[Senate Hearing 106-351]
[From the U.S. Government Publishing Office]


                                                        S. Hrg. 106-351


 
  TOTAL QUALITY MANAGEMENT: STATE SUCCESS STORIES AS A MODEL FOR THE 
                           FEDERAL GOVERNMENT

=======================================================================


                                HEARING

                               before the

                  OVERSIGHT OF GOVERNMENT MANAGEMENT,
        RESTRUCTURING AND THE DISTRICT OF COLUMBIA SUBCOMMITTEE

                                 of the

                              COMMITTEE ON
                          GOVERNMENTAL AFFAIRS
                          UNITED STATES SENATE

                       ONE HUNDRED SIXTH CONGRESS

                             FIRST SESSION


                               __________

                             JULY 29, 1999

                               __________

      Printed for the use of the Committee on Governmental Affairs


                                


                      U.S. GOVERNMENT PRINTING OFFICE
 61-666 cc                   WASHINGTON : 2000
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                   COMMITTEE ON GOVERNMENTAL AFFAIRS

                   FRED THOMPSON, Tennessee, Chairman
WILLIAM V. ROTH, Jr., Delaware       JOSEPH I. LIEBERMAN, Connecticut
TED STEVENS, Alaska                  CARL LEVIN, Michigan
SUSAN M. COLLINS, Maine              DANIEL K. AKAKA, Hawaii
GEORGE V. VOINOVICH, Ohio            RICHARD J. DURBIN, Illinois
PETE V. DOMENICI, New Mexico         ROBERT G. TORRICELLI, New Jersey
THAD COCHRAN, Mississippi            MAX CLELAND, Georgia
ARLEN SPECTER, Pennsylvania          JOHN EDWARDS, North Carolina
JUDD GREGG, New Hampshire
             Hannah S. Sistare, Staff Director and Counsel
      Joyce A. Rechtschaffen, Minority Staff Director and Counsel
                  Darla D. Cassell, Administrive Clerk

                                 ------                                

SUBCOMMITTEE ON OVERSIGHT OF GOVERNMENT MANAGEMENT, RESTRUCTURING, AND 
                        THE DISTRICT OF COLUMBIA

                  GEORGE V. VOINOVICH, Ohio, Chairman
WILLIAM V. ROTH, Jr., Delaware       RICHARD J. DURBIN, Illinois
JUDD GREGG, New Hampshire            ROBERT G. TORRICELLI, New Jersey
                  Kristine I. Simmons, Staff Director
   Marianne Clifford Upton, Minority Staff Director and Chief Counsel
                     Julie L. Vincent, Chief Clerk



                            C O N T E N T S

                                 ------                                
Opening statements:
                                                                   Page
    Senator Voinovich............................................     1

                               WITNESSES
                        Thursday, July 29, 1999

Steve Wall, Executive Director, Ohio Office of Quality Services..     4
Teresa Shotwell-Haddix, Union Quality Coordinator, Ohio 
  Department of Transportation...................................     6

                     Alphabetical List of Witnesses

Shotwell-Haddix, Teresa:
    Testimony....................................................     6
    Combined prepared statement..................................    15
Wall, Steve:
    Testimony....................................................     4
    Combined prepared statement..................................    15

                                APPENDIX

J. Christopher Mihm, Associate Director, Federal Management and 
  Workforce Issues, General Government Division, prepared 
  statement and responses to questions from Senator Voinovich 
  submitted by J. Christopher Mihm...............................    32
Deidre A. Lee, Acting Deputy Director for Management, Office of 
  Management and Budget, prepared statement and responses to 
  questions from Senator Voinovich submitted by Deidre A. Lee....    51


                       TOTAL QUALITY MANAGEMENT:
                    STATE SUCCESS STORIES AS A MODEL
                       FOR THE FEDERAL GOVERNMENT

                              ----------                              


                        THURSDAY, JULY 29, 1999

                                     U.S. Senate,  
       Oversight of Government Management, Restructuring,  
                 and the District of Columbia Subcommittee,
                        of the Committee on Governmental Affairs,  
                                                    Washington, DC.
    The Subcommittee met, pursuant to notice, at 10:20 a.m., in 
room SD-342, Dirksen Senate Office Building, Hon. George V. 
Voinovich, Chairman of the Subcommittee, presiding.
    Present: Senators Voinovich and Durbin.

