

“First, the private sector’s mission is far simpler.” The overriding goal is maintaining profitability. Every worker understands that.

Second, CEOs have the ultimate decision making authority. Executives know they are in charge; workers cannot question their authority. In government, multiple critics question decisions.

Third, “public sector leaders face far more scrutiny than business leaders.” That’s especially relevant with small, privately held companies.

Rubin could have mentioned three more reasons. The most obvious are the financial incentives that have created more and more billionaires. Another is one that stands out today – elected and appointed leaders often have no experience managing in large organizations. A third is that aside from financial reporting, the public has virtually no access to the performance of the millions of private companies. As Vanderbilt University’s David Lewis says, “presumably, voters longing for a government that operates like a business are not referring to the high percentage of businesses that fail.”

The Problem Is Rooted in the Civil Service System

When the system was created, its purpose was clear: to protect employees and keep hiring free of patronage. It’s silent on performance and accountability. The foundation of the system, the General Schedule, is the same today as it was when it was created in 1923. It’s classic bureaucracy.

In that era, management thinking was narrowly focused on top-down control. Time-and-motion specialists controlled how workers performed their jobs. Detailed job descriptions specified each worker’s “duties.” Workers had virtually no discretion.

That philosophy dominated into the 1980s when the book by Dr. W. Edwards Deming, Out of the Crisis, triggered what was then a radical change, allowing frontline workers to tackle job problems. He understood the change in thinking would be difficult – "long-term commitment…is required of management that seeks transformation. The timid and the fainthearted, and the people that expect quick results, are doomed to disappointment.” The failed attempts to change government confirm that.

The next decade began with the 1990-‘91 recession that forced corporations to cut costs. The most prominent change was the elimination of management layers, which increased a manager’s span of control – and worker autonomy. It marked the beginning of a revolution in work management. Now there are workers who work remotely with no direct supervisor. Books and columns on “great places to work” and high performance are published frequently. The civil service system, however, remains unchanged.

The Government Accountability Office recognized the problems triggered by the civil service system when “strategic human capital management” was included on the first High Risk List in 1990. It’s been on the list for 35 years.

Now the Trump administration has taken several steps to slash the federal workforce. It started with the hiring freeze and the “deferred resignation” offer. Now agencies are planning for widespread layoffs and attrition-based hiring. No one knows how many employees will lose their jobs but key positions could be vacant and disrupt agency operations.

What is known is that the buyout offer along with several executive orders have created what one federal employee described as “a climate of fear, confusion, skepticism and anger at federal agencies.” The phrase “I am terrified” was used in a Politico column describing “the dark mood inside federal agencies.” Fear and anxiety are the antithesis of a healthy work culture. A toxic work environment will trigger quits, deter job seekers, and lower productivity. Recovering from this will necessitate wide ranging reform.

From Hiring Reform to Civil Service Reform

Jennifer Pahlka, a former federal employee, recently made a compelling argument supporting Trump’s executive order to reform the hiring process, saying that it “keeps great talent out of the federal government.”

Possibly the most important section of the EO is the mandate to “provide specific best practices for the human resources function in each agency…with advice and recommendations as appropriate from DOGE.” The mandate should open the door to evaluating and implementing best practices, including the use of the best technology. The EO does not delineate what’s included in the hiring process but to realize significant improvements it should include:

An in-depth workforce analysis to understand current and projected retirements and quits, the occupational knowledge and skills essential for high performance, as well as the availability and level of competition for the best qualified job seekers. Each job series has its own labor market, making staffing far more complex than in business.
A related step would be to analyze and document the profile of skills related to selection, promotions, and performance for each job series and career level. Job skills are important in hiring as well as in promotions, training and coaching. It’s fair to everyone.
Hiring is also affected by the government's “Employee Value Proposition” or brand. It’s central to attracting and retaining well qualified candidates. The concept of EVP is understood to include pay and benefits, career development, and work-life balance, as well as an organization’s social purpose, and organizational culture. A Partnership for Public Service survey found that the federal government’s EVP discourages Gen Z interest in federal careers.
Federal hiring is also affected by the competitive level of pay and benefits. Not surprisingly, the better qualified job seekers can expect above average salaries. Its supply and demand. It’s been decades since the federal government completed a market analysis. With high demand occupations, federal salaries are well below market and have to hurt recruiting.

The GAO argument is consistent with the best thinking for creating high performance work environments. It pays off where employee performance is a key to agency results and customer satisfaction. The federal government has clearly not focused on sustaining public support.

Hiring is only one element in creating a high performance environment. It’s not about the numbers or the costs; it’s about building a workforce committed to addressing the nation’s concerns.

Managing Employees as Assets

The GAO discussion of strategic HR management was on point – high performing organizations understand the relationship between effective people management and organizational success. That is totally missing in the civil service system. Employees are more than a cost.

The distinctive workforce problems in federal agencies make talent management more complex than any business conglomerate. In the rapidly changing world of work, it's not possible for OPM to address the mix of talent problems with one-size-fits-all administrative practices. Agency performance has to be a higher priority than maintaining an inviolate civil service system. The election made that clear.

Realistically reform cannot begin until the purge ends. The first step should be to document where job vacancies impede work team performance. Solving those problems should be a priority.

The best work management practices are discussed in books and websites. The Great Places to Work Institute is a good place to start. Several consulting firms also promote the benefits of “best practices.” There are states and no doubt other countries that have successfully transitioned to proven practices. We know what pays off in better performance – and in improved worker engagement. Those practices are the “levers” that count.

The most productive strategy would be to follow Pahlka’s recommendation to involve senior specialists as Subject Matter Experts in developing plans to address problems. Working with experts in workforce management, the combination will add credibility for co-workers and managers. She is adamantly opposed to relying solely on HR staff. SMEs add value in all workforce management projects.

Success stories need to be promoted and by a trusted source. The Partnership for Public Service is of course a possibility. The National Academy of Public Administration is another possibility. The purpose is one that a foundation might fund. Promoting best practices along with the strategies that support the changes benefits everyone, including the public.

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The civil service system is a barrier to effective talent management

Howard Risher — Fri, 17 Jan 2025 07:00:00 -0500

Former President Carter’s recent death reminds us that it's been almost 50 years since the Civil Service Reform Act was passed. Stuart Eizenstat, Carter’s chief domestic adviser, told Federal News Network in 2018, that at the time the president thought that federal employees needed “more flexibility, more incentives, more encouragement [and] that there was a lot of dead wood.”

Carter created the Senior Executive Service, gave federal managers more flexibility and linked their pay increases to performance, although that policy was short-lived.

Carter’s goal, as stated in the law and highlighted on the Office of Personnel Management’s website, was “to provide the people of the United States with a competent, honest, and productive workforce...and to improve the quality of public service.”

Despite creating the SES, however, Carter failed to change how federal employees are managed. The General Schedule is unchanged, except for increases and the introduction of locality pay. Job classification is also the same. OPM still relies on classification standards that date to before Carter’s election. Agencies are reducing the time to hire, but NEOGOV, a public sector human resources software company, reported in 2020 that the average public sector time-to-hire was 119 days–more than three times the average in the private sector. Carter reportedly believed government was “a bureaucratic maze which neglects merit, tolerates poor performance.” For years the responses to the employee survey question with the lowest score -- “in my work unit, steps are taken to deal with a poor performer” – confirmed that was accurate.

Now, after the disruptive changes triggered by the COVID crisis, employers have changed how they value “the human behind the employee.” Many GenZers who recently started their careers have never worked in a traditional office environment. The rapid introduction of AI is redefining how workers do their jobs. Worker burnout has become a widespread problem, causing turnover, and a lack of effort at work. The world of work is dramatically different than when President Carter was elected – except in government

While it’s still uncertain how President-elect Trump will change government, it’s expected to start with a hiring freeze and a mandate for employees to return to working in the office. A stated goal is to dismantle the “deep state.” The role of the non-governmental Department of Government Efficiency is to eliminate wasteful spending. There could be mass layoffs. The changes over the next month or two are likely to end many federal careers as well as convince job seekers to avoid government careers.

Government’s Staffing Problems

Fedscope data shows close to 650,000 employees are 55 or older. Retirements in early 2025 could be high, with a heavy loss of operational knowledge. Many of course are in senior level positions.

Among younger workers, 195,000 or 8.5% of the total are GenZers – age 29 or younger. In the nation’s workforce, roughly 20% are younger than 30. Federal jobs have not been popular with young workers but now with the promise of layoffs agencies are unlikely to see many new applications.

Earlier this week OPM officials praised its efforts to reestablish the agency’s “essential role in a well-functioning government” and said it is “primed to build on that success.” But the barrier in government is that employees have always been viewed as a cost, not an asset worthy of investment.

Last month a Government Accountability Office report on staffing problems at the Homeland Security Department suggested that OPM’s touted reforms are inadequate. The report showed that increasing workloads continue to dog the department, finding that“the hiring process ranged from three to 18 months” and “some acquisition staff found those efforts helpful but others worried that the strategies exacerbated the workforce problems.”

DHS of course oversees the Border Patrol agency and its staffing problems. In October, President-elect Trump announced a goal of hiring 10,000 new U.S. agents, along with asking Congress to approve a 10% across-the-board salary increase, and $10,000 retention and recruitment bonuses. But Presidents Obama, Trump and Biden all had plans to increase Border Patrol staffing that failed -- despite offering recruiting bonuses that were double or triple Trump’s latest plan.

DHS’ staffing problems have been reported frequently by Government Executive. Over the past two years vacancy problems have been reported in other DHS agencies -- FEMA, TSA, Secret Service and the Coast Guard. Vacancies have been reported in a number of other departments and agencies, too, including, Interior, Energy, the Bureau of Prisons, VA Medical Facilities -- the list is not complete.

Staffing problems go back decades. As they say, it’s complicated. The reasons for recruiting problems would be difficult to document since the problem varies by occupation, job level, and the local supply of job seekers. OPM’s No. 1 goal has been to “position the federal government as a model employer,” but job seekers are not standing in line applying for federal jobs. Looking ahead, the problems are likely to get worse.

The Growing Importance of Knowledge Workers

The nation’s workforce as well as the federal workforce are very different today. When the GS system was established in the post-war years, work was routine, the majority of jobs were administrative - but those jobs have largely disappeared. Today there is a long list of occupations that either did not exist or were then employed in significantly smaller numbers.

The expansion has been in knowledge occupations – those requiring specialized expertise to “think for a living.” Knowledge workers typically work alone or in small teams of similar experts to solve problems or develop action plans. They conduct research, strategize action plans, analyze data, serve as a technical resources, and assess new developments and emerging trends. Generally, their roles are not part of the bureaucracy.

In terms of employment numbers, healthcare specialists are the largest group and with an aging population vitally important to the health of the country. BLS tracks roughly 50 healthcare fields.

For different reasons STEM fields – science, technology, engineering, and mathematics – are the most important to government and the economy. The proliferation of specialized IT jobs stands out. The jobs website Indeed lists “132 IT Job Titles to Consider.”

Fedscope data show agencies employ over 600,000 knowledge workers. That includes 360,000 in the Medical, Hospital, Dental and Public Health job series. And an unknown number of people work as government contractors.

The important point is that agencies are competing with private employers for the specialists in each of these fields. Their careers follow a common pattern, with promotions based on increased expertise. It’s not uncommon to see young emerging experts overshadow older colleagues. The General Schedule, the use of classification “standards” and seniority-based pay increases are wrong for these specialists.

The best specialists – experts -- command far above average salaries. They expect to be paid based on their expertise. Their “value” and their pay is linked to their knowledge and skills, not assigned job duties. The true experts of course are not new graduates, making it essential to understand competitive hiring practices. That has obvious implications for talent management.

Significantly, the BLS pay surveys used by the Federal Salary Council are irrelevant. The BLS focus on nationally representative samples of employers misses the point. That’s also true for the data available on hiring websites like Glassdoor and the data analytic firms like Lightcast.

