Setting the Stage for Improved Performance
The Biden administration has an opportunity to significantly change how government works.
The pandemic and transition to a new presidential administration has triggered renewed attention to agency management challenges. A number of loosely related recent reports and columns point to a framework that could serve the Biden White House in its efforts to improve agency performance. Central to these efforts is the redefinition of the role of managers based on agencies’ recent experiences with widespread telework. This is a new stage of a revolution in the way work is organized and managed that began in the private sector three decades ago. It starts with a shift in management philosophy.
Leaders Point the Way
The first report is from IBM’s Institute for Business Value, “Find your essential: How to thrive in a post-pandemic reality,” based on a survey of chief executive officers “across the economy and around the world.” It found that “CEOs recognize that this new way of driving flexibility and delivering innovation can only be realized with an empowered remote workforce.” Additionally, the best performing companies “identify a sense of purpose and mission as critical to engaging employees at a rate 53% higher than underperformers.”
That is solidly consistent with President Biden’s message to the federal workforce: “You’re the ones running the show. I have the utmost trust in your capabilities … to make good decisions, stay focused on what’s most important: humility, trust, collegiality, diversity and competence.” That statement of trust should be reflected in all supervisor/employee relationships.
The emerging management philosophy in business was discussed in last year’s reports from the World Economic Forum and from the Business RoundTable. It was captured in a statement by Jamie Dimon, CEO of JPMorgan Chase & Co. and chairman of the Business Roundtable: “Major employers are investing in their workers and communities because they know it is the only way to … create long term value.”
The philosophy is well suited to government. It is consistent with the reasons many employees at all levels of government chose public service and with Biden’s statements. In a column last summer, I suggested the phrase “stakeholder public service” to refer to a commitment to be fair to all government stakeholders, including employees. “Investing” in employees supports the idea that they are valued assets.
Leaders appropriately define how employees are to be managed—by trusting them, empowering them, supporting their development and recognizing their accomplishments. Biden’s statements would serve government now as well as future administrations.
Redefining the Role of Managers
The change in management philosophy is supported by the argument in a recent John Kamensky column that the pandemic triggered a “shift in workplace dynamics” that created a new focus on bottom-up, front-line worker initiatives. Kamensky’s column went on to argue this gives new emphasis to improving management practices. He referred to the work of a 2019 IBM report that considered ways to assess the quality of agency management. Added to this is a recommendation in a column on federal compensation by James Perry to “Design rewards and incentives to reinforce a public service culture.”
Together the columns effectively summarize workforce management in high performance organizations. For government, it would be a significant shift from the top down “do as you’re told” approach to management. The practices highlighted are consistent with Biden’s statements.
The president has a number of aspirational goals. He is starting, however, with a workforce that is arguably burned out and needs to be rebuilt. At his inauguration, the work environment was infused with distrust. Achieving the president’s goals will require a commitment to enhancing workforce management to tap individual capabilities at every level.
A recent task force recognized the central importance of also investing in steps to improve the quality of management. In a new white paper, following the taskforce conclusions, an ad hoc group of current and former federal executives recognized that:
“The pandemic has brought into sharp relief the importance of good management in government operations … Given recent upheavals in many government operations, federal agencies face an imperative to modernize and improve.”
The white paper is silent on a core consideration highlighted by the pandemic: high performance rides on the delegated responsibility of local managers and employees. They need the autonomy to respond to unanticipated developments and circumstances throughout the year. The reliance on top-down management is simply too slow and unresponsive to address frontline operational issues. Further, in large, geographically dispersed organizations, it's unrealistic to rely on top-down management to anticipate and address local circumstances. The U.S. Postal Service exemplifies the ineptness of top down management.
The task force focused on developing ways to assess and improve agency management practices. The results of these discussions are summarized in the 2019 IBM Center report, “Measuring the Quality of Management in Federal Agencies.” The report summarized several initiatives that set forth frameworks for assessing management strengths and weaknesses. It also included summaries of the GPRA Modernization Act and the Program Management Improvement and Accountability Act.