             OPENING STATEMENT OF SENATOR VOINOVICH

    Senator Voinovich. Good morning. The hearing will please 
come to order.
    As has been the tradition here, we ask our witnesses to be 
sworn in. If you will stand: Do you swear that the testimony 
you are about to give this Subcommittee is the truth, the whole 
truth, and nothing but the truth?
    Mr. Wall. I do.
    Ms. Shotwell-Haddix. I do.
    Senator Voinovich. Thank you very much.
    I thought that for the record, because of the stacked vote 
this morning and that we are not going to be able to have 
people here from GAO and the Office of Management and Budget, 
although we are going to have them in at another time, that I 
would try to put this hearing into perspective for them and the 
other Members of the Subcommittee in the hope that they might 
have an opportunity to review the record.
    Today the Subcommittee on Oversight of Government 
Management, Restructuring, and the District of Columbia holds 
its first in a series of management oversight hearings. But 
before I describe today's meeting, I would like to take this 
opportunity to describe why I am going to be holding these 
hearings and what we hope to accomplish.
    Common sense tells us that good management is the key to 
productive workers and, in our case, successful government. I 
am interested in improving the work environment and culture not 
of political appointees who come and go every few years with 
the change in administrations, but of the career civil servants 
and middle managers who I believe do most of the heavy lifting 
and receive little acclaim for their hard work. I call these 
dedicated men and women ``the A Team.''
    Through my work as Chairman of the Subcommittee, I am going 
to do all I can to help create an environment where those 
dedicated public servants can maximize the talents God has 
given them so that their jobs will become more meaningful and 
they will be better able to respond to the needs of their 
customers, the citizens of the United States of America.
    So in the coming months, during the fall and into the 
second session of Congress, we will be examining Total Quality 
Management and its implication at the Federal level: The 
benefits of labor-management partnerships; career training for 
Federal employees to maintain their skills and productivity; 
and the effectiveness of incentive programs that encourage 
employees to be innovative, take risks, and reward them for a 
job well done; and, last, how the Results Act and its emphasis 
on performance is affecting the day-to-day activities of 
Federal employees.
    Regarding that last point, I am particularly concerned that 
the formulation of strategic and performance goals may be 
wasted, paper-pushing exercises if it fails to include the 
perspectives of line employees and middle managers who really 
know the programs and know how to make government work better. 
In other words, the Results Act sets goals, and the question 
is: Are they achieving those goals? And I do not believe, 
unless your people are involved, your A Team, in terms of 
consensus management, and quality management, that you are 
never going to achieve those goals.
    During and after these hearings, we will determine if there 
are additional legislative or administrative changes that can 
enhance the work environment of Federal employees by empowering 
employees and re-engineering work processes. I think that 
probably sounds familiar to Teresa and Steve.
    Having described the Subcommittee agenda, I would now turn 
to this morning's hearing, which we titled ``Total Quality 
Management: State Success Stories as a Model for the Federal 
Government.'' I think that title does well in describing our 
approach to this hearing.
    To begin with, as a former governor and firm believer in 
federalism, I know there is a great deal that the Federal 
Government can learn from States, and today the Subcommittee 
will be focusing on what the Federal Government can learn in 
the area of management, specifically Total Quality Management, 
or TQM. Representatives from the State of Ohio will share with 
us their experiences in adopting and implementing a TQM program 
which in Ohio we call Quality Services through Partnership, or 
QStP, and the essential role that is played in the reinvention 
of State Government.
    We will also discuss how TQM is different from the 
Government Performance and Results Act and how the two 
complement each other. In the future, we will hear from the 
General Accounting Office and the Office of Management and 
Budget in terms of their perspective on Total Quality 
Management and whether or not there are any Federal agencies 
involved in the process.
    Now, TQM means different things to different people. I 
