[House Hearing, 112 Congress]
[From the U.S. Government Publishing Office]



 
                           BUILDING ONE DHS: 

                      WHY IS EMPLOYEE MORALE LOW?
=======================================================================


                                HEARING

                               before the

                       SUBCOMMITTEE ON OVERSIGHT,

                     INVESTIGATIONS, AND MANAGEMENT

                                 of the

                     COMMITTEE ON HOMELAND SECURITY

                        HOUSE OF REPRESENTATIVES

                      ONE HUNDRED TWELFTH CONGRESS

                             SECOND SESSION

                               __________

                             MARCH 22, 2012

                               __________

                           Serial No. 112-79

                               __________

       Printed for the use of the Committee on Homeland Security
                                     

[GRAPHIC] [TIFF OMITTED] CONGRESS.#13


                                     

      Available via the World Wide Web: http://www.gpo.gov/fdsys/

                               __________



                  U.S. GOVERNMENT PRINTING OFFICE
76-605                    WASHINGTON : 2009
-----------------------------------------------------------------------
For sale by the Superintendent of Documents, U.S. Government Printing 
Office Internet: bookstore.gpo.gov Phone: toll free (866) 512-1800; DC 
area (202) 512-1800 Fax: (202) 512-2104  Mail: Stop IDCC, Washington, DC 
20402-0001



                     COMMITTEE ON HOMELAND SECURITY

                   Peter T. King, New York, Chairman
Lamar Smith, Texas                   Bennie G. Thompson, Mississippi
Daniel E. Lungren, California        Loretta Sanchez, California
Mike Rogers, Alabama                 Sheila Jackson Lee, Texas
Michael T. McCaul, Texas             Henry Cuellar, Texas
Gus M. Bilirakis, Florida            Yvette D. Clarke, New York
Paul C. Broun, Georgia               Laura Richardson, California
Candice S. Miller, Michigan          Danny K. Davis, Illinois
Tim Walberg, Michigan                Brian Higgins, New York
Chip Cravaack, Minnesota             Cedric L. Richmond, Louisiana
Joe Walsh, Illinois                  Hansen Clarke, Michigan
Patrick Meehan, Pennsylvania         William R. Keating, Massachusetts
Ben Quayle, Arizona                  Kathleen C. Hochul, New York
Scott Rigell, Virginia               Janice Hahn, California
Billy Long, Missouri                 Vacancy
Jeff Duncan, South Carolina
Tom Marino, Pennsylvania
Blake Farenthold, Texas
Robert L. Turner, New York
            Michael J. Russell, Staff Director/Chief Counsel
               Kerry Ann Watkins, Senior Policy Director
                    Michael S. Twinchek, Chief Clerk
                I. Lanier Avant, Minority Staff Director
                                 ------                                

       SUBCOMMITTEE ON OVERSIGHT, INVESTIGATIONS, AND MANAGEMENT

                   Michael T. McCaul, Texas, Chairman
Gus M. Bilirakis, Florida            William R. Keating, Massachusetts
Billy Long, Missouri, Vice Chair     Yvette D. Clarke, New York
Jeff Duncan, South Carolina          Danny K. Davis, Illinois
Tom Marino, Pennsylvania             Bennie G. Thompson, Mississippi 
Peter T. King, New York (Ex              (Ex Officio)
    Officio)
                  Dr. R. Nick Palarino, Staff Director
                   Diana Bergwin, Subcommittee Clerk
              Tamla Scott, Minority Subcommittee Director


                            C O N T E N T S

                              ----------                              
                                                                   Page

                               STATEMENTS

The Honorable Michael T. McCaul, a Representative in Congress 
  From the State of Texas, and Chairman, Subcommittee on 
  Oversight, Investigations, and Management:
  Oral Statement.................................................     1
  Prepared Statement.............................................     2
The Honorable William R. Keating, a Representative in Congress 
  From the State of Massachusetts, and Ranking Member, 
  Subcommittee on Oversight, Investigations, and Management:
  Prepared Statement.............................................     4
The Honorable Bennie G. Thompson, a Representative in Congress 
  From the State of Mississippi, and Ranking Member, Committee on 
  Homeland Security..............................................     3

                               WITNESSES
                                Panel I

Admiral Thad W. Allen (Ret.), Senior Vice President, Booz Allen 
  Hamilton:
  Oral Statement.................................................     5
  Prepared Statement.............................................     7

                                Panel II

Ms. Catherine V. Emerson, Chief Human Capital Officer, Department 
  of Homeland Security:
  Oral Statement.................................................    18
  Prepared Statement.............................................    20
Mr. David C. Maurer, Director, Homeland Security and Justice 
  Team, Government Accountability Office:
  Oral Statement.................................................    23
  Prepared Statement.............................................    24
Mr. Max Stier, President and CEO, The Partnership for Public 
  Service:
  Oral Statement.................................................    33
  Prepared Statement.............................................    35
Dr. Jeff T.H. Pon, Chief Human Resources Officer, Society for 
  Human Resource Management:
  Oral Statement.................................................    42
  Prepared Statement.............................................    44

                             FOR THE RECORD

The Honorable William R. Keating, a Representative in Congress 
  From the State of Massachusetts, and Ranking Member, 
  Subcommittee on Oversight, Investigations, and Management:
  Statement of the National Treasury Employees Union.............    56


             BUILDING ONE DHS: WHY IS EMPLOYEE MORALE LOW?

                              ----------                              


                        Thursday, March 22, 2012

             U.S. House of Representatives,
    Subcommittee on Oversight, Investigations, and 
                                        Management,
                            Committee on Homeland Security,
                                                    Washington, DC.
    The subcommittee met, pursuant to call, at 9:08 a.m., in 
Room 311, Canon House Office Building, Hon. Michael T. McCaul 
[Chairman of the subcommittee] presiding.
    Present: Representatives McCaul, Duncan, Keating, and 
Thompson.
    Mr. McCaul. The committee will come to order. Good morning, 
everybody. I want to thank the Ranking Member of the full 
committee for subbing in for the Ranking Member of the 
subcommittee today.
    I now recognize myself for an opening statement.
    More than 200,000 men and women whose job is to keep 
Americans safe from terrorist attacks have a low level of 
morale, and equally as important, a low level of confidence in 
their leadership. Simply put, the Department of Homeland 
Security, whose employees' job responsibilities range from law 
enforcement to intelligence analysis, from screening airline 
passengers to protecting cyberspace, have a morale problem.
    To quote a memo written by the Department of Homeland 
security, ``vulnerability in leadership is a vulnerability in 
homeland security.'' I could not agree more.
    With such a diverse workforce there are bound to be 
inherent leadership challenges. But after 9 years the 
Department continues to struggle with low employee morale.
    DHS employees strongly believe in their work and their 
mission, but what does it say when only 37 percent of DHS 
employees believe senior leaders motivate them and only 37 
percent are satisfied with their senior leaders' policies and 
practices? Those numbers are some of the poor grades assigned 
to the Department's leadership in the Office of Personnel 
Management Federal Viewpoints Survey.
    This is unacceptable. DHS's mission is the safety and 
security of this country and the success or failure of that 
mission depends on the people in that organization. We need to 
ensure our men and women on the front lines of securing our 
homeland have the support of the Nation and their own 
leadership.
    These hardworking individuals deserve the best the 
Department has to offer. Instead, DHS ranks 31 out of 33 
Federal organizations in the Best Places to Work survey.
    We should also be concerned about the range of employee 
satisfaction in the various DHS subordinate agencies, 
especially the differences. The United States Coast Guard made 
gains this year, to commend them, in the survey, and they 
ranked 37 out of 240 subcomponents in the Federal Government 
while the Office of Science and Technology ranked 238 out of 
240. Of course, various DHS components have different mission 
sets, but they should not have different mindsets.
    Today we look forward to hearing from Admiral Thad Allen 
about building morale in these organizations. As most of us 
know, Admiral Allen, besides a distinguished military career, 
led the successful response and clean-up of the Gulf oil spill.
    Morale can drive an organization forward or it can fuel the 
fire of deeper discontent among employees, eventually 
compromising its mission. There is too much at stake for the 
American people to allow this to continue.
    We hope to hear today what is causing low morale in DHS and 
how DHS plans to improve morale by communicating a vision, 
energizing staff, and developing loyalty and a team mentality 
within its workforce. Without these essential elements the goal 
of developing what Secretary Napolitano wants, ``One DHS''--
that cannot be accomplished.
    This is our fourth hearing examining DHS management issues. 
There is a sense of deja vu for anyone following these 
hearings. While I believe DHS management is working to address 
their problems and moving in the right direction, by their own 
admission they have a long road ahead.
    Merely combining 22 agencies with the mission of homeland 
security will not produce better performance or a coherent 
policy. This is the job of leadership.
    In order to create One DHS, greater attention and focus 
needs to be placed on the issues we have highlighted over the 
past 2 months. Resolving the management issues, such as 
developing a clear and focused strategy in line with budget 
allocations, technology integration, and eliminating waste and 
duplication in the Department are issues I believe will go a 
long way to improving workforce morale.
    Now, with that I would like to recognize now the Ranking 
Member of the full Homeland Security Committee, Mr. Thompson, 
for his opening statement.
    [The statement of Chairman McCaul follows:]
                Statement of Chairman Michael T. McCaul
                             March 22, 2012
    More than 200,000 men and women whose job it is to keep Americans 
safe from terrorist attacks have a low level of morale, and equally as 
important a low level of confidence in their leadership.
    Simply put, the Department of Homeland Security, whose employees' 
job responsibilities range from law enforcement to intelligence 
analysis, from screening airline passengers to protecting cyberspace, 
has a morale problem.
    To quote a memo written by the Department of Homeland Security, 
``vulnerability in leadership is a vulnerability in homeland 
security.''
    I could not agree more.
    With such a diverse workforce there are bound to be inherent 
leadership challenges. But after 9 years the Department continues to 
struggle with low employee morale.
    DHS employees strongly believe in their work and mission. But what 
does it say when only 37% of DHS employees believe senior leaders 
motivate them and only 37% are satisfied with their senior leaders' 
policies and practices? Those numbers are some of the poor grades 
assigned to the Department's leadership in the Office of Personnel 
Management's Federal Viewpoints Survey.
    This is unacceptable.
    DHS's mission is the safety and security of this country and the 
success or failure of that mission depends on the people in that 
organization. We need to ensure our men and women on the front lines of 
securing our homeland have the support of the Nation and their own 
leadership.
    These hard-working individuals deserve the best the Department has 
to offer. Instead, DHS ranks 31 out of 33 Federal organizations in the 
Best Places to Work survey.
    We should also be concerned about the range of employee 
satisfaction in the various DHS subordinate agencies, especially the 
differences. The United States Coast Guard made gains this year in the 
survey and ranked 37 out of 240 subcomponents in the Federal Government 
while the Office of Science and Technology ranked 238 out of 240. Of 
course various DHS components have different mission sets but they 
should not have different mind sets.
    Today we look forward to hearing from Admiral Thad Allen about 
building morale in organizations. As most of us know, Admiral Allen, 
besides a distinguished military career, lead the successful response 
and clean-up of the Gulf oil spill.
    Morale can drive an organization forward or it can fuel the fire of 
deeper discontent among employees, eventually compromising its mission. 
There is too much at stake for the American people to allow this to 
continue.
    We hope to hear today what is causing low morale in DHS, how DHS 
plans to improve morale by communicating a vision, energizing staff, 
and developing loyalty and a team mentality within its workforce. 
Without these essential elements the goal of developing what Secretary 
Napolitano wants, ``One DHS,'' cannot be accomplished.
    This is our fourth hearing examining DHS management issues. There 
is a sense of deja vu for anyone following these hearings. While I 
believe DHS management is working to address their problems and moving 
in the right direction, by their own admission they have a long road 
ahead.
    Merely combining 22 agencies with the mission of ``homeland 
security'' will not produce better performance or a coherent policy. 
This is the job of leadership.
    In order to create ``One DHS'', greater attention and focus needs 
to be placed on the issues we have highlighted over the past 2 months. 
Resolving the management issues such as developing a clear and focused 
strategy in line with budget allocations, technology integration, and 
eliminating waste and duplication in the Department are issues I 
believe will go a long way to improving workforce morale.

