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Using Human Capital to Drive Organizational Change
This summer, the IBM Center for the Business of Government released a study on the Government Accountability Office's (GAO) use of human capital to drive organizational transformation. The study outlines evolution of the GAO's mission, the challenges presented by the transformation, and the lessons learned. While all agencies have their unique histories, environments, and missions, the lessons the GAO learned in the process of its transformation can be informative to all agencies as they stand at the doorway to major change.
According to the IBM report, after years of mission change and with limited change to the organizational structure, when David Walker became the GAO's Comptroller General in 1998, "he found an organization with great people but with significant morale, credibility, and very real fiscal problems, an organization in need not of further evolution but of full-scale transformation." Among other issues, Walker recognized the value in using human capital to effect the transformation the GAO needed.
Lessons Learned
The IBM report points to five key lessons the GAO learned in its efforts to use human capital to drive major organizational change.
Lesson 1: Move Cautiously and Involve Staff in the Process
Any kind of change naturally causes concern for employees, and complete transformation can be entirely unsettling and demoralizing. To alleviate the concern as much as possible, employees must be involved in the process of developing and implementing change.
One way that the GAO has sought to involve employees is through the consolidation of disparate employee groups representing various interests (disabled or minority employees, for example) into one group that represents all employees, the Employee Advisory Council (EAC). The EAC was developed with an eye toward providing employees direct and consolidated input into decisions as the agency moves through its transformation.
The EAC has met with mixed reviews. The council does provide employees opportunity to have input, influence, and access in the process. At the same time, the EAC does not have veto power over issues with which it has real disagreement. The members of the EAC believe that the council has been successful in forging a communication channel that has reduced rumors and ensured no surprises for employees.
Lesson 2: Develop a Strong Strategic Workforce Plan
The GAO highlighted strategic human capital management as the centerpiece of any major organizational change. The strategic human capital plan is essentially a document that matches staffing needs and efforts with the organization's mission and strategic goals. In particular, the GAO's plan included:
Conducting staff needs assessments Taking full advantage of human capital flexibility granted by Congress Offering training to meet employee and organizational needs Creating programs to recruit the skills needed to meet the organization's mission and mandate Developing programs to improve retention.
Lesson 3: Build Smarter, Targeted Recruitment, Hiring and Retention Policies
As part of its transformation, the GAO focused on and improved the key functions of human capital management—recruiting, hiring, and retention. One area of concentration for the GAO was speeding the process for getting recruits hired. "Several of the younger staff interviewed for this report noted that the process of getting in the door at GAO was head and shoulders above that of other federal agencies to which they'd applied for jobs."
One key to the GAO's success in this area is an internship program that brings in students, generally graduate students nearing the end of their studies. Those interns who complete 400 hours of work and seem ready for a full-time job are given the opportunity to convert to full-time employment with the GAO. Once they convert, most employees then spend two years rotating among teams on a probationary employment basis, a process that many at the GAO credit with ensuring a good employer/employee fit.
GAO staff members also note that strong benefits, such as flex time and a student loan repayment, contribute to recruitment and retention success.
Lesson 4: Increase Investment in Manager Selection and Training
One of the real challenges the GAO identified as it engaged in transformation efforts was the need to improve management capability. Organizational leaders recognized that a more flexible system that offers more freedom also requires much stronger management capability. The GAO identified the need to ensure that managers are competent and objective and that systems for evaluating employee performance are fair. Furthermore, strong processes to manage employee appeals need to be in place.
The GAO uses its annual employee survey as one method to identify where it needs to make investments in manager development. That section of the survey addresses issues such as employee empowerment, trust, recognition, decisiveness, leading by example, and work life.
Lesson 5: Ensure a Fair, Unbiased, and Transparent System for Hearing Employee Appeals
A concern that is unique to government is that political pressure may be brought to bear on career staff to toe an administration line on various issues. As a result, organizational leaders who seek to develop a system that moves away from traditional civil service protections must be doubly concerned about ensuring mechanisms are in place to enable employee appeals.
GAO employees can grieve a variety of personnel-related decisions, including performance ratings, some kinds of suspensions, and official reprimands. The GAO's current administrative order identifies 22 exclusions, such as the content of GAO orders and policies and failure to receive a non-competitive promotion.
The GAO has a three-step procedure for hearing employee grievances.
Step 1: Employees are encouraged to discuss issues with supervisors and managers, and all parties are encouraged to resolve issues informally.
Step 2: If a grievance cannot be resolved through the procedure outlined in step one, it goes to the unit head, regional director, or other appropriate official. The official must provide his/her decision in writing.
Step 3: Finally, if the employee is not satisfied with the results of step two, the chief operating officer will review the grievance.
Additional Best Practices
The IBM report cites several additional organizational transformation best practices gleaned from its work in both the public and private sectors:
Centralize authority and accountability Actively involve customers in key design decisions Drive change through top-down transformations Reduce the administrative burden on human capital staff to free up time for strategic program planning Empower and enable employees and managers to take on administrative human capital functions Ensure that senior staff openly supports and champions changes Maintain open communications channels between management and staff.
For more information on how Pivotal Insight can help with human capital planning, visit us at www.pivotal-insight.com.
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