would not be surprised if each of the four witnesses before us 
maybe had a different definition of TQM. Here is how I define 
it: A system that focuses on internal and external customers; 
establishes an environment which facilitates team building, 
employee contribution and responsibility, risk taking, and 
innovation; analyzes work processes and systems; and 
institutionalizes a goal of continuous improvement.
    For TQM to be successful, several important elements must 
be present, including management-union partnerships--and I 
would hope that the witnesses today emphasize how important 
that is--effective employee training, modern personnel 
policies, and an established system to measure program 
outcomes.
    The last point, of course, is a core characteristic of the 
Results Act. I find it odd that although there is currently a 
government-wide requirement for strategic planning and 
performance-based goals, there is no government quality 
management program to help achieve these goals. Even with the 
best strategic plans, poor management practices will hinder 
achievement of long-term goals. Conversely, even with effective 
management on a day-to-day basis, without long-term objectives 
little will be accomplished. And that is why I believe that we 
must have in place at the Federal level both a strategic 
framework, which is provided by the Results Act, and a Total 
Quality Management framework, which will enable the government 
to use the Results Act to its full potential.
    I believe that if the Federal Government were to adopt a 
TQM program, it would do for the Federal Government what it has 
done for Ohio. Federal workers would feel empowered. They would 
experience greater employee satisfaction, and they would 
deliver a better product to the Nation's taxpayers.
    The improvements to which a quality management program in 
conjunction with the Results Act could lead would go a long way 
in restoring some of the confidence, the faith, and the trust 
of the American people in Washington. I think that many of us 
know, for some reason, people who work for government are kind 
of held in low esteem. I have found from my experience that 
people in government are some of the hardest-working people 
that I have ever met, and with the proper environment they can 
surpass anybody that I have seen in the private sector.
    So today we are very fortunate to have two individuals that 
have experienced a TQM program in the State of Ohio. They are 
Steve Wall, who is the Executive Director of the Office of 
Quality Services, and Teresa Shotwell-Haddix, who is the union 
quality coordinator for the Ohio Department of Transportation.
    We thank you both for coming here this morning. Again, I 
apologize for the way things work around here.
    Mr. Wall and Ms. Shotwell-Haddix will discuss Ohio's 
Quality Services through Partnership program, how it was 
implemented, where it has been successful, what mistakes were 
made, what was learned from them, and we would like them to 
emphasize why QStP has been so important to the reinvention of 
State Government.
    Ms. Shotwell-Haddix, you might be interested to know that I 
have been distributing copies, as I mentioned to you earlier, 
of the Transcript newsletter from the Ohio Department of 
Transportation to a lot of people here in Washington because I 
really think that that newsletter is the best way for people to 
comprehend what quality management is about. I sent it to the 
presidents of the two top Federal labor unions, and we are 
going to get it out to as many people as possible. Because when 
you start talking about quality management, unless you have 
some real examples of what it is about and how it works, I 
think it is difficult to really comprehend what it can mean. 
And that issue of Transcript, I can't tell you how excited I 
was when I read it because I realized that, wow, this is 
working and it is making a difference.
    When you work on something a long time, it is nice to read 
something and say, it is making a difference, it is happening, 
because so often in government we get involved with these 
things, and at the end you wonder whether or not they are 
making any difference. And that is the difference also with 
being in the Senate. You are so far removed from things that 
you wonder if it ever really does make a difference. You are a 
little closer on the State level.
    So we are glad to have you here today. Steve, we will start 
off with you, and I expect Senator Durbin will be coming in. He 
is waiting to make the third vote. When he is finished, he is 
going to come over, hopefully, and take over and then I will 
vote and then come back. And hopefully he will have an 
opportunity to get a sense of what TQM is about. So, Steve, we 
are glad to have you here and look forward to hearing from you.