    Mr. Thompson. Thank you very much, Chairman McCaul, for 
holding this hearing.
    For too long the Department of Homeland Security has been 
plagued with low morale, employee dissatisfaction, and rankings 
at or near the bottom of the Federal human capital surveys. 
Eleven years into the Department's existence it remains at or 
near the bottom in Federal Government rankings.
    There are more than 220,000 employees who serve every day 
at the Department in an effort to keep our country secure. They 
are clear on their mission, and according to the latest Office 
of Personnel Management survey, 91 percent of those responding 
believe the work they do is important. And it is.
    Department of Homeland Security employees represent the 
front lines of our Nation's airport, land, and marine borders 
and ports of entry. They are called when disaster and 
emergencies strike and they uphold the immigration laws of our 
Nation.
    They develop technology for homeland security and homeland 
defense missions and work with other Federal agencies to 
protect and secure our infrastructure. They protect the 
President of the United States and over 9,000 Federal buildings 
across America.
    They also work at the Department's headquarters providing 
the managerial and administrative means for the Department to 
fulfill its mission, and this exhaustive list does not fully 
cover what it takes on a daily basis to staff and operate the 
third-largest agency in the Federal Government.
    Yet, despite numerous Government Accountability Office 
recommendations and insight on where the problems lie from 
surveys conducted by the Office of Personnel Management and the 
Partnership for Public Service, the Department has yet to 
figure out a strategy for improving its employees' morale. 
Given its mission, the lack of human capital strategy is not 
about numbers; it is about the security of our country.
    The solution must come from the top. Unfortunately, the 
position responsible for establishing human capital priorities, 
recommending program improvements, and implementing corrective 
action--the chief human capital officer--has been one of the 
highest turnover rates of all Department leadership positions. 
Including those serving in an acting capacity, there have been 
eight different human capital officers at DHS since 2003. Only 
one has served more than 2 years; most last about 13 months.
    Moreover, the Department has yet to achieve the level of 
diversity that is reflected Government-wide. In every category 
except one the number of racial and ethnic minority employees 
at the Department is lower than the Federal average.
    It is no secret that the current economic climate has 
caused Federal agencies to do more with less. But I am 
encouraged that the 2011 OPM survey revealed that 96 percent of 
respondents feel that they are willing to put in the extra 
effort to get the job done and 90 percent feel that they are 
constantly looking for ways to do their job better.
    To the contrary, only 78 percent feel that they are treated 
with respect by supervisors and less than half--46 percent--
believe that promotions are based on merit.
    I applaud the efforts to put into place, by Secretary 
Napolitano, such as new workforce strategy, the leader 
development program, and the integrated strategy for high risk. 
I am also pleased to see the addition of a diversity and 
inclusion officer at the Department.
    However, I am deeply troubled that employees continue to 
rank the Department at or near the bottom. Hopefully today's 
hearing will shed light on how to improve this dismal picture.
    I yield back, Mr. Chairman.
    Mr. McCaul. I thank the Ranking Member. Other Members are 
reminded that they may submit statements for the record.
    [The statement of Ranking Member Keating follows:]
              Statement of Ranking Member William Keating
                             March 22, 2012
    Thank you Chairman McCaul for holding today's hearing.
    I would also like thank our distinguished witnesses for their 
participation.
    Today, we will examine an issue that is vital to the Department of 
Homeland Security's operations and that is the management of its 
220,000 employees.
    I am deeply troubled by the Department's ranking in both the Office 
of Personnel Management Federal Employee Viewpoint Survey and the 
Partnership for Public Service's Best Places to Work rankings.
    In both surveys the Department ranked near the bottom.
    On a positive note, the survey revealed that progress has been made 
in the last 5 years; however, this progress has been incremental and 
has not yielded overall improvement for the Department's ranking as 
compared to other Federal agencies.
    To that end, I am pleased that today's hearing will provide us with 
an opportunity to examine ways to chart a way forward.
    To do so, however, the Department must properly address the causes 
of its employees' dissatisfaction and make a concerted effort to 
improve Department-wide morale.
    Given the huge gap between component-level responses, it is clear 
that there needs to be a clearer connection and better collaboration 
between DHS headquarters and its components.
    For example, although the U.S. Coast Guard and the Federal Law 
Enforcement Training Center received overall scores of 70.9 and 66.5, 
respectively; TSA's score was a mere 48 and the Science and Technology 
Directorate was even lower at 41.
    The Department recently developed its Workforce Strategy for fiscal 
years 2011-2016.
    Hopefully, this plan will serves as the blueprint for improved 
human capital management and result in better morale among the 
Department's employees.
    I look forward to hearing today's testimony.
    Thank you.

    Mr. McCaul. Like to introduce our first witness. Admiral 
Allen is the senior vice president at Booz Allen Hamilton, 
supporting the firm's work with the Departments of Justice and 
Homeland Security.
    Mr. Allen completed his distinguished career in the United 
States Coast Guard as its 23rd commandant. In 2010 President 
Obama selected Admiral Allen to serve as the National Incident 
Commander for the unified response to the Deepwater Horizon oil 
spill in the Gulf of Mexico.
    I commend you for your great work in that effort.
    Prior to his assignment as commandant Admiral Allen served 
as a Coast Guard chief of staff.
    I want to thank you for being here today, Admiral. With 
that, I recognize you for your testimony.

