[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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