    [Senate Hearing 109-329]
    [From the U.S. Government Publishing Office]

                                                          S. Hrg. 109-329

       THE RIGHT PEOPLE? OVERSIGHT OF THE OFFICE OF PERSONNEL MANAGEMENT

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

                                    HEARING

                                   before the

                      OVERSIGHT OF GOVERNMENT MANAGEMENT,
                     THE FEDERAL WORKFORCE AND THE DISTRICT
                            OF COLUMBIA SUBCOMMITTEE

                                     of the

                                  COMMITTEE ON
                             HOMELAND SECURITY AND
                              GOVERNMENTAL AFFAIRS
                              UNITED STATES SENATE

                           ONE HUNDRED NINTH CONGRESS

                                 SECOND SESSION

                                   __________

                                 JUNE 27, 2006

                                   __________

           Printed for the use of the Committee on Homeland Security
                            and Governmental Affairs

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    29-507 PDF                  WASHINGTON : 2006
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            COMMITTEE ON HOMELAND SECURITY AND GOVERNMENTAL AFFAIRS

                       SUSAN M. COLLINS, Maine, Chairman
    TED STEVENS, Alaska                  JOSEPH I. LIEBERMAN, Connecticut
    GEORGE V. VOINOVICH, Ohio            CARL LEVIN, Michigan
    NORM COLEMAN, Minnesota              DANIEL K. AKAKA, Hawaii
    TOM COBURN, Oklahoma                 THOMAS R. CARPER, Delaware
    LINCOLN D. CHAFEE, Rhode Island      MARK DAYTON, Minnesota
    ROBERT F. BENNETT, Utah              FRANK LAUTENBERG, New Jersey
    PETE V. DOMENICI, New Mexico         MARK PRYOR, Arkansas
    JOHN W. WARNER, Virginia

               Michael D. Bopp, Staff Director and Chief Counsel
                 Michael L. Alexander, Minority Staff Director
                      Trina Driessnack Tyrer, Chief Clerk

       OVERSIGHT OF GOVERNMENT MANAGEMENT, THE FEDERAL WORKFORCE AND THE
                       DISTRICT OF COLUMBIA SUBCOMMITTEE

                      GEORGE V. VOINOVICH, Ohio, Chairman
    TED STEVENS, Alaska                  DANIEL K. AKAKA, Hawaii
    NORM COLEMAN, Minnesota              CARL LEVIN, Michigan
    TOM COBURN, Oklahoma                 THOMAS R. CARPER, Delaware
    LINCOLN D. CHAFEE, Rhode Island      MARK DAYTON, Minnesota
    ROBERT F. BENNETT, Utah              FRANK LAUTENBERG, New Jersey
    PETE V. DOMENICI, New Mexico         MARK PRYOR, Arkansas
    JOHN W. WARNER, Virginia

                       Andrew Richardson, Staff Director
                  Richard J. Kessler, Minority Staff Director
                Nanci E. Langley, Minority Deputy Staff Director
                          Emily Marthaler, Chief Clerk

                                C O N T E N T S

                                     ------
    Opening statements:
                                                                       Page
        Senator Voinovich............................................     1
        Senator Akaka................................................     3

                                   WITNESSES
                             Tuesday, June 27, 2006

    Hon. Linda M. Springer, Director, Office of Personnel Management.     4
    Hon. David M. Walker, Comptroller General, Government
      Accountability Office..........................................     8

                         Alphabetical List of Witnesses

    Springer, Hon. Linda M.:
        Testimony....................................................     4
        Prepared statement with attachments..........................    27
    Walker, Hon. David M.:
        Testimony....................................................     8
        Prepared statement...........................................    49

                                    APPENDIX

    Questions and answers submitted for the Record from:
        Ms. Springer.................................................    83
        Mr. Walker...................................................    92

       THE RIGHT PEOPLE? OVERSIGHT OF THE OFFICE OF PERSONNEL MANAGEMENT

                                  ----------

                             TUESDAY, JUNE 27, 2006

                                     U.S. Senate,
                    Oversight of Government Management,
                            the Federal Workforce and the
                         District of Columbia Subcommittee,
                        of the Committee on Homeland Security
                                      and Governmental Affairs,
                                                        Washington, DC.
        The Committee met, pursuant to notice, at 10:15 a.m., in
    room SD-342, Dirksen Senate Office Building, Hon. George V.
    Voinovich, Chairman of the Subcommittee, presiding.
        Present: Senators Voinovich and Akaka.

                OPENING STATEMENT OF CHAIRMAN VOINOVICH

        Chairman Voinovich. The hearing will please come to order.
    We are going to begin. Unfortunately, Mr. Walker is stuck in
    traffic and will be late, but, we are pleased that Ms. Springer
    is here today.
        This hearing is titled, ``The Right People? Oversight of
    the Office of Personnel Management.'' I called today's hearing
    to discuss GAO's management review of the Office of Personnel
    Management that has been underway for the past year. My
    colleagues, Senators Collins, Lieberman, Akaka, and I requested
    this review to assist the incoming Director, following the
    departure of Director Kay Coles James. GAO's work is important
    to assist Congress in evaluating the current status of OPM and
    find an answer to this key question: ``Is OPM positioned to be
    the Federal Government's agency of change for effective
    strategic human capital transformation?''
        People often ask me why I spend my time on Federal human
    capital management. I have to ask, what if the intelligence
    community did not have enough linguists fluent in languages
    critical to conducting the war on terror? Or, what if the
    Office of Personnel Management did not have enough
    investigators to conduct background investigations for agencies
    to grant employees security clearances? Or, what if the
    Veterans' Administration did not have enough nurses to provide
    care at our veterans' hospitals? Or, what if the Social
    Security Administration did not have enough administrative law
    judges to hear disability claim cases in a timely fashion?
        These are not hypothetical questions. These are real areas
    in which the Federal Government is lacking the right people
    with the right skills. OPM must be able to assist agencies to
    build the necessary workforce to accomplish these vital
    missions and others.
        The Office of Personnel Management is no different from the
    rest of the Federal Government. It is facing a retirement wave,
    a ``tsunami,'' as Director Springer has called it. In the next
    4 years, 46 percent of OPM's total workforce, and 66 percent of
    its Senior Executive Service, will be eligible to retire. In
    his written testimony, Comptroller General Walker gives the
    overall statistics for the Federal Government: That in the next
    4 years, 33 percent of the total workforce and 68 percent of
    the Senior Executive Service will be eligible to retire. This
    could be a debilitating loss of talent and institutional
    knowledge.
        As everyone here knows, in the previous 3 years, Congress
    has enacted more changes in the Civil Service Code than in the
    previous quarter of a century. I want to acknowledge Senator
    Akaka's effort in that regard. In every instance, OPM has been
    given a critical role in guiding agencies through the
    implementation process, whether through issuing regulations to
    guide agencies on use of category rating, approving requests
    for direct hire authority, certifying performance management
    systems for the Senior Executive Service, or working with the
    Department of Homeland Security and the Department of Defense
    to develop regulations for new personnel systems. OPM has been
    tasked with new responsibilities.
        In addition, OPM has maintained all its previous functions,
    such as administering the Federal Employee Health Benefits
    Program, processing all Federal employee retirements, and
    conducting the background investigations needed to process a
    security clearance.
        Furthermore, we in Congress continue to discuss whether
    additional Federal workforce reforms are necessary in order to
    ensure the Federal Government is a 21st Century employer of
    choice. It is no secret that I believe that additional reforms
    are necessary. I have introduced legislation, the Federal
    Workforce Performance Appraisal and Management Improvement Act,
    to improve Federal employees' performance appraisals and more
    closely tie pay levels to those appraisals. In fact, this
    Subcommittee will have a hearing on this legislation, as well
    as the bill introduced by Senator Akaka, this Thursday.
        Under our legislation, OPM has a key role to play in
    reviewing performance management systems. Comptroller General
    Walker's testimony is going to be imperative to help us
    understand whether OPM is prepared to lead the way.
        Ms. Springer, you have been in your position for just one
    year, a year tomorrow to be exact. I suspect you feel like you
    have been in it for 5 years. Since you assumed the position,
    you have made significant progress in positioning the agency to
    lead future reform. I was very much impressed by the new OPM
    strategic and operational plan. In addition, OPM has earned a
    ``green'' on the President's Management Agenda scorecard for
    strategic human capital management. It is vital that OPM be a
    model agency in order for it to successfully lead
    transformation throughout the Federal Government.
        I was with the President several weeks ago, and we were
    talking about Josh Bolton moving on to be Chief of Staff and my
    friend Rob Portman becoming the new OMB Director. I said, ``Mr.
    President, did you know that they have green in one area and
    all the rest of them are red?'' He said, ``What?'' I said,
    ``Yes. OMB has three areas that are red.'' My feeling is that,
    just as Ms. Springer's agency should be right on top and all
    green, so should the Office of Management and Budget. So the
    President says, ``We will see about that.''
        However, I think that, Ms. Springer, you know that we can
    always do better. I am sure that Mr. Walker will identify and
    make appropriate recommendations to do just that.
        I look forward to both of your testimonies and the honest
    discussion we will have here today on where OPM has been and
    where you would like to take it.
        I would now like to call on Senator Akaka for his opening
    statement. Senator Akaka.