    STATEMENT OF ADMIRAL THAD W. ALLEN (RET.), SENIOR VICE 
                 PRESIDENT, BOOZ ALLEN HAMILTON

    Admiral Allen. Thank you.
    Chairman McCaul, Ranking Member Thompson, I want to thank 
you for holding the hearing this morning and congratulate you 
on taking the opportunity to look at what I think is a very 
important issue in the Department of Homeland Security. I have 
been involved with the Department since its inception and I 
welcome the opportunity to discuss the linkage between employee 
morale and personal and organizational performance, which I 
believe is a key.
    I would say today that I am testifying in my capacity as a 
private citizen and the views expressed by me are not intended 
to represent any Government agency or a private firm. A summary 
of my work experience and experience related to the missions of 
the Department of Homeland Security are provided at the 
conclusion of my statement.
    Mr. Chairman, with your permission I will submit a 
statement for the record and proceed with a brief oral summary.
    Mr. McCaul. Without objection, so ordered.
    Admiral Allen. Thank you.
    Let me state at the outset that it is my belief that morale 
is not an objective to be achieved in an organization. It is 
rather the natural byproduct of a high-performing organization 
and its people. It is a measure of their collective 
understanding by the employees of their mission and their role 
in the organization and an acknowledgement that the conditions 
in which they work enable them to succeed.
    When there is a shared vision of the mission, commitment to 
shared values of an organization, and strong, effective 
leadership that enables employees to be successful, morale 
happens. Creating such an environment is not necessarily easy 
and cannot be accomplished overnight. It is the collective 
impact of workplace conditions, the quality of front-line 
supervisory leadership, the mission support structure that 
enables mission execution, and an enduring commitment by senior 
leaders to the concept that mission performance starts and ends 
with people.
    I believe there are three contexts in which morale is 
generated in any organization of Government. The first place is 
the workplace environment and the conditions under which 
employees work and the front-line supervisory leadership.
    I believe the next level is the Department agency or 
environment, and there the mission, the structure of the 
organization itself, the culture, the maturity of the support 
structures that are in that agency all bear on the ability of 
employees to do their job and create the perception in these 
employees that the organization cares about them and their 
performance. Finally, there is the overall structure of the 
Federal Government and its real or perceived competency to meet 
its social contract with the American public.
    I have said in a number of fora over the last couple years 
that as we look at a constrained budget environment moving 
forward in the Government we need to understand that we are 
going to have to make difficult choices and we shouldn't 
confuse the mandate to deal with shrinking budgets with the 
value of public service. I think we do a great disservice to 
hundreds of thousands of Federal employees when a constrained 
fiscal environment is interpreted as a referendum on the value 
of public service.
    I think before we have any discussion of morale regarding 
the Department it is important to note what I would call the 
preexisting organizational issues that create so much 
complexity and challenges in the Department of Homeland 
Security, and I think anybody that is familiar with the 
evolution of the Department since its establishment in 2003 
would probably agree that we are in the process of trying to 
retrofit basic organizational structures, capabilities, and 
competencies into an organization that was mandated to come 
into effect 60 days after the President signed this act into 
law, and then the agencies had to come in by March 1, 2003, 
less than 6 months' total time.
    This was done in the middle of a fiscal year. There was no 
appropriation provided to the Department until fiscal year 
2004. The bill was signed just before and during midterm 
elections with no real capability for the Senate to be 
impaneled and actually confirm senior leaders in the 
Department. That created a massive amount of complexity and 
difficulty in standing up the Department.
    I think we need to understand, too, that some agencies--and 
you mentioned this earlier, Mr. Chairman--the Coast Guard and 
Secret Service--were moved over intact, with the mission set 
intact and their culture and organizational structures in 
place, and because of that they have scored higher, 
traditionally, in these surveys and rankings. TSA was still a 
work in progress; they were transferred intact but they were 
still trying to build an organization. CBP and ICE were--
basically inspection functions were taken from INS--legacy 
INS--Treasury, and other agencies, and recombined, as was ICE 
with the investigative functions from Customs and Immigration.
    So what you have is a mixture of 22 agencies that are in 
various stages of their life cycle, and therefore, various 
stages of maturity and trying to develop the internal 
mechanisms that allow them to enable employees or create 
support structure. We should understand that but we should not 
take that as an excuse why we shouldn't move forward.
    One look at the appropriations proposal for this year--the 
budget justification--will show you, if you look across all the 
different agencies, that the breakdown of the appropriation 
structures is not the same so it is hard to compare the cost 
and the structure related to things like human resources, that 
are very, very impactful on employees.
    I would say there are four areas to look at moving forward. 
One, we would look at development of leaders to retain 
employees and create unity of effort. We need to provide the 
tools, capability, and competencies that enable personnel to 
succeed in the workplace.
    We need to create a mission support architecture to 
generate and sustain the capability and capacity of the 
enterprise to execute the mission. Finally, we need to 
integrate planning and coordination of mission execution that 
reflects internal unity of effort and external interagency 
leadership for the Department.
    In my view, those four basic dimensions will empower and 
improve personal performance and organizational performance, 
and morale will be a by-product of that process.
    Thank you for having me here this morning, Mr. Chairman.
    [The statement of Admiral Allen follows:]
                  Prepared Statement of Thad W. Allen
                             March 22, 2012
                              introduction
    Chairman McCaul, Ranking Member Keating, and Members of the 
subcommittee, thank you for the opportunity to provide testimony today.
    Let me first congratulate you Mr. Chairman and the committee for 
addressing an important issue. I have been involved with the Department 
since its inception and welcome the opportunity to discuss the linkage 
between employee morale and and personal and organizational 
performance.
    I am testifying today in my capacity as a private citizen and the 
views expressed by me are not intended to represent any Government 
agency or private firm. A summary of my work experience and experience 
related to the missions of the Department of Homeland Security are 
provided at the conclusion of this statement.
    Max Stier, the President of the Partnership for Public Service is a 
member of the next panel and is best suited to discuss in detail their 
report Best Places To Work In The Federal Government. My perspective 
today is one of a leader who served in the Department of Homeland 
Security since its inception and as a coworker and colleague of the men 
and women who serve or have served in the components that make up the 
Department for over 40 years. My comments also reflect my experience 
leading large complex responses across the Federal Government that 
demand unity of effort to meet our commitment to the American public.
                                 morale
    Let me state at the outset that it is my belief that morale is not 
an objective to be achieved in an organization. It is rather the 
natural by product of high-performing people and organizations. It is a 
measure of the collective understanding by employees of the mission and 
their role in the organization and an acknowledgement that the 
conditions in which they work enable them to succeed.
    When there is a shared vision of the mission, commitment to the 
shared values of an organization, and strong and effective leadership 
that enables employees to be successful, morale ``happens.'' Creating 
such an environment is not necessarily easy and cannot be accomplished 
overnight. It is the collective impact of workplace conditions, the 
quality of front-line supervisory leadership, the mission support 
structure that enables mission execution, and an enduring commitment by 
senior leaders to the concept that mission performance starts and ends 
with people.
                         organizational context
    It is my opinion that there are three environments that 
collectively interact with individual performance and therefore impact 
morale.
The Workplace Environment
    At a very basic and personal level, morale is the collective effect 
and interaction of individual aspirations, interpersonal relationships, 
workplace conditions, and front-line supervisory leadership that that 
drive employee performance. From this view, to paraphrase your former 
colleague Tip O'Neill, all ``morale is local.'' At this level the 
greatest organizational impacts on employee morale in my view are: (1) 
The quality of front-line supervisory leadership and (2) the work 
environment--the physical surroundings, support structures, work tools, 
and co-workers. This applies equally to deployed units, field offices, 
and headquarters staffs.
The Department or Agency Environment
    Beyond the immediate work environment, factors that impact personal 
and organizational performance are legislative authorities that define 
the mission and structure and effectiveness of the organization. 
Specifically, I am referring to the capability and capacity of the 
enterprise to execute the mission, the real or perceived competency of 
the organization (internally and externally), and ultimately the 
understanding of the individual of their role and their value in that 
structure. Critical to employee understanding of their role in this 
larger context is clear, unambiguous communication by leaders on 
mission and core values.
The Federal Government Environment
    Finally, the overall structure of the Federal Government and its 
real or perceived competency to meet its social contract with the 
American public is something that every Government employee feels and 
understands. I have stated repeatedly in various fora that is important 
to distinguish between the difficult choices that are required to deal 
with shrinking budgets and the value of public service. We do a great 
disservice to hundreds of thousands of Federal employees when a 
constrained fiscal environment is interpreted as a referendum on the 
value of public service.
  pre-existing organizational issues create complexity and challenges
    It is difficult to discuss employee morale in DHS without first 
acknowledging the conditions under which the Department was created and 
the degree of difficulty associated with ``retrofitting'' basic 
organizational structure and capabilities. This issue is greatly 
misunderstood but any discussion regarding Departmental performance and 
morale must acknowledge it. We need to understand that different 
elements and components of the Department were created and now exist 
within radically different structures and are in different stages 
organizational life cycle and maturity, including the Departmental 
headquarters. For example, the highest-scoring Departmental agencies in 
the rankings (Coast Guard and Secret Service) were moved intact to DHS 
in 2003 with minimal disruption to on-going operations. While TSA was 
transferred intact, the organization was still being built. CBP and 
ICE, on the other hand, were created largely from reorganized INS and 
Customs functions with the attendant challenges of integrating work 
forces, different collective bargaining structures, different grade 
structures, and operating procedures. Still other entities such as the 
Domestic Nuclear Detection Office, Science and Technology, and 
Intelligence and Analysis were created from ``whole cloth'' by 
legislation and had no precursors.
    The process was further complicated by the inelegant redistribution 
of base funding from legacy departments and agencies due to a lack of 
historical cost information (the Department was created in the middle 
of a fiscal year with reprogrammed funds and did not receive an annual 
appropriation until FHY 2004). OMB has pressed for efficiencies 
throughout the life of the Department without first acknowledging that 
capability, competency, and capacity are precursors to cost savings (IT 
savings were sought in the transition process when new investment was 
required).
    The Department's fiscal year 2013 budget justifications reveals 
little consistency in budget presentation or treatment of standard 
organizational costs such as personnel, operating expenses, capital 
investment, programs of record, or support costs such as information 
technology. While progress has been made to standardize budget 
submissions the basic structure of appropriations remains different in 
each component and is an indicator of the enduring challenge of 
functional integration in DHS. While these issues sound bureaucratic 
and removed from actual work environments, there are few employees in 