A GAO audit discussed the staffing problem for experts in the Advanced Research Projects Agency for Health within the Health and Human Services, finding that (he agency is “designed to be flat and nimble” and “expected to drive innovation.” But, that’s not a typical bureaucratic agency.

GAO concluded the agency “has not fully applied selected leading practices to assess the effectiveness of its” recruiting and hiring efforts. Where agencies employee specialists in the same field, it makes sense to pool resources and develop a recruiting strategy that combines their strengths.

It’s not clear how the planned downsizing will impact government’s knowledge workers. The best should have no trouble securing a job in the private sector, possibly with government contractors. The work is not going to stop, and very often if they work for contractors, government will continue “to pay the bill.”

Focusing on Competitive Employment Practices

An obvious problem is that white collar salaries are significantly below private sector pay levels – and the gap never closes. For 2025 (based on 2023 pay data) the average gap was 59% and in a couple of high pay cities, the gap exceeded 100%. Since that is an overall average, the gaps have to be worse for high demand occupations. That no doubt contributes to the small number of GenZ job applicants.

Significantly, the BLS surveys do not report market pay levels by occupation or job level, nor do they monitor basic information like starting salaries. Further, the locality pay construct has been distorted to raise salaries for employees who live miles from their work site. Employers in every other sector rely on more or less standard practices to manage salaries, but OPM relies on a unique approach.

In 2021 RAND released a report for the Defense Department comparing the practice of STEM compensation management with employers in the private sector. The report’s broad recommendations included:

“Conduct a thorough implementation analysis of current, non-GS pay plans, their effectiveness, and their usage. .”
“Investigate the effectiveness of special hiring programs and authorities in attracting and hiring talented workers into the federal government.”
“Explore the relationship between specialized, occupation-specific labor market practices and the [alternatives] to the USAJOBS website"
“Examine and tailor employment policies toward specific occupations or labor markets”

The changes in work management practices triggered by the COVID crisis makes the RAND report even more important today. The demographic trends and worker shortages in a growing list of occupations will increase competition. As RAND recommended, agencies should monitor the practices that are effective with specific occupations and labor markets. Specialists in a field know what’s effective. Employee Resource Groups are a simple but proven way to understand what’s needed to make an organization attractive to job seekers.

The continuing economic recovery has made the competition for top talent intense. A recent survey from Human Resource Executive found hiring and retaining key talent was twice as important as other HR issues. As McKinsey & Co said in a 2023 report, “it’s no longer enough to simply fill roles; companies must invest in leaders and innovators who can navigate complexity, and align with the values and vision of the organization.” It’s time to acknowledge the civil service system is a barrier to competing for talent.

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The forgotten keys to agency performance: Senior Executives

Howard Risher — Wed, 08 Jan 2025 07:00:00 -0500

When companies fail, it’s not because of the performance of front-line workers. The same is true in health care. The current crisis in health care is unrelated to the care provided to patients or the people who process health insurance claims. That’s true in government as well. In business, workers play an important role but success starts at the top, with executives held accountable for company performance.

In other sectors, executive selection and development are board-level priorities. Business executives know they are accountable for achieving goals. Their compensation is reviewed annually by the board. Rewards based on year-end results contribute to a shared team culture. The word “accountability” rarely appears in business reports, but the concept is entrenched in the culture, and reinforced by pay for performance.

The salary increases for 2025 highlight the problem. The announced pay increases included a 1.7% increase in the Senior Executive Service salary schedule. Surveys show employers in the private sector are planning 3.7% increases, and typically executive increases are somewhat higher. That has been the norm – increases in the private sector have been higher. The differences compound, with SES salaries falling steadily behind their counterparts in business.

But the problem is broader than pay. Appointed agency heads often do not have the experience to create and lead results-focused organizations. Improving performance rides on creating a positive work culture where trust and engagement are priorities and that, in government, starts with senior executives.

Executive Performance Has Not Been a Priority

The SES salary system is essentially the same today as created under the Civil Service Reform Act of 1978. Then a stated goal was “To hold executives accountable for individual and organizational performance.” However, possibly the last Presidential statement on the subject, Obama’s 2015 “Strengthening the Senior Executive Service,” is silent on the subject. Furthermore, multiple “Results Oriented Management” reports from the Government Accountability Organization failed to find evidence that SESrs are rewarded for agency performance.

Significantly, senior executives are rarely mentioned in discussions of agency performance. OPM’s description of the “SES performance appraisal systems” has all the right words but the limited evidence suggests SESrs are not seen as accountable for results.

For years OPM posted a summary of SES ratings, Report on Senior Executive Pay and Performance Appraisal Systems, but the last was released in 2016. That year 51.7% of the ratings were at the highest level. Only 15 executives had a rating of Minimally Satisfactory and 13 were Unsatisfactory. Combined that’s 0.4% of the 6,664 SESrs. Agencies should post agency performance metrics along with SES ratings and performance awards.

SESrs work in theory under a pay for performance system but that 2016 report shows the best performers received a mere 2.1% increase. The same year CEO pay in business increased 5.3%.

A literature search found only one relevant article, “Evaluating Executive Performance in the Public Sector,” from 2005. The same search, switching “Business” for “Public Sector,” produced 7.6 million results. In business, executive performance gets far more attention.

The CSRA also introduced a pay for performance policy for managers. It started in 1981 but the new policy failed and reverted to the General Schedule in 1984. Performance pay is all but universal for managers in other sectors.

The Ceiling on SES Salaries

Comparative data show SES salary increases are significantly lower than for similar jobs in other sectors. That’s been a pattern for decades, and the gaps are growing at all levels of management.

When Congress established the Commission on Executive, Legislative, and Judicial Salaries in 1967, it started regular reviews – here “QuadCom” reports -- of the “appropriate pay levels” for government leaders. Recommendations were developed every four years until passage of the Ethics Reform Act of 1989. There has not been a rigorous assessment of the compensation of leaders since then.

From that point, Executive Schedule (ES) salary increases were to be based on increases in the BLS Employment Cost Index, but looking back for what is now 35 years, executive pay increases in business have been consistently higher. Simply stated, the ECI understates increases in executive compensation.

Federal agencies compete for talent in a myriad of labor markets. The QuadCom reports focused on trends and broad comparisons with jobs associated with high-level federal jobs. One showed federal judges were paid more than law school deans. That’s no longer true. For 2025, district judges will be paid $247,400. In 2024 the average dean was paid $328,940 and the highest paid deans now earn more than $450,000. That data might have supported the Judges Act that President Biden vetoed recently.

Finally, ES salaries serve as a political “ceiling” for the SES. The 2025 maximum salary for the SES is $225,700, the same as the ES II salary. There are a number of occupations where managers and high performers in the private sector are paid above that level. There is anecdotal evidence the ceiling is a disincentive for promotion to SES positions.

In 1965 CEO pay was 20 times “worker” pay, $819,000 to $39,500 (from a 2013 study). That ratio has gotten steadily larger. A CNN headline from June reported, “CEOs are making almost 200 times what workers are.”

Today, top level executive jobs – top finance, top legal, top IT and top HR – were paid significantly less than their CEO but follow the same pattern. In Fortune’s annual list of top companies, the average pay of top financial executives is $446,690. Top legal executives earn $391,551, top engineering earns $297,954, etc. – the numbers vary with the industry, location and size of the company. In larger companies, managers two or three levels down are paid more than SESrs. If nothing changes, SES salaries will fall further behind.

Pay and Performance Management in Comparable Systems

There are few organizations comparable in purpose and size to federal agencies. The best comparators are the country’s larger health care systems. Several of the Veterans Affairs secretaries previously worked in one or more of the large systems.

In the best-known hospital systems like the Mayo Clinic and Mass General, CEOs are paid $3 million or more. Two executive positions – top finance and top legal – typically earn $1 million or more.

Government of course will never pay salaries close to those levels, but a key point is that there is a huge drop to the highest SES salaries. The textbook practice in for profit and not-for-profit hospital systems is adjusting pay levels regularly to remain competitive.

When the salaries of executive leaders are significantly below market pay levels, it holds down salaries at lower levels of management. It cannot be verified, but the gaps diminish the pool of managers interested in filling vacancies. It also violates the “fair pay” principle. The SES gaps are huge.

Perhaps more important is compensation management in the current operating environment for hospitals. A report from The Governance Institute, “Modernizing Healthcare Executive Compensation: A Deep Dive or the Board” (December 2023), highlights the problems in the health care sector and the importance of the team in the current “period of crisis.” Data analyses show, “Over the last 20 years, annual variable performance-based compensation has grown exponentially. . . Over that time, goal setting has become more sophisticated, tightly focused, and predicated on outcomes as opposed to process measures.”

Health care providers are certainly not unique. Management incentives are effectively universal. Also close to universal is the use of cascading SMART (Specific, Measurable, Achievable, Relevant, Timely) goals to link together levels of management. Executives and managers are rewarded as a “team,” based on organization results as well as for achieving individual goals. It’s a proven practice.

It's Time for a New ‘QuadCom’

It’s been 35 years since the Ethics Act ended the QuadCom reviews. The latest Federal Salary Council report shows the average pay disparity for white-collar employees is 59%. It’s 81% in the Washington-Baltimore area. The history of executive pay in larger organizations – those similar to federal agencies – suggests SES compensation gaps are far worse.

Government needs to employ specialized experts – Senior-Level and Scientific or Professional positions – for the same reason President-elect Trump now supports recruiting foreign experts. Agencies should be able to pay market competitive salaries to recruit experts in all knowledge fields. There are serious shortages in the STEM fields and medical specialties. Multiple surveys provide market data for these occupations..

Continuing the EX salary ceiling perpetuates a problem. Members of Congress as well as appointees have had successful careers in other sectors. Many are wealthy, and their time in government is limited. SESrs and those who will fill SES vacancies are career workers. Increasing SES salaries will help to attract well qualified talent for the future.

The Quadrennial Commissions gave recognition to the importance of the individuals most directly responsible for leading and managing federal agencies. Raising senior salaries would make all management levels more attractive career opportunities.

Public agencies have something in common with all other organizations – agency performance is directly tied to the effectiveness of management, and that starts at the highest levels.

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Focusing on the pay gap undermines the commitment to equity

Howard Risher — Thu, 15 Aug 2024 08:00:00 -0400

The recent memo from OPM Acting Director Rob Shriver on pay equity coincidentally was issued within days of a related statement from the Society for Human Resource Management that sets forth a change in policy that is counter to OPM’s message. The change was summarized succinctly in the Wall Street Journal column, “America’s HR Lobby Scraps the ‘E’ From DEI.”

In a recent statement, SHRM indicated that they will shift “to leading with Inclusion as the catalyst for holistic change in workplaces and society” because they aim to address the "current shortcomings of DE&I programs, which have led to societal backlash and increasing polarization.”

The gap, as OPM has defined it, is an artificial number comparing the average pay of men and women. It compares male and female data from the multiple pay schedules across the country and the hundreds of occupations, which is not consistent with federal EEO statutes. However calculated, the gap comparison pits men and women against each other – the reason for SHRM’s decision.

SHRM’s shift reflects what’s unfolding in the social environment this election year. That’s the focus of a new report from the American Enterprise Institute that says “the share of men under 30 who said the U.S. has gone ‘too far’ promoting gender” and Gallup reported there is a 30-point difference between women ages 18 to 29 who identify as Democrats and the men in the same age group. This January 2024 report from Axios may explain why: “Companies are backing away from DEI.”

Equal Pay Has Been a Long-Term Goal

Shriver’s memo on pay equity opens with federal data showing the current gender pay gap is 5.6%. That’s compared with the current 16% in the private sector. Superficially, a gap that small should be celebrated – but it’s not a meaningful measure of the gender gap or equitable pay.

Government has a long history of addressing equal pay. It first made headlines in World War I when the War Labor Board ordered employers to pay women the same as the men they replaced. The equal pay policy was adopted again at the start of World War II.

In the early 1960s President Kennedy created the President’s Commission on the Status of Women, which led to passage of the Equal Pay Act in June 1963.