TESTIMONY OF STEVE WALL,\1\ EXECUTIVE DIRECTOR, OHIO OFFICE OF 
                        QUALITY SERVICES

    Mr. Wall. Thank you, Senator. We certainly appreciate the 
invitation. We have agreed that we will kick each other if we 
accidentally refer to you as Governor Voinovich instead of 
Senator Voinovich. That is a hard thing for us to do. But we 
certainly bring greetings from everyone who appreciates all the 
work you put into getting Quality Services through Partnership 
started in Ohio.
---------------------------------------------------------------------------
    \1\ The prepared statement of Mr. Wall and Ms. Shotwell-Haddix 
appears in the Appendix on page 15.
---------------------------------------------------------------------------
    Our mission goes very much with what you were saying. Our 
mission is to bring out the best in State employees and to 
deliver the best to customers, and that really is the two 
things that you talked about. You also mentioned TQM and what 
is in a name. In a way, it is almost a shame that there has to 
be a name for it at all. We really want to talk about it as 
much as possible. Simply, what are the world-class best 
practices out there that allow you to serve your customers 
better?
    And I think we learned something from the manufacturers in 
the private sector. One of the things they said that you have 
to kind of think about a second is that any system you have is 
perfectly designed to give you exactly what you are getting. It 
sounds so simple. But if what you are getting is long lines and 
complexity and busy signals and unhappy workers and 
inefficiencies, you really need to take a look at fixing the 
system, not fixing the blame. Too often I think that is what we 
have done, is taken a look at who is responsible rather than 
how can we make this work better.
    A couple of the things that I think are important about 
QStP is that we rely heavily on measurement. It is not about 
guesswork. And I think sometimes in the public sector we almost 
make the excuse that we cannot measure things because we don't 
make widgets.
    The fact is there are many things we can measure. There are 
things that the customers want from us. We can measure how much 
time it takes to respond to customers' needs. We can measures 
the steps we have reduced, the errors we don't make any more, 
the rework that is not costing us all kinds of money, how much 
money we save, and our customer satisfaction.
    One of the key things of this is to recognize, as you have 
said many times, that the people who know the work best are the 
people to do it. And if we are going to fix the system, we have 
to have those people involved in it. And that is where teamwork 
comes in, in that you have to fix the whole system and get all 
the people involved to do that.
    One of the key things is our union-management partnership 
you referred to. We have had a lot of successes. To be brief, 
we have saved over $100 million in your administration alone, 
and that number is climbing. We have trained 54,000 State 
employees; 91 percent of the current workforce has the basic 
tools they need and skills they need to improve things. We have 
a network of over 2,500 facilitators who are available to go to 
other departments to help their process improvement teams move 
forward.
    It is kind of interesting to note that at this point we 
have over 3,000 formal process improvement teams and thousands 
of informal ones. And just from formal process improvement 
teams, we have been implementing them at the rate of three a 
day for 3 years now, and we have been implementing two and a 
half solutions a day for 3 years now. So it is pretty amazing 
how it has really grown and come together for us.
    I think that Teri's position itself speaks a little bit 
about our unique union-management partnership. We have a 
statewide steering committee that is 50 percent union and 50 
percent management, and they are part of the decision-making 
process. We also have regional committees that have the same 
make-up, and we work together. Teri is actually a union 
employee who has been hired by the Department of Transportation 
in their Office of Quality shop, so the union has made, I 
think, a remarkable commitment to move the quality program 
forward. So that is kind of an exciting possibility.
    I want to give you in just a couple of minutes three quick 
issues, and I will do that very fast. I already went through 
most of the results, but I want to say that it isn't just the 
results that you see on paper. It is frequently how this means 
to people's lives, which is just amazing.
    I think we have made some mistakes initially, and I want to 
talk about those real quick, and then end up with the people 
part of it.
    When we began, we were all anxious to go, we were ready to 
move forward, we got going, and a half-year later we turned 
around and took a look at it and realized we hadn't involved 
the union properly. We really had thought that partnership 
meant let's get this going and tell them what we are going to 
do and ask them to help versus let's work with them to figure 
out how we make this work. And we had to stop and start over 
again with the union involvement to really move forward.
    I think another thing we did was we probably got too 
excited about just getting everybody trained and didn't really 
think about the fact that we had to have people using that 
training once they got out of it. So we had all kinds of 
activity going on, but not very many results.
    Finally, I think one of the mistakes we made was that we 
got top management support, and we got the union and rank-and-
file support, but we kind of neglected the mid-level managers 
who you referred to as a very important part of the A Team.
    I guess what is really exciting about this for me, though, 
isn't so much the money that we save, but it really is the 
effect on people's lives. It almost gets emotional at times 
when you go to one of our efforts like Team Up Ohio, where we 
had 5,000 people last year go through and see 250 teams and the 
changes they made. And here was this convention center full of 
excited State workers who couldn't wait to tell the story of 
how they had served the public better and how much better their 
jobs were.
    Senator Voinovich. There were 5,000?
    Mr. Wall. Yes, 5,000 people attended the last one.
    I remember one lady who stood up and said that she has 
hated her job for 25 years, but on Thursdays from 3:00 to 4:30 
when her team meets and she gets to think and serve the 
customers better and use these skills, she loves her job. And 
her question was: Why can't it be like that 40 hours a week? 
And I think that is a pretty good question, actually.
    I think I will wrap it up with my favorite cartoon which 
comes from the New Yorker Magazine. There are two dogs walking 
down the road together, and one dog turns to the other and 
says, ``It is always sit, stay, and heel. Never think, 
innovate, and be yourself.'' And I really think that kind of 
sums up for us what the benefits of QStP are.
    Senator Voinovich. Thank you, Mr. Wall. Ms. Shotwell-
Haddix.