the Department that are not aware of the challenges associated with 
maturing the enterprise.
 improved individual and organizational performance positively impacts 
                                 morale
    An exhaustive evaluation of every factor that impacts employee 
morale is well beyond the scope of my testimony today. Accordingly, I 
would like to focus on a few areas that I believe offer the best 
opportunities to improve organizational and individual performance and 
by extension morale. It is not surprising that these recommendations 
also contribute to a more integrated, functionally aligned department 
that is more capable of mission execution.
   Develop Leaders That Retain Employees and Create Unity of 
        Effort
   Provide the Tools, Capabilities, and Competencies That 
        Enable Personnel To Succeed in the Work Place
   Create A Mission Support Architecture To Generate and 
        Sustain the Capability and Capacity of the Enterprise to 
        Execute the Mission
   Integrate the Planning and Coordination of Mission Execution 
        That Reflects Internal Unity of Effort and External Interagency 
        Leadership
    develop leaders that retain employees and create unity of effort
    The Federal Government has struggled for decades to create a 
strategic and comprehensive leadership development framework. The 
Government-wide effort has been attenuated by various individual 
mandates to develop training programs within communities of interest 
such as the intelligence community, National security organization, 
Defense Department, State Department, and others. The spotty collective 
performance of these initiatives has less to do with their content than 
the lack of sustained commitment at the highest levels of the 
organization that protects, nurtures, and celebrates the process that 
produces leaders, an earmark of successful and sustained military 
professional and leadership development.
    As a strong supporter of the current DHS Fellows program I can 
personally attest to the fact that the program is valued and celebrated 
by the cohort that has received the training and the program is helping 
to build cohesion within the Department. I also strongly support the 
evolving DHS leadership framework that focuses on employees at all 
levels. That fact however carries little weight with budget reviewers 
and examiners and these programs are often the first casualty of 
internal reviews, OMB passbacks, and budget negotiations that focus on 
large, high-dollar programs and policies at the expense of the basics 
of organizational success. As a result these programs are often funded 
from year-end ``fall out'' funds or reprogrammed funds from other 
programs when available. Mr. Chairman, these are not huge amounts of 
money but the return on investment is considerable. The leadership 
development program in Homeland Security should fence off a budget line 
item that allows multi-year planning, promotes consistency of program 
execution, and demonstrates senior leader commitment. While current 
programs begin with senior leader training, I would focus on improving 
the skills of front-line supervisors who have a significant impact on 
employee performance and morale.
provide the tools, capabilities, and competencies that enable personnel 
                      to succeed in the work place
    As noted earlier one facet of employee morale is their sense of the 
commitment of their organization and leaders to them through the tools 
they are provided to do their jobs. To that end, physical facilities, 
information technology, communications, specialized training, access to 
enterprise information, performance systems, collective bargaining 
structures, employee benefits, and the opportunity for organizational 
learning can all positively impact morale. It is well beyond the scope 
of my testimony to ``drill down'' in each of these areas regarding 
Departmental capability and performance. However, there are strong 
thematic links that can be discussed in the context of stronger 
component and Departmental performance. Three are discussed here.
Human Resource Systems
    First, the current human resource system the Department is an 
aggregation of pre-existing systems from legacy agencies and 
departments. Early attempts to create an all-encompassing HR system and 
a pay for performance structure across the Department failed and 
current efforts are focused on smaller incremental changes to integrate 
the diverse existing systems. Past failures to adequately forecast and 
budget for adjustments to position grades needed to integrate legacy 
organizations have resulted in short-term emergency fixes. The 
Department should seek to standardize the forecasting, accounting, 
budgeting, and funding of personnel costs within a Departmental 
framework that is visible and comparable across Departmental components 
and entities in the annual budget. Increased consistency and 
transparency in managing personnel costs will reduce uncertainty and 
the need for year-to-year adjustments that, in turn, create concern in 
the workforce.
Information Systems
    Second, whether an employee executes the mission in the field or 
supports the mission regionally or in a headquarters, the 
organizational medium of exchange that propels daily operations is 
information. From automated license plate readers at land ports of 
entry, to personal radiation detectors, to passenger and cargo 
screening, to cost accounting information related to logistics support 
of aircraft, mission execution, and mission support is enabled by the 
information that is generated by or made available to Department 
employees. Information sharing is an enterprise challenge that I will 
address in the next section but we should remember that employees 
measure organizational commitment by how much they are empowered to 
know and then to act on that knowledge. The challenge can be seen in 
discrete parts.
   Information collection, storage, and access.
   Analytical tools that convert data to decision-supporting 
        knowledge.
   Platforms and devices that allow access, including 
        visualization of knowledge to enable decision-making.
   Systems security.
    At present there are numerous efforts to improve information access 
for employees in the Department but it is generally focused at the 
component level and within individual stove-piped data and 
communications systems. While progress has been and is being made, 
every effort must be made to put state-of-the-art information 
technology tools in the hands of Departmental employees and those tools 
must be integrated across components.
Workplace Integration, Building A Unified Team
    Every DHS component and headquarters office has a noble and worthy 
mission to protect the American public. Some components such as Customs 
and Border Protection and the Coast Guard have legacies that span two 
centuries of service. However, the promise of the Homeland Security Act 
was knit these functions and activities into a unified, cohesive 
enterprise.
    The entering argument for unity of effort at the working level is 
trust. The formula for trust is: (1) A shared vision of the mission, 
(2) a commitment to share expertise and information, and (3) the 
ability to represent a parent organization without allowing parochial 
policy, budget, or cultural issues to cloud effective participation and 
the success of the larger ``good.'' When employees see their leaders 
creating this type of work environment they are motivated to improve 
their performance as well.
    I have seen this demonstrated in countless venues across the 
Department where effective teams work side-by-side, tirelessly everyday 
to executive the mission. The challenge is that this model is not 
present everywhere. Where it exists morale is high, where there is no 
trust employees revert to governing policies that protect the resources 
and discretion of their component, regardless of the mission 
requirement or the demands of the situation. These situations erode the 
rationale for the Department's creation and inhibit the maturation of 
the Department as a leader across Government.
    The ability to integrate effort in the field is affected by: (1) 
Facility decisions that restrict, do not allow, or fail to facilitate 
colocation, (2) stove-piped data systems that make access to even DHS 
counterpart's information difficult, and (3) local leadership 
challenges where supervisors are hesitant or unwilling to partner and 
collaborate. Similar challenges exist in Washington where components 
are physically separated from the Departmental headquarters and there 
is a proliferation of command centers.
   create a mission support architecture to generate and sustain the 
    capability and capacity of the enterprise to execute the mission
    During my first 2 years as Commandant of the Coast Guard I 
initiated a sweeping transformation of our mission support structure to 
build a more effective organization to enable mission execution. That 
transformation continues today. To demonstrate my commitment to this 
change I participated in a number of All Hands meetings throughout the 
Coast Guard. I explained the mandate for improved mission support in 
simple terms. If you work for the Coast Guard (or any governmental 
agency for that matter), you do one of two things: You either execute 
the mission or you support mission execution. If your daily work cannot 
be explained by either of these, one of two mistakes has occurred. The 
task has not been fully explained or the task is not needed.
    A significant driver of employee morale is the ability for the 
employee to connect their daily work to the agency mission. Everyone 
has heard the classic story of the janitor at a NASA facility who was 
asked what he did and his response was ``I put men on the moon!'' As 
noted earlier, the first decade of the existence of the Department of 
Homeland Security has been challenging and earmarked by: (1) Public 
``zero tolerance'' for failure, (2) unrelenting media scrutiny, (3) 
duplicative oversight, and (4) the inevitable immediate public 
discourse and referendum on Departmental performance while operations 
are being conducted. In this environment it is easy to become captive 
to what I call the ``tyranny of the present.'' That said, it is 
critically important to preserve the time, effort, and resources to 
unambiguously define the need and create a mission support structure 
that enables mission execution and allows every employee to say, ``I 
protect the homeland.''
    While one could argue exactly what constitutes ``mission support'' 
I think an acceptable structure would generally include the following:
   Human Resources
   Financial Management
   Information Systems and Communications (and their security)
   Acquisition Planning and Management
   Facilities Management
   Logistics and Maintenance
   Health, Safety, and Environment
    The challenge in creating an integrated Departmental mission 
support system is to combine disparate support systems that were 
transferred from legacy agencies with base funding contained in 
component appropriations. This requires a shared vision of the end-
state and a framework to implement needed changes. Repeated attempts at 
integration and/or consolidation across these functional support lines 
of business have not been successful. Employees know this. That said, 
current demand for improved performance and morale are now converging 
with a constrained budget environment to create a cause for action to 
refocus on the integration of mission support functions of the 
Department.
   integrate the planning and coordination of mission execution that 
 reflects internal unity of effort and external interagency leadership
    The Department faces two major challenges in effective mission 
execution to achieve unity of effort and improve performance (and 
morale): (1) Internal integration of operational planning and execution 
across components and mission areas, and (2) creating the capability, 
competency, and capacity to eternalize planning and execution across 
the Federal Government and vertically with State and local governments. 
This fundamental process of an operating department is, in my view, is 
the single most impactful Departmental role that is visible to all 
employees. Further, it is the basis by which the Department is seen and 
evaluated by stakeholders, overseers, the public, and the media.
    From the outset the Department has been hampered by the 
Balkanization of facilities and command centers, particularly in the 
Washington, DC area. The exigencies associated with standing up the 
Department rapidly and the proliferation of office locations in and 
around Washington has hampered the development of a central unified 
command center that is necessary to the effective planning and 
coordination of operations. The promise of a unified National 
operations center at the St. Elizabeth's venue appears to be in doubt.
    Notwithstanding the need for physical consolidation, the Department 
should continue to press ahead to develop improved organizational 
capability to plan and execute operations, including effective 
information sharing and analysis, risk assessment, and the development 
of Departmental and National doctrine to guide mission execution.
                               conclusion
    Mr. Chairman, the challenges faced by the Department of Homeland 
Security are numerous but hundreds of thousands of dedicated employees 
work tirelessly everyday to serve the American public. Our collective 
responsibility is to provide them the best leadership and tools that 
enable them to perform to their greatest potential. The goal should not 
be to try to affect survey respondents behavior to achieve a better 
score but to enable and empower employees to do their job and be proud 
of it. If you enable performance, morale will follow.

