Government at all levels is experiencing workforce problems that are contributing to deteriorating performance. That was the No. 1 management challenge for state and local government in two independent surveys. It’s confirmed almost every day by stories on Government Executive.
The political candidates are exacerbating the problem: It’s now hunting season, metaphorically, to criticize workers. There is no evidence the candidates are interested in developing real solutions.
As every parent learns, rewards are far more effective than punishment. In the work context, public criticism that is not directed at a specific employee sends an unfortunate message that is felt by everyone; it undermines employees commitment and adversely affects both performance and the employer’s brand, a vital factor in recruiting high-quality applicants.
Government’s performance will inexorably be affected by three trends: People age and eventually everyone retires. New graduates have options and need to be convinced their career choice will be satisfying. Finally, with the economic recovery, businesses are experiencing skill shortages that will push up pay levels. In combination, they portend deteriorating performance for government agencies.
A related problem is the cost of “disengaged” workers. Gallup estimates the cost to state and local government is up to $100 billion. The cost of poor morale is not estimated at the federal level—as measured in absenteeism, turnover, poor performance, etc.—but it has to be in the same range.
A recent Government Executive story, “Why Millennials Spurn Government Jobs,” focused on the problem. What may be surprising is that compensation was barely mentioned.
Government needs to change. Organizational change is often problematic; the uncertainty of how employees will be affected triggers their anxiety and resistance; it’s easy to rationalize delaying what’s obviously needed. However, if government leaders project the current trends a few years into the future, it should make them very uneasy.
Government is People
Recent headlines have focused on the importance of IT modernization. What has not been emphasized is the ramifications for workforce management, both for current IT specialists and for hiring and retaining new employees with essential skills. Legacy systems are maintained by legacy specialists. At its core this is a human capital problem.
Another currently problematic area is procurement. A recent report from the Volcker Alliance highlighted the importance of workforce skills and competencies. Again it’s a human capital problem.
The same can be said for the reported problems in the Department of Veterans Affairs. Medical care is heavily dependent on technology but it’s the expertise of medical specialists, the adequacy of the staff and their capabilities, and the quality of care that makes a hospital successful.
For more than two decades, technology has been promoted as the solution--the newest system is always the answer—but the results have been disappointing. The problem is that government broadly depends on people to collect and analyze information, make decisions, and provide advice or services to “customers,” ranging from the President to applicants for patents. Technology is an essential tool but only that.
This people problem does not have a simple solution. Pay is clearly a core issue—leaders will have to address it for IT modernization to go forward—but with an apology to Sen. Heidi Heitkamp, the answer is not “special rates” or bonuses. Someone on her staff should print out the incredibly long list of jobs and locations that already have special rates. The story on millennials makes it very clear that dissatisfaction with the day-to-day work experience is the heart of the problem. Only a couple of the concerns cited by the millennials interviewed would require increased spending—training and the opportunity to attend conferences.
When the baby boomers started their careers, they no doubt experienced the same frustrations—the desire for autonomy, inflexibility, the slow pace, boredom at times, and the difficulty accomplishing anything within the bureaucratic quagmire. It’s only recently that job satisfaction and engagement has been more than an HR issue; work was not expected to be stimulating or rewarding. The new generation no longer feels they need to tolerate the dissatisfaction.
It’s Time for a Revolution
The work paradigm in the private sector has changed dramatically. Research and experience provides solid evidence that the way employees are managed has a significant impact on how they perform. That’s why the focus on employee engagement is now a top management concern.
All of this gained public prominence in the late 1990s. Today it’s best understood as a revolution in the way work is organized and managed. There are thousands of books, research studies and articles on what’s transpired. At the heart of the new paradigm is a radical change in management philosophy: Employees are managed as assets and the goal is to fully utilize their capabilities.
Government has never joined the parade. That’s true at the state and local level as well. Civil service practices reflect the management thinking that prevailed a century ago. The classification system dates not to 1949 but more accurately to the Classification Act of 1923. The recent focus on the USAJOBS website ignores a protracted hiring process. The Federal Employee Viewpoint Survey highlights continuing employee dissatisfaction with several key supervisory habits (e.g., promotions based on merit, awards dependent on performance). Academic and author Don Kettl was correct when he used the phrase “Jurassic Government” in the title of his new book, Escaping Jurassic Government: How to Recover America’s Lost Commitment to Competence (Brookings Institution Press, 2016).
Every now and then the phrase “performance culture” is used in a discussion of government. It’s usually an expression of wishful thinking. Culture is an amorphous construct that influences, if not controls, employee decision-making and behavior. In a performance culture there is a shared commitment to high performance. To be sure, there are agencies and work teams performing at high levels. However, culture also hinders efforts to perform well. Culture change will require a herculean effort that addresses a number of issues, but only a concerted initiative will improve performance.
CHCOs Need to Take the Lead
One of the barriers to improved performance is that too few government leaders have experience with workforce management in large organizations. That’s often true for appointees as well. They were attracted to government by public policy issues. They need to understand that reforming the way work is managed will pay off in improved performance.
Realistically, the expertise needed is found in the field of human capital management. HR executives, however, have not been seen as change agents in the private or public sector. If anything, over the years the field has been disparaged. HR specialists have not been strategic or leaders.
However, in the private sector the tide is turning. Front and center is a 2015 Harvard Business Review article, “People Before Strategy: A New Role for the CHRO,” authored by a trio of prominent business advisors.
They argued, “It’s time for HR to make the same leap that the finance function has made in recent decades and become a true partner to the CEO . . . Managing human capital must be accorded the same priority that managing financial capital came to have in the 1980s.” In their words, HR should have the lead in “building and assigning talent, especially key people, and working to unleash the organization’s energy.”
In larger companies a sure sign of the emerging importance of CHCOs is their place on the pecking order. Many are now paid more than marketing and information systems executives, and only slightly less than chief financial officers. A recent report from a leading search firm refers to CHCOs as the Chief Change Officer.
Describing CHCOs as leaders of change efforts is a very different role from their traditional responsibility for administering HR policies and programs and monitoring compliance with laws and regulations. That’s reflected in the metrics widely used to track HR performance. The focus has been on speed, efficiency and cost minimization (e.g., HR cost per employee).
An expanded role for HR needs to address human capital problems, including performance, and will require the approval and support of government leaders. Those leaders need to understand HR’s expanded role and what any new initiatives are expected to achieve along with needed resources. Soliciting their views, addressing their priorities and convincing them to remove roadblocks requires regular interaction.
Government of course has different dynamics. HR has had no day-to-day involvement in employee performance, but in the new role HR will be working as an advisor to managers. The goal is to energize work teams and reinforce their focus on outcomes. That will depend on working relationships, which may not exist today.
Government’s performance problems will get worse without leadership. Too often workforce management does not have a champion. Realistically only HR can fill the void.
Howard Risher is a consultant on pay and performance and the author of several books, including one scheduled for released in August, "It’s Time for High Performance Government: Winning Strategies to Engage and Energize the Public Sector Workforce."