Government Needs to Invest in Human Resources

In high performing organizations, HR specialists work as advisers and consultants to line managers to address workforce problems. That doesn’t happen in federal agencies.

Skills shortages. Aging workforce. Disengaged employees. Compliance culture. Risk aversion. Lack of trust. Silos. Bureaucracy. Noncompetitive pay. Burnout.

Those are the terms that too often come to mind when we think about government. The workforce problems are serious and likely to get worse with budget shortfalls and tight labor markets. The complexity of the civil service system compounds the problems. Moreover, the Office of Personnel Management is not widely seen as a valued talent management partner. An opening statement in a recent report from the National Association of State Chief Administrators is relevant at all levels of government: “In the battle for talent, government is falling too far behind in preparing for the workforce of the future.”

Here in a nutshell is the problem: Until the work of government is automated, agency performance will depend on having a well-qualified, engaged and committed workforce. Research studies show effective managers and the work experience are the keys. In high performing organizations, HR specialists work as advisers and consultants to line managers to address workforce problems.

But that’s not reality in federal agencies. The problem, as stated in the National Academy of Public Administration report “No Time to Wait: Building a Public Service for the 21st Century,” is that “government's human capital system is fundamentally broken . . . and is demonstrably hurting mission performance. It is wasting taxpayer dollars and undermining public trust.” The authors were clear that HR today is “reactive, transaction-based, compliance-focused” but failed to present the case for investing in the HR management capabilities to guide what will be an essential and difficult culture change.  

The business community was forced by the 1990 recession to deal with similar but less complex workforce problems. Since then, there has been a true revolution in the work management paradigm. Driving change in business and healthcare was the emergence and growing importance of knowledge workers, and the realization that traditional people management practices failed to promote their best performance.  

It took a decade, but a new HR model emerged to attract needed talent and make better use of employee capabilities. It’s a radical change from the management philosophy reflected in the civil service system. The new HR is proactive, working with managers to create a work environment where employees are empowered and expected to tackle job-related problems.

The new model is exemplified in a statement by Southwest Airlines’ Chief People Officer, Julie Weber, who was recognized on the annual Workforce 100 list as the best of HR: “We’ve really put our employees first . . .  Our belief is that happy employees make for happy customers, which makes for happy shareholders.” Southwest’s approach to workforce management has been touted by the press since the company’s beginning. Technology and consulting firms dominate the list but it also includes employers like In-and-Out Burger, Hilton and St. Jude Children’s Hospital. The many “best places to work” lists confirm great employers exist in every sector.

The argument too often is that government is not like business and of course there is some truth to that.  However, as discussed in a recent column, Tennessee and Governor Bill Haslam made civil service reform a priority of his two terms and building that “21st century public service.” The state’s HR Commissioner, Rebecca Hunter, had a lead role throughout the project and transformed the HR function to support the Governor’s goals.

In a speech at a conference of the Tennessee Center for Performance Excellence, Hunter described how the HR department changed.

“We've been working to shift the key focus of our human resource professionals from transactions and compliance to that of a strategic, trusted advisor focused on the needs of the organization. What we've found is that through the use of the Baldrige framework, Human Resources can be positioned to contribute to the organization improving operationally by driving continuous improvement and performance excellence throughout the enterprise,” Hunter said.  

Four additional points are important to understand the transformation of the state’s HR function.  

  • First, Hunter based the function’s upgrading on the Baldrige Performance Excellence Framework. For reasons that are not clear, the framework has been largely ignored by federal agencies.  
  • Second, the state’s agency heads committed to improve citizen satisfaction with government services and that goal was central to reform. That helped to gain the support of voters and other stakeholders. “Customers” is one of the seven Baldrige Criteria for Performance Excellence. Hunter adopted the customer focus in working with state agencies. For government and especially HR, customer satisfaction would be a new and powerful metric.  
  • Third, Hunter went on a listening tour soon after the Governor’s inauguration that highlighted workforce problems across state government. The variety of problems identified both the need for reform and the importance of flexible approaches and flexible policies. Research on reform efforts confirms that an initial analysis helps to identify and understand challenges and specific needs, define goals and track progress, justify strategies for skeptics or opponents.
  • Fourth, they switched to a simplified pay for performance policy after investing in preparing managers over three years. Employees are now rewarded for their accomplishments.  

The state’s reform legislation was driven by the governor’s goal to improve state government performance and address recognized workforce problems. The law focused narrowly on hiring, the employee appeals process, and the requirement that employee performance management be based on goals and outcomes. However, it triggered the broad rethinking of HR policies and practices. Hunter credits the Baldrige excellence criteria for creating a shared commitment within the department to be the best.

Today the department exemplifies the best of human resource management in any sector. Few corporate HR departments have as much impact on an organization’s performance. The department’s “Our Vision” statement summarizes the goal:

“To strategically drive transformation through innovative human resources leadership and practices to shape the best workforce for state government.”

What the department calls “Our Values” would have been unheard of in government a decade ago: Continuous Improvement, Respect, Customer Driven Excellence, Data Driven Decision Making, Visionary Leadership and Collaboration. I recommend federal HR specialists visit the webpage:

Statements like that define expectations both for the department’s employees as well as for state managers and employees. The contrast with the cryptic description of the federal HR function in the NAPA report could hardly be more striking.

The Administration has proposed breaking up OPM and creating a new policy-focused HR office organized under the Office of Management and Budget. The proposal focuses on technology but this would also give HR a badly needed seat at the executive table. It’s consistent with HR’s cabinet level status in Tennessee.  Studies of reform initiatives in other countries reported by the World Bank show it is important to have champions at high levels.

More important, however, is developing a strategy that recognizes the potential contribution of a world class HR function. I have noticed that on departmental websites it's often difficult to find Chief Human Capital Officers. The Commerce Department, as an example, has the photos of 12 leaders and a listing of 13 bureaus and 14 offices but HR is not included. The Department of Labor website lists its Leadership Team showing, by a quick count, the titles and names of 80 deputies, chiefs, associates, etc. but does not include HR. The contrast with Tennessee is again striking.

Last Fall, the Volcker Alliance and the Partnership for Public Service released a joint statement, Renewing America's Civil Service. It listed a number of badly needed policy and practice changes. It was silent, however, on the need to invest in the HR leadership and cadre of specialists that will be needed to guide agencies in the transition to that new civil service. The changes are critical if government is to successfully transition from the “culture of compliance” (from the NAPA report) to focus on performance. But it will take time to build the capabilities. It should start soon.