    Mr. McCaul. Thank the admiral for your testimony.
    Let me just say, you know, the report card--the grade is 
not good in terms of morale at the Department of Homeland 
Security, but the purpose of this hearing is not to beat down 
on the Department about this. The purpose of this hearing is: 
How can we constructively fix the problem? How can we build 
morale within the Department of Homeland Security?
    It is often referred to as a step-child or a whipping boy, 
and that is not where we want the Department to be. The mission 
is too important--to protect the lives of Americans. So I think 
constructively, in a bipartisan way, what we are trying to do 
here today is: How can we make it better and how can we improve 
that morale?
    There are some examples with other departments--Department 
of Defense, for instance, went through a lot of growing pains 
in a similar fashion. It took a while--as you mentioned, 
maturity of an organization--to get to the point where they are 
today.
    In fact, there was a book that was entitled ``How Much is 
Enough?'' about the Department of Defense, and it--and I have 
to read the quote from this book. It says, ``No large 
organization, military or civilian, public or private, is 
likely to pursue automatically the broader national interest as 
distinct from its own institutional interests without external 
forces and leadership in that direction.''
    So it really is about leadership. It is about maturity of 
the organization.
    I guess my question to you here is: What can we learn from 
the Department of Defense model? What are some of the maturity 
insights? For instance, Goldwater-Nichols--when we look at what 
we did--what they did to reform the Department of Defense and 
get it to where it is today, what are lessons learned we can 
utilize by looking at the DOD example, applying it to the 
Department of Homeland Security?
    Admiral Allen. Well, sir, if I were to give you two or 
three that just stand out, and this is a personal opinion now, 
I think relating back to your--the book--you mentioned ``How 
Much is Enough?'' which was written during the 1960s, is really 
a treatise on how the planning, programming, and budgeting 
system was put in place that exists today in the Department of 
Defense. Now, it has been changed and it gets altered by 
politics and leadership and everything, but a rational way to 
look at budgets and a multi-year forecasting model was what 
came out of that period under Secretary McNamara.
    If you look at the Homeland Security Act right now it 
actually mandates a future years homeland security plan, and 
the goal was to try and achieve some kind of a consistency in 
long-term budget estimations so you could have that ability to 
project out and make the tradeoffs between the types of 
capabilities and competencies that you would need to execute 
the mission. I would say in the 9 years the Department has been 
in existence the annual struggle to try and build out a future 
years homeland security plan and have that reflected in the 
budget justification has been an on-going internal struggle 
inside the administration because when you put out a 5-year 
projection that vastly starts to reduce the flexibility and 
oversight that is included in places like OMB and inter-
decisions that are taken in regard to the budget get pretty 
complex at that point.
    The second point I would make was the Goldwater-Nichols 
legislation was groundbreaking. As you know, it was driven 
largely by the failed rescue of the Iranian hostages in 1980 
and spotty performances in Panama and Grenada.
    We have similar experiences inside the Department that 
would lead us to believe that we need better unity of effort in 
integrating operations, planning, and coordination. This would 
traditionally be called the J3 or the J5 function in the 
military.
    But I think for the Department to succeed moving forward, 
and again, improve performance and morale, there needs to be a 
mechanism to create that kind of unity of effort inside the 
Department, to integrate across the components and unify the 
Department. That is a precursor for then projecting that 
leadership into the interagency for the responsibilities the 
Secretary has under the Homeland Security Act and directives 
like homeland security Presidential Directive 5.
    Mr. McCaul. What we have seen in prior hearings on this 
management issue is that it is not fully integrated; it is 
still 22 different agencies and in many respects stovepiped. 
Acquisition is not integrated. Procurement is not integrated. 
It is 22 different agencies. I think technology can play a big 
role in terms of cloud computing, integrating these 22 agencies 
together.
    Other than oversight, which is the function of this 
subcommittee, what can the Congress do to help in this effort?
    Admiral Allen. Well, I firmly believe, as a former 
commandant and as a recovering budget director of the Coast 
Guard that long-term consistency and predictability and out-
year budget estimates cannot be overstated as a way to be able 
to make tradeoffs, make reasoned choices about investments you 
are going to make, and the associated risk acceptance with 
that. If you have to redefine the 5-year estimates every year 
there is no baseline.
    I guess, to what you see in the Department of Defense in 
the Future Year Defense Plan, or the FYDP, I think the 
intention always was to create that. If I were to give you one 
thing that is already authorized, called for in the Homeland 
Security Act that has never been actually put into place it 
would be that.
    Mr. McCaul. Right. I appreciate the testimony. I think that 
someone like yourself, an admiral with Coast Guard experience, 
would be well-equipped to provide a leadership role within the 
Department. I know you are at Booz Allen now but I hope you 
will consider returning to public service in the future.
    With that, I recognize the Ranking Member.
    Mr. Thompson. I noticed we didn't get an answer from you on 
that return to public service.
    Admiral Allen. I am very happy with the status quo.
    [Laughter.]
    Mr. Thompson. Let me say at the outset, Admiral, we 
appreciate your service. You and I have worked on a number of 
projects together and even though those projects were difficult 
we worked through it to the satisfaction of everyone. So again, 
thank you for your service.
    Now that you are kind of out of the fishbowl and--I want to 
give you an opportunity to say that if you had an opportunity 
to create this One DHS--this goal of creating DHS--the Chairman 
talked about acquisition and some other things, but as you 
know, every department, for the most part, has a personnel 
system, and some of them relate, some don't. What would you do?
    Admiral Allen. Thank you for the question, sir. It is my 
personal opinion when you look at the operation of a Government 
agency the people in that agency do one of two things: You 
either execute the mission or you support the people that are 
executing the mission.
    When I was trying to go through a very difficult 
transformation in the Coast Guard in 2006, as you will 
remember, I went around and I held all-hands meetings and I 
would tell people, ``If you come into work every day and we 
cannot tell you--or you cannot tell me what you do to either 
execute the mission or support the mission we have made one of 
two mistakes. Either we haven't explained your job to you or we 
don't need your job.''
    I don't want to be binary about this, but I think that two 
areas of focus to improve the Department are mission execution 
and mission support, and if you start to parse that down--first 
on mission execution, it is the internal integration of 
planning and coordination of operations across the components 
and the ability to have that capacity at the Departmental level 
to be able to unify the effort of the Department. It is 
incredibly important for the Department's missions.
    This happens a lot in local areas. You can go to joint 
harbor operation centers--the TSA viper teams that are working 
with Coast Guard. There are tremendous examples in the field 
about how this works.
    I think the challenge is to institutionalize that in the 
Department and have a standard operating doctrine that is very 
similar to the joint operating doctrine you would see inside 
the military. I think this has to be done inside the Department 
first before the Department then can extend that type of 
leadership across the interagency, which is expected under the 
Homeland Security Act.
    On the mission support side, you are absolutely right, sir. 
We are talking about acquisition, finance, human resources, 
health, safety and environment, facilities--all those things 
that kind of create the environment that enables people to 
perform and organizations to perform.
    All of the base resources that actually make that happen in 
the Department rest in the components, and if you try and 
compare the cost of those services across the components and 
the budget you can't because the budgets are not presented the 
same way and the appropriations structures are not the same 
way. So I would press for greater transparency and uniformity 
of how those functions are represented in the budget so you can 
actually see who owns the resources and how they are being 
managed.
    After that I think there is a very valid role for the 
Department--comparing and contrasting to the Department of 
Defense--the Chairman's last question--there is no Secretary of 
the components in between that does acquisition, so you have to 
have competency in the components to do a certain level of that 
but then you have to have oversight in the Department. So in 
the area of acquisitions what you need is a very robust, 
competent life-cycle acquisition type of a management 
structure, and they have been working on this for a long time. 
I was actually part of this. That needs to continue but it 
needs to have the ability to integrate investment decisions. 
Again, it has to be put against a long-term budget that is 
predictable and consistent so you can make those decisions 
about that.
    So I would reduce everything to mission execution, mission 
support on execution that is unified, coordinated operations, 
planning and execution in the Department on the mission support 
side. It is to take the Under Secretary of management 
functions, which are administration, the CHCO, the CFO 
functions, and so forth, and figure out a way to have 
comparability across the components to where those bases are at 