    TERESA SHOTWELL-HADDIX, UNION QUALITY COORDINATOR, OHIO 
                  DEPARTMENT OF TRANSPORTATION

    Ms. Shotwell-Haddix. Well, I just want to stress how 
important it has been that the union has been an integral part 
of the initiative in Ohio. It is very enlightening to me as I 
go around the State and I see some of the things that are 
happening.
    One of the most important reasons that I believe that we 
have been so successful is that we are actually asking people, 
how is it that you would improve this process.
    I was telling Steve yesterday--I would like to, rather than 
keep going on about how we did this, I would like to give you a 
perfect example of what I am talking about. I have been with 
the Department of Transportation for about 15 years, and many 
years ago, prior to the institution of QStP, I worked in a 
county garage where we plowed snow in the wintertime. No one 
had ever talked to the people that plowed snow about what are 
the best ways to do this. And constantly you would get 
decisions, well, we are going to use this ratio of salt and we 
are going to use this kind of trucks, and nobody asked the 
employees who were out there sometimes 16 hours a time plowing 
snow what is the best way to do this.
    I was telling Steve that we had a particularly bad storm 
one time, and we were going by the new directive we had just 
gotten a month before on how to plow snow. And we were losing 
the roads. So after the supervisors left at midnight and we 
were just left with our lead worker, we kind of improvised and 
did it the way we knew would work. And within 3 to 4 hours, our 
county, our roads were 10 times better than the neighboring 
counties. And when they came in the next day, they wanted to 
know why. They said, ``Because we did it the way we knew it 
would work.''
    Now, that doesn't happen anymore. They ask the employees, 
they ask the highway workers: What is the best way to do this? 
What kind of equipment do you need? And these are the things 
that are actually causing us to provide so much better services 
because people are using words like customer. It used to be--
well, we are doing it that way because my boss said that is the 
way he wants me to do it. Now when you ask somebody why are you 
doing it that way--because that is what our customer needs. 
That is the best way to serve the taxpayers. And to me, that is 
what it is all about.
    Senator Voinovich. Teresa, could you tell me about how it 
was organized in the Department of Transportation, the Quality 
Service through Partnership? Have you been with it from the 
beginning?
    Ms. Shotwell-Haddix. Yes, I have, and actually I am very 
proud of what ODOT did. Like the other agencies, we have a 
steering committee which is half management and half union. But 
ODOT took it one step further. They wanted to actually have 
somebody on board full-time that would--like a consultant, if 
you will, on the union's perspective on how the initiative was 
affecting the bargaining unit, and someone in the bargaining 
unit who could talk to the union people about management's 
initiative.
    Senator Voinovich. I would like to recess because I have to 
leave and go vote. Hopefully by that time Senator Durbin will 
come back, and I would love to have him hear you talk about 
this so he can get a little flavor of it. OK?
    Ms. Shotwell-Haddix. Great.
    Senator Voinovich. We will recess the hearing for 10 
minutes.
    [Recess.]
    Senator Voinovich. We will resume our hearing.
    You were talking about union participation and getting QStP 
started. Do you want to refresh my memory on what you had to 
say?
    Ms. Shotwell-Haddix. We were talking about how in ODOT what 
we had done was they actually took it a step farther, and they 
created the position of union quality coordinator, which I was 
fortunate enough to be selected for that position, and my job 
duties are to consult with the union and with management and 
make sure that when management is discussing an issue that they 
have the union perspective, how this will affect the bargaining 
unit people.
    And I go to the union and I talk about different things 
because I am included in most of the upper-level meetings, and 
I know what is going on, and it just gives the partnership a 
real true--it isn't just we are going to say we are partners 
just to say it and it sounds pretty. We truly are.
    I go out in the districts, and I talk to people on teams. 
If there is a problem, say, in the Cleveland area or the 
Cincinnati area, they send me down there, and I sit down with 
the union people and with the management people, and we make 
sure that we maintain that partnership and that we are always 
working together to make the best possible services that we 
can. And you cannot just give that talk. You have to actually 
do it because the people that--the front-line workers, they 
aren't silly. They know that you can say, oh, yes, come be my 
partner, come be my partner. But if you are rolling out your 
initiatives and you are changing the processes and then you are 
telling them--like Steve said earlier, you are telling them 
what you decided to do, they are not going to buy that and they 
are not going to participate in that very long.
    People will support what they have ownership over, and I 
have to tell you that in the Department of Transportation the 