That law requires men and women in the same workplace be given “equal pay for equal work”. Jobs need not be identical, but they must be substantially equal. The court cases summarized on the EEOC website focus narrowly on men and women in very similar jobs, and with rare exceptions they have the same title.

This is consistent with the views of many political leaders. When the Paycheck Fairness Act was reintroduced in 2021, one of its sponsors, Rep. Rosa DeLauro, D-Conn., said , "the concept is simple: men and women in the same job deserve the same pay.”

The media focus on the gap is subtly different but significant. Closing the gap is seen as an indicator of progress. Last year, as an example, Pew Research issued its report on “The Enduring Grip of the Gender Pay Gap.” An internet search of the phrase “gender pay gap” produced at least 1.3 million results.

Career Choices Contribute to the Gap

Analyses from by the Center for Economic and Policy Research show the narrowing of the pay gap “is almost entirely due to the retirement of older worker cohorts who, on average, had larger pay differentials.” Today, the remaining gap is largely due to career choice decisions made by young people starting careers.

That is reflected in the choice of college majors. Women account for 75% or more of the students in the “20 most common majors” for womens: nursing, teaching, social work, etc. Men account for 75% or more of the graduates in 13 of the 20 highest paying majors – virtually all are STEM fields. Males also account for 75% or more of the workers in the 10 highest paid hourly jobs. Gender gaps continue to appear in federal occupational data (e.g., 69% of STEM employees are male).

A key related point is that a high percentage of women are concentrated in sectors where pay increases are constrained by funding issues – especially education (65%) and health care and social assistance (78%). That’s reflected in pay increase data since the start of the COVID pandemic.

Considering the occupational trends, it’s unrealistic to expect the national gap to close.

Focusing on “Diversity and Inclusion”

The leadership of SHRM says the organization is “committed to leading with Inclusion and Diversity, knowing a culture of Inclusion is the true catalyst for effecting positive change in our workplaces.” That’s consistent with multiple research studies.

“The data doesn’t lie: companies that are committed to diversity and inclusion outperform those that aren't,” according to McKinsey researchers Sundiatu Dixon-Fyle and Sara Princes. “But the benefits of having a diverse workforce extend beyond the financial. There’s a strong correlation between diversity in influential company leadership roles and multiple indicators of holistic impact across workforce, community, and environmental components.”

The goal of Executive Order 14035 is “to promote diversity and inclusion in the federal workforce, expand its scope to specifically include equity and accessibility.” Agencies are “to address any pay inequities and advance equal pay…consistent with applicable law.”

The reference to the law is relevant. There are a small number of recently adopted state laws that go beyond “equal pay for equal work,” but no statute suggests national comparisons of gender pay levels in diverse jobs.

The EO also promotes diversity and inclusion for a long list of underserved communities that goes beyond the usual gender and racial/ethnic groups. “[G]ender pay gaps, and pay inequity” are not addressed until Section 12, close to the end. Agencies are required “to build evidence to…address any pay inequities and advance equal pay.” Closing the gap is never mentioned.

Diversity and inclusion are qualities describing an organization’s culture that can and should be reinforced with workforce management practices: recruiting, training, coaching and recognition. Words like engaging, respectful and empathetic are often used to describe diverse and inclusive organizations. They emphasize equal opportunity.

Pay Inequities Exist Everywhere

The comparison of averages ignores the many factors that influence salary decisions. Pay differentials exist in every sector and every labor market. Differentials are not always inequities. The list of separate pay plans confirms different circumstances warrant differentials.

Simplistic analyses have limitations. The averages, as an example, show larger differentials for management jobs. Those jobs continue to be filled by older males but analyses could also consider years of experience, industry dynamics, size of organization, reporting relationships, and job function.

Statistical analyses are needed to “measure” and understand the factors that explain differences in pay, but decisions to limit pay adjustments to women and racial/ethnic groups are best addressed by leaders who understand how it could impact the work culture.

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Investing in job skills pays off

Howard Risher — Fri, 24 May 2024 08:00:00 -0400

Skills-based hiring initiatives have become broadly popular with the worker shortages emerging from the pandemic. The Office of Personnel Management is clearly on board with the decision to drop degree requirements followed by the release last fall of its updated lists of competencies for federal jobs. The focus on skills in other sectors predates the pandemic but the shortages along with declining college enrollment has sharpened attention to recruiting practices. In 2022 there were 2.5 million fewer undergraduates than in 2010 although there was a small increase in 2023.

As a workforce strategy, my experience confirms focusing on skills is an important step – degrees only help in getting a job. However, the initiative has to be more than an isolated change to attract more applicants. Knowledge, skills and abilities should be a concern at every job level. Moreover, investing in training and coaching to improve skills is known to pay off in improved performance.

The real payoff is when improved skills enable engaged employees to perform at higher levels. Knowing the basics of how to drive a car does not guarantee a teenager will be a safe driver. Or from the list of skills for the General Attorney series, “attention to detail” and “flexibility” are not what makes a great lawyer.

The demographic trends indicate this will be a long turn problem. A few days ago The Wall Street Journal published a column, “Suddenly There Aren’t Enough Babies. The Whole World Is Alarmed.” The growth of the U.S. population has steadily slowed for decades; several states and cities reported a drop in population for 2024. That promises to escalate the competition for talent going forward.

Now, except for professional jobs, degree requirements no longer make sense. There was never any real evidence that having a degree confirms a good hire.

A Broader Strategy to Improve Performance

A new Harvard Business Review article, “What Companies Get Wrong About Skills-Based Hiring,” outlines a strategy that would help to gain support for identifying key skills for all jobs, including professionals, and using the skills to improve performance and commitment.

Government differs from industry on a key workforce concern. Only a relatively small percentage of jobs have a measurable output. The phrase “knowledge jobs” describes thousands of government jobs. Large groups of workers are involved in administering laws, protecting the public, or supporting the economy. Service jobs also account for large numbers of public employees. Whatever a worker does, he or she benefits from feedback to improve performance. Enhancing their skills should be a universal concern.

The HBR strategy is broadly consistent with my experience in working with Court Services and Offender Supervision Agency 25 years ago. That was when it was created by combining three small, essentially failing departments in the Washington, D.C., government. Congress acted in response to repeated reports of parolees involved in horrific crimes.

When they were District agencies, individuals on parole or probation were required to check in regularly. They sat for a few minutes, responded to questions, and their attendance recorded. There was virtually no follow up or efforts to monitor their lives.

That changed dramatically under the newly appointed CSOSA director. He worked with his team to create a new strategy with aggressive goals and key performance indicators. A prominent goal was to reduce the rate of recidivism (that is, new crimes by parolees) by a significant percentage. It was collectively seen as a difficult challenge but in conversations it was clear the staff were committed to achieving the goal.

He also introduced a radical change in the role of what are now Community Supervision Officers. They went out into the community to meet with family, friends and contacts of parolees working to keep parolees out of trouble. That was a largely unproven approach at the time but the CSOs were committed.

My role was to help develop a new pay and performance system, making it supportive of the plan for the CSO staff. A team of experienced CSOs was formed to support the planning.

A key point is that the best CSOs were assigned to the most difficult parolees. That means even the best CSOs could have failures. So, the team agreed to assess performance on a set of nine skills or competencies. Newly hired CSOs were assessed on a related set of competencies. The team members “sold” the new system with ongoing feedback to their colleagues.

Limiting the number of competencies helps managers focus their performance feedback. With CSOSA, each competency was defined at three levels, with the highest descriptive of “role model” performance. One, for example, was “flexibility” defined at the highest level as the ability to switch instantaneously from “law enforcer” to “social worker” to be effective in discussions with an offender.

Initially this was to be a demonstration “pay for competence” system but the director ran into problems with OPM’s director, was forced to resign, and CSOSA was brought under the GS system. That hurt the new agency.

The HBR article provides a similar story. It mentions Walmart and their decision to start by rewriting all the job descriptions to include essential job skills, “not those that would generally be ‘nice to have’. . .” The ‘nice to have’ skills “obscure what really matters and can scare qualified applicants away.” Again, the intent is to focus on those skills that are most important.

The OPM lists of skills unfortunately are loaded with “nice to have” skills. For lawyers (0905), two that standout are “writing” and “memory” on a list that grows from 13 skills at GS-11 to 25 skills at GS-15. Another example, Administrators in the Correctional Institution series (0006) need 30 skills at GS-11 but only 28 skills at GS-12. Each set of skills includes several that “obscure what really matters.”

Well-Defined Competencies Are Keys to Performance Discussions

When OPM kicked off the Federal Workforce Competency Initiative in 2021, the announcement stated the work product, updated competency models, would be used for “a wide variety of human capital actions including job design, recruitment, selection, performance management, training, and career development.” That would be important but it’s not clear from the lists released so far if that’s been achieved.

The lists released by OPM raise important questions. To use the General Attorney list, as an example, skills like “Attention to Detail” or “Flexibility” could be deleted. Both are also listed as skills for Administrators in Corrections but logic tells us the two job series are very different. “Writing,” as another example, was included for CSO trainees as a requirement for promotion but then deleted at the next job level. A basic job duty is drafting statements for use in court, making it a core skill expected of every experienced CSO.

For the lists to be useful, the competencies should be reviewed and defined or fleshed out by individuals in each field, ideally in each agency. The lawyers in the Justice and Interior, for example, would very likely define them differently. The key is defining skills in ways that capture the thinking and behavior of the best performers – “that really matter.” They know how the skills are understood by colleagues and how each impacts the management of individuals in their job series.

My experience has convinced me employees want to be successful in their job; they value effective coaching and training. Well-defined competencies are tools that help managers provide useful feedback. The commitment of the CSO teams in defining competencies was manifest. Everyone was determined to make the new agency a success. The cost is nominal but the potential payoff benefits everyone.

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Agencies need to consider alternative personnel systems

Howard Risher — Tue, 30 Apr 2024 09:00:00 -0400

It’s hard to decide where to start. Human capital management has been on GAO’s High Risk list for more than 20 years. Recent GAO reports have focused on several agencies where staffing shortages and challenges are causing operational problems. Staffing problems have also been discussed in recent Government Executive columns. Last week it was FEMA’s problems. A search for columns discussing staffing challenges found close to 5,000.

A key point is that staffing problems exist in very different federal agencies and involve very different job series, from VA nurses to prison correctional officers. Starting in the 1980s agencies solved staffing problems by replacing the General Schedule with an alternative personnel system. But for some reason the options have not been considered for years.

Now COVID and the pandemic have changed the country’s labor markets along with worker expectations. The heavy retirements – roughly 100,000 each year – and declining pool of young workers suggest the workforce problems will get worse. Simply stated, the GS system’s rigid structure, the annual adjustments, and related workforce practices are barriers to competing for talent in the “new world of work.”

McKinsey captured the problem in a recent column, although the focus was the private sector:

“ . . . a management system based on old rules -- a hierarchy that solves for uniformity, bureaucracy, and control -- will no longer be effective. Taking its place is a model that is more flexible and responsive . . .”

They argue leaders “should do nothing less than reimagine the basic tenets of organization.”

A new model for government is still to be developed but history and the current problems make it clear the GS system is not the answer.

Today’s Tight Labor Markets Add to the Problems

Labor markets across the country are historically tight. Hiring in March “soared past expectations.” Employers in every sector have experienced worker shortages. While the number of vacant jobs has steadily declined, the total in January remained close to 8 million. There were 900,000 vacant jobs in the public sector. That’s more than double the total at the end of 2010.

In the most recent BLS report, there were 6.5 million unemployed – only 0.8 job seekers for each vacancy. Prior to 2018 there were always more unemployed workers than job vacancies – at times there were five or more unemployed workers per job opening.

But there are more relevant statistics. In March the unemployment rate for college graduates was 2.1%, with only 1.3 million unemployed.

Added to that, the population in their prime working years, 25 to 54, who are currently employed is close to an all-time high. In early 2000 it peaked at 81.9%; it’s fluctuated since then, hitting a low in 2020, but today it’s back to 80.7%.