                   OPENING STATEMENT OF SENATOR AKAKA

        Senator Akaka. Thank you very much, Mr. Chairman. I want to
    thank you for this hearing and for always looking to address
    problems that we will be facing in the future and holding
    hearings so that we can address them.
        I also want to commend the Director for her work during the
    past year, to come forward with the State of the Agency Report.
    It is impressive and I want to commend you for that.
        Although we, in Congress, understand that OPM is the focal
    point of human capital management, it is safe to say that the
    average taxpayer looks toward the Federal worker to run the
    government, and the American people need confidence in the
    ability of government to provide the services on which they
    depend. OPM needs the right people who understand how efforts
    to modernize the Civil Service could adversely impact agency
    performance and public confidence.
        Our goal today is to understand what resources OPM needs to
    fulfill its operational and managerial responsibilities, while
    safeguarding the rights, benefits, and protections of employees
    under a merit-based personnel system.
        Mr. Chairman, I want you to know that, unfortunately, I
    must leave at 10:30 to attend a classified briefing on the
    North Korea missile program, which may affect the State of
    Hawaii. Mr. Chairman, I want to make sure that the Comptroller
    General and the Director of OPM have time to deliver their
    statements before I leave. Therefore, I ask, Mr. Chairman, that
    my full statement be made a part of the record.
        Chairman Voinovich. Without objection.
        Senator Akaka. Thank you.
        [The prepared statement of Senator Akaka follows:]
                      PREPARED STATEMENT OF SENATOR AKAKA
        Thank you, Mr. Chairman. As you've noted, the oversight of the
    Office of Personnel Management (OPM) is the responsibility of this
    Subcommittee. I, too, welcome the opportunity to evaluate the ability
    of OPM to be the government's leader in personnel policy today and in
    the future with our two witnesses--OPM Director Springer and
    Comptroller General Walker--both of whom share our view that public
    service is an honorable profession.
        OPM has one of the most important roles in the Federal Government--
    administering and enforcing Federal Civil Service laws, rules, and
    regulations as well as aiding the Executive Branch in managing the
    Federal workforce. OPM also supports agencies in recruiting, retaining,
    training, and motivating the best and most effective workforce
    possible. If agencies do not have the personnel systems in place to
    have the right person, with the right skills, at the right place, at
    the right time, they cannot meet their goals.
        Although we in Congress understand that OPM is the focal point of
    human capital management, the taxpayer looks toward the Federal worker
    to run the government. And the American people need confidence in their
    government's ability to provide the services on which they depend--from
    protecting their private, personal data to providing quality health
    care to the Nation's veterans, and to provide them in a manner free
    from political pressures. That is why the rights and protections of
    Federal workers are so important. Unfortunately new personnel reforms
    being touted by the Administration for Federal workers, such as those
    being developed at the Departments of Defense and Homeland Security,
    have eroded employee morale. This can impact agency performance and
    undermine the public's trust in government. OPM needs the right people
    who understand how OPM's efforts to modernize the civil service could
    adversely impact agency performance and public confidence. Our goal
    today is to understand what resources OPM needs to fulfill its
    operational and managerial responsibilities, while safeguarding the
    rights, benefits, and protections of employees under a merit-based
    personnel system.
        Although Director Springer and I do not always agree on the
    direction of government, she knows I am appreciative of the enthusiasm
    and leadership she has brought to OPM. I am especially pleased with
    OPM's new advertising campaign showcasing Federal employment. However,
    no amount of advertising will erase the perception that it takes too
    long to get a Federal job, which is why OPM's resources must be devoted
    to attracting--retaining--training--and motivating a skilled and
    professional workforce. It's imperative that OPM eradicates the
    perception among young people that it's not worth their time to pursue
    working for the Federal Government.
        Making Federal employment more attractive to the next generation is
    an area where Chief Human Capital Officers (CHCO) and Human Resource
    Directors can help. OPM must continue to exercise its leadership in
    guiding this endeavor. The same holds true for pushing agencies to use
    existing flexibilities to hire talented individuals. Communication and
    collaboration between OPM and other Federal agencies must be
    strengthened, and it is my expectation that the CHCO Council will be an
    important link in OPM's strategy to improve communications among
    agencies.
        In my discussion of OPM's capacity to lead, the issue of retirement
    comes up, especially since nearly half--46 percent--of OPM's workforce
    will be eligible for retirement in about 4 years. The loss of
    experienced personnel, both at OPM and across the Federal Government,
    should concern us all. I commend OPM on working to develop a strategy
    to convince these seasoned employees to remain on the job longer. On
    the other hand, pursing programs that are not in the best interest of
    the Federal workforce will result in workers opting to retire. Employee
    morale is a critical feature in figuring our retirement numbers no
    matter whose retirement estimates we use.
        OPM must also increase its capacity to ensure that supervisors
    receive adequate training. Since the 1990s, supervisory training has
    been the responsibility of individual agencies which has resulted in
    inconsistent training. The Federal Managers Association notes that 60
    percent of its members will be retirement eligible in 5 years, and we
    must commit to nurturing new managers. Mandatory training programs,
    developed through guidance provided by OPM, will strengthen manager-
    employee relationships and increase communication.
        Mr. Chairman, we're looking for OPM to lead by example, which is
    why we asked GAO to identify specific management challenges that stand
    in the way of OPM capitalizing on its role. I want to thank you again
    for holding today's hearing which will serve as a roadmap for future
    discussions of OPM's capacity to lead.

        Senator Voinovich. If you will stand, I will swear you in.
    Do you swear that the testimony you are about to give this
    Subcommittee is the truth, the whole truth, and nothing but the
    truth, so help you, God?
        Ms. Springer. I do.
        Chairman Voinovich. We welcome you back. Usually, I would
    limit you to 5 minutes, but if you want to go for 7 minutes, we
    will let you do that.