front-line workers actually feel like they have ownership over 
their jobs, they have ownership in the results. So if a process 
fails, they take it personally because you cannot blame it on 
your manager any more. You can't say, well, yes, it is stupid 
but that is because they decided how to do this. We used to 
call Central Office ``the ivory tower.'' Those decisions were 
made up there, and if it fails, it fails. If it fails now, it 
is because we as front-line workers did not examine the process 
or collect the right kind of data. So it is very personal if it 
fails. So we want to do the best we possibly can, and I think 
it is wonderful.
    Mr. Wall. Teri has been very effective in a lot of those 
roles, too. She really has the credibility of the union to talk 
about this stuff. I was going to say that she actually put 
together a Team Up DOT this fall. How many teams did you have?
    Ms. Shotwell-Haddix. We had 70 teams. It was the first time 
we have ever done this.
    Mr. Wall. And the union basically organized Team Up DOT. It 
was quite a deal. It was theirs and it was wonderful.
    Senator Voinovich. So you had a separate Team Up Department 
of Transportation where 70 groups came in to talk about what 
they were doing in quality and how quality has improved their 
operation?
    Ms. Shotwell-Haddix. Yes. It was wonderful.
    Mr. Wall. Inside and outside the State Fair building. 
Outside the State Fair building were the people who had parked 
with pride their trucks that they had converted to do certain 
things and a cone trailer where they found a safer way to put 
cones on the highways to save time and money because the 
storage was there, and just on and on and on. It was really 
impressive.
    Senator Voinovich. So what has happened is that you have 
institutionalized it in the department. For the record, you 
went through the training?
    Ms. Shotwell-Haddix. Oh, yes.
    Senator Voinovich. And did you find it worthwhile?
    Ms. Shotwell-Haddix. Yes. I think the training was very 
important, not just because of the information that we received 
in the training, but because it was jointly conducted. It 
wasn't--a lot of times--and I have to be careful how I say 
this. We will have training as a government agency, as a State 
agency, and they will train the managers. This is all about 
this program, and then some time later they will bring the 
bargaining unit people in and then they will give them 
training.
    Well, when that happens, you typically get the suspicion, 
especially from the front-line worker, well, I wonder what it 
was that they gave them in that training that they are not 
going to tell us about and is there a hidden agenda here. And 
everyone got the training together. It was jointly conducted, 
and it made the whole process very open, and it lent itself to 
the people actually buying into it and trusting what they were 
being told because we are all doing this together. We are not 
doing it separately.
    Senator Voinovich. Unfortunately, I am going to have to 
wrap this up in about 5 minutes. But a big-picture question is: 
Where do you put Quality Services through Partnership? I have 
met with the union presidents here and am looking at some way 
of moving forward with quality management on the Federal level. 
The issue is: Where do you put it? Part of our problem is the 
Office of Management and Budget basically says they don't think 
that is their responsibility.
    Do you want to comment on that?
    Mr. Wall. Sure. We had the same question in Ohio trying to 
decide where we were going to put it, because we certainly did 
not want to link it directly to the Governor's office because 
we wanted this to be a way of doing business that transcended 
administrations. We also didn't want to link it at the time 
with the Department of Administrative Services because we 
wanted to separate collective bargaining, which is a whole 
different issue for union and management, from what we did.
    As I recall, the Xerox people, who kind of mentored us, 
said that what was critical was that it be in some kind of 
internal consultant's capacity where they had direct reporting 
to the CEO, which in our case was the Governor. And so we ended 
up with kind of a dotted line off the Office of Budget and 
Management for administrative purposes, but we made it a 
relatively autonomous organization that did report to the 
Governor.
    But as you will recall, I was actually hired by both union 
and managers, and so we also saw ourselves as representing the 
partnership.
    I am not really aware of what the Federal hierarchies are, 
but embedding it within a bureaucracy is also a concern for 
folks. The advice we followed was to use the internal 
consultant role, and I think that has worked very effectively 
for us. I am not sure how that applies in the Federal system.
    Senator Voinovich. You have gone through a transition, and 
how has that worked out?
    Mr. Wall. Yes. That actually was a real concern for us, 
obviously, and 2 years before the transition, as you know, we 
put together a transition plan on what we needed to do. We had 
three elements of it: Measuring, marketing, and then the group 
of people that were still going to be there needed to take 
ownership of it. And so we worked really hard to capture our 
results, to have a good results book, as I have in front of 
you, so people could see exactly what was going on, publicizing 