because the money does not rest with the Department; the money 
is in the components. But there needs to be the authority and 
the ability and the accountability to integrate the operations 
across the top at the Department and then have that visible in 
the budget process.
    Mr. Thompson. Thank you.
    The other part is that--does that require legislation or 
that--does that just require the will to do it?
    Admiral Allen. In my view?
    Mr. Thompson. Yes.
    Admiral Allen. Requires no legislation.
    Mr. Thompson. Thank you.
    Yield back.
    Mr. McCaul. Thank you, Ranking Member.
    The Chairman now recognizes the gentleman from South 
Carolina, Mr. Duncan.
    Mr. Duncan. Thank you, Chairman.
    Admiral, thank you for being here today.
    I think one thing, Mr. Chairman, that we can do is simply 
say thank you to the men and women who are serving our country 
under the umbrella of the Department of Homeland Security right 
now, understanding that there is a level of frustration, 
especially when you think of the history of independent 
agencies or independent organizations within the U.S. 
Government that were brought under that umbrella, and they have 
lost some of their independence, so to speak, but under a 
broader mission to defend this homeland and make sure that we 
are safe.
    It is easy, I think, to become a little bit down when you 
constantly read the press and you constantly hear Members of 
Congress talk about the need to reduce the budget, find cuts, 
to save money for the taxpayer, and they are constantly berated 
by that. We have oversight hearings and we hammer the Secretary 
and the Department on their budget, and their expenditures, and 
making smart decisions. So I understand the morale component of 
that.
    So let me just pause and say thank you, because you all are 
keeping us safe. When I think about the myriad of duties that 
you have from, you know, Coast Guard, from your background, but 
container security, which we have talked about here, to TSA and 
internal and international flight safety, and just Customs and 
Border Patrol as a whole having to secure our Southwest Border 
and our Northern Border and deal with drug interdiction but 
also the things they are dealing with with EPA compliance, and 
just other things that are heaped upon the agency. I get that.
    So I think this oversight hearing is necessary in order to 
find ways we can facilitate to help you and help employee 
morale.
    I just have a quick question in terms of improving that 
morale. Which program or initiative, such as leadership 
development programs, or employee award ceremonies, visits from 
Members of Congress--which would have the greatest return on 
investment and what can we do to help you facilitate that?
    Admiral Allen. Well, sir, the first and most important 
thing we can do about employee morale--and there is not even a 
close second--is the best quality front-line leadership 
supervision. I believe that about any organization--and any 
military organization, any non-Governmental organization. 
Front-line supervisors are the most important impact on morale 
and employee retention. People do not leave jobs; they leave 
bad leaders.
    I believe there is a multi-tiered leadership program under 
development in the Department. I think what needs to happen is 
it needs to be formalized; it needs to be supported with a 
permanent budget line item that creates the predictability and 
consistency that allows them to implement that program. Then 
there needs to be an integration of existing leadership 
programs and their components so that it all comes together in 
a leadership architecture for the Department.
    But there, in my view, more important than developing 
front-line leaders.
    Mr. Duncan. Well, I have taken an opportunity as a freshman 
Member of Congress to go visit different programs under the 
DHS, try to understand staff development within my own staff.
    So, Mr. Chairman, I would just ask that we continue that 
process as Members of Congress to go and shake the hands of the 
front-line folks that are defending our Nation and making sure 
that we are safe, telling them ``thank you,'' asking their 
input on what we can do as Members of Congress to help them. 
Not just at the top level; I am talking about the folks from 
all across the spectrum.
    So I appreciate this hearing and I yield back the balance.
    Mr. McCaul. Thank the gentleman.
    Just one last follow-up, Admiral: As I mentioned, the 
report card is not good. DHS ranks almost dead last in terms of 
morale. This survey was taken by the people on the front line, 
whether it is Custom and Border Patrol, you know, or ICE. It 
was the referendum on leadership is what it was. It is not a 
good referendum.
    I think as you point out, people don't leave jobs; they 
leave bad leaders. I think that answers the question I had, but 
if you could maybe expand upon why, after 10 years, is the 
report card still so bad?
    Admiral Allen. Well, as I said earlier, I think morale is a 
byproduct of leadership and enabling employee performance and 
organizational performance. So if you are going to look at 
morale, which is the subject of the hearing and is discussed in 
the rankings, I think you need to go back and look at that--
that is the effect and what is the cause? I believe it is a 
combination of the issues related to front-line supervision and 
the development of leaders, but it also is the on-going 
understanding by employees in the Department of Homeland 
Security that that support structure--and everybody knows what 
the issues are--for some reason is not able to mature over 
changes of leadership that you mentioned earlier.
    A good example--and I will take one that is not Coast Guard 
related--when you bring inspectors from Immigration and Customs 
together and you have different grade structures, different 
levels for what are journeyman grades, you have different ways 
to estimate the cost associated with that--we went through a 
huge amount of turmoil in the last 24 or 36 months inside the 
Department to try and standardize the grade structures from the 
legacy organizational structures and then find the money to 
support the standardization of those grades because some of 
them had to be raised.
    Employees see that. That is not de facto leadership but 
they tend to aggregate that all in their impression of the 
commitment of the organization to them. That is the reason the 
evolution and the maturation of the support structure is so 
important as it relates to human resources. Information sharing 
and IT--what are the tools we put in the hands of our employees 
so they can actually work together and share at the port level?
    I think those are all things that become indicia to them of 
how much the Department cares, and it is easy to make that 
become a surrogate measure of leadership. So I am not sure you 
can parse this down. I think it is all interconnected.
    But the notion of maturing the support structure and all 
the basic elements that support the workforce cannot be 
understated in their impact on how employees perceive 
leadership.
    Mr. McCaul. Well, I think you are spot on, and I don't know 
if we need to--if leadership in DHS needs more training, 
perhaps maybe replacement. I don't really know what the answer 
is.
    Admiral Allen. Mr. Chairman, as a recovering budget officer 
I would tell you, you don't make policy until you spend money.
    Mr. McCaul. Right. That is a very good point.
    Well, Admiral, let me just say thank you for your testimony 
and I appreciate you showing up bright and early this morning. 
Thanks for the service--great service you made to this Nation 
through your tenure at Coast Guard, and the Deepwater Horizon 
cleanup, which was a great tragedy but you turned it into about 
as positive of a thing as you possibly could have. So thanks 
for your service to the country and I appreciate your 
testimony.
    Admiral Allen. Thank you, Mr. Chairman. Thank you for your 
leadership.
    Mr. McCaul. Thank you.
    With that, we will go to the second panel.
    Okay. I want to thank the second panel for being here 
today. I want to go ahead and begin the introductions.
    First, we have Ms. Catherine Emerson, who is the chief 
human capital officer at the Department of Homeland Security. 
She is responsible for the Department's recruiting, diversity, 
learning, and development policies, programs, and technology to 
ensure the Department has the right people in the right jobs at 
the right time. Prior to joining the Department, Ms. Emerson 
was the assistant administrator for human resource management 
at the Federal Aviation Administration.
    Thank you, Ms. Emerson, for being here this morning.
    Second, we have Mr. David Maurer, who has testified before 
this subcommittee on many occasions.
    It is good to have you back here again.
    He is the director of the U.S. Government Accountability 
Office of Homeland Security and Justice team. He leads the 
GAO's work reviewing DHS and Department of Justice management 
issues. His recent work in these areas include DHS management 
and integration, the Quadrennial Homeland Security Review, 
Secret Service financial management, DOJ grant management, and 
the Federal prison system, and an assessment of technologies 
for directing--detecting explosives in the passenger rail 
environment.
    Thank you for being here today, Mr. Maurer.
    Next, Mr. Max Stier--am I pronouncing that correctly--is 
the president and CEO of Partnership for Public Service. He has 
worked in all three branches of the Federal Government.
    In 1982 he served on the personal staff of Congressman Jim 
Leach. Mr. Stier clerked for Chief Judge James Oakes of the 
U.S. Court of Appeals for the second circuit in 1992, clerked 
for Justice David Souter of the United States Supreme Court in 
1994. Between these two positions Mr. Stier served as special 
litigation counsel to Assistant Attorney General Anne Bingaman 
at the Department of Justice.
    Next, we have Mr.--or Dr. Jeff Pon, chief human resources 
and strategy officer at the Society for Human Resources 
Management. Prior to joining the Society for Human Resources 
Management, Dr. Pon was the president and COO of Founders Inc., 
an organization whose mission it was to find the right jobs for 
returning military veterans and their families. In 2006 he was 
appointed as the chief human capital officer at the Department 
of Energy.
    I want to thank all of you for being here today.
    Now the Chairman recognizes Ms. Emerson for her testimony.