Simply stated, people who want to work have jobs. Enticing others to join the workforce would require aggressive recruiting. Furthermore, the population data for those 24 and younger – future workers – show a steady decline relative to the total (except for 9/11 babies). That will further exacerbate the recruiting problem.

The decline in the youth population is reflected in today’s college enrollments. There are 1.5 million fewer college students than in spring 2019. Enrollments are down in a long list of majors, from healthcare to engineering to public administration. That’s prompted a growing number of employers to drop degree requirements. Information/technology majors are one of the few that are increasing.

The GS System is a Barrier to Change

It’s often forgotten but the General Schedule was actually created in 1923. The Classification Act of 1949 locked in consistent salary administration, simplified the classification system, and established equal pay for substantially equal work – but that’s the problem, salary administration is controlled by statute.

In the late 1940s workforce management was very different. Workers started with an employer and stayed with the same organization until they retired. There were no salary surveys; the planners of pay systems focused narrowly on the internal ranking of jobs. Only the worst performers were denied increases.

Now surveys are conducted in virtually every industry. Employer associations, consulting firms, professional groups and even a few journals conduct surveys. All report job-specific competitive pay levels for commonly defined “benchmark” jobs (e.g., entry level civil engineers). Limited pay data are available to job seekers on websites like Indeed and Glassdoor, making it easy to find better paying opportunities.

The Federal Salary Council report from February shows market pay levels are significantly higher than GS salaries, ranging from 109 percent in San Jose-San Francisco to 37% for Rest of the U.S. On average, GS salaries are 59% below market pay levels – and compared with prior years it’s getting worse.

The reports combine pay data for all GS levels and all job series into a single value for each locality area. The gaps for high demand, high pay occupations are no doubt worse. For reasons that are not clear, current BLS surveys do not report market pay levels. They did when the Federal Employee Pay Comparability Act was enacted in 1990 but BLS changed their survey methodology a few years later.

That’s very different from the use of survey data in other sectors. Pay for performance is another difference. It’s effectively universal for white collar employees in other sectors. Private sector pay systems have more flexibility to respond to emerging competitive practices. Newer issues like DEI/pay equity and “hot [higher order thinking] skills” are beginning to influence pay practices. The changes in jobs triggered by AI is an added factor. The new work environment forced employers to begin rethinking their practices.

Leaders in the National Academy of Public Administration concluded years ago that government also needs to rethink the GS program. Less than a year after passage of FEPCA, a NAPA team produced a report recommending the GS system be replaced. NAPA has released several subsequent reports advocating its replacement. In a 2021 column, NAPA President Terry Gerton and Janet Hale wrote:

“[Government] is limited by rigid and outdated hiring, pay and performance policies and practices. Public managers and employees also struggle to adapt to the rapidly changing nature of work. . . . we face a significant risk that soon many public agencies and organizations will not have the workforce capabilities necessary to achieve their critical missions and provide services to the public.”

That risk has proven to be true.

There Are Proven Alternatives

The program changes started only a few years after the Classification Act was passed. In 1955 incentive awards were added to recognize outstanding performers. A few years later quality step increases were introduced to reward the better performers. In 1978 the Civil Service Reform Act created the Senior Executive Service and extended the use of performance incentives and ‘merit pay’ for managers.

Merit pay for managers eventually failed but that was because of a basic mistake. In hindsight, the mistake could have been avoided – managers eligible for merit increases earned the same as those continuing with step increases, thus minimizing any incentive to accept the new policy. It was too early for merit pay.

The more important change in light of current staffing problems was the authorization of Demonstration Projects, starting with China Lake in 1980. It gave agencies the chance to test ideas to address workforce problems; a common thread was the switch to pay for performance – and the change gained acceptance. Agencies also tested the idea of pay banding, a pay model where employees are rewarded for their skills.

A related development was the legislation in 1989 that allowed the FIRREA agencies, most notably FDIC, OCC, NCUA and SEC, to develop their own pay systems. Congress recognized that the GS system “could impede these agencies’ ability to recruit and retain employees critical to meeting their organizational missions” [from a GAO report]. A few years later FAA, GAO and IRS also developed new pay systems. One of the more recent is the intelligence community.

Three agencies known to have workforce problems that could benefit from new pay systems are the National Park Service, the Bureau of Prisons and FEMA. Each have experienced a serious drop in employment and have staff in major cities as well as isolated rural areas. None are “white collar.”

The VA developed a slightly different model. Under Title 38 the primary medical specialists (physicians, nurses, etc.) are paid under separate schedules based on local surveys.

Developing separate pay programs for select occupations could help address specific workforce problems. Those working in border patrol or at our ports are possibilities. Workers in the new Wildland Firefighter series are another possibility. The goal should be to attract needed workers, not comply with decades ago regulations.

The alternative program models are proven and well documented. Agencies understand their staffing problems, they also understand the costs and risks of not addressing the problems. Experience with alternative pay systems over the 40+ years since China Lake proves the changes can gain acceptance and contribute to better workforce management. But there is still strong resistance to new systems even when the need is readily apparent. A case in point is the years lost trying to develop a separate pay system for government’s almost 100,000 technology specialists.

OPM’s FY 2022-26 Strategic Plan does not mention the General Schedule. A century after it was created, it’s time for a rigorous review.

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Championing an expanded role for HR in the federal government

Howard Risher — Thu, 21 Mar 2024 06:00:00 -0400

Last year the Office of Management and Budget announced a “reset” on how agencies manage their workplaces. Sometimes it’s hard to believe but the civil service system is today virtually unchanged since it was adopted in 1948 (except for the introduction of locality pay). Now, with the Great Resignation, dramatically altered labor markets, and serious staffing problems in several agencies, changes are definitely warranted. It follows similar changes in the private sector, led by the emergence of an expanded role for human resources. It supports the President’s Management Agenda’s No. 1 Priority - Strengthening the Federal Workforce. In light of what’s been called, the “new world of work,” change is needed, and arguably essential.

The impetus for change in the private sector was the COVID crisis. The layoffs and business closures, followed by working remotely changed the work environment more than at any time in decades. The abrupt change in the daily lives of workers changed their job expectations. Employers in every sector, here and in other developed countries, are finding it difficult to fill vital job vacancies.

The mounting shortages are affecting the delivery of vital public services. The IRS failure to fill thousands of tax processing positions stands out. That makes it a problem that should be addressed at the highest levels. Pew research shows a steady decline in the public’s trust of government, making it critical for leaders to focus on maintaining performance levels. However, that’s less and less possible with prolonged worker shortages.

In the past staffing shortages have not been a pervasive problem in government. Recent reports, however, show that’s no longer true. In addition to the IRS, several other agencies have reported worker shortages – the Bureau of Prisons has reported chronic staffing shortages, Social Security Administration has had a “historic staffing shortfall,” the Veterans Affairs Department has reported “a spike in positions with critical shortfalls.” Last week The Washington Post reported there is “a workforce crisis.”

State and local government agencies are experiencing mounting job vacancies as well. The staffing problems in law enforcement, public health and public education have made headlines across the country.

Tight Labor Markets Are a Problem

Worker shortages are not a new problem. It began after the Great Recession and has gotten steadily worse. It’s attributable to two demographic trends that are affecting economies in every developed country – the aging population and smaller families. Birth rates have been steadily declining. Fewer young people are starting careers. Significantly, 30% of the U.S. population is age 55 or older. In the pandemic an “excess” 3 million workers retired.

Bureau of Labor Statistics data show there are more job vacancies than job seekers. Not too many years ago there were three unemployed workers for every vacancy. In January there were 900,000 job openings at all levels of government. In December 2010, the total was 428,000.

The aging population is reflected in the federal workforce. Since 2010 the federal workforce ages 55 and over has increased by close to 100,000, from 537,000 to 630,000. Less than 200,000 are younger than 30.

Government’s workforce plans are complicated by two obvious issues. First, there are occupations where demand is growing and the trained supply is inadequate to meet the country’s needs. Physicians and nurses are a prime example. Public health workers are also in short supply. Government employs specialists in roughly 350 occupations, making workforce planning far more complicated than in business.

The planning is complicated further by the many locations where federal employees are based. With COVID and the rising cost of living in major cities, young workers are staying away from cities like New York and Chicago. Pittsburgh and Nashville are reported favorites. Some local economies are growing, with employers offering attractive career opportunities; others are not. Congress partially addressed the differences in 1990 when locality pay was adopted. Now, however, the thousands of federal employees paid special rates confirms the “one-size-fits-all” General Schedule is no longer the answer.

Traditional thinking made pay increases the answer when an employer had a problem attracting or retaining workers. Now, an employer’s reputation, remote working opportunities, flexible work schedules, non-financial benefits are also important. Websites like Glassdoor post a wealth of employer information. Dissatisfied employees can easily move to new jobs. The recent GAO report on staffing problems in the Transportation Security Administration made it clear pay is not the only issue.

Notably, reports on agency workforce problems have not focused on labor market issues or the current problem – worker shortages. There was a time when agencies could simply post job openings on usajobs.com and wait for applicants. Clearly that’s not an adequate practice today.

Solving the problem starts with understanding what’s unfolding in labor markets; that is, the local business closures and layoffs, population trends, regional college graduations, etc. It’s all relevant to workforce planning. Data analytics are useful here to understand local hiring and turnover experience.

The Expanded Role for HR

In the past HR was limited to a “backroom,” administrative role but at least in the private sector that’s changing quickly. Forbes recently described what’s emerging as follows,

“The days have long passed when the core duties of human resources experts only centered on welcoming new staff members and ensuring a safe, fair working environment. Today, HR leaders are a crucial instrument for unleashing human potential and driving an organization's progress. They're also uniquely positioned to redefine how the CEO views their business and workforce. The crux of this fresh perspective involves more than simply giving HR a seat at the leadership table; it entails a thoughtful reconsideration of HR's fundamental role within the organization.”

Studies over decades have shown successful companies have a highly engaged, committed workforce. That’s been a focus for Gallup and the Great Places to Work Institute. HR executives have the lead role in creating a great workplace. COVID elevated and expanded HR’s role. McKinsey recently posted a description of “HR’s New Operating Model.” Deloitte is discussing “HR Transformation.” Perhaps the best argument was in another Forbes column, “1. Employees First – Always” and “2. HR Innovation is Pivotal.”

Government’s many, very different agencies resemble a business conglomerate. The GE corporation is – or was – a highly publicized conglomerate (It’s splitting into three companies). In businesses like GE, the corporate HR office is limited to managing executive pay and company-wide benefits but delegates workforce management to the subsidiaries. Government’s workforce problems are far more complicated than any corporation, including GE. That makes it fully appropriate and necessary to hold agencies and their HR offices accountable for creating and managing all aspects of their workforce.

There are no companies with workforce problems as diverse or as complex as those in government agencies. There are also no companies that have to deal with the complex regulations governing how workers are managed. Change initiatives have been resisted and successfully blocked in the past.

This time hopefully will be different. One of the recently introduced tools that could help sell the need for change is the use of HR analytics, the data-driven approach to understanding “people problems” and supporting management decisions. The GAO report on the TSA staffing problem is an example of what’s possible. Actually, this is not new, statistical analyses were first used in comparable worth, now pay equity studies in the 1980s.

Analyses that bring together employee data with turnover and retirement data provide insight into staffing issues going forward. That information is the basis for workforce planning.

A new wrinkle that’s obviously been missing in workforce reports is the recognition that worker engagement is linked to agency performance. Since laws like the Government Performance and Results Act were enacted, reports have been silent on the importance of workers. They somehow exist in a separate world. Workforce management is also not addressed in graduate programs in public administration.

Recent OPM directives show that’s changing. In OPM’s FY 2023 Annual Performance Report and in the message from the agency’s director, Kiran Ahuja, the word “performance” appears over 300 times. The change is also reflected in the recent statement from OMB’s Jason Miller, “By Investing in People, We Invest in America,” which refers to workers as “Government’s most important asset” and lists a number of “workforce investments and policies” to build a fully productive workforce.