it over the Web, marketing it very carefully. And then we made 
sure that the private sector knew what we were doing and 
supported it, that the unions had ownership of it and bought 
it, and we worked really hard to get the mid-level managers to 
get involved in the whole thing as well.
    Fortunately, when Governor Taft took over, he heard very, 
very positive things from all those constituents, and he also 
saw the results, and interestingly enough, when it came time 
for him to do his education summit, he chose to have some of 
the QStP facilitators facilitate that and saw the value in it 
right away. And so I was sharing with you before, 2 weeks after 
his inauguration, he came to one of our quality forums and 
spent 2 hours there with us, saying QStP is here to stay and we 
want to move forward.
    The unions were very responsible for that, but being able 
to have the time to actually show value I think is what made it 
move forward.
    Senator Voinovich. The issue is, on the Federal level, 
where you put it.
    Mr. Wall. Yes, I would like to give that some more thought 
and talk to you about that.
    Senator Voinovich. Maybe in several days we can talk about 
that. One of the things that I think really is important here 
is that the unions do get excited about it. As I said, I have 
met with the presidents of both of the major unions, and they 
seem to understand it. And there is a frustration right now, as 
we had in State Government, that the A Team just isn't 
participating. It is interesting that there is little money for 
training. That is another thing that we are going to have 
hearings on. Maybe you could just comment about how important 
the money is that we put into the budget for training and 
skills improvement for your union members.
    Ms. Shotwell-Haddix. Well, I think it is critically 
important because, I mean, the training is kind of the 
foundation for everything. But I have to tell you, as far as 
training dollars go, even the union now--we have realized this 
is something that is worth investing time and money in. The 
union is now actually separate and apart from the money that we 
have that we can get from the State. They are offering training 
on quality and facilitating, and they are actually using part 
of our union money to do this kind of training because it is 
that important.
    Senator Voinovich. My recollection was that in the last 
collective bargaining bill or the one before it, there was a 
lot of discussion about training and it was very important. I 
think, wasn't it, that you gave up some of your wage increase 
if the State would come in with----
    Ms. Shotwell-Haddix. Yes, we gave up--it goes up each year 
of the contract. It started out at a nickel an hour, the 
Workforce Development Fund. It is hugely successful. I just 
can't speak enough about it. As a matter of fact, just coming 
up in September, they are taking money from Workforce 
Development and we are having the second High Performance 
Workplace Conference. And we bring in managers and union 
leadership, and we talk about a lot of these issues, and we 
have people coming in from all over the country to give us 
their expert advice and share success stories. So the education 
has just been very, very key.
    Senator Voinovich. Approximately how much money is 
available to each employee, do you know?
    Ms. Shotwell-Haddix. Oh, yes, I do, because I am very proud 
of that. We just had a change. It started out we were allowed 
$1,000 a year for an employee to take training outside of what 
you can get on the State. Now every employee, every bargaining 
unit employee, is entitled to get $2,500 a year to take any 
type of college courses. We are offered $1,000 a year to take 
career enhancement, anything that relates--like if you are in 
an area where you have to maintain a certification--I don't 
know if I am explaining it right--and you need continuing 
education credits, you can take $1,000 for that, and then it is 
$1,500 a year for any kind of computer training, and then on 
top of that, they take money and do these massive things like 
the High Performance Workplace Conference, or you can get a 
grant in your agency. You can apply to Workforce Development. 
Say we are going to do something with the High Performance 
Workplace and we want to bring in someone to an agency to train 
a specific amount of people, as long as the training is jointly 
developed by the union and management, you can tap into 
Workforce Development and get grants for $40,000 or $50,000 at 
a time out of this fund.
    Senator Voinovich. So there are three options, then. One is 
$1,000 if you just want to enhance your skills for your job.
    Ms. Shotwell-Haddix. Right.
    Senator Voinovich. And $1,500 is for computer training so 
that you can get computer literate. And the last thing would be 
if you are taking college courses, they will go up to $2,500 
toward college credit courses.
    Ms. Shotwell-Haddix. Yes. So, conceivably, if you use all 
three, you would get $4,800 a year, is what it maxes out. I 
think one of them might have gone up to $1,300. And that is in 
addition to what I just said, the other things that they do 
jointly that they also take out of that same money.
    Senator Voinovich. And that means a great deal, doesn't it?
    Ms. Shotwell-Haddix. It is a benefit that people are very 
excited about and it means a lot to the individuals.