STATEMENT OF CATHERINE V. EMERSON, CHIEF HUMAN CAPITAL OFFICER, 
                DEPARTMENT OF HOMELAND SECURITY

    Ms. Emerson. Chairman McCaul, thank you for having me here 
today to discuss employee morale at the Department of Homeland 
Security. One of my top priorities as chief human capital 
officer for DHS is to support the Secretary's efforts to 
improve employee morale and engagement across the Department.
    While DHS ranked 31 out of 33 large agencies in the 
Partnership for Public Service Best Places to Work rankings, 
our strengths include DHS employees' belief in their work and 
willingness to go above and beyond the call of duty. This is a 
strong foundation and gives me hope that we can return to a 
strong upward trend in scores DHS experienced from 2006 to 
2010. Moreover, our drop in the Federal Employee Viewpoint 
Survey scores between 2010 and 2011 was mirrored Government-
wide, to a lesser degree, suggesting external factors also 
shaped 2011 results.
    While the specific strengths and gaps, as measured by the 
2011 survey, vary by component, we are using these findings to 
dictate a three-prong strategy to improve employee morale at 
DHS: The first is institutionally--institutionalizing a 
Secretarial mandate to all component heads to prioritize 
employee engagement, including the establishment of an Employee 
Engagement Executive Steering Committee. Second, supporting a 
unified One DHS through improved employee communication, 
training, emphasis on diversity and inclusion, and employee 
recognition. The third, strengthening the leadership skills and 
capacity of all supervisors and managers within DHS.
    With this comprehensive approach I expect to see DHS 
improve in its survey scores in the coming years. The 
correlation between morale and employees' need to feel 
connected to their leadership and to feel valued are 
unmistakable links to improving our overall scores.
    In January Secretary Napolitano directed the creation of 
the Employee Engagement ESC, which I chair. This group will 
focus on strategic employment engagement, including enhanced 
employee communications, recognition, and effective engagement 
with our union partners through the DHS Labor-Management Forum.
    One DHS is an idea that the Secretary has been using to 
build a stronger and more unified DHS, and there are several 
mutually reinforcing employee engagement efforts that fit under 
this umbrella. My written testimony highlights our efforts to 
consolidate our learning management systems, the DHS SES 
Candidate Development Program, and the DHS Fellows Program. It 
also highlights our diversity and inclusion strategic plan, the 
Secretary's award program, which are initiatives that I believe 
positively impact employee engagement.
    I would like to highlight our exciting work in the area of 
leader development, which we consider to be our most critical 
effort and is tied to employee satisfaction. In fiscal year 
2010 the deputy secretary directed the establishment of an 
integrated DHS leader development program to maximize mission 
performance, strengthen the DHS leadership bench, and to build 
leadership competencies at all levels of the DHS workforce. To 
accomplish this we ensured component participation in 
developing Department-wide requirements and programs and are 
leveraging what already exists within the components and 
applying them across the Department.
    The top priority to date has been the development of 
Cornerstone leader development program for front-line 
supervisors. This program establishes Department-wide training 
requirements for four distinct groups: Understanding the DHS 
leadership commitment, supervisor on-boarding, fundamentals of 
DHS leadership, and continuous development for supervisors.
    We are also moving forward in developing our Executive 
Capstone Program, which will be required for all new DHS 
executives, including Coast Guard admirals. The program, 
designed with significant input from components, will provide 
new executives across the Department with an intensive exposure 
to strategic leadership capabilities unique to being an 
executive at DHS.
    The 3-week program will feature on-site instruction at key 
DHS locations and will include simulation activities that build 
leadership competencies within a homeland security context. We 
plan to pilot the program this summer.
    With this renewed focus on employee engagement I am 
optimistic that DHS will again make incremental gains in 
employee satisfaction. It is our goal that the Department of 
Homeland Security be considered a best place to work in the 
Federal Government and beyond.
    I believe that the Department has instituted a strong and 
broadly-focused foundation upon which our efforts to improve 
employee morale will continue. Given the history of DHS we have 
significant challenges, but they are not insurmountable.
    Thank you.
    [The statement of Ms. Emerson follows:]
               Prepared Statement of Catherine V. Emerson
                             March 22, 2012
                              introduction
    Chairman McCaul, Ranking Member Keating, and other distinguished 
Members of the subcommittee, I thank you for the opportunity to appear 
before you today to discuss employee morale at the Department of 
Homeland Security.
    One of my top priorities as Chief Human Capital Officer for DHS is 
to support the Secretary's efforts to improve employee morale and 
engagement across the Department. In the 2011 Federal Employee 
Viewpoint Survey, our strengths included DHS employees' belief in their 
work and a willingness to go above and beyond the call of duty. This is 
a strong foundation and gives me hope that we can return to the strong 
upward trend in scores DHS experienced from 2006 to 2010. Moreover, our 
drop in Federal Employee Viewpoint Survey scores between 2010 and 2011 
was mirrored Government-wide to a lesser degree, suggesting external 
factors also shaped 2011 results.
    DHS's areas for improvement, as outlined in the 2011 Survey 
results, included employee recognition; opportunities for creativity, 
innovation, and empowerment; opportunities to get a better job within 
the organization; and the ability of senior leaders to generate 
employee motivation and commitment. While the specific strengths and 
gaps, as measured by the 2011 results, vary by component, we are using 
these findings to dictate a three-pronged strategy to improve employee 
morale at DHS:
    (1) Institutionalizing a Secretarial mandate to all component heads 
        to prioritize employee engagement, including the establishment 
        of an Employee Engagement Executive Steering Committee;
    (2) Supporting a unified, One DHS, through improved employee 
        communication, training, emphasis on diversity and inclusion, 
        and employee recognition; and
    (3) Strengthening the leadership skills and capacity of all 
        supervisors and managers within DHS.
    With this concerted and comprehensive approach, I expect to see DHS 
improve its Employee Viewpoint Survey scores in the coming years. The 
correlation between morale and employees' need to feel connected to 
their leadership and to feel valued are unmistakable links to improving 
our overall scores.
                          secretarial mandate
    I would like to share with the subcommittee some concrete examples 
of what DHS is doing to address employee engagement and morale. On 
January 9, 2012, Secretary Napolitano directed component heads to take 
several steps to institute accountability in a focused employee 
engagement initiative across the Department. Component heads were 
directed to:
   Develop and assume responsibility for employee engagement 
        improvement plans;
   Identify and assign specific responsibilities for improved 
        employee engagement to component Senior Executive performance 
        objectives;
   Identify a component Deputy-level official to serve on a 
        newly-created DHS Employee Engagement Executive Steering 
        Committee (ESC);
   Conduct town hall meetings with employees (including in 
        field locations);
   If applicable, attend a labor-management forum; and
   Provide regular reports on actions planned and progress made 
        to my office.
    The Employee Engagement ESC, which I chair, launched in February 
and is developing a strategic framework to boost employee engagement, 
including enhanced employee communications. At our first meeting, we 
shared best practices regarding what each component was doing to 
address gaps identified by the 2011 Survey, which facilitated the 
development of action items at both the component and Departmental 
Headquarters levels.
    The DHS Employee Engagement ESC will continue to meet periodically 
to inject new ideas and leadership attention to the set of 
communications, recognition, and other employee engagement efforts I 
will describe shortly. The Employee Engagement ESC will also more 
effectively engage our union partners through the DHS Labor-Management 
Forum and encourage Components with bargaining unit employees to work 
with union partners on action planning. In the spirit of transparency 
and best practices sharing, the Employee Engagement ESC members will 
also post all Component Action Plans to the DHS intranet and conduct 
targeted pulse surveys across the Department.
          communication, training, diversity, and recognition
    Over time, the Secretary has been building a stronger and more 
unified One DHS, and there are several mutually reinforcing employee 
engagement efforts that fit under this umbrella. Today, I'd like to 
highlight our efforts to consolidate our learning management systems; 
our DHS Senior Executive Service Candidate Development Program and our 
DHS Fellows Program; our new Diversity and Inclusion strategic plan; 
and the Secretary's Awards Program as initiatives that I believe will 
positively impact employee engagement.
    One of the areas we are prioritizing in our Human Resources 
Information Technology strategy is the move from many to a common 
learning management system, or LMS. This will enable employees from 
across DHS to access the same training and development opportunities, 
and will create greater consistency, and a stronger and more unified 
culture and Departmental identity. A common LMS will channel resources 
to the important training and professional development that is so 
crucial to continued investment in our employees.
    We have also been delivering a set of DHS-wide programs aimed at 
improving unity and common leadership skills across the Department. 
This past year we selected our first cohort of a DHS-wide Senior 
Executive Service Candidate Development Program, or SES CDP, replacing 
component-specific programs with different curricula. The DHS SES CDP 
is now preparing high-potential employees that will be able to step 
into leadership positions across in the Department. Similarly, our DHS 
Fellows Program identifies and grooms employees across the Department 
at the GS-13, 14, and 15 levels and instills a common leadership vision 
and experience. I believe these common leadership and development 
programs will significantly help us realize the One DHS vision.
    We have developed a diversity and inclusion strategic plan which 
will be important to acknowledging and appreciating the diverse 
workforce of DHS, including Veterans, women, individuals of all 
heritages, abilities, and backgrounds. Integrating a recruitment 
strategy that communicates that the Department focuses on education 
and/or experience as its priority, ensures those we hire will 
contribute to our mission--which is our top priority. The plan builds 
on progress we have made in the area of diversity and inclusion at the 
Department, including in the Senior Executive Service (SES) and the 
Transportation Senior Executive Service (TSES). For instance, we have 
made considerable progress in diversity in our senior levels over the 
last several years.
    Employee recognition is a key element of employee engagement. In 
addition to our performance recognition efforts, a Secretary's Awards 
program is being scheduled for later this year to recognize and honor 
the important and impressive work of individuals and teams across the 
Department. This level of recognition is another example of our 
concerted effort to promote the Secretary's One DHS theme and address 
gaps identified in the Employee Viewpoint Survey.
      leaderships skills and capacity of supervisors and managers
    Last, I'd like to share our exciting work in the area of leader 
development, which we consider to be our most critical effort. This is 
an area integrally tied to employee satisfaction, and is an area in 
which we are doing a lot of groundbreaking work at DHS.
    In fiscal year 2010, the Deputy Secretary directed the 
establishment of an integrated DHS Leader Development Program to 
maximize mission performance, strengthen the DHS leadership bench, and 
build leadership competencies at all levels of the DHS workforce, 
through a coherent and seamless continuum of leader development 
opportunities across the Department.
    The guiding principles for the Leader Development effort at the 
onset include transparency by ensuring Component perspectives are 
considered; ensuring components have a seat at the table to help 
design, develop, and execute the leader development programs, which 
ensures their ownership and buy-in; component participation in 
developing the Department-wide requirements and programs; and 
leveraging what already exists within the components, across the 
Department.
    In collaboration with the components, the DHS Leader Development 
Program Office has identified a common set of competencies for DHS 
leaders. The competencies have been organized into five groups: Core 
Foundations (integrity/honesty, continual learning, self-management); 
Building Engagement (written/verbal communications, interpersonal 
skills, conflict management); Management Skills (financial/HR/
performance management, developing others, accountability); Solutions 
Capabilities (problem solving, creative/critical thinking, decision 
making); and Homeland Security (leading joint teams, risk and incident 
management, planning joint operations).
    In January 2011, the Deputy Secretary approved the Leader 
Development ``Framework,'' a strategic roadmap for the next 3 years, 
which identifies five leadership levels spanning all of DHS. They are: 
Team Member (learning good Departmental citizenship and how to lead by 
example); Project Leader (an informal leadership position); Supervisor 
(first formal level of supervision, leading performance and employees); 
Manager (overseeing supervisors and leading organizations and 
programs); and Executive (strategic leadership, includes all SESs and 
Coast Guard admirals).
    The top priority to date has been the development of the 
``Cornerstone'' leader development program for front-line supervisors. 
The program establishes Department-wide training requirements in four 
distinct groups: Understanding the DHS Leadership Commitment, 
Supervisor On-boarding, Fundamentals of DHS Leadership, and Continuous 
Development for Supervisors.
    We are also moving forward in developing our Executive Capstone 
Program, which will be required for all new DHS executives (SES, TSES, 
and Coast Guard Admirals). The program, designed with significant input 
from components, will provide new executives across the Department with 
an intensive exposure to strategic leadership capabilities unique to 
being an executive at DHS, and support their transition into executive 
leadership. The 3-week program will feature on-site instruction at key 
DHS locations, action learning, and simulation activities that build 
collaboration, strategic, and crisis leadership competencies within a 
homeland security context. We plan to pilot the program this summer.
                               conclusion
    With this renewed focus directed from the Department-level through 
the Employee Engagement ESC, I am optimistic that DHS will again make 
incremental gains in employee satisfaction and engagement as measured 
by the annual Federal Employee Viewpoint Survey. It is our goal to 
ensure that the Department of Homeland Security is considered ``a best 
place to work,'' in the Federal Government and beyond. Through the 
collective efforts described in the statement, I believe that the 
Department has instituted a strong and broadly-scoped foundation upon 
which our efforts to improve employee morale will continue. We 
recognize the difficulties that exist due to the many organizational 
cultures that were brought together when the Department was created 9 
years ago, but these difficulties are not insurmountable and we will 
continue to move forward in our efforts toward creating a One DHS. Once 
again, I thank you for the opportunity to appear before you today, and 
I look forward to answering your questions.