Government is different from business in a fundamental way. Technology will soon replace administrative jobs but personal contacts and interaction with the public will always be central to many government jobs. Learning what drives worker performance is vital and varies from agency to agency. Related evidence-based analyses will help to understand workforce concerns like the reasons for turnover or promoting DEI in the workplace. HR analytics is the answer for building the workforce agencies need.

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Federal managers play a key but forgotten role in job satisfaction

Howard Risher — Fri, 15 Mar 2024 09:00:00 -0400

The continued high turnover problem of TSA’s transportation security officers confirms an important lesson: pay increases have little impact on job satisfaction. The poor performers are more likely to stay if their salary is increased. Studies also show when everyone gets the same increase, it’s the high performers who leave. Pay is a factor in recruiting – both positive and negative – but, as the TSA experience shows, it’s not the answer for solving job vacancy problems.

The Government Accountability Office completed an analysis of TSA’s staffing problems, digging deeply into understanding the root causes of employee dissatisfaction, and exposing issues that have not previously surfaced in discussions of federal workforce management. Significantly, the issues are solidly consistent with what’s emerging in studies in other sectors.

The analysts relied on regression to understand how each TSO’s responses on the Federal Employee Viewpoint Survey are linked or explain their level of engagement. Multivariate statistics are now widely used in pay equity studies.

The findings also highlight a key but often ignored consideration: managers are primarily responsible for employee engagement. Gallup’s research confirmed that over two decades ago. Working remotely makes their role even more important.

As solid as the GAO report is, it’s silent on a related consideration that magnifies the importance of TSA’s management practices. It’s what’s happening in the country’s labor markets and specifically in airports. Since the start of 2022, unemployment has been close to historical lows. Quit rates are also historically high. There are more job openings than job seekers. It’s triggered intense competition for workers.

Airports have historically had staffing problems. After laying off thousands when COVID began, airlines and airports are struggling to fill job vacancies. TSA employees should have no trouble finding new jobs. Worker shortages are a problem in a number of industries.

COVID, Worker Shortages, and Gen Z

The COVID crisis followed by the Great Resignation triggered the introduction of the “New World of Work,” a phrase that’s been used in the Harvard Business Review and by the management consultant group, McKinsey. The common thread is the need for employers to transition to new work and worker management practices.

The need for change was heightened by worker shortages in a broad range of occupations, industries and communities across the country. The shortages are contributing to operational problems for government agencies at all levels. The TSA is one of many examples.

This is not a new problem. In 2018 Korn Ferry released a major report, “The Global Talent Crunch,” that showed shortages affect both developed and developing economies. The concluded that the U.S. faced “one of the most alarming talent crunches of any country in our study,” with a projected deficit by 2030 that will exceed 6.5 million highly skilled workers (college educated). Worker shortages have been the subject of reports from a number of organizations, including the U.S. Chamber of Commerce.

The most recent Bureau of Labor Statistics JOLTS report shows public sector job openings increased 300%over the decade. In December, the country had 8.8 million job openings and only 6.1 million unemployed workers – 0.7 job seekers for each opening.

The shortages are attributable to two demographic trends: smaller families, fewer Gen Z-ers starting careers, and the number of Baby Boomers retiring. In 1960 the average family included 3.67 individuals, today it’s 3.13. There are a million fewer young people ages 20-24 than ages 25-29, and each younger cohort gets progressively smaller. The number of young job seekers will continue to decline.

It’s not clear if Gen Z-ers are avoiding government jobs or actually gravitating to them. There have been reports they are “turning to low-paid but “stable government jobs” – the “anti-layoff hack.” Posts on TikTok claim they are looking for job stability despite the low salaries.

But there are also surveys showing that “more young people are saying the same thing [as older workers]: Salary and career growth are the most important things about a job. And it could explain why Gen Z workers are so much more unsatisfied with their jobs than their older colleagues.” They want good benefits but, for 20-year-olds, saving for retirement is a low priority. A recent survey found 83% of Gen Z-ers said they considered themselves job hoppers, suggesting the TSA experience is not unique.

Focusing on Healthy Organizations

Today’s answer to attract and retain workers is creating “healthy organizations.” Studies going back more than two decades show investing to create a healthy organization will improve performance, reduce turnover, and increase job applications. The cost is nominal except for the time to identify and gain acceptance for needed changes. As one expert explained it, “a people-centric approach to all aspects of work” contributes to an organization’s success. Simply stated, it’s a win-win for organizations and their employees.

But the argument has not gained acceptance in government. In 2018, the National Academy of Public Administration published the report, “Strengthening Organizational Health and Performance” but it was ignored by the Trump administration. It was not until t Spring 2023 that the Office of Management and Budget issued the memorandum, “Measuring What Matters: Organizational Health and Performance.” Months later, the Office of Personnel Management released its, "Workforce of the Future Playbook," which includes a section on organizational health, but again it focuses on measurement, not the way workers are managed.

McKinsey took the lead in developing an Organizational Health Index but it’s complicated, using 38 measures of management practices. While McKinsey’s focus is company performance, a thread running through the list of practices highlights the importance of employee management – "shared vision," "employee involvement" to "role clarity" and "personal ownership." More than 20 practices impact an employee’s work experience and their engagement.

GAO reached a similar conclusion, identifying five “key drivers of engagement.” The first is “Managing and recognizing employee performance.” As GAO reported, one of challenges at TSA is “inadequate formal and informal recognition for good performance.” Surveys show Gen Z-ers expect recognition for accomplishments. It’s consistent with “best practices in every sector except government. Each of the drivers is linked to how managers manage.

Managers Play Vital Roles

Gallup’s research confirms, “Managers are ultimately responsible for engaging employees, coaching for high performance and promoting long-term, individualized development.” That’s consistent with both McKinsey’s and GAO’s analyses.

In government, however, managers have never been prominent in discussions of agency performance. The NAPA report, the OMB release and the OPM playbook each focus on the use of data but are silent on the role of managers. That’s also true for college MPA programs where it’s rare to find a course on day-to-day workforce management. Thought leaders in the private sector make a very different argument. In a new book, Power to the Middle: Why Middle Managers Hold the Key to the Future of Work, three McKinsey consultants highlight research showing, “…companies able to tap the potential of middle managers deliver three times greater returns to shareholders.”

Managers are compared with coaches in sports. The coaches of the best teams are celebrated, their names make the headlines. Winning seasons are rewarded with million dollar, multi-year contracts. Successful teams do not promote coaches to other jobs. Coaching, compared with controlling supervision, is a far more satisfying and productive role for managers.

In the distant past, when civil service systems were developed, government emulated the management practices then common in industry. But now, to remain competitive for essential talent, business leaders are rethinking the role of managers. It is and will be a difficult change; leaders know it is essential to their long term success. The changes have to start at the top and cascade down to frontline supervisors.

One of the success stories in government is GAO. When David Walker served as comptroller general, he argued that leaders need to “build a burning platform,” provide a “call to action,” and show “a way forward.” GAO just received “the highest possible rating” from an international peer review team. At the state level, in 2011 Tennessee initiated civil service reform led by Gov. Bill Haslam. The state invested years in retraining and coaching managers and that investment will make an agency a “great place to work.”

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A basic flaw in the federal pay system

Howard Risher — Tue, 01 Aug 2023 06:00:00 -0400

A growing number of federal agencies are understaffed. Some have announced plans to add significant numbers of new hires, but they face increased competition from employers in other sectors that are also experiencing costly worker shortages. Observers frequently contend that federal salaries are too low to attract talent.

The core problem is that the General Schedule pay system was not planned to compete for talent. At no point are federal white collar salaries compared with the market pay of similar jobs in other sectors. When the system was adopted in the mid-20th century, labor markets were very different. Workers were hired soon after graduation and stayed with the same employer until they retired. Workers were seen as interchangeable, almost like a burned-out light bulb.

For a quarter of a century both public and private employers relied on rigid salary systems, with pay increases based on rising living costs. The start of locality pay for federal workers in 1990 did not change the underlying pay philosophy.

Today employers in every sector are struggling to fill job vacancies. Recent headlines have reported shortages in every sector. The COVID-19 pandemic triggered what appear to be permanent changes in worker expectations and the worker-employer relationship.

In 2009 there were 6.5 unemployed workers for each job opening. Employers, including public agencies, could simply post job openings and wait for applicants. But the ratio began to decline, dropping to a low 0.8 in early 2020. It jumped dramatically when workers lost their jobs in the pandemic, climbing to 4.9 workers per job opening. But with end of the pandemic and employers again hiring, the ratio fell to a new low of 0.5—one worker for every two job openings. Data posted by Moody’s and others show there will be shortages for years. Agencies need to expect intense competition for talent.

Making Government More Competitive

It’s in the new world of work that federal agencies need to become more competitive. The Republican Study Committee argued recently government should adopt the private sector’s more “efficient” approach to compensation management. What they may not fully understand is that the country’s leading companies manage their compensation programs aggressively to ensure they attract qualified talent.

Hundreds of salary surveys are conducted every year for that purpose. Businesses, hospitals and colleges all base their pay programs on market pay rates. It’s a simple and logical philosophy.

The General Schedule system’s “special rates” serve to highlight the shortcomings of Bureau of Labor Statistics surveys. Special rates to attract talent for harder to fill positions have been approved for over 150 job series, from Messenger (302) to Medical Officer (602), and for over 850 locations. The numbers have mushroomed.

Government’s true competitors— larger private employers—are far more likely to provide comparable benefits, which makes total compensation an issue. Yes, federal benefits are generally better. However, in competing for talent the “value” of benefits depends on the age of job seekers.

More importantly, for young workers, pay is important but they also look for a healthy work-life balance, training opportunities, good managers, respect, and a positive workplace culture. All of that is referred to now as the Employee Value Proposition (EVP); that is, the financial and non-financial benefits of the job. Understanding how government’s EVP is assessed by prospective applicants should be a priority.

An Urgent Situation

This is a problem that should not be ignored. With over 550,000 employees 55 or older, the vacancies are likely to increase. Documenting current vacancies by job series, grade and location along with the age and service of those a few years from normal retirement would enable agencies to anticipate and plan for the future.

The contrast with textbook competitive practices is most obvious in the management of the pay of high demand technology specialists. New job specialties emerge frequently. Traditional job descriptions no longer make sense. Each has a somewhat unique labor market. They are too important to classify them in the catch-all GS-2210 series with its rigid special rates. A better answer would be to rely on a team of experts, possibly in the White House Office of Science and Technology Policy, to develop a government-wide staffing strategy.

Looking to leaders in each field to stay abreast of labor market developments would enable Congress and the White House to consider what’s needed to compete for talent. Today, a long list of jobs would benefit from a separate pay system–Border Patrol agents and wildland firefighters were in recent headlines. The GS pay system should not be a barrier to staffing essential jobs.

Significantly, the model for future federal pay programs is very likely to be similar to recommendations described in a 1991 National Academy of Public Administration report, “Modernizing Federal Classification: An Opportunity for Excellence” (and repeated in several subsequent reports). It’s a simple approach, based on salary bands aligned with market data for similar occupations (e.g., scientists and engineers). The Federal Aviation Administration salary program is based on that model.

The Office of Personnel Management should oversee the planning but the issue today is not program administration, it’s building a committed workforce. Continued job vacancies will both increase worker burnout and impair public service. It would be a mistake to ignore the changes needed to compete for talent.

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The case for creating an Older Workers Bureau

Howard Risher — Tue, 05 Jul 2022 17:21:00 -0400

Older workers need help. The problems are multiple and started decades ago. Over the years, the federal government’s unvoiced message has been the same as industry’s: “You’re largely on your own.” Ageism and discrimination are a problem in the United States, and globally. The coronavirus pandemic triggered the reversal of a decades-long trend to defer retirement. Now, inflation threatens everyone on a fixed income.