      TESTIMONY OF HON. LINDA M. SPRINGER,\1\ DIRECTOR, OFFICE OF
                          PERSONNEL MANAGEMENT

        Ms. Springer. Thank you, Mr. Chairman, and thank you,
    Senator Akaka. As you mentioned, it is one year since I took
    the oath of office to become the eighth Director of the Office
    of Personnel Management. As you mentioned also, there are times
    when it seems a little longer than that, but for the most part,
    we have gotten a lot done in that year.
    ---------------------------------------------------------------------------
        \1\ The prepared statement of Ms. Springer with attachments appears
    in the Appendix on page 27.
    ---------------------------------------------------------------------------
        My objective at the time of assuming this office was to
    raise the agency's performance level. Clearly, the agency was
    coming off of a period, and a survey, that indicated that there
    were things that needed to be adjusted and fixed. Many of the
    Comptroller General's comments are founded on that 2004 survey.
    What I can report to you today, is that we have made
    demonstrable progress since that time, and we are beginning to
    realize the two goals that I have for OPM. One, is that we
    would achieve operational excellence and two, strategic
    creativity. So, what I want to talk to you today about,
    primarily, are the steps that we have taken since I came on
    board and what that is leading to in both of those areas.
        Obviously, at the very beginning, you have to look to
    leadership. Leadership is what is reflected through an
    organization, and so it starts at the very top. Sitting before
    you today is the senior leadership team of OPM. They have all
    come to demonstrate the fact that we are a team. Half of them
    are relatively new to their positions over this past year, both
    internal promotions as well as people from outside. We now have
    a senior leadership team that has been reinvigorated and really
    works together in a very constructive and candid way, that they
    hadn't been able to do for some time.
        Beyond just the leadership, effective organizations ensure
    that the associates throughout the organization are connected
    to the mission. That was something that, candidly, as the 2004
    survey demonstrated, was not the case for significant portions
    of OPM, particularly for the thousands of associates who were
    operating around the country. We have roughly 59 offices. One
    of my goals was to visit every single OPM office at least once
    every year. When I leave this hearing today, I am going to be
    visiting our offices in Dallas, Tucson, and Denver. That will
    be close to wrapping up all those visits.
        But what I learned repeatedly, was that agency visits by a
    Director hadn't been happening, in many cases for as many as 10
    years. So, it is no surprise that the results of the survey in
    2004, prior to my arrival, indicated that people felt detached
    from the leadership, detached from the overall goals and
    objectives, because even at the highest level, leadership
    wasn't engaged and wasn't visibly out there connecting to
    staff.
        That is changing, not only with these visits but also with
    the use of nation-wide Webcasts with real-time Q and A, and
    with other visits by members of this senior team, who are
    committed to being visible. All of those things, flows of ideas
    to and from the office here in Washington, are raising morale,
    raising engagement, and are allowing us to better serve the
    nation-wide workforce, which, as you know, is located
    predominately outside of Washington, DC.
        So, getting the right people in place and getting people
    engaged were the first two steps. Now we need to have a plan to
    really set our course.
        As you have acknowledged, we did come out in March with a
    new strategic and operational plan with new goals. Among
    others, we had the CHCO Council Executive Committee review
    those goals and review that plan before we published it. It is
    one of the ways that we are trying to link better with the
    Council and bring them more into our management for the human
    capital community.
        The new plan is distinctive. It is clear, it is candid, and
    it is specific. It has got about 170 to-dos. It doesn't have
    pictures. It doesn't have a lot of text. It is very different
    from most other plans. The Washington Post called it strikingly
    clear and simple and reflects a no-nonsense, down-to-earth
    style. I consider praise from the Washington Post something to
    be valued.
        We have the plan. We have the people. Now the next step is
    to create an accountability culture. An achieving of the goals
    of those plans really meant that we had to incorporate those
    goals into each individual person's own personal plan. OPM
    associates throughout the organization now have objectives that
    are tied to the plan. Senior executives, particularly, have 75
    percent of their performance contracts tied to those plan
    goals. Word for word, they are exactly transferred, and there
    is a direct linkage now to their compensation at the senior
    executive level when executing and achieving those goals. That
    means we have greater assurances that the goals will be
    achieved and we have a well-harnessed team environment, where
    everyone is sharing in the goals and working to get those done.
        Those are all positioning steps, and now that they are
    done, we are ready to raise our operational performance. All of
    those things are just a prelude to actually achieving results.
        Progress for all of our plan goals is monitored using a
    chronological tracking system, and a copy of that is attached
    to my statement today. You also can see that on OPM's website.
    The link is also listed in my written statement. I will be
    honest with you, I don't know of any other agency that has a
    link on their website where you can go directly to all of their
    goals, specifically, and have the date that they were
    completed. It is something that I don't think is heard of,
    candidly, among agencies and even in the private sector--
    complete visibility.
        To date, we have achieved every plan objective that has
    been scheduled since we introduced the plan in March. And, in
    some of the cases, we are ahead. We have achieved ones that
    aren't even due yet. So, we are achieving results. We are off
    to a good start there.
        As far as funding the effort, that is an important thing.
    We won't be able to realize the results of our plan without
    getting the 2007 budget funding that we need. Things that we
    are doing, important things like the guidance for the
    President's human capital plan for the possibility of pandemic
    flu wasn't due until August. OPM has already been releasing it
    in advance. That is part of the new customer service mindset.
    We are looking at the customer, saying, what does the customer
    need? Not just accurate, good guidance, but they need it in a
    timely manner. So, even though we didn't have a date until
    August 1, we already did the first release in June. The second
    release will be in early July. And then the balance will follow
    at the August due date.
        That is the mentality that we are operating under. We think
    that we are in a good position to ask you for full funding of
    our 2007 budget request. One of the things that we will fund is
    our retirement systems modernization. Unfortunately, the
    funding for that by the House was zeroed out, and that was a
    disappointment to us, and I think they realize that needs to be
    put back in. We are hoping to work with the Senate to make sure
    that doesn't happen and it gets resolved in conference.
        We now have a 1950s-vintage retirement calculation process.
    As you know, OPM does all the calculations of retirement
    benefits, not just for the Executive Branch agencies, but also
    for the Legislative Branch. So, all of us in this room who are
    either with the Legislative or the Executive Branch will have
    our retirement benefits calculated by OPM. We are using a
    paper-based 1950s system that has file drawers that end-to-end
    would run from this conference room to Baltimore and back
    again. That is how bad it is.
        As you mentioned, we have a retirement wave coming. This
    system will crash if we don't get the new automated one put in
    place. We need funding to do that. You have my personal
    assurance that this is my highest priority and I will not let
    this program fail, as other IT projects have across the
    government.
        Now, those are all operational things that we have done.
    What we are now looking to do, as well, is to look
    strategically and do that in new ways. In the span of just a
    few months, OPM has fast-forwarded beyond decades of what I
    would consider worn-out practices and we have initiated two of
    the first three steps for bringing and attracting Federal
    workers into the government. The first was a media campaign,
    the first of its kind. You can see on this chart a little
    preview. The tag line was, ``What did you do at your job
    today?'' This campaign used four Federal agency employees. OPM
    produced the commercials. They have been running in many media
    markets, right now in Cincinnati, Ohio, Mr. Chairman. One of
    the triggers or steps is that people who are interested will go
    to a special section of the USAJOBS Website. We have had over
    11,000 visits since we started this campaign just a few weeks
    ago.
        So, it is working and it is attracting people to raise
    their awareness of a broader range of government jobs. You
    don't just come to Washington and sit behind a desk nine-to-
    five and do the same thing day after day after day. There are
    exciting jobs. Our job is to make sure that people know about
    it. So that is our media campaign, step one.
        In addition to that, we have gone to step two, which is to
    recognize that the future workforce wants a variety of working
    arrangements. They don't necessarily want just the traditional
    arrangement. That is a good one, but that is only one. There
    are people who want to get up at four in the morning and work
    from their homes at unusual hours for the U.S. Government. If
    they want to do that, and they are qualified, we need to reach
    those people.
        So our career patterns approach to attracting talent in the
    21st Century identifies all the types of patterns that should
    be made available, and we have introduced this now to agencies
    and are requiring agencies by January 1 to go through and
    inventory their positions according to the different patterns.
    We didn't stop there. We didn't just put out a rule or put out
    a demand. We actually developed a tool that agencies can use to
    analyze which of the patterns apply, and an important part of
    that tool is to use all the flexibilities that you have granted
    and passed over the past several years to say which
    flexibilities line up with which pattern and we will help you
    to attract and retain this new 21st Century workforce. So, we
    are very focused on that, and we are actually doing things.
        The third component of our approach here will be speeding
    up the hiring process, because there is no point in getting
    people excited about coming if we can't bring them on board in
    a timely fashion. You have both recognized that and charged us
    to do that, and obviously, that is something else that is an
    important part of our work.
        I just want to wrap up by saying that we are committed to
    all of the things that go with our goal of making sure we have
    an effective civilian workforce. Clearly during my tenure, we
    have made many changes. Many concrete things have taken place,
    with many more to come. This is not the old OPM. This team
    sitting behind me is committed to making sure that we are able
    to meet the demands that you place on us and that the American
    citizens do, as well.
        I will be glad to respond to your questions. Thank you.
        Chairman Voinovich. Thank you, Ms. Springer.
        Mr. Walker, we are glad that you are now here. This storm
    that we had in Washington has really impacted everyone,
    including the Comptroller General.
        If you will stand, I will swear you in. Do you swear that
    the testimony you are about to give this Subcommittee is the
    truth, the whole truth, and nothing but the truth, so help you,
    God?
        Mr. Walker. I do.
        Chairman Voinovich. Thank you. Please proceed with your
    statement.

