OPM’s challenge of creating a high-performance culture

A Dec. 8 memo from Office of Personnel Management Director Kupor listing the “Management Opportunities Going Forward” states  “Creating a high-performance culture across government” is the agency’s leading challenge.

The memo was a response to the report from OPM’s Office of the Inspector General, “Top Management Challenges for Fiscal Year 2026.” The report caps the reports over decades critiquing OPM and the practices included in “Strategic Human Resource Management.” The Government Accountability Office stated in its 2025 High Risk report that “Heightened Attention [to workforce management] Could Save Billions More and Improve Government Efficiency and Effectiveness.” (italics added)

The “challenges” focused on the internal problems OPM needs to address going forward. Those problems include functioning effectively with a reduced staff, administering federal benefit plans, modernizing its IT systems and the need to upgrade the federal HR systems. 

OPM has taken steps to change the management of performance – the Senior Executive Service was “overhauled,” performance standards were changed, there is the plan to “limit top ratings,” along with “meaningful bonuses and awards.” Additionally, OPM is implementing “one HR system” – Federal HR 2.0 – to consolidate workforce information. Director Kupor summarized the changes in a recent release to OPM team members, “Changes at OPM: Building a High Performance Culture.” 

The “nuts-and-bolts” changes are clearly important. However, missing from the recent releases are important discussions of the “softer” issues like leadership, behavioral change, capability building and psychological safety. There is also no reference to the obvious importance of new technology and the problems building employee capabilities using new IT systems. And perhaps most important is the problem unique to larger organizations – the cultural transformation from compliance to high performance.

For reasons embedded a century ago, the administration of government’s HR system has never been linked to agency performance. That was true in President Clinton’s "reinventing government” – despite the performance gains and the Hammer Awards - and through the years on Performance.gov. The new head of the General Services Administration reinforced that when he referred to his agency as “the engine room that makes the mission run.” 

McKinsey, however, a different perspective as discussed in their report, “Performance through people: Transforming human capital into competitive advantage.” Gallup agrees – when expectations are clear, feedback is frequent and accountability is real, organizations outperform peers. The investment pays off.

Related studies confirm the linkage of the HR practices associated with a “high-performance culture” and an organization’s success. It’s captured by comparisons of the lists of the best places to work and the lists of the best performing organizations. On the Fortune list of the best places to work, the top 10 are or are close to the most successful in their industries. 

To transition to a high-performance culture, government will need to understand the emerging issues now influencing performance. Research and experience in other sectors make it clear – workforce management is changing and agencies will need to understand and address the new issues, led by the COVID changes, the unplanned staff reductions and now by new IT systems. 

Understanding High Performance Organizations

Government cannot be a High Performance Organization since the phrase refers to organizations that perform better than their peers. Further, the HPO concept is a construct to facilitate understanding and discussion of what enables complex organizations to perform at high levels.

The research by the research/academic HPO Center shows that there is “a direct and positive relationship” between a list of 35 common characteristics, organized into five factors, and an organization’s performance. It’s significant that 28 of the 35 involve human behavior. Their analyses show the five factors are consistently linked across industry sectors and countries.

• HPO factor 1: Management Quality – “Managers in an HPO work with integrity and . . . show commitment, enthusiasm and respect. . . HPO managers coach and facilitate employees to achieve better results by being supportive, helping them, protecting them from outside interference and by being available to them.”
• HPO factor 2: Openness & Action Orientation – “In an HPO, management values the opinion of employees by frequently having dialogues with them and involving them in all important business and organizational processes. HPO management allows experiments . . . and seeing mistakes as an opportunity to learn.”
• HPO factor 3: Long-Term Orientation – “An HPO creates a safe and secure workplace by giving people a sense of safety and job security and by using dismissal as a last resort. They grow new management from their own ranks by encouraging staff to become leaders . . .”
• HPO factor 4: Continuous Improvement & Renewal – “It continuously simplifies, improves and aligns all its processes . . .  The organization also measures and reports everything that matters . . . People in an HPO feel a moral obligation to continuously strive for the best results.”
• HPO factor 5: Employee Quality – “An HPO makes sure it assembles a diverse and complementary workforce and recruits people with maximum flexibility . . . An HPO continuously works on the development of its workforce by training staff to be resilient and flexible, . . . inspiring them to improve their skills . . .”

The 28 characteristics may be “soft” (e.g., “Managers are confident and trusted by employees”) but they are universally understood and intuitively relevant to good performance. The factors capture a work environment that attracts talent and supports effective public service.

