Why Biden Should Expand OPM’s Role
Changes instituted by the Trump administration reflect an outdated and discredited “do as you’re told” approach to management.
President-elect Biden brings a radical shift in the management philosophy that should guide workforce management now and into the future: “The federal government should serve as a role model for employers to treat their workers fairly.” He has stated, “Dedicated public servants are the lifeblood of democracy.”
His statements are important. Leadership is essential for an organization’s success. It builds employee commitment. Ideally the individuals appointed to key positions in the Biden administration will share the president’s philosophy.
This is an appropriate—some would argue crucial—point in history for government to reconsider how work and workers are organized and managed. Thought leaders for decades have called for change. The response to COVID-19 has already triggered what has been called a “new normal.” Changes instituted by the Trump administration reflect an outdated and discredited “do as you’re told” approach to management. A new McKinsey report refers to 2021 as “the year of transition” for business and that certainly applies to government. A new Gallup survey shows the public expects a lot from the Biden administration. Reenergizing and rebuilding the workforce is a key.
Leading employers in other sectors have relied on the equivalent of their chief human capital officers and their staff to plan and lead the changes. A 2015 article in Harvard Business Review, “People Before Strategy: A New Role for the CHRO,” made the case for a more proactive role for HR. The authors, three nationally prominent business consultants, argue for forming a three-person team at the top of a company, with the CHRO joining with the chief executive officer and the chief financial officer.
Government’s problem is that the Office of Personnel Management was not conceived or staffed to assume that role. Its role is typical of HR offices a generation ago—a back-office function, a cost center focused on administrative tasks. When I posted a column making the case for HR a couple of years ago, the comments confirmed how OPM is viewed:
- “We have HR? Really? Who knew!’
- “HR is a punchline in my agency.”
- “HR is the perfect place to count days until retirement.”
- “HR is now a DMVesque operation, able to delay processing by weeks through rejection of paperwork without explanation, needing days to move from Point A to Point B.”
Recently Steve Goodrich and his company, The Center for Organizational Excellence, joined with the Senior Executives Association to develop a set of recommendations for transforming the governance of federal human capital. The report and the recommendations are relevant here.
Goodrich also arranged last summer for Rebecca Hunter, the HR commissioner for Tennessee when Bill Haslam was Governor, to meet with leaders across government to describe the strategy that facilitated the state’s successful civil service reform. Hunter was a member of the state’s cabinet.
When Haslam was inaugurated in 2011, the state’s workforce problems were similar to the current federal problems. It was an older workforce—almost 40% would be eligible to retire within five years. The state’s antiquated civil service law (it dated to 1939) was another impediment. Plus state budgets were still recovering from the 2010 recession; employees had not had a pay increase for two years. In one of Haslam’s early speeches, he announced a goal was to build a “winning” workforce. In the last year of his second term, the state’s annual engagement survey had a participation rate of 95%, with 95% of respondents recommending the state as a great place to work. (The 2019 OPM survey had a 43% participation rate.)
Tennessee’s reform took eight years. If the Biden administration were to undertake reform, it would take at least that long. President Clinton initiated reform shortly after he took office; nothing important was accomplished. President Bush followed with reform limited to the Defense Department, the failed National Security Personnel System. There have been federal success stories. A few weeks ago, I posted an interview with former Comptroller General David Walker, where he discussed the reform he led at the Government Accountability Office. A number of demonstration projects are also success stories.
Despite the record of failures, reform or even something less comprehensive is badly needed. The workforce issues and the work environment are acknowledged to be serious problems. OPM or a specially appointed task force will need to provide leadership.
Tennessee’s opening steps could be a good model for federal agencies. Soon after Haslam’s inauguration, the state undertook three initiatives:
- First, each Cabinet member undertook a top to bottom review of his or her agency to identify problems. In each agency ineffective human capital practices were high on lists of barriers to improved performance.
- Second, the deputy governor and Commissioner Hunter went on an employee listening tour, traveling to major cities in Tennessee to understand state staffing problems.
- Third, the commissioner of finance & administration (a former corporate CEO) learned that citizens were not seen as customers. He created a taskforce of Cabinet members to focus on better serving the government’s customers.
The top to bottom review would make sense for newly elected leaders at every level of government. Leaders need to know where problems can be expected to hinder planned results. Concomitant with identifying problems, managers should be encouraged to propose actions to address them. They have a unique understanding of local problems. The comments are likely to focus on the civil service system.
The size and geographic dispersion of federal agencies make listening tours by agency leaders unrealistic. However, the tour idea is similar to a practice recommended by the Great Places to Work Institute—the use of “employee resource groups” to play a role in defining problems and developing solutions. Their surveys claim ERGs “are found in 90% of Fortune 500 companies.” Great Place research has learned that companies that solicit employee ideas “operate with greater agility, realize greater speed in implementation, and have significantly better financial results.” Employee teams should play a role in both the planning and the implementation. Biden’s strong support for federal workers could facilitate those discussions.
Employees are the obvious choice to discuss their work experience. That should be a priority since it contributes to the costly, early turnover of new hires. Agencies need to document the reasons. Where ineffective supervisors are involved, agencies need to invest in training and coaching. Encouraging upward feedback facilitates collaboration, builds trust, and increases employee engagement by demonstrating employees’ knowledge and views are valued. Gallup’s research shows it triggers improved performance.
Those steps would enable agencies to document the “soft” workforce issues hindering government performance. Additionally, agencies need to invest in developing human capital metrics to provide leaders with easily understood data that make it easier to track progress in addressing workforce issues. It's not clear why but government has never gotten on that bandwagon. Human capital dashboards are widely used in other sectors.
In Tennessee, the HR department won an award from the Tennessee Center for Performance Excellence, the local version of the Baldrige awards, for creating and posting dashboards to enable everyone to quickly understand key workforce metrics. Government of course has its own in-house experts, the staff responsible for the Baldridge Performance Excellence Program.
HR metrics have been collected in business for over four decades. Metrics are central to the work of the Performance Improvement Council. In government, the size, geographic dispersion, and criticality of key occupations to national priorities makes metrics the only practical way to track workforce problems.
It’s noteworthy that the Securities and Exchange Commission issued new rules in November requiring publicly traded companies to disclose:
- The number of employees and a description of their human capital resources, and
- A description of “any human capital measures or objectives that the registrant focuses on in managing the business (such as, depending on the nature of the registrant’s business and workforce, measures or objectives that address the development, attraction and retention of personnel).”
SEC Chairman Jay Clayton, who resigned at the end of December, was quoted, “I am particularly supportive of the increased focus on human capital disclosures, which … can be an important driver of long-term value.”
The new rules do not specify the required metrics nor do they define “human capital.” A statement on the Harvard Law School Forum on Corporate Governance provides a summary of the workforce information that can be captured in metrics: workforce diversity, workforce compensation, cultural initiatives, workforce health and safety, workforce skills and capabilities, and workforce stability (the statement lists possible metrics for each).
OPM has resources for developing human capital metrics on their website. It's all there. The software for developing metrics as well as for creating dashboards are readily available.
Significantly, investors have a limited use for the metrics. They use the information to assess investment possibilities and are always looking for better investments. Government leaders need the information to track progress in addressing problems and to hold local managers accountable. That’s a far more important use of the information. Since many workforce problems are local, it will be important to develop metrics relevant at the appropriate level.
There is an old cliché: “What gets measured gets done.” Government has workforce problems that need to be addressed. For OPM, taking the lead in developing the information would be a good way to build credibility.