      TESTIMONY OF HON. DAVID M. WALKER,\1\ COMPTROLLER GENERAL,
                    GOVERNMENT ACCOUNTABILITY OFFICE

        Mr. Walker. Mr. Chairman, Senator Akaka, let me just say
    mea culpa, mea maxima culpa. I apologize for being late.
    Ironically, I was at my desk this morning at 7 o'clock, but
    today, we have our senior executives annual meeting across the
    river, and when I tried to come back across the river, it was a
    zoo. Let me just say, I am thinking of calling Noah, and I
    don't mean the agency in the Federal Government, to hedge my
    bets in case we get any more rain here, but I do appreciate the
    opportunity.
    ---------------------------------------------------------------------------
        \1\ The prepared statement of Mr. Walker appears in the Appendix on
    page 49.
    ---------------------------------------------------------------------------
        Chairman Voinovich. We really appreciate your being here,
    too. I just publicly want to say that we have really benefitted
    from your help, cooperation, advice, and sincere interest in
    the Office of Personnel Management. I don't know what, frankly,
    we would have done without the tremendous input from you and
    the people that work for you. Thank you. The progress we have
    made would not have been possible without your help.
        Mr. Walker. Thank you, Mr. Chairman, and thanks to you and
    Senator Akaka for your leadership, because I think a lot has
    been accomplished in the last few years and I am confident that
    a lot more will be accomplished in the coming years.
        Chairman Voinovich. By the way, Senator Akaka is leaving to
    attend briefing of the Armed Services Committee on North Korea.
        Mr. Walker. Thank you, Mr. Chairman. I can understand why
    he is going.
        I would like to summarize my statement, if I may, Mr.
    Chairman, and I ask that my entire statement be included in the
    record.
        Chairman Voinovich. Yes.
        Mr. Walker. Thank you, Sir. As I have noted previously in
    our 21st Century Challenges Report, people are the most
    valuable asset of any knowledge-based enterprise and the
    Federal Government is no exception. We must modernize our human
    capital policies and practices if we are going to attract,
    retain, and motivate a top-quality workforce in the 21st
    Century.
        It is important that we recognize that we need to transform
    our human capital policies and practices, and in many cases, we
    need to transform the agencies that comprise the Federal
    Government. While the Federal Government needs to undergo a
    broad-based transformation effort, OPM is one of the agencies
    that has its own transformation challenges. I know from my
    conversations with Director Springer that she agrees that OPM
    does have a major transformation challenge and she has
    undertaken a number of efforts to try to help facilitate and
    expedite such an effort.
        In that regard, we have seen considerable progress in a
    short period of time under her leadership. She has taken a
    number of steps to try to transform the agency, not the least
    of which was the publication of OPM's, ``Strategic and
    Operational Plan for the Period 2006 to 2010.'' This plan
    identifies a number of activities that OPM plans to implement
    in order to achieve its stated objectives, including dealing
    with the employee satisfaction issue.
        As you undoubtedly know, we have a situation where OPM was
    ranked, I think, No. 6 in employee feedback in 2003. It went
    down to No. 27 in 2005. But that was based on 2004 survey data.
    We will have to wait and see what the results of the next
    survey are, and I know that Director Springer has taken a
    number of steps to try to help enhance communication and engage
    a broader cross-section of the OPM employee community.
        I also note, when you look at the results of the employee
    feedback survey and the rankings, that while government is a
    very hierarchical organization, in general, the results from
    the survey show that OPM was more hierarchical than most
    government organizations. I know that Director Springer is
    trying to take steps to deal with that.
        As I said, they have taken commendable steps and made
    meaningful progress. What I would like to do is to focus on
    four areas where I would recommend that Director Springer
    continue to take steps in order to build upon the progress that
    has already been made and in order to address the challenges
    that remain.
        First, leadership. There is no doubt in my mind that
    Director Springer is committed to doing what it takes to
    achieve the outlined objectives. I think, as I said before, it
    is pretty clear from the survey results that OPM's culture,
    based on the feedback results, has been more hierarchical than
    most. Steps that can be taken to fully engage leadership, and
    to expand communication efforts to try to deal with that past
    problem and break down the barriers, are very much needed.
        Second, with regard to talent and resources, OPM has made
    progress in assessing its current workforce needs and
    developing leadership succession plans. However, OPM also needs
    to try to take a look at what type of future skills and
    competencies it will need as compared with what it has, and how
    best to go about filling those gaps. The basic nature of OPM is
    likely to change dramatically in the coming years and that
    means that the type of skills and knowledge that it will need
    and capabilities and the relative quantities will likewise
    change.
        This means that, in addition to looking at the skills and
    knowledge, they are going to also, in my view, look at their
    organizational structure and possibly realign their
    organizational structure as well as consider alternative
    sourcing strategies as to how best to meet their needs of the
    future. To what extent should work be done by civil servants?
    What type of skills and knowledge, at what levels and
    compensation programs, would they need to have? To what extent
    can and should they be leveraged to technology? And, to what
    extent, might they be able to employ alternative sourcing
    strategies?
        With regard to customer focus, communication, and
    collaboration, agency views and survey results in our previous
    work show that OPM is taking steps to improve its customer
    service and communication with agencies. It is important they
    continue to do so. It will be critically important as we move
    ahead because they will become more of an enabler rather than a
    compliance type of organization, although they still will have
    certain oversight responsibilities.
        With regard to performance, culture, and accountability,
    OPM has made progress in creating a line of sight and in
    enhancing alignment and accountability across their
    organization in an effort to achieve the stated objectives that
    are outlined in their newest plan. Ultimately, success in
    achieving Director Springer's reforms objectives will rest in
    part not only on her committed leadership and sustained
    attention and her other top executives, but OPM's ability to
    properly align and consistently support mission accomplishment
    of the employees of the organization through making sure that
    they have modern, effective, and credible performance
    management systems that align institutional, unit and
    individual performance management objectives.
        Mr. Chairman, that is an overview, an executive summary of
    my extensive written statement, which I know has been submitted
    for the record. I would be more than happy to answer any
    questions that you may have.
        Chairman Voinovich. Thank you very much, Mr. Walker.
        Ms. Springer, could you further describe OPM's budget?
    First, is the budget that was approved by OMB sufficient? If we
    are able to maintain that number here in the Senate, would that
    be adequate, or are you going to be strained?
        Ms. Springer. We will be able to----
        Chairman Voinovich. Listen, I want you to level with me.
        Ms. Springer. Yes.
        Chairman Voinovich. One of my concerns is that agencies are
    not forthcoming above their fiscal challenges. More and more is
    being asked of various departments and agencies, but they are
    not getting additional resources.
        It is attributable to the fact that we are squeezing the
    non-defense part of the discretionary budget. We have to face
    up to the fact that there are growing challenges but not
    increasing resources.
        We really need candor from people like yourself I told the
    same thing to OMB Director Rob Portman, who I have known a long
    time. I said, one of his priorities is taking care of the
    personnel needs of departments and agencies. So I would like
    you to be as candid as you can be with us.
        Ms. Springer. For 2007----
        Chairman Voinovich. Yes.
        Ms. Springer. For 2007, we can get the things that are in
    our plan done if we get all the funding. We will be challenged
    to be creative in how we deploy people, and if any new demands
    come up during 2007, unfunded mandates, if you will, then
    something will have to give because that level that we have
    requested will just do it for us. But if new things come up,
    then something will have to take a back seat. So, that is how
    tight the 2007 budget is.
        The biggest concern that I have about 2007 is that we don't
    get the funding we need for this retirement system. You and I
    have had the chance to talk about this, which I appreciate. Two
    things were a real shocker to me when I came in a year ago.
    First was the state of the retirement calculation process and
    the second was the 2004 survey. You can imagine coming into an
    organization and being hit with those two things makes you
    wonder why you came. That is fair, but then you just do
    something about that. You sort of move on from that point.
        Regarding the 2004 survey, I can work with that with this
    leadership team. Regarding the retirement systems
    modernization. I understand the history of false starts and
    government-wide programs that failed because of bad leadership
    or whatever, but we can't afford to fail this time. We can't go
    further without the funding. So from a budget standpoint, that
    is my biggest concern for 2007.
        Mr. Walker. Mr. Chairman, can I touch on the retirement
    system real quick, if that is OK with you?
        Chairman Voinovich. Yes, fine. Sure.
        Mr. Walker. There is no question in my mind, Mr. Chairman,
    that they absolutely, positively need to modernize their
    retirement information system. I had a personal experience
    within the last couple of months where a friend of mine passed
    away who was a Federal Government employee and whose wife was
    waiting for weeks in order to try to be able to get her
    survivor benefit payments from OPM. There are real human faces
    on a lot of these problems. The volume involved, the fact that
    it is paper-intensive, the fact that we have got a huge
    retirement wave coming, there is absolutely no question that it
