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Finally, Managing People Seems to be a Priority

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The Office of Management and Budget recently posted a job opening: “Serve as a Performance Manager, GS-0301, 14/15 leading interagency efforts to improve program performance, management, and efficiency.” The job description suggests the incumbent will be expected to provide leadership on all aspects of agency performance with a focus on human capital issues.

After repeated attempts to improve agency performance over the past three decades, someone will finally be accountable for improving performance. That’s tongue-in-cheek, of course, but with all the investments in technology and strategic planning, this is perhaps the first time people management will be a priority. As an observer, the failure to adopt the strategies proven in other sectors has long been a mystery.

It’s not apparent from the job description or Office of Management and Budget guidance, but recent reports confirm government needs a wholesale change of its approach to managing people. Human capital management has been on GAO’s high-risk list since 2001. Nothing in the civil service system is supportive of raising performance levels. It’s significant that this will be an OMB job and not in the Office of Personnel Management.  

The job duties are well defined with a notable omission – there is no reference to employee engagement or commitment. A key point from the research is that there is a solid linkage between an employee’s commitment and his or her performance. Steps to strengthen engagement will pay off with improved results. Conversely, actions that undermine employees’ commitment will trigger a decline in performance.

Unfortunately employee engagement to this point has been treated as an HR problem. While the Federal Employee Viewpoint Survey is conducted each year, the reported results read as if it is another “soft” HR issue. Engagement, as it was operationally defined by Gallup, is not another feel good or morale consideration. It’s the linkage to organization and employee performance that makes it important, but that point has been ignored in OPM reports.

There is solid research showing engaged employees are more productive. Employee productivity gains of even 5 percent or 10 percent would result in savings in the billions. Gallup research in 2014 concluded federal employees are less engaged than those in the typical private sector organization. The gap then translated into 11 percent lower productivity. For many occupations in government, productivity defies measurement but is still very definitely relevant. Based on the current average salary ($84,000) and a workforce of roughly 2 million, the productivity gap costs government $18.5 billion a year.  

Improving productivity by even 5 percent would save $8.4 billion. There are metrics more important than time, but to illustrate on a task that now takes four hours that is only 12 minutes. However, when the time is aggregated across the workforce, the savings would exceed the budget needed for market competitive salary increases. Of course, when productivity falls, costs increase.

When employees are not engaged, the increased costs are not restricted to lower productivity. There are also increases attributable to absenteeism, turnover (including the costs to replace talent), accidents, time and resources to correct mistakes, poor quality, waste, etc. It adds up.

One of the problems with the engagement construct is that each “expert” relies on a somewhat different definition and set of survey questions. Gallup categorizes employees as Engaged, Not Engaged, and Actively Disengaged. Their analyses make it very clear which units have problem employees. OPM limits its reporting to trends and avoids comments suggesting an agency has disengaged employees.

There is at least one federal organization that is among the lowest on Gallup surveys. Rumors suggest engagement has fallen badly in several agencies. In those agencies, the costs of poor performance could be far higher than the Gallup estimate. Every agency undoubtedly has Not Engaged and Actively Disengaged employees. When the numbers are large, disgruntled employees will impede OMB’s efforts to improve performance. The costs of poor performance can be substantial.

A recent Washington Post column highlighted another aspect of the performance problem, “Shortages of employees . . . are hampering a range of services to the public and stressing the federal workforce.” The column specifically cited skills gaps in  “acquisition, information technology, finance, analysis, engineering, and management support” occupations. Healthcare fields could have been included. The Post reporter, Eric Yoder, contends the agencies “are challenged even to understand the skill sets they need and have in their workforces

To state the obvious, well qualified applicants in each of the fields are in demand and can command fully competitive compensation packages from competing employers, including federal contractors.

The column also cited a lack of training as part of the problem. Too often, training budgets are among the first to be cut, but that undermines performance, especially in knowledge occupations, and adversely impacts government’s brand as an employer. It also makes recruiting difficult. Millennials are looking for career opportunities where their development is supported. “Developing a workforce for 21st century” has to be more than a slogan.

This is one of the times when government’s plans expose its Jekyll and Hyde approach to workforce management. On the one hand, the Dr. Hyde side of government is planning to reorganize agencies, reduce the workforce and freeze salaries. Where staffing shortages exist, morale is reportedly down because employees are working longer hours. This year’s FEVS will not be conducted for a couple of months but with everything that has unfolded since the 2017 survey, it’s highly likely that the results will not be as positive.

Now Dr. Jekyll is searching for someone who can provide the leadership to raise performance levels.  Aside from the engagement issue, the performance problem cannot realistically be addressed until the staffing configurations and working relationships affected by the reorganizations have the time needed to return to a semblance of normalcy. Reorganizations are always disruptive for a time. Plus improved performance may not be possible as long as gaps in staffing and in mission-critical skills exist.

Raising engagement levels will actually be the more difficult problem. There is no question that employee engagement is a key to improved performance. It’s been treated as an HR issue, however, and that is a mistake. Engagement depends on the way employees are managed and it starts at the top. It also depends on the effectiveness of day to day supervision. That is a management problem.

Government has thousands of talented, highly educated employees who chose a career where they could make a difference. It’s clearly time to commit to management practices that recognize the value of their contributions. The civil service system is a barrier to needed changes.

Howard Risher is a consultant focusing on pay and performance. In 1990, he managed the project that led to the passage of the Federal Employees Pay Comparability Act and the transition to locality pay. Howard has worked with a variety of federal and state agencies, the United Nations and OECD. He earned his bachelor’s degree from Penn State and an MBA and Ph.D. in business from the Wharton School, University of Pennsylvania. He is the co-author of the new book It's Time for High-Performance Government: Winning Strategies to Engage and Energize the Public Sector Workforce (2016), with Bill Wilder.

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