When President Biden ran for office, his campaign released a plan for older Americans that included a focus on preserving and strengthening Social Security, and providing help for older workers who wanted to remain in the workforce. Both are needed but clearly neither are priorities. An Older Workers Bureau could take the lead in highlighting the problems and build support for needed change.

The issues facing older workers have been discussed on several websites, including a recent four-part Bloomberg opinion series, which declared that “America’s Retirement Crisis is a Financial Crisis Too.” A new report from the Social Security Administration stated that scheduled benefits will have to be reduced after 2034. The adequacy of retirement income is clearly a concern, but it is unlikely Congress could agree to help those within a few years of retirement. There are changes, however, that could help workers plan their lives, defer retirement and continue contributing to society.

Older Workers Are the Answer to Talent Shortages

The “Great Resignation” accelerated a labor shortage that dates back years. In 2018, Korn Ferry released a report, “The Global Talent Crunch,” which posited that the U.S. “could miss out on $1.748 trillion in revenue due to labor shortages.” The estimates are the “unrealized output” when companies do not have adequate talent. Their analysis was silent on the cost to society when vacancies in healthcare, law enforcement and education are not filled.

Talent shortages are worse today. Job vacancies have averaged over 11 million since last October, but there are currently only 5.9 million unemployed workers. Early in the pandemic, there were five job seekers for every vacancy. Today there are 0.5 job seekers per vacancy. Unemployment is historically low at 3.6%. People that want a job have one.

Scarcity is a problem in virtually every industry. The current spate of flight cancellations, for example, are attributable in part to shortages of pilots and air traffic controllers. The hours of the National Zoo in Washington, D.C., had to be reduced because of staff shortages.

Demographic trends make it clear: these shortages will worsen if employers fail to entice older workers to “unretire.” People are living longer, there are fewer babies, life expectancy today means people who live to 65 can expect to live another 20 years, a quarter of their lives. Studies show people who continue to work enjoy healthier, more satisfying lives.

A central issue that will have to be addressed is the role ageist stereotypes and discrimination play in creating unpleasant, hostile work environments. It’s been reported that many older workers were encouraged or forced to quit during the pandemic. The U.S. cannot afford to lose the talent prematurely.

Studies show common stereotypes, such as, older workers being resistant to change, are not valid. They are sometimes at a disadvantage with jobs requiring physical skills but those jobs are disappearing. They frequently have a decided advantage with jobs requiring effective interpersonal skills, experience in a team environment, emotional intelligence, or a strong work ethic. Older workers are also more likely to be good in a crisis. And employers can be more confident they will perform well without direct supervision. Their skills and commitment make them more productive than young workers.

Hearing Confirming the Importance of Older Workers

The issues affecting older workers were the subject of a February hearing of the U.S. Congress Joint Economic Committee, “Building a Better Labor Market: Empowering Older Workers for a Stronger Economy.” The first two speakers, Teresa Ghilarducci, a professor from The New School for Social Research, and Monique Morrissey, an economist from the Economic Policy Institute, outlined the problems affecting older workers. Both supported the creation of an Older Workers Bureau.

The third speaker, Jocelyn Frye, president of the National Partnership for Women and Families, made the point that older women workers are often missing from discussions about how “to support workers, improve workplaces, and strengthen our economy.” That comment summarizes the role of the proposed Bureau.

The final speaker, Andrew Briggs, an economist from the American Enterprise Institute, made comments that reflected tired ageist stereotypes, but implicitly supported better jobs for older workers.

Defining the Mission of an Older Workers Bureau

President Biden made his commitment to diversity, equity and inclusion clear on his first day in office. Older workers also have to deal with career barriers and warrant the same attention. A specific goal of the Bureau should be to highlight the prevalence and cost of age discrimination. It could support conferences, research studies, advocate with industry groups, propose laws to support the mission, and coordinate the work of similar state agencies. It could work with human resource groups as well as unions and professional associations.

A service that is badly needed and will need government support is making counseling for older workers widely available. Financial counseling is already a big business but only a few companies make it available to employees. Workers have to make consequential life choices and they should be able to evaluate the alternatives. The Bureau could work with organizations like AARP to make counseling available locally.

The Bureau should also support training programs to enhance workers’ skills. It’s widely recognized that the country’s workforce needs ongoing training to keep up with new technology. Surveys show older workers want to develop new skills. This is also consistent with the goals advocated by DEI leaders. Employers could work with local colleges to identify specific local training needs.

An idea that is sometimes resisted by employers and unions is adopting flexible work arrangements to help workers transition to retirement. The possibilities are many – days off, reduced hours, extended weeks off, special assignments, contract arrangements, time off for caregivers. A 2017 GAO report examined these issues.

The Biden Plan for Older Workers advocated for legislation to protect people from discrimination. Court decisions have weakened the Age Discrimination in Employment Act and older workers need protection against unfair employment decisions. The Bureau could take the lead in an initiative similar to the DEI movement to advocate for eliminating ageism and age discrimination.

In 2019, then-acting chair of the EEOC Victoria Lipnic made the case for older workers in a message during Older Americans Month.

“Today's strong economy is good news for workers as there are millions of job openings and many workers are in high demand,” Lipnic stated. “While that should be good news for older workers, we see little sign that employers are seeking out older workers to fill that demand. Many employers have diversity and inclusion strategies and tactics - but most don't include age. That's a lost opportunity. Research shows that employers would be doing themselves a lot of good by valuing the talent of experienced workers as part of a diverse, multi-generational workforce, such as improving organizational performance and individual productivity, and reducing employee turnover.”

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The Case for Creating an Older Workers Bureau

Howard Risher — Fri, 01 Jul 2022 05:59:00 -0400

Older Workers Are the Answer to Talent Shortages

Hearing Confirming the Importance of Older Workers

The final speaker, Andrew Briggs, an economist from the American Enterprise Institute, made comments that reflected tired ageist stereotypes, but implicitly supported better jobs for older workers.

Defining the Mission of an Older Workers Bureau

In 2019, then-acting chair of the EEOC Victoria Lipnic made the case for older workers in a message during Older Americans Month.

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To Be Successful, the Federal Government Needs to Empower Its Employees

Howard Risher — Mon, 14 Mar 2022 05:59:00 -0400

The Biden-Harris Management Agenda Vision launched last November focuses on what has long been a serious weakness in government operations. “Priority Area 1 -- Strengthening and empowering the Federal workforce” – focuses on the vital importance of frontline workers in “Priority Area 2 -- Delivering excellent, equitable, and secure Federal services and customer experience.”

It's straight out of the textbooks on creating high-performance organizations. The Vision is an excellent statement of what agencies at all levels of government should have recognized decades ago.

The missing element in the discussion is the importance of managers in creating a workplace where everyone is valued and committed to achieving organizational goals. Gallup argues that, “the employee experience begins and ends with the manager.” The manager/employee working relationship is central to improved engagement and to better performance. Effective managers empower their people, and the Vision statement fails to mention managers.

The statement is also silent on the time agencies will need to realize the transition to an empowered work climate. The all too common “culture of compliance” will be a high barrier. The pandemic and working remotely increased employee autonomy, opening the door to empowerment. But managers will need support. Investing in the workforce of course is also a political issue. Focusing on improved results could help to build broader support.

The Power of Empowerment

The pandemic, remote work, and increased autonomy has made virtually every employer reconsider how their people are supervised. Empowerment has become almost faddish. In other sectors leaders realized years ago that empowering employees – making better use of talent -- leads to better results.

As far back as 1983, the American Academy of Nursing adopted the “14 elements of magnetism” seen as “the building blocks of excellence” that included participative management. With the 1990 recession, companies eliminated layers of management to cut costs which increased the ‘span of control’ and gave workers increased autonomy. Early in the decade the growing importance of knowledge jobs made corporate leaders aware that top down, close supervision inhibits an employee’s contribution. Only government sticks with 1940s workforce practices.

A 2018 article in the Harvard Business Review, “When Empowering Employees Works, and When It Doesn’t,” summarized the results of more than 100 studies in 30 countries. The key finding is:

Managers “who were perceived as more empowering were more likely to delegate authority to their employees, ask for their input, and encourage autonomous decision-making. And they were more likely to have employees who were rated, by either their leader or colleagues, as being highly creative and good organizational citizens. Specifically, this type of leadership seems to encourage employees to generate novel ideas and think of new ways of doing things, and to help others in the workplace, volunteer for extra assignments, and be willing to support their organization outside of an official capacity.”

The authors noted two distinct psychological processes.

Empowered employees “felt a greater sense of autonomy or control in their work, they felt that their job had meaning and it aligned with their values, that they were competent in their abilities, and that they could make a difference.”
Empowered employees “are more likely to be powerful, confident individuals, who are committed to meaningful goals and demonstrate initiative and creativity to achieve them.”

They found that empowerment had a stronger positive influence on the performance of less experienced employees. That’s a key issue for government.

However, the analyses also found that when managers empower employees, it can do more harm than good. One study found that by trying to provide employees with additional responsibility and challenges at work, managers “burdened their employees and increased their level of job stress.”

The article ends by stating that empowerment “has its limits” and “factors like trust and experience affect how the shift in approach to management is perceived.” Are agencies ready?

“Supervisors in the Federal Government: A Wake-Up Call”

Two decades ago, OPM conducted “a study of a road map of the changes that need to take place in the identification, selection and development of government supervisors.” The study’s date is not shown on OPM’s website. A retired federal HR executive guessed it was likely completed “within the last six years.”

The study found :

Supervisors “. . . felt like a forgotten group; they are no longer employees, but they are not viewed by executives as part of the management team.”

Federal selection practices placed “a higher value on technical competence over leadership competencies.”
“Only 11% said they participated in leadership development programs and only 5% had attended some form of development that dealt with leadership or supervisory topics.”
A supervisor’s performance is rated “much the same way as they do non-supervisors. Leadership responsibilities are not assessed extensively.”
“Management’s concern is that nothing go wrong, not that a job is particularly well done.”

The final quote captures the reason NAPA has emphasized the importance of shifting from a “culture of compliance” to a performance culture.

The OPM study also noted “agencies give far greater weight to technical work over supervisory responsibilities in terms of what agencies recognize and reward. Many supervisors voiced frustration about being unappreciated for doing a tough job.” According to the report, “agencies need to take action to make their supervisors feel valued.” That statement highlighted a core problem. In other sectors managers are recognized and rewarded for the performance of their units.

To OPM’s credit, this was one of the first studies in any sector of the importance of supervisors. Gallup’s early research on the importance of employee engagement dates to the same period. The word “empowerment” was not yet a buzzword. Since then, the interest has exploded.

The sudden shift to working remotely during the pandemic prompted renewed attention to frontline supervisory problems and to maintaining team and organization performance. What was effective when people worked together is no longer feasible. Employers in every sector were unprepared. It was clear months ago that in a remote work environment managers need a new approach to supervision along with new tools and practices for communicating, and for monitoring and managing performance.

A core question is, if OPM undertook the same study today, would the results be significantly different?

Managers Need Love Too

That retired HR executive said they “would not be surprised to find the results the same.” The point is, “while we study lots of things, taking action to address the issues is a whole other thing.”

There is a long history of commissions, hearings and studies focused on improving government operations. But somehow the missing element in virtually all the deliberations is the importance of middle management. When the Senior Executive Service was established in 1978, the legislation also created the Merit Pay System for managers in GS 13-15, but it was poorly conceived and failed. Since then, the 150,000 middle managers have largely been ignored.

A core problem across government – including the USPS – is that the pay increase to become a supervisor is far too small. Front line managers have to live with too much stress and aggravation. And the mistaken emphasis on technical skills and seniority restricts the pool of candidates considered for promotion at higher levels. The problem is further exacerbated by the artificial ceiling on SES pay. A very different pattern exists in the private sector.

(The ceiling on salaries at the highest levels of government is a related but separate problem. In other sectors, executives and managers earn significantly higher compensation. The ceiling has been cited as a problem in filling judicial vacancies. The answer years ago was relying on the Commission on Executive, Legislative, and Judicial Salaries to recommend pay increases but that ended with the passage of the Ethics Reform Act of 1989. The existing framework fails to differentiate between career employees and those who run for office).