    Senator Voinovich. One other thing, and I will finish on 
this note. I would like the answer to this question. So often 
we hear people say, ah, you don't want to spend the money on 
training your people because you will train them and then they 
will leave you. I would like you to respond to that, if you 
would.
    Ms. Shotwell-Haddix. Well, I have to tell you that--there 
are two ways that we look at that. When you train people, you 
want the best possible workforce that you have. But the other 
thing is--and this isn't something that--how can I explain it? 
We have people--obviously, with downsizing, we are doing more 
with less. And we have actually made it possible through 
education whereas the jobs change and they evolve, the people 
have the education to where they can go up within the 
department as opposed to we no longer need this set of workers 
and so I am sorry, but we are going to have to lay you off. 
Because of the education available, we have already got people 
in the workforce that can move into these changing positions as 
opposed to bringing somebody else in and having to train them 
and letting this group of people go. So it actually is very--it 
is the opposite. It is increasing the job security and your 
sense of belonging to the department.
    Senator Voinovich. I really thank you for your testimony 
today, and as I said, it is going to be a while before we get 
through with this. Perhaps down the road, maybe I could----
    Mr. Wall. If we can help in any way, please call on us.
    Senator Voinovich. I could get back with you, and I would 
like very much if we could maybe get Federal union 
representation to come to Ohio and spend a day or two with you 
guys to see how you feel about it, because I really think if we 
are going to get this done on the Federal level, it is going to 
take our Federal unions saying this is something that we really 
want and get them involved in the process. We have got 17 
months left of this administration, and then we don't know what 
is coming. I doubt if anything will get done now, but hopefully 
if we do enough work and enough preparation, no matter who gets 
elected president the next time, maybe we would be in a 
position where we could lay something out for whoever it is and 
try and get them to buy into it. Because I know from being 
Governor that if the boss is not involved, it doesn't get done. 
And I think that one of the neatest things that I did as 
Governor was to get to know the union leaders in Ohio. I took 
my 3-day training with the union leaders. It is great when you 
are in the same room together and you get a chance to get to 
know each other and there is real commitment and openness.
    I think that what you folks have done with quality in Ohio 
may be the greatest legacy that I have had anything to do with 
in State Government, because it has really ignited our 
workforce. You just testified to what is happening, and it is 
continuing. It is not one of these deals where you get 
management in to look at things, decide you have got to do 
eight things, and then it is over with. But this is continuing, 
teams are being built, programs are being improved, and the 
thing that is exciting is that it is coming from you guys. The 
unions are the ones that are coming forward and saying we have 
got an idea.
    We had a golf course that the private sector had botched 
up, and the union came in and said we think we can do a better 
job than they did. Before you give it to another private 
outfit, give us a shot at it. They got it, and they have turned 
it around.
    Mr. Wall. It made $210,000 more for the State coffers than 
the private company paid for doing it as well. So it is reverse 
privatization that paid off.
    Ms. Shotwell-Haddix. I have to tell you I was really 
concerned when our administration changed in Ohio what was 
going to happen. And I was so grateful that things were so in 
place when we got the new Governor that it was very difficult 
for them not to continue with this.
    But I have to tell you at this point, with the union 
employees, they are so empowered and feeling so--they own those 
jobs, and they are so proud of them. I think anybody that would 
come into the State of Ohio today and try to take that 
ownership back from those people would have one heck of a fight 
on their hands.
    Senator Voinovich. Well, as one private sector person told 
me from Cincinnati who instituted quality about 10 years ago, 
he said that the genie is out of the box.
    Ms. Shotwell-Haddix. That is exactly right.
    Mr. Wall. Can't put it back in.
    Senator Voinovich. Well, listen, thank you so much for 
coming today, I want you to know that I appreciate your time, 
and we are going to do what we can to see if we can't get this 
on the Federal level. Thank you.
    We will include in the record the statements of Mr. Mihm of 
GAO and Ms. Lee of the Office of Management and Budget.\1\
---------------------------------------------------------------------------
    \1\ The prepared statements of Mr. Mihm and Ms. Lee with responses 
to questions appears in the Appendix on pages 32 and 51 respectively.
---------------------------------------------------------------------------
    [Whereupon, at 11:15 a.m., the Subcommittee was adjourned.]



                            A P P E N D I X

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