The research is consistent with the arguments supporting a related construct, “healthy organizations.” That was the focus of a NAPA report, “Strengthening Organizational Health and Performance in Government.”

McKinsey has also focused on “organizational health”. Its studies show healthy companies show three times the total shareholder return than less-healthy companies. It argues:

“US government agencies also stand to gain considerable benefits from boosting organizational health. Key focus areas for leaders could include instilling a focus on purpose among employees; creating a supportive work environment that encourages innovation, autonomy, and ownership; nurturing talent development and deployment; and motivating staff through recognition and career opportunities.

Further research is not needed – creating “healthy organizations” benefits organizations and their employees. On that point, public sector employees are no different than those working in other sectors.    

The barriers to realizing gains

Despite the recommendations over the years, government’s human capital framework has been immutable. In the era when it was conceived, employers expected employees to follow orders. That approach to management is still evident in all but a few state and local government “merit” systems as well.

There are exceptions, however – the long list of demonstration projects and “alternative personnel systems”. They confirm change is possible. The practices loosely aligned with HPOs can gain acceptance in government agencies. GAO is the most prominent. The agency has consistently led the Partnership’s list of the Best Places to Work for mid-size agencies.

The “system” barriers include the General Schedule and its administrative practices, the outdated approach to selecting and training new managers and the inability of the political leaders to agree on the need for reform. Through the years OPM was seen as a roadblock to change. It’s telling that, until recently, the need to improve agency performance was not addressed on OPM’s website.

An unrecognized barrier is the typical background of the individuals who run for election. Few have had successful careers managing or leading large organizations. In owner-managed businesses, the old top-down, “do-as-you’re-told” approach to management is still common. That approach, however, is never successful in government – or in any complex organization, especially in this era of dynamic change.           

Notably, Elon Musk epitomizes the top-down approach. He is reported to prefer to personally direct major decisions, move fast and override traditional organizational structures. His tough management style is offset by lucrative stock-related incentives for executives and employees.

Musk’s disdain for government regulation is documented. He was quoted in Politico, “DOGE is the wood chipper for bureaucracy.” The blanket staff reductions added new barriers. There have been reports of skill gaps, inadequate staffing, employee burnout and the loss of operational knowledge. Most important, Federal News Network has reported the job losses have “destroyed workforce morale” – “schedules are slipping” – “trust is . . .at an all-time low.”

The cancellation of the 2025 Federal Employee Viewpoint Survey makes it clear OPM is aware of the problems.

People remain the key to high performance

The unexpected staff reductions affect both those who lost their jobs as well as those who continue working. The latter often suffer from what is close to “survivor syndrome" when they feel a sense of guilt and disengagement having survived the traumatic termination of co-workers. Addressing the “aftershocks” is not damage control; it’s about rebuilding psychological safety and commitment. Cash incentives could help but not when employees have to “compete” for the awards.

Government’s heightened workforce problems are not unique. Research by Korn Ferry shows “Less than half, 48%, of employees trust their senior leaders . . .” 

Agencies would do well to conduct a similar survey or rely on Employee Resource Groups to understand how the staffing changes have impacted their commitment to their agency’s mission. Korn Ferry argues employers need “the trust of their employees to roll out massive strategies around AI and successfully execute [organizational changes] . . .” It goes beyond AI of course. 

Employees want to use their experience to solve local operational problems but only if they feel their ideas will be valued. The success of the demonstration projects confirms in the “right” work setting employees do not hesitate to commit to their unit’s success. But in the current work climate, significant gains – and the goal of a high-performance culture – are now “a bridge too far.” Consistent with the Korn Ferry point, the level of mutual distrust is a barrier to change. 

The heightened emphasis on AI is certainly justified. It can be a performance multiplier when used effectively to accelerate and improve decisions. It also can eliminate low value activities. It’s best seen as a tool to support manager-employee discussions, and raise performance expectations in goal setting. 

AI supports improved performance but employee “soft” skills – collaboration, communication, judgement, adaptability, etc. – explain why certain employees are high performers. Investing in training pays off. The essential soft skills depend on the mission (e.g., medical care, law enforcement) and the nature of the operating problems. Those skills also enhance manager coaching and mentoring.

The investment needed to improve performance is discussed in the ebook, “Preparing Managers for Tomorrow’s Government”. My co-author, Dr. Trish Holliday, was the Chief Learning Officer when Tennessee successfully completed reform.