The Biden-Harris Vision focused on the below average employee engagement scores. Notably, the engagement scores in the best performing companies are well above that average. Gallup’s two decades of research shows managers are the key to improving employee engagement as well as to better performance. OPM’s Wake Up Call discussed the supervisor/employee relationship, emphasizing “trust, respect and support,” but was essentially silent on employee performance. That’s repeated in the FEVS questions used in OPM’s engagement metric.

Significantly, the agencies with the highest engagement scores – e.g. NASA, GSA and NSF – have well-defined missions, clear goals and metrics. Their operations are well-suited to goal setting and make it possible for employees to understand how their efforts contribute to achieving the goals. That work environment and the importance of managers was subtly depicted in the recent movie, Hidden Figures.

It’s clear the over-the-shoulder supervisory style is no longer workable. It’s the antithesis of empowerment. The Vision goal of “Strengthening and empowering the Federal workforce” will require a different approach, giving employees more discretion to do their jobs. But to make the transition, agencies will need to prepare their managers and their workforce.

Empowerment Starts with Preparing Managers

The potential payoff is high. Given the political nature and the extended time frame, a suggested strategy is the creation of an independent review body to recommend new workforce management practices. Reviewing the practices in high-performing companies and healthcare organizations would be instructive. The strategy adopted successfully to guide Tennessee’s reform shows public agencies can make the transition.

Managers will need to develop new supervisory styles and new soft skills. Agencies will need to invest in identifying those skills, provide new development opportunities, and introduce related appraisal and recognition practices. Progress reports will help to maintain focus. But change is very unlikely without solid, continuing leadership.

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Pay Will Be a Barrier to Rebuilding the Federal Workforce

Howard Risher — Mon, 10 Jan 2022 12:42:40 -0500

In early 2021, U.S. workers began to resign in unusually large numbers. A record 4.4 million Americans left their jobs in September, accelerating a trend now referred to as the “Great Resignation.” Unusually tight labor markets and talent shortages are projected to continue for several years, and private sector employers are responding by offering more attractive compensation packages. “For many college-educated workers, 2021 will close with big bonus payouts and raises in sectors such as finance, law and technology,” stated a December 26 Wall Street Journal column.

Employers in every sector, including the millions of mom-and-pop businesses, understand compensation is important for attracting and retaining talent. It’s more than the pay level; employees want the assurance pay will be managed fairly. Employers committed to hiring and retaining fully qualified talent know they have to offer fair pay and benefits, an engaging work experience and career growth opportunities.

Unfortunately, the federal government’s workforce management practices have not been competitive for years and its pay system is too rigid to offer the kind of raises and bonuses necessary to compete in this new environment. That’s especially true for high demand STEM job families. To date the Biden administration has been silent on plans for the white collar salary system, except for a statement in the December pay agent report, “[W]e believe there is a need to consider major legislative reforms of the white-collar federal pay system.”

The Office of Personnel Management’s FedScope database shows there were over 600,000 federal employees age 55 and older as of September. That’s 30% of the workforce. Heavy retirements are inevitable. There is an immediate need to for federal agencies to undertake analyses and develop a plan to attract and retain talent in a tight labor market, including with improvements to pay.

Government’s Convoluted Pay Adjustments

In contrast to the market sensitive practices in other sectors, government is locked into the rigid General Schedule pay system, with its scheduled step increases. The recommended 2022 pay adjustments are based on now irrelevant Bureau of Labor Statistics data from 2020. It’s not until this coming spring that the Bureau of Labor Statistics will release its May 2021 estimates. Then, “a new estimation methodology” will obscure comparisons with previous year estimates. For unclear reasons, the bureau’s surveys ignore bonus payments, which understates the compensation of millions of employees in other sectors.

The steps leading to the 2022 pay increase for federal employees started with bureau surveys dated March 2020. The Federal Salary Council met to discuss the data in October 2020. Their recommendations were considered by the pay agent and sent to the president. In late August the White House announced the pay increase would be 2.2% with 0.5% for locality adjustments. This month, 22 months later, increases will appear in paychecks.

The pay agent’s December 2021 report noted, “the statutory formula for locality adjustments has not been followed since January 1994 because of budgetary and methodological concerns.” Budget concerns are understandable, although spending always depends on the expected payoff. Here, the budget concerns need to be balanced with the importance of rebuilding the workforce.

The methodology has been pieced together by BLS and the Office of Personnel Management over two decades. It may be that no one can explain the rationale or the steps in the analyses. The key point is that neither the Bureau of Labor Statistics nor the Salary Council can produce data showing a job is overpaid or underpaid. No other employer uses a remotely similar methodology. Further, presidents rarely provide the annual increase recommended by the pay agent.

Recent Salary Increases

In November the Government Accountability Office released a report, “Administration and Implementation of the General Schedule and Locality Pay Program,” focused on salary adjustments from 2015 to 2021. The report is not overtly critical but a comparison of the annual pay agent recommended pay increases with the actual increases makes it all too clear General Schedule salaries have fallen steadily behind.

In only one year—2020—was the pay agent’s recommended across-the-board increase accepted by a president and Congress. In the other six years the lowest pay agent recommended increase was 1.3% in 2015 and the highest a president approved was 1.4% in 2018. In five of the years the president authorized 1% or less. The authorized locality increases were less than 1% in every year except 2017 (when it was 1.1%). It’s as if the Federal Salary Council reports and data analyses did not exist.

The history of increases through the years prior to 2015 would show a very similar pattern.

There are several important factors that make the Salary Council reports and data analysis less relevant in addition to old data. First, government’s annual analysis focuses narrowly on schedule adjustments, ignoring the step increases. That understates the actual pay increases. Second, the Bureau of Labor Statistics methodology fails to focus on the employers competing with government for talent. Government contractors are an obvious group relevant to assessing federal pay. Third, BLS surveys ignore starting salaries. That makes the data useless for addressing staffing problems.

The only flexibility to respond to market developments enjoyed by federal agencies is special rate authority, but once the Office of Personnel Management approves the rates, it remains a rigid system. It’s not possible to be responsive to emerging trends.

In other sectors salary planning focuses on salary levels, not increases. Over a thousand surveys are produced every year, reporting pay data for common benchmark jobs. Salary planning is based on job-specific pay data–e.g., the starting salaries for new accountants. BLS surveys are not relevant to salary management.

Focusing on Labor Markets

The GAO report subtly highlights another issue that has been ignored. The law (5 U.S.C. § 5304) states “the boundaries of pay localities shall be determined based on appropriate factors which may include local labor market patterns, commuting patterns and practices of other employers.” Logically, the goal for all employers is to determine the pay levels needed to compete successfully for talent. However, since 1994, federal locality areas have been based arbitrarily on the metropolitan area definitions established by the Office of Management and Budget.

The metropolitan statistical areas were defined independent of the General Schedule system and are unrelated to the “appropriate factors” cited in the statute. Those factors are central to salary planning in other sectors. In the planning, employers rely on published surveys for their industry or local area and assemble data for benchmark jobs. That’s routine.

There is an argument that the current methodology used to define locality areas violates the law. Simply stated, the “appropriate factors” have been ignored. The GAO report sets the stage for that argument.

In 2022, it is likely that many employers will grant additional pay increases before the year's end. It’s happening with cybersecurity salaries. That’s basic economics—pay levels are governed by supply and demand. The pressure driving increases varies by occupation, the local availability of talent, and the circumstances affecting jobs and work environments. In health care, for example, the pandemic is obviously important.

Responsive, flexible practices were not common in 1949, when the General Schedule system was established. Employees rarely resigned to take higher paying jobs. There were no pay surveys. Other large employers at the time relied on pay programs similar to the General Schedule system. But that was almost 75 years ago. Today the system is trapped in a time warp and no longer serves government well.

The focus on the locality areas also ignores a huge geographic area— “Rest of US”—with countless labor markets. Government has thousands of employees working in locations outside of a locality area. Recent reports have highlighted the staffing problems in the Forest Service, National Park Service and the Bureau of Prisons. The common problem is that those employees work in non-urban areas and by law are paid without regard to “local labor market patterns.” That’s true as well for employees working in Defense facilities, Veterans Affairs health care facilities and Social Security offices—the list is long. Many are front-line workers.

Given the essential nature of many of these jobs, agencies should be authorized to adjust salaries as needed to keep jobs filled. The cost should be secondary to satisfying public service expectations. In large companies with multiple locations, local leaders are trusted and accountable for meeting local performance goals. Leaders work with their HR managers to develop local pay programs. Managing pay is basic to workforce management

Government cannot afford to treat the General Schedule pay system as sacrosanct. Gen Z job seekers are not lining up for jobs. Turnover is costly. Heavy retirements are inevitable. The competition for scarce skills is surging. The General Schedule system is a barrier to rebuilding the workforce.

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Are Agencies Ready for the New HR?

Howard Risher — Thu, 09 Dec 2021 13:32:50 -0500

Congressman Gerald Connolly’s proposed legislation, Strengthening the Office of Personnel Management Act, is essential to empowering and rebuilding the federal workforce. It’s consistent with the emerging importance of HR’s role in business management.

That role was championed in a recent book, Talent Wins: The New Playbook for Putting People First, by three of the country’s most prominent management consultants, Ram Charan, Dominic Barton and Dennis Carrey. The importance of their argument is affirmed by the long list of major company CEOs that endorsed the book. This is an ideal juncture to consider the relevance of their argument to government.

For government, strengthening OPM is central to President Biden’s management agenda. His top priority is “strengthening and empowering the federal workforce.” Previous administrations have voiced similar goals but those initiatives have been largely unproductive. It’s time to acknowledge that OPM and the civil service system are a barrier to effectively using talent. Strengthening OPM will be the key to realizing the president’s vision.

The book opens with a discussion that captures government’s talent management problem:

“Most executives today recognize the competitive advantage of talent, yet the talent practices their organizations use are vestiges of another era. They were designed for predictable environments, traditional ways of getting work done, and organizations where lines and boxes defined how people were managed … Companies must deploy talent in new ways. In fact, talent must lead strategy. In our opinion, putting talent first means a complete transformation of the way most companies have done business for decades.”

The authors argue, “Something this big is a job for the CEO. Simply put, reimagining and leading a people-first company cannot be delegated to anyone else in the organization.”

Nowhere is their argument more relevant than in government. No business, large or small – or any entity trying to achieve goals – would rely on unchanged management practices for more than 70 years.

Government is clearly not a business; even the largest companies do not have to address problems as difficult as those confronting the country. The COVID-19 crisis highlighted the importance of employing qualified, committed front line workers. The public depends on federal employees for everything from airport security to weather forecasting to food safety.

The focus on talent is not another “soft” or “feel good” idea. The business purpose is to improve performance. As the book’s authors argue: “People, not companies, generate value.” Numerous studies have confirmed that investing in employee capabilities and creating a supportive, positive work experience pays off with higher performance.

The most recent Gallup studies show, “Across companies, business/work units scoring in the top half on employee engagement more than double their odds of success compared with those in the bottom half. To focus on selected performance metrics, a comparison of employers with top-quartile and bottom-quartile engagement scores shows a 14 percent difference in productivity, 81 percent lower absenteeism, and 41 percent better quality (fewer defects). In government, improved employee engagement would translate into lower operating costs and better results.

OPM’s focus on engagement is on target but as the president’s management agenda illustrates, a large majority of agency scores are below comparable scores in the private sector average. To state the obvious, high performing companies score well above the average. Realistically there is no barrier preventing agencies from raising engagement scores. It starts with holding executives and managers accountable for making that happen.

The PMA reiterates and broadens a previous executive order, which state “The federal government must be a model for diversity, equity, inclusion, and accessibility, where all employees are treated with dignity and respect” but restates it in a broader context, making the point that agencies need almost desperately to add younger workers to replace the large numbers of employees approaching retirement.