    has to be modernized.
        The one thing that I would suggest that this Subcommittee,
    and the Congress, may want to consider, is if there are
    concerns about OPM's readiness, the Congress can always
    consider employing an approach similar to what it has done with
    the IRS's modernization effort. Specifically, to give OPM the
    money, but possibly require GAO to take a look to make sure
    that things are going reasonably well. I know that Director
    Springer is dedicated to making sure that this does go well and
    she has made it one of her highest priorities, but it is a bona
    fide need and I do think it is something that deserves serious
    attention.
        Ms. Springer. We did have GAO visit with us periodically on
    our progress.
        Chairman Voinovich. The other thing is, how much help are
    you getting from the unions? They ought to be really concerned
    about this.
        Ms. Springer. Any time I speak to them about this, this is
    one of those areas where we have got really complete agreement.
    So the answer is yes----
        Chairman Voinovich. I am hoping--what I would love to see
    is some copies of letters from major employee unions to the
    members of the Appropriations Committee to let them know how
    important this project is. This is a big deal for their
    membership.
        Have either one of you calculated a reasonable time period
    in which such a system can be implemented? I know that it took
    about 3 years in Ohio. We have a very extensive workers' comp
    program and everything was stovepiped. I will never forget it.
    It took them about 3 years to modernize a paper system. Now it
    is a paperless system, and everybody is so much happier with
    it. But, how long will it take to put this system in place?
        Ms. Springer. Our project plan would call for it to be done
    essentially in late 2009, early 2010, so it is about the same.
    It is about the same 3-year period. But the biggest challenge
    we have is, and I think you probably had in Ohio, is the
    conversion of the paper into the system. I mean, the software
    exists. Adapting the software and the functionality for the
    calculation, that is less time-consuming actually than the data
    conversion and then the change----
        Chairman Voinovich. In other words, the software exists? It
    is not something that has to be developed for your operation?
        Ms. Springer. It has to be adapted for the Federal
    Government, but we are not starting from a clean sheet of
    paper, a blank sheet of paper. That was the problem that OPM
    had when they first started this in the 1990s, was to try and
    build something from scratch, which doesn't make sense for a
    process that every company in America has to do, which is to
    calculate pension benefits.
        Mr. Walker. Mr. Chairman, from our standpoint, there is no
    question it is a multi-year effort. I will be happy to talk to
    our IT team and provide something for the record with regard to
    their preliminary observations on how many years it will take.
        But I just want to reinforce that, in addition to the data
    conversion effort, it is very important before one engages in a
    major system modernization effort to take a hard look at
    current processes and controls and to make sure that they have
    been modernized before one seeks to automate. That is very
    important and I know that Director Springer understands that,
    given her background in financial management and controls.
        Chairman Voinovich. Is there any way that GAO could help
    them?
        Mr. Walker. We are happy to take a look at it and provide
    constructive input. I think it is in all of our interests for
    them to be successful. At the same point in time, I know
    Congress has a legitimate concern to make sure that we don't
    have a repeat of major system development problems that have
    occurred in the past.
        Chairman Voinovich. That is for sure--FBI.
        Mr. Walker. I could state a long list.
        Chairman Voinovich. Another example is at the Bethesda
    Naval Hospital. It had taken 3 years to put in a computer
    system out there. I don't know who was in charge, but these
    stories just drive me up the wall. I cannot believe it. It
    seems like the left hand doesn't know what the right hand is
    doing.
        Furthermore, completing the RSM project will take until at
    least 2009 or 2010. There will be a new administration then.
    How do you guarantee that this project will be completed?
        Ms. Springer. Probably the best guarantor of that is that
    you can have a strong project management system in place, a
    governance for the project that is driven by career people, not
    political. Most of the senior team behind me is career. Those
    are people who are going to be there when I am gone.
        Second, having a well-documented, well-designed plan is not
    a political issue. This is something that, regardless of your
    political philosophy, you want to have done right. So it is not
    something that a new administration is going to want to short-
    circuit. We have gotten bipartisan support for what we are
    doing--support on both sides of the aisle.
        One of the things I have learned during my time in
    Washington is that the real strength of an organization lies
    with its career team. We are just sort of the summer help that
    comes and goes from time to time. But the career involvement in
    this project is particularly important.
        Chairman Voinovich. Well, I don't agree with how you
    describe your role because there is no question that good
    leadership makes a big difference in a department, and I have
    seen that in OPM.
        Mr. Walker. Mr. Chairman, can I add real quickly, I agree
    with you on the leadership point, but I think in addition to a
    dedicated and capable career civil service--that is absolutely
    essential--I would also note that the Congress' continued
    attention to this effort is also an important element to make
    sure that you can continue to maintain momentum irrespective of
    what happens in the Presidential election of 2008.
        Chairman Voinovich. Well, God willing, I am going to be
    around until at least 2010. I assure you that I am going to
    stay on top of it with oversight.
        Next, you discussed a new way of attracting Federal
    employees. Have you teamed with Monster to develop a new
    Website?
        Ms. Springer. Yes, we work with them----
        Chairman Voinovich. So, the ads you discussed are different
    from the work Monster does?
        Ms. Springer. Yes, this is entirely different. The USAJOBS
    is a place where you go to actually see the announcement of
    positions. What we are doing here, first with the media
    campaign, is actually running ads around the country. These
    aren't PSAs that run in the middle of the night. These are
    actual paid advertisements, media spots, in areas that have a
    little bit higher than average unemployment, that have a good
    student population, and where there is a market that is ripe
    for a new career. This is about job awareness, and so we will
    have someone from NOAA or we will have someone from Interior or
    some other department that will actually tell about what they
    are doing and how exciting it is and meaningful for public
    service.
        Chairman Voinovich. Is it working?
        Ms. Springer. It is working. We just started in May, so it
    has only been a little over a month since it has been running--
    the first measure of whether it is working is the visits to the
    special part of the Website to find out more, and we have had
    11,000 visits just as a result of the ads we have run. But then
    the follow-up is important, and the career patterns
    initiative--again, that is entirely new, hasn't been done
    before--is where that next step will come in.
        Chairman Voinovich. One of the complaints I hear is that
    applying for a Federal job takes so much work and then they
    never hear back from the agency.
        Ms. Springer. Yes.
        Chairman Voinovich. For example, the Postal Service. They
    are still recrutiing and administering tests, but the Postal
    Service is not hiring. So why are they doing this if they are
    not hiring? This discourages people from considering jobs with
    the Federal Government.
        Ms. Springer. Yes, and that needs to change and that is one
    of the things that is in our plan. The fact is that we need a
    shorter timeframe from when the job announcement closes to when
    there is a notice given back that we want to bring you on. And
    then from that point, it needs to go faster. So, that is the
    next step that we are working on. I agree with you, that is
    still a challenge.
        Can I just add one other thing?
        Chairman Voinovich. Yes.
        Ms. Springer. Mr. Chairman, part of the issue isn't so much
    the technology, it is what agencies do. All the steps are at
    the individual agency level once the applicant has gone through
    the technology and through that front door. There is a variety
    of steps, and as we work with the CHCO Council, we need to
    shorten some of those steps at the individual agencies in
    dealing with the application when it comes in.
        Mr. Walker. And Mr. Chairman, if I can add onto that, two
    notes of caution. We have to be careful to make sure that we
    have qualitative as well as quantitative measures. You can have
    a lot of people that are hitting a site or applying for a job,
    but if they don't have the right kind of skills and knowledge
    that we need, then it can be misleading.
        Second, a major problem is that while we can, and should,
    leverage technology to a greater extent than we have, nothing
    takes the place of the personal touch. Once somebody takes the
    time and effort to apply, it is really important that there be
    some human contact at some point in time, within a reasonable
    period of time, with those individuals or else they will get
    turned off. I mean, you can have status reports electronically
    that they can go to the Web and take a look at, but you have
    got to have some human intervention, because after all, we are
    a people business and you want to have a positive experience.
        Chairman Voinovich. Well, what I hear from my constituents,
    is that the Federal Government does not respond to job
    applicants. The more people hear that, the less they will want
    to consider working for the government.
        The other thing that I want to know is whether you have
    worked with agencies to identify the people that they need?
    There are some specific agencies that have a much greater
    challenge. Also, I would be interested in knowing what kind of
    relationship and communication there is between you and the
    Partnership for Public Service. The Partnership was created, as
    you know, by Sam Hayman to promote working for the Federal
    Government.
        Working with groups like the Partnership is important. I
    was at a breakfast today and heard how the government is
    struggling to hire engineers. Mr. Walker is working on a report
    to evaluate the workforce for the technical workforce in the