Good management has of course been an ongoing concern in the private sector. Business experts have written and studied the issues for decades although they focus generally on executive issues: strategy, leadership, and execution. One of the broadest studies of managerial effectiveness was summarized in a 2017 Harvard Business Review article, “Why Do We Undervalue Competent Management?” It's mentioned in passing in the IBM report but its focus on the linkage of management practices and performance goes beyond simply reporting metrics.
The studies include thousands of employers in several sectors, including healthcare, and in nearly 40 countries. Interviewers ask how managers use 18 managerial practices in four areas: operations management, performance monitoring, target setting, and talent management. To illustrate, the initial question on performance monitoring from the healthcare version reads, “What kind of performance or quality indicators would you use for performance tracking?”
The research concludes:
“Firms with strong managerial processes perform significantly better on high-level metrics such as productivity, profitability, growth and longevity. In addition, the differences in the quality of those processes—and in performance—persist over time, suggesting competent management is not easy to replicate.”
Their analyses confirm the linkage is universal. The authors go further and state, “After all, if a firm can’t get the operational basics right, it doesn’t matter how brilliant its strategy is. Achieving managerial competence takes effort, though: It requires sizable investments in people and processes through good times and bad.” Tennessee proved it’s a viable strategy for government. In 2020 the state ranked No. 10 on the Forbes Best Employers list.
Unfortunately, similar studies have not been undertaken in government. However, there is no reason to think proven management practices would not raise performance levels. Setting personal goals, for example, stimulates better results in virtually any setting. Gallup studies also focus on managers and their interpersonal effectiveness. Their studies confirm managers are the key to improved performance.
The “Professions Model”
Perry’s column recommended modifying Title 5 to provide for “occupation-specific, market-sensitive” pay systems. Although he did not say it, his description summarized the way salaries are managed in other sectors. It’s also more or less consistent with the way pay has long been managed for teachers and law enforcement, and more recently for technology specialists. Separate pay systems are also widely used in healthcare for physicians, nurses and several other medical care specialties.
It’s not what he had in mind but special rates are authorized in the “Special Rates” section (5 CFR § 530.305). Today there are a staggering number of special rates authorized across the country. It’s out of control and is solid evidence the GS system is broken.
He focused on what had been referred to as the “professions model” that is used in a few other countries, particularly Australia which has a history of trying innovative HR policies. In countries that have adopted the model, the professions (or communities) have a “head of profession,” create communities of practice, participate in recruiting, identify essential competencies and plan development programs.
The community leaders would be in the best position to decide how performance should be managed. That would assure their commitment to making it successful.
Perry’s primary recommendation was in his title—pay reform should be the highest priority. That’s not new of course. Similar recommendations have been made countless times going back decades.
This time could be different. President Biden’s commitment and legislative support would be important. That supposedly was true when the Federal Employee Pay Comparability Act was enacted but succeeding presidents have consistently rejected the recommendations of the Salary Council and the Pay Agent. The new statute’s language should make that rare in the future.
Initiating pay reform would not supplant the president’s aspirational goals. In 1990, Connie Newman, then director of the Office of Personnel Management, formed a group of stakeholder representatives, including union leaders, that met regularly to discuss the policy issues. Feedback was secured from agencies and employee groups. A smaller task force addressed the planning. Today a similar strategy would be needed to build a consensus understanding of the problems and evaluate proposed reforms.
Rethinking Recognition and Reward Practices
To reiterate Perry’s recommendation, “design rewards and incentives to reinforce a public service culture.” It's important to understand that Perry has been a frequent critic of pay for performance in government.
But he understands how important it is to recognize individual and team achievements. That may be the most glaring void in federal workforce policies. Cash awards provide a focus. Employees enjoy celebrating successes. Downplaying the attention to poor performers would also help. The Office of Personnel Management should create a center of excellence to promote high performance practices.
For more insight on this topic, on February 10 Government Executive will publish a new ebook, The Case for Investing in Federal Employees.