This is about more than fairness. There is a growing body of evidence showing that diverse, equitable, inclusive and accessible workplaces yield higher-performance. Companies in the top quartile of gender diversity and those in the top quartile of racial and ethnic diversity typically generate financial returns above their national industry medians. Prominent companies got on this bandwagon several years ago. Many now link executive bonuses with achieving diversity goals.

The reality is that when talented employees are precluded from moving into new positions or otherwise prevented from fully developing and applying their capabilities they lose and their employer loses. Discrimination has held back women and employees from non-white racial and ethnic groups for too long. It’s both unfair and costly. As an older, white male, I can empathize with men in positions of seniority but recognize the practices of the past are at odds with today’s emphasis on creating performance cultures.

Leadership Is Essential

The authors emphasize that leadership is critical: “Simply put, reimagining and leading a people-first company cannot be delegated to anyone else in the company.” They recommend creating a “G3” -- a group composed of the CEO, the chief financial officer and the chief human resources officer -- “as committed, talented and empowered as the CFO.” The important point is that the CHRO should be involved in all organizational and operating decisions.

President Biden has made his people management goals and priorities clear in a series of executive orders. The job of accomplishing Biden’s goals falls to the President’s Management Council working with chief management officers. They should be accountable to the president for achieving those goals.

The legislation introduced by Connolly would create a federal advisory committee “to help the [OPM] Director better understand stakeholder needs, concerns, and ideas as they relate to OPM’s policymaking and operations.” Advisory committee appointees should be recognized leaders in human capital management in other sectors.

Assuming the White House is open to the best thinking in other sectors, the committee could be invaluable in floating ideas for improving the civil service system. As with other advisory committees, OPM should have no trouble securing agreement from leaders in the HR community to serve. Their purpose would be to bring the best HR thinking and ideas to government.

This inflection point, to use Biden’s phrase, would be an opportune time to initiate an assessment of government’s HR policies and practices. It's not clear when, if ever, an assessment has been completed. It’s time for government to decide what’s working and what’s broken.

The past two decades have seen a revolution in the role of HR and the practices governing talent management but it’s been ignored by government.

Strengthening HR’s Digital Capabilities

Connelly’s proposal would require that future OPM directors “be selected without regard to political affiliation and that he or she have human capital and leadership expertise.” That experience should include time actually leading an HR function that has a unified digital platform. Digitalization is key to how a modern HR function operates and what it is capable of delivering.

From Talent Wins, ‘if your CHRO is not a first-rate business leader whom you [the CEO] can trust completely, your company’s HR department will never become more than a source of administrative support … It’s not about building out an HR department. It’s about building out an HR capability.”

Improving service and reducing costs on the transaction side of HR is clearly important. The Trump administration recognized that. However, as the authors argue, streamlining “without investing in the strategic/delivery side is a recipe for disaster” and delivery is linked to technology skills and methods.

Where talent leads strategy, the HR office “must arm itself with cutting-edge, talent-oriented, data-based IT, which lets you understand your workforce better than ever before.” In the future, analytics can enhance HR delivery in several ways:

Recruiting: linking to social media, resumes, and other public data to find job candidates, using AI to sift through individual social media (with permission) to identify jobs that match their skills, experience, and personalities. Data analytics can also be used to identify discrimination.
Retention: Crunching data to discover who might be considering leaving the company and why. Google for example cut the attrition of new mothers in half by lengthening maternity leave from three to five months. Analytics can also help to identify employees dissatisfied with their work experience.
Career Development: Looking at a variety of data over time to discover talented internal candidates whose growth should be accelerated. The software can monitor, for example, time spent in meetings, interactions with managers, performance reviews, and performance metrics.
Performance Management: The best practice today is continual coaching, and apps can track performance progress and provide several ways for supervisors to provide current feedback.
Culture Transformation: “Driving a people-first organization means learning, and then fostering, the kinds of behaviors that help employees do their best collaborative work.” Another study at Google, for example, found the most productive teams were ones in which everyone had an opportunity to voice their ideas.

Redefining HR’s Focus

Another widely respected consultant, David Ulrich, has written frequently on HR’s role. A key point for Ulrich is that HR has to shift its traditional focus from jobs and individual employees to focus on “how those individual people join together to create successful organizations.” He argues that,

“Isolating and improving a single HR practice area (e.g., hiring people, orienting new employees, training employees, or paying employees) is not enough; HR must emphasize the integration or bundling of the separate HR practices into integrated solutions and patterns, often called high performance work systems.

That would be invaluable to the functioning of government.

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The Missing Element in Revitalizing the Workforce: Performance

Howard Risher — Fri, 22 Oct 2021 08:00:00 -0400

The calls for rebuilding the federal workforce started in 2020 when the National Academy of Public Administration listed “modernize and reinvigorate the public workforce” as one of the 12 “grand challenges” facing the nation. Since then, the workforce has been a topic of countless congressional hearings, panel discussions, podcasts, and even a Washington-area television program. The Biden White House has released several executive orders and memorandum focused on strengthening the workforce.

NAPA made three recommendations focused on adding talent: Building interest in public service, shifting to more flexible pay and job classification, and reforming the hiring process. A working group also recommended improving the quality of managers and supervisors and identifying talent management as a presidential priority.

But aside from “the quality of managers,” the many reports written on the topic have been largely silent on two issues that are continually a focus of initiatives in the private sector. First are the workplace attributes highlighted in the research on high performance organizations and the Great Places to Work—open communications, trust, collaborative working relationships, etc. Second, the only reference to “performance” in the NAPA paper is in the statement criticizing “promotion rules that value longevity over expertise and performance.”

NAPA of course has produced several reports that focus on the management of performance. However, the management of agency performance and employee performance unfortunately are treated as unrelated problems. That reflects the history of civil service, the governing statutes, and the separate roles of the Office of Management and Budget and the Office of Personnel Management.

A House committee used the word “revitalizing” in the title of a hearing on needed actions “to repair, rebuild, and fortify [the civil service] for the future.” Implicit in the use of the word is that a revitalized workforce will be more solidly committed to an agency’s mission. However, during the hearing, only James Sherk, Trump’s labor policy adviser, discussed performance—and his focus was on dealing with poor performers.

The reports and hearings are valuable—building a broad consensus for investing in the workforce is important—but as long as the day to day management of performance remains unchanged, it’s unrealistic to expect better results.

Investing in Managers

There was a time in the distant past when the job of “manager” was relatively simple. They told subordinates what to do and made sure they did it. Industrial engineers were responsible for defining jobs and performance expectations. Seniority was the basis for naming new supervisors. Manager training was limited, focused on company policies and legal requirements.

In the years after World War II, pent-up consumer demand fueled exceptionally strong economic growth. With the rapid growth, large organizations emerged; owner/managers were replaced by a cadre of professional executives trained in business schools. Growth continued, with brief downturns, to 1990 when global competition and the recession necessitated cost cutting. A common response was eliminating layers of management, which opened the door to employee empowerment. Personal computers and cell phones came into common use, enabling managers to monitor results from a distance. Knowledge jobs emerged. The pandemic and working remotely is the latest development. The changes in the work management paradigm have been revolutionary.

Two decades ago, Gallup started promoting the importance of employee engagement and its impact on performance. While Gallup has gotten the attention, a number of researchers have confirmed the linkage of employee engagement and performance.

The research also confirmed the old adage, “people quit their bosses, not their jobs.” In government a dissatisfied employee may be reluctant to quit—walking away from accrued benefits is costly—but they can and sometimes do resign. That’s costly since their discontent affects other employees.

Gallup’s studies show managers and their approach to supervision account for 70% of the variance in employee engagement. Their analyses show the level of engagement is correlated with several performance metrics—absenteeism, turnover, accidents, mistakes, etc.—associated with operating costs. To quote from a recent Gallup post, “In nearly every dimension of business success, the manager makes the difference. From diversity and inclusion to productivity and retention, the manager plays a singular role in the life of an employee.”

It needs to be emphasized that raising performance levels requires change. Investing in managers to develop the supervisory practices associated with high performance will pay off with better results.

All the evidence suggests far too many federal managers rely on an approach to supervision that is not appreciably different than it was decades ago. Unless there is a reason to change, managers perpetuate the supervisor style they learn from their experience. Evidence from other sectors makes it very clear performance cannot be improved as long as the work experience and the approach to supervision are unchanged.

As this was written, OPM announced the plan to begin the 2021 Federal Employee Viewpoint Survey in November. It would be timely to connect the results with the performance measures in the Gallup survey and similar research studies. The survey data could be used in an analysis to compare the responses linked to performance and with the practices of the most effective managers.

It’s likely the optimal manager practices vary from agency to agency. To be sure, there are common cultural characteristics but effective supervision in agencies as diverse as the Bureau of Engraving and Printing and the Internal Revenue Service has to require somewhat different supervisory behaviors. An analytics study would identify the differences. Analytics could also identify clusters or archetypes of manager styles.

Then agencies would have the information to develop manager training programs, develop more focused appraisal instruments, and use coaches to work with managers needing improvement.

But when the goal is to improve performance, change is essential. Research, as well as personal experience as parents, tells us desired behavior needs to be reinforced and rewarded. In other sectors, pay for performance for managers is universal. That is a proven strategy to improve results. A manager's success should be directly related to their effectiveness.

Replace Traditional Job Descriptions

A key problem for government is how it defines jobs. For example, the standard for Professional and Administrative Work in the Accounting, Auditing, and Budget Group, 0500, is 103 pages long—and it's one of the newest, released in 2019. No other sector would ever consider anything like that. Its screams of outdated bureaucracy. It would be interesting to learn how often those pages have actually been read.

Despite the volumes of job documentation, anecdotal evidence suggests an unknown number of jobs are over graded. OPM no longer has the staff capability, however, to verify grades. That undermines the credibility of the GS system. Again, change is needed.

In today’s uncertain environment, jobs and performance expectations change throughout the year. As a guess, the sudden shift to working remotely must have invalidated virtually every existing standard. In business, the focus in planning is improving results.

Assuming agencies want to improve performance—that’s discussed in reports but not supported by the evidence—it would be far more productive to shift to the widely used goal-based management, with managers and their people discussing and agreeing on expected accomplishments. Employees work at their best when they are empowered and know what they need to accomplish.

When someone is asked about their job, they can describe what they do in a minute or two. Similar brief descriptions are used in salary surveys.

Descriptions should include a statement summarizing how the incumbent contributes to a team, unit or agency’s success, metrics relevant to evaluating performance, the knowledge and competencies associated with good performance, career paths, reporting relationships and working relationships with co-workers and other units. That information is relevant to all stages of talent management.

The Goal: Creating a Performance Culture

Business planning focuses on growth and profitability. Those cascading goals depicted in textbooks always end with the so-called bottom line. That works in part because of the financial incentives. In the past, it was argued that “it’s the paycheck that counts.” Today millions of employees are resigning. That makes it clear today’s employees want something more.

Government should have an advantage. A McKinsey podcast from June, “The Search for Purpose at Work,” captured the value of a job that provides “a sense of direction, intention, and understanding that the contribution you’re making is going somewhere [and a] reason for going to a job each day.” Purpose “usually speaks to higher values or a higher mission.” That describes government service.

NAPA reports have repeatedly highlighted the importance of “mission accomplishment.” Agency performance goals and metrics have been required for almost two decades. A 2004 GAO report, “GPRA Has Established a Solid Foundation for Achieving Greater Results,” highlighted agency progress.

However, although that was years ago, a key point in the report is that managers agreed they are “accountable,” but a significantly lower percentage agreed they have the “decision-making authority needed to help the agency accomplish its strategic goals.” Moreover, fewer than half “reported receiving relevant training” or a “positive recognition for helping agencies achieve results.”

That reality represents one of the most important differences when government practices are compared with best practices in the private sector. Empowering managers is fundamentally important. Additionally, in business, the pay package for managers at every level includes “merit” salary increases and cash incentives. Add to that occasions to recognize team and individual accomplishments and agencies should realize significant performance gains. Everyone wins.

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