    Federal Government. OPM needs to look out across the Federal
    agencies to identify areas where there will be tremendous
    competition for needed talent with the private sector, or I
    think is something that is very important.
        Ms. Springer. You are absolutely right. We will be
    competing in a supply and demand environment that is going to
    shift dramatically over the next several years--already
    started--to where the demand is going way up and the supply,
    meaning the talent pool, is going down. There are a number of
    ways to deal with that. Some of them are the ones that I have
    shared with you. It is particularly critical in certain
    occupations. Engineering is one of them, and there are some
    others. I talk with major accounting firms, and they are having
    trouble finding CPAs. That is another example. It is always
    difficult for us to get good chief financial officers and
    financial staff in government agencies.
        There are organizations like the Partnership, and others
    that we do work with, and we do some joint programs with a
    number of them, so yes, we are engaged.
        What we need to do is, with the CHCO Council, to have more
    focused job fairs, for example, and really do focus as opposed
    to just doing them in areas as courtesies or other things. Go
    to the area where there is going to be an engineer population
    so that we are able to make contact, that personal touch, with
    the portion of the talent pool that we really need. So, yes,
    that is a way that we need to focus.
        All the CHCOs are doing succession planning right now.
    Under a plan, they have to get those done. When we see where
    those particular needs are, we will be able to coordinate our
    efforts.
        Chairman Voinovich. If I asked you today, are there on file
    succession plans for all of the Federal agencies that are
    really substantive, what would the answer be?
        Ms. Springer. No.
        Chairman Voinovich. How many agencies have them?
        Ms. Springer. Well, I can't answer that, but I will know
    pretty soon because we have got a date in our own plan. We are
    holding ourselves accountable for making sure that the agencies
    get those up to speed. I don't remember the exact date. It may
    be this fall. I am thinking it is maybe by the end of the
    fiscal year. So at that point, I will have a better read. But
    there is really that whole risk analysis, the risk of how many
    are scheduled to leave, how many will leave, what is the risk
    and the vulnerability to the agency, that is a process that
    many of the agencies are still working right now. I would be
    surprised if half of them are as robust as they ought to be.
        Chairman Voinovich. Half of them?
        Ms. Springer. I would be surprised. But by the end of the
    fiscal year, I think is the point at which we will double-check
    again and see exactly where they are.
        Chairman Voinovich. Is that taking into consideration when
    they are evaluating for the President's Managemen Agenda?
        Ms. Springer. On the scorecard? Yes.
        Chairman Voinovich. What is your impression of the
    Government Performance and Results Act (GPRA)? One of the
    things we found is that when the GPRA reports are filed each
    year, they did not include anything dealing with human capital.
    Is human capital being included in GPRA reports?
        Ms. Springer. Well, I don't know if we have given a
    specific directive. It should be. One of the things that we
    need to deal with, candidly, and I see it now as an agency
    head, is that there are many requirements that are put on the
    human resource community. What we have got to make sure is that
    we are not spending all our time just in a compliance mode but
    actually doing something that is meaningful and will lead to
    some sort of action. So whether it is GPRA, which is great, or
    a scorecard or some other things, we have to make sure that all
    those things bear fruit and they don't just become a compliance
    exercise.
        Chairman Voinovich. One of the things that we set up was
    the CHCO Council. Mr. Walker and Ms. Springer, do you think the
    Council has done the job that it was expected to do? My vision
    for the Council was that it would meet, share ideas, and build
    relationships to share best practices. To my knowledge, that
    has not happened. Is that fair?
        Ms. Springer. I think it is fair. I think it has had a
    modicum of success, but it hasn't realized its full potential.
    I think, correctly, the GAO report acknowledges that and points
    it out as an area of opportunity for us. We have done some
    things. We have realigned the committees. We have brought them
    into meetings with OPM for planning.
        The one place where I would say we really worked well
    together was on Hurricane Katrina, and getting guidance out and
    understanding the needs of the human capital community. We are
    doing it now again with developing this pandemic flu guidance,
    where the Emergency Preparedness Subcommittee is very engaged.
    So those are models that we need to build on.
        But it hasn't realized its full potential. We have a new
    executive director, as you know, and we are going to take some
    steps. We have created the new position of a deputy CHCO, which
    wasn't there originally. That is modeling after this CFO
    Council. That allows us to make sure we have good continuity
    from administration to administration and lets us dig down
    deeper into the organization. These CHCOs often wear several
    hats in management roles, and so it is helpful to have another
    person, and that will help them to be engaged in more ways with
    us.
        So there are a number of steps we need to take. I think we
    can make a lot of progress over the next year.
        Chairman Voinovich. I would like to identify where it
    hasn't reached its potential. I would like to work with you to
    set goals to evaluate the Council.
        The other thing is that when we got the legislation
    establishing the Council was passed, one goal was to bring a
    high-level commitment to the importance of human capital.
    Again, anecdotally, my understanding is that it really hasn't
    happened. I would like either one of you to comment on that
    situation.
        Ms. Springer. Could I just say one thing and then defer to
    my colleague?
        Chairman Voinovich. Yes.
        Ms. Springer. One of the things that I think happened with
    the Council, and why it wasn't as effective, candidly, and I am
    being honest with you here, is, I think, the meetings came to
    be just an opportunity largely for OPM to convey information,
    as opposed to a real strong interaction and engagement. I saw
    the same thing with the CFO Council when I first came in there,
    where it became an opportunity for OMB to present information.
    What we need to do is make sure that it is a two-way dialogue,
    it is not just a vehicle for making announcements by a central
    agency.
        As far as our own commitment, we had the CHCO Executive
    Committee review our strategic plan and give us input on it.
    That is about the highest level of engagement we could have,
    not just our own CHCO, but the CHCOs of other agencies. So, I
    think you are right, we need to expand that level of
    engagement.
        Mr. Walker. Mr. Chairman, I would say that I agree that it
    is important to have effective two-way communication through
    the CHCO Council. It is not just OPM disseminating information,
    it is information being pushed to OPM.
        Second, I think there are additional opportunities for the
    Council to employ, what I would call, a matrix approach,
    whereby they have responsibilities relating to their own
    individual department and agency and then assign selected CHCOs
    to be the point person on a horizontal or government-wide
    challenge so that they are focused not just on their own
    agency, but across agencies, creating taskings and partnerships
    to move forward.
        In that regard, two areas in particular where I think we
    need more progress would be critical skills gaps, which has
    been touched on already in this hearing, and performance
    management approaches. The performance management approaches
    that are taken by most Federal agencies are abysmal, and if we
    really want to try to transform what the government does, how
    the government does business, if we really want this to be a
    more results-oriented government, then we need to modernize our
    performance management systems, because people will behave
    based upon how they are measured. If we can end up aligning
    institutional, unit, and individual performance measurement
    reward systems, we can achieve great progress in a reasonable
    period of time. But in many cases, the systems just aren't
    anywhere close to cutting the mustard.
        Chairman Voinovich. Well, again, I beleive the jury is out
    on the pay-for-performance system for the Senior Executive
    Service. At some places, it has been successful. In other
    places, it has not been effective. OPM has to work with
    agencies that are facing challenges. If the systems for the SES
    are not successful, agencies will not be successful with strong
    performance management for the rest of the workforce.
        I have to tell you, and I don't think I have shared this
    with Ms. Springer, that Senator Akaka and I had a really good
    oversight hearing on the new National Security Personnel
    System. It looks like they have done a good job communicating
    information about NSPS for Spiral 1.1. It seems to me that one
    of the jobs that OPM should have is to identify successes to
    share through the CHCO Council. It is not effective for
    agencies to individually try to figure out to address problems.
        Mr. Walker. I think it is real important, Mr. Chairman--
    there are two afflictions that are prevalent in government and
    we have got to figure out ways to deal with them. One is
    myopia, or near-sightedness, focusing on today. The second is
    tunnel vision, just focusing on more of a particular span of
    control without looking horizontally. Councils like the CHCO
    Council and the CFO Council and others provide an opportunity
    to help people not just focus on their turf, but also to look
    horizontally, to share best practices, and avoid common
    mistakes.
        The last thing I would say is, I understand there have been
    different experiences with regard to pay-for-performance, and
    that is a major transformational change. I would respectfully
    suggest that we must modernize our performance management
    systems. That must happen first, because unless and until we do
    that, you are not in the position to effectively implement a
    pay-for-performance system credibly, equitably, and in a
    sustainable manner. So it is really important that we do first
    things first and there needs to be much more progress in that
    area.
        Chairman Voinovich. I have introduced legislation that I
    think moves in that direction. I have heard that the General
    Services Administration, under Steve Perry, has improved its
    performance management program. I don't know if you have
    evaluated their work, but the concerpt is that each employee's
    performance should be tied to the organization's goals.
    Somebody asked me, why is this important, and I said, well,
    people like to know whether they are doing a good or bad job.
    There should be a meaningful discussion of what they do to
    advance the goals of the agency.
        I think that strong performance management is really
    important, and I think my legislation would help move the
    Federal Government in that direction. Except for DHS and DOD,
    the Federal Government doesn't have this mandate.
        One of the things that I think you should understand, Ms.
    Springer, is that how well you do during the next couple of
    years is going to have a lot to do with whether or not Congress
    considers additional reforms. I suspect that in the next
    election, Civil Service reform will be an issue. The unions are
    not happy with reforms underway at DHS and DOD.
        So the quality of what you are doing is going to have a
    major impact on whether these reforms continue. You must engage
    the unions in this work. After an NSPS oversight hearing in
    April, I sat down and discussed it with the union witness. He
    was very interested in working with Congress and the Department
    of Defense.
        In the next couple of years, you are going to have to prove
    to the rank and file civil servants that this is really a good
    thing. These changes will help foster an excited group of
    people, that are going to get a better chance to improve their
    career in the Federal Government. I think that is a real
    challenge, because if we don't do it right, or it looks like it
    is not working, then I think the reforms may end.
        That gets back to the issue of involvement of people. Mr.
    Walker, your report shows that OPM involves people at the top
    but is not as successful engaging the rank and file. It is not
    what it should be. I would like you to comment on how you think
    that situation could change. It gets back to Total Quality
    Management which is to take care of your internal customers
    first so that they can do a good job of taking care of your
    external. If you ignore the internal, then you are not going to
    be able to do a very good job with the external. Ms. Springer,
    would you tell me about what you are doing to change that?
        Ms. Springer. Absolutely, and you are right, it is a
    question of engagement. When people are ignored, when people
    are left out, when they don't have an opportunity to comment,
    when they don't know what they are doing, how what they are
    doing affects the overall mission, people are going to be very
    dissatisfied. You are going to have disengagement and you are
    going to have bad morale and you are going to have bad results
    on surveys, and that is exactly what we had at 2004.
        What are we doing to fix that? I will give you an example,
    and I am not saying this to throw stones at anyone, but if you
    have a senior leadership team working across the street from
    one of your processing offices, one of your important offices,
    and that team doesn't take the time to go across the street and
    visit with their own employees, then that sends a very strong
    message that you don't really care about them, and that was the
    kind of environment that was there. I am not saying it was
    intentional, but how else can you take it if you are one of
    those employees?
        We have set up a website. It is called ``My Ideas.'' I get
    e-mails directly from any OPM employee anywhere in the world
    and we get back to them. I give them a commitment of two
    things. I will read it and they will get an answer, and they
    will get an answer quickly, and that always happens.
        We have webcasts where we go on, with other senior
    managers, live on the website. Anyone can dial up from wherever
    they are. We have people who telework. They can get right on.
    And they can real-time e-mail us questions and we answer them.
    They are engaged.
        There is a new sense, and it is not just me, it is the
    members of this team, of people going out and we want to hear
    from them and we actually put their ideas into practice. When
    we get things done each month, the goals, the whole agency
    celebrates, not just one office, and there are novel ways of
    doing that. They don't cost much, an ice cream social, for
    example, where senior managers serve ice cream to people. But
    we have got newsletters. There are things that weren't there
    before, lots of engagement for the employees.
        The goals weren't set by an outside consultant. They were
    set by members of OPM. They were reviewed by a number of
    outsiders, but they are the employees' goals, so they have
    ownership. It is not just handed to them or done to them. They
    are their own goals, and their own performance agreements, not
    just SES, but every member of OPM has a goal or goals to some
    degree or another that they can see tied directly to that
    strategic plan and operational plan.
        Chairman Voinovich. How many people were involved in
    putting that plan together? You have a strategic and
    operational plan that I have been very impressed with, but how
    many of your top managers provided input and did you get any
    input at all from the rank and file?
        Ms. Springer. Yes. We had the senior team plus another 50
    members of OPM, both general schedule and SES, that I met with
    10 or 11 times, every week. I didn't take a step forward
    without that group of 50 reviewing what we did and them giving
    us direction. So they are their goals.
        That is just the starting point. Now, you have to show that
    you have a successful culture and you reward it and you
    acknowledge it. You go up to our site in Pennsylvania that has
    hundreds of employees and you go out and shake hands and you
    listen to people. I have people that literally came up to me in
    tears in the beginning of June because it was the first time
    that they really had people to come and interact and listen to
    them.
        That is what is different now. It is the whole sense that
    these are people. The agency is not so huge that you can't
    interact. That is one of the great advantages we have. And so
    people are engaged. They understand what they are doing. They
    are getting acknowledged when they succeed. Leaders make sure
    they have what they need to succeed, and that is what is going
    to turn it around. That is why I am confident when we get this
    2006 survey that is going to be done in August at OPM, that you
    are going to see a huge change, just a huge change.
        Chairman Voinovich. That is terrific. I chair a
    Subcommittee in the EPW Committee which has oversight of the
    Nuclear Regulatory Commission. I am spending a lot of time
    working with the NRC. I am talking to them about implementing
    total quality management. It is involvement of people in the
    decisionmaking that drives continuous improvement. That is the
    excitement that makes an organization, I think, really
    outstanding.
        Mr. Walker, during your review, did you identify any
    particular area of concern or significant skill gap that OPM
    must address in order for it to successfully lead the Federal
    Government's human capital transformation?
        Mr. Walker. One of the areas that OPM needs to continue to
    make progress on is the plan that was issued in March. I
    believe it is excellent, it is very transparent, it has
    specific goals, and specific time frames. However, I think they
    need to continue to update their more comprehensive workforce
    plan and what type of skills and knowledge they are going to
    need to achieve their objectives in the future. Given the
    nature of OPM, its business is going to change in the future,
    their role and functions are going to change, what type of
    skills and knowledge they are going to need and what relative
    quantities, what items can be automated, what items should be
    core to the Civil Service, what items might we look for
    alternative sourcing approaches.
        I think that is an area where, I think, there is more time
    and attention that needs to be focused. It is a major
    undertaking, because you are really talking about OPM being
    fundamentally different in the future than what it was 10 years
    ago, in many ways.
        Chairman Voinovich. This is one area where I thought the
    CHCO Council would be effective. For example, sharing best
    practices to encourage telework. Which agencies really are
    making use of telework? Is that kind of information being
    shared with other agencies?
        I am familiar with the Defense Finance and Accounting
    Service. They really are utilizing the ability to telework. For
    example, how many agencies today have telework? Do you know?
        Ms. Springer. Yes, we do. We have a survey going on right
    now. We will have the results of that. It is small. Some are
    doing more than others. Patent and Trademark Office does it. In
    fact, we featured them at one of our press briefings to roll
    this out. The Council is the vehicle we should be using to
    amplify these best practices.
        Chairman Voinovich. The thing is, OPM has to look down the
    road and envision the Federal Government is going to compete
    for talent. I think that the government should be strongly
    advocating telework. There are a lot of fabulous people out
    there with great skills who, for example, are moms at home and
    can't come to the office every day. I have an example in my own
    family--my own daughter-in-law. She has four kids. She gets up
    at 4 o'clock in the morning and works from a secure computer at
    home. She also goes into the office once a week. She worked for
    this organization before. They love it, and she is making a
    contribution.
        The point is that there is going to be a lot more of that.
    Everybody is going to be looking at different flexibilities. We
    have got a whole different world that we are living in today.
    If we are going to be the employer of the 21st Century, the
    government ought to be looking around and seeing what other
    organizations are doing. Law firms are doing it. Accounting
    firms are doing it. That is one way we can stay up there and be
    competitive and not fall behind the private sector.
        Ms. Springer. Mr. Chairman, you have been the best
    advertiser for what we are doing and have just launched, which
    is that we need to identify all those patterns, alternate work
    sites, telework is one of those patterns. There are lots of
    them. Mobility--there are people who want to come in government
    and out of government. They want to come mid-career or late-
    career. Retirees don't want to necessarily leave altogether.
    They might want a reduced, limited basis work schedule. There
    are people who want to come for just a particular mission or
    particular role. They want to put in systems and do that from
    agency to agency, and then they are almost like an internal
    consultant, if you will.
        But there are all kinds of arrangements, and that is our
    initiative, a 21st Century approach to attracting talent. It is
    exactly what you just articulated. But it is not enough to just
    dump this idea out to agencies and say, here it is, have at it.
    You have to have a tool to help the agencies to take their
    positions and say, which of these patterns work? Does telework
    work for this kind? That is fine. Here are the flexibilities
    that the U.S. Congress has given you that might help attract
    somebody for that pattern.
        And even beyond all that, one of the things, and it goes
    with Mr. Walker saying that what we need to do in a new role is
    train leaders to manage in these environments, because it takes
    a different type of manager and our managers today aren't
    necessarily going to be good managers in these types of
    relationships. So that is one of the big things we have on our
    plate to do.
        Chairman Voinovich. Well, it gets back to something Mr.
    Walker said. If there is an agency successfully implementing
    telework, the CHCO Council is an appropriate venue to explain
    to other agencies the success. This could encourage other
    agencies to explore implementing a new program, like telework.
        Ms. Springer. Right.
        Chairman Voinovich. The Council should spread best
    practices.
        Ms. Springer. Yes. And he is here to hear you say that
    today. We did actually do that at our roll-out of this and it
    is the first of many more times that we have to do it. We had
    PTO, we had Interior, and we had part of OPM. The actual
    employee was there saying how this works. There was a mother
    there saying, ``Here is how I am able to telework at home and
    here are the tools I have to do it.'' She works for PTO. And
    someone from Interior and someone from OPM. So we are starting
    to do it. We need to do a lot more of it and the CHCO Council
    is the place to do it.
        Chairman Voinovich. OK. This gets back to one other thing,
    and neither one of you answered the question on this. What is
    your assessment of the status of the CHCOs in the departments?
    Mr. Walker, I don't know if you have had a chance to look some
    of these over. I would like your opinion about this. The goal
    of the CHCO Council is to elevate the role of human capital in
    the departments. Has it happened?
        Mr. Walker. That is an area I think we need to do more work
    on, but I will tell you this. There is absolutely no question
    that the human capital function needs to be elevated, it needs
    to be much more strategic, and it needs to employ much more
    forward-looking, creative, and integrated approaches. In some
    cases, the people who are in those jobs are well-suited to the
    new future. In some cases, they may not be well-suited to the
    new future. Merely because this function needs to be something
    that it hasn't been in the past doesn't mean that the existing
    players can achieve that objective. You have to analyze that,
    because you have to earn people's respect to be a strategic
    player, to be at the table with top management and in order to
    be able to add that value.
        I would like to reinforce something that you touched on
    before. In my view, with the major transformational challenges
    that we face, not just in the human capital area but overall,
    we need to do much more work in the area of benchmarking and
    best practices, much more work. Let me give you two examples in
    the human capital area to try to help bring it home.
        In my view, there are two key dimensions. One dimension is,
    what are the major challenges that we face? Examples of that
    would be critical skills gaps and inadequate performance
    management systems. Those are just two of many examples. So
    what are the critical challenges that we face across
    government? And then second, what are effective tools or
    strategies that can be employed in order to address the key
    challenges that we face across government? Those could include
    things like telework or student loan repayments, pay-for-
    performance systems or whatever.
        We need to create these matrices where we are saying, here
    are the big challenges and here are the strategies. Let us make
    sure that we have mechanisms that provide benchmarking
    information while sharing best practices. Let us tap a key
    player, not only just within OPM, let us tap a key player
    within the CHCO Council to have some responsibility for each of
    these so we can end up fighting the siloism, the tunnel vision,
    and the focus on today and start helping to create a more
    positive future quicker than otherwise might be the case.
        Chairman Voinovich. If you can do it in the Executive
    Branch, maybe we can do it in the Legislative Branch.
        Mr. Walker. Well, Mr. Chairman, I have said this before. I
    think the Congress is a critically important player in our
    constitutional form of government. There is a reason that it is
    Article I in the Constitution. There is a reason that it is on
    the Hill. At the same point in time, realistically, in major
    transformational efforts, you have to start with the Executive
    Branch because the Executive Branch at least has a CEO.
        Chairman Voinovich. Right.
        Mr. Walker. So you have got a point person who is
    responsible and accountable. But I do think the Congress is
    going to have to make some major changes, too. It is not well
    aligned to meet the challenges and capitalize on the
    opportunities of the 21st Century.
        Chairman Voinovich. I agree with you. I just think we are
    not looking at the big picture, I call it stovepipes. For
    example, funding MAX HR for the Department of Homeland
    Security. Does he ask you for help?
        Ms. Springer. Well, no, not on the budget. Obviously, we
    want them to be successful. We haven't been engaged in the
    budget. We have been engaged in other ways to try and steer
    them to achieve success. We think that in the area of their
    personnel reform, especially once they get a permanent new
    Under Secretary in for management, they need to follow the
    model that has been used at DOD, and DOD obviously has a long
    history of training and they have an infrastructure, but I
    think that the whole program management structure they have
    there is one that would serve them well. Our advice to them has
    been to, once they get the right people in place, visit with
    DOD and try to take some steps along that line.
        Chairman Voinovich. So they have a long way to go?
        Ms. Springer. I think, with all the turnover and other
    things, for the CHCO positions that are vacant right now, they
    need to get the right people in place first in those key
    leadership positions.
        Chairman Voinovich. Well, my observation is that DHS and
    DOD need chief management officers. They have to have somebody
    that is going to follow through with transformation. One of the
    things that I am really concerned about, again, is Congress
    making more organizational changes. We are going to try and
    redo FEMA all over again, and I just think it is crazy. I
    really do. I just think that the Secretary has got his hands
    full and now we are talking about changing again. He has got
    2\1/2\ years, and what Congress ought not to be doing is
    spending time debating the FEMA organizational chart. It just
    doesn't make any sense to me.
        I just think that the Administration should be more
    aggressive in coming to Congress and saying what they need.
    That is one area that I am really concerned about. Mr. Walker,
    you talk to these people. I just think at this stage in this
    Administration, we ought to be just telling DHS to focus on its
    mission and not another reorganization. Even if it started now,
    it will not be done by the end of this Administration. Does
    anyone want to comment on that?
        Mr. Walker. Well, I think that we need a reasonable degree
    of stability in order to be able to execute on critical areas
    that need to be focused on. As you know, some of these
    organizational issues are not just internally driven. In some
    cases, Congress is looking into possibly restructuring.
        We have done work with regard to what went right, what
    didn't go right with regard to Hurricanes Katrina and Rita, and
    one of the things that we talked about is you need to have,
    among other things, a person responsible and accountable for a
    major emergency who reports directly to the President of the
    United States in the wake of a catastrophic event. That does
    not necessarily mean that FEMA has to be outside the Department
    of Homeland Security. There are ways to accomplish the
    objective without unbundling that organization, and I think
    Congress and the key players need to focus on the substance,
    rather than the form, of a lot of the challenges that we face,
    so we can focus more on achieving results.
        Chairman Voinovich. Exactly, and it gets back to a
    management principle. I have spent over 18 years managing in
    the Executive Branch. My observation is, you can have a
    structure that may not be perfect, but if you have the right
    individuals, you can be successful. You can have a perfect
    structure, but if you don't have the leadership, it is not
    going to work. I think that is where we are right now. They
    need consistent leadership at Homeland Security. They have the
    right people. Give them the job and let them go out and get it
    done instead of debating the organizational structure. Then
    what happens is officials spend time coming up here to testify
    when they should be out in the field emphasising getting the
    job done.
        Mr. Walker. Mr. Chairman, when I first came to GAO in
    November 1998, I worked together with all our top executives
    and got input from our employees to be able to come up with our
    first ever strategic plan in early 2000 and then to realign the
    organization to support that plan. I made those decisions early
    and we got it behind us. You need some stability in an
    organization so you can focus on achieving positive results.
    When people are worried about where their organization is going
    to be, or where they are going to be, that has an automatic
    undercutting of productivity.
        Chairman Voinovich. And it doesn't help in recruiting,
    either.
        Mr. Walker. No, and I also agree that if you don't have the
    right leaders, nothing else matters.
        Chairman Voinovich. Listen, that is a great way to end this
    hearing. I really appreciate the fact that the two of you have
    been here. I think this has been very helpful to us. We
    continue to look forward to working with you. Keep it up. To
    your team back there, we are very proud of you. You are really
    stirring the pot and getting things done. Thanks for following
    Ms. Springer in her efforts. She is only as good as you guys
    are. Thank you for what you are doing.
        This hearing is adjourned.
        [Whereupon, at 11:42 a.m., the Subcommittee was adjourned.]
                                A P P E N D I X

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