    Mr. McCaul. Thank you, Ms. Emerson.
    The Chairman now recognizes Mr. Maurer for his testimony

 STATEMENT OF DAVID C. MAURER, DIRECTOR, HOMELAND SECURITY AND 
         JUSTICE TEAM, GOVERNMENT ACCOUNTABILITY OFFICE

    Mr. Maurer. Good morning, Chairman McCaul and staff. I am 
pleased to be here today to discuss employee morale at the 
Department of Homeland Security.
    Over 200,000 people work at DHS on a wide variety of 
missions. Given the Department's critical role in protecting 
the security and economy of our Nation, it is important that 
its employees are satisfied with their jobs and that DHS can 
attract and retain the talent required to complete its work.
    Mr. Chairman, we currently have work underway for you and 
Ranking Member Keating examining morale issues at DHS and we 
expect to issue our final report in September. My comments 
today draw on that work and are focused on two key questions: 
First, how do DHS employee satisfaction scores compare to the 
rest of the Government? Second, what is DHS doing to improve 
employee satisfaction?
    Now, as you know, morale at DHS has been a long-standing 
problem, although it has been slowly improving. Compared to the 
rest of the Government, DHS has always ranked and continues to 
rank near the bottom for employee satisfaction.
    Of particular note, last year less than half of DHS 
employees reported positive responses to the statement, ``My 
talents are used well in the workplace.'' Now, the encouraging 
news is that the gap between DHS and the Government-wide 
average has narrowed to 4 points down from 12 in 2004, and in 
some cases, DHS's scores last year were at or above the Federal 
average, including responses related to pay and workload.
    It is important to recognize that DHS-wide results mask 
significant differences across the components. Coast Guard, 
Secret Service, and CBP reported job satisfaction as slightly 
higher than the Government average while ICE and TSA were 7 and 
11 points below the Government-wide figure.
    This variation demonstrates the challenge DHS faces in 
addressing morale issues. Across such a large, diverse 
department, one size does not fit all.
    So what is DHS doing to address this problem? There are 
some encouraging signs. There is clear senior-level commitment 
to tackle this issue. The Department plans to launch an 
analysis of survey results to understand what is behind the low 
scores.
    At the component level, our work has identified promising 
efforts at TSA and ICE to identify where problem areas reside. 
Components have also developed individual action plans to 
address morale issues.
    As we are conducting our work we are keeping one very 
important thing in mind: If you want to improve morale you need 
to look beyond the numbers. Job satisfaction scores alone don't 
tell you why people responded the way they did and they don't 
tell you what you need to do to fix the problem.
    In addition, as Admiral Allen has already pointed out so 
well, you don't fix morale. Rather, improving morale is a 
byproduct of fixing other things.
    This is borne out in our prior work at DHS and elsewhere 
where we found a wide variety of problems that resulted in 
lower employee morale: Centralization of human resources and IT 
services, different approaches to paying civilian staff 
deployed overseas, lack of respect for leadership, and concerns 
about training, failure to plan for and address frequent 
turnover. All of these things hurt morale, yet in many cases it 
would have been hard to figure that out just from survey 
scores.
    So we are looking at what DHS is doing to determine where 
it has morale problems, what the root cause of those problems 
are, and what actions are best suited to address those root 
causes. Based on what we know so far, it is still an open 
question whether DHS has determined the root causes of its 
morale issues. This greatly complicates efforts to figure out 
how to fix things.
    If you are taking aim at a problem you need to know where 
to shoot, and while DHS has efforts underway we want to make 
sure that the Department is not shooting in the dark on the 
morale issue. My hope is that today's hearing and our on-going 
work will help shed some additional light and better enable DHS 
to become an even better place to work for its employees.
    Mr. Chairman, thank you for the opportunity to testify this 
morning. I look forward to your questions.
    [The statement of Mr. Mauer follows:]
                      Statement of David C. Maurer
                             March 22, 2012
                             gao highlights
    Highlights of GAO-12-509T, a testimony before the Subcommittee on 
Oversight, Investigations, and Management, Committee on Homeland 
Security, House of Representatives.
Why GAO Did This Study
    DHS is the third-largest Cabinet-level agency in the Federal 
Government, employing more than 200,000 employees in a broad range of 
jobs. Since its creation in 2003, DHS has faced challenges implementing 
its human capital functions, and its employees have reported having low 
job satisfaction. GAO designated the implementation and transformation 
of DHS as high-risk because it represented an enormous and complex 
undertaking that would require time to achieve in an effective and 
efficient manner. This testimony presents preliminary observations 
regarding: (1) How DHS's employees' workforce satisfaction compares 
with that of other Federal Government employees, and (2) the extent to 
which DHS is taking steps to improve employee job satisfaction. GAO's 
comments are based on on-going work on DHS's employee job satisfaction 
survey results and its actions and plans to improve them, as well as 
reports issued from January 2003 through February 2012 on high-risk and 
morale issues in the Federal Government and at DHS. To conduct its on-
going work, GAO analyzed DHS and component planning documents, 
interviewed relevant DHS officials about employee morale, and analyzed 
2011 Federal employee job satisfaction survey results.
  department of homeland security.--preliminary observations on dhs's 
                   efforts to improve employee morale
What GAO Found
    Over time, Federal surveys have consistently found that Department 
of Homeland Security (DHS) employees are less satisfied with their jobs 
than the Government-wide average. In the 2004 Office of Personnel 
Management's Federal employee survey--a tool that measures employees' 
perceptions of whether and to what extent conditions characterizing 
successful organizations are present in their agency--56 percent of DHS 
employees responded that they were satisfied with their jobs, compared 
to 68 percent Government-wide. In subsequent years, the disparity 
continued--ranging from a difference of 8 percentage points in 2006 to 
a 4 percentage point difference in 2008, 2010, and 2011. In 2011, DHS's 
percentage of positive responses was lower than the averages for the 
rest of the Federal Government. For example, slightly less than half of 
the DHS employees surveyed reported positive responses to the statement 
``My talents are used well in the workplace,'' nearly 12 percentage 
points less than the rest of the Federal Government average. In two 
areas, DHS's percentage of positive responses was nearly the same or 
higher than the rest of the Federal Government average. For example, 
DHS's percentage of positive responses to the statement ``Considering 
everything, how satisfied are you with your pay?'' was not 
statistically different than the rest of the Federal Government 
average. Job satisfaction data for 2011 show that satisfaction levels 
vary across DHS components. For example, job satisfaction index results 
show the Transportation Security Administration as 11 percentage points 
below Government-wide averages while other components, such as U.S. 
Customs and Border Protection, posted above-average results.
    DHS has taken steps to identify where it has the most significant 
employee satisfaction problems and developed plans to address those 
problems, but has not yet improved DHS employee satisfaction survey 
results. For example, to determine root causes of job satisfaction 
Department-wide, DHS conducted an evaluation of the 2008 Federal Human 
Capital Survey results, according to DHS officials. In that analysis, 
DHS determined that the drivers of employee satisfaction across DHS 
included the DHS mission, senior leadership effectiveness, and 
supervisor support. According to DHS officials, DHS is working with a 
contractor on a new Department-wide analysis of root causes of employee 
morale. As of March 2012, this analysis was not complete. DHS and its 
components are also taking steps to improve components' positive 
response rates to selected survey items. For example, DHS's Integrated 
Strategy for High-Risk Management identified corrective actions to 
improve employee job satisfaction scores, such as the launch of the 
Employee Engagement Executive Steering Committee. GAO has previously 
reported on a variety of issues, including concerns about pay and a 
lack of trust in leadership that can lead to morale problems. This 
variation in potential issues that can result in morale problems 
underscores the importance of looking beyond survey scores to 
understand the root causes of those problems and developing plans to 
address them. Given the critical nature of DHS's mission to protect the 
security and economy of the United States, it is important that DHS 
employees are satisfied with their jobs so that DHS can attract and 
retain the talent required to complete its work. GAO will continue to 
assess DHS's efforts to address employee job satisfaction and expects 
to issue a report on its results in September 2012.
    Chairman McCaul, Ranking Member Keating, and Members of the 
subcommittee: I am pleased to appear today to provide our preliminary 
observations on the Department of Homeland Security's (DHS) efforts to 
address employees' job satisfaction. DHS is the third-largest Cabinet-
level agency in the Federal Government, employing more than 200,000 
employees in a broad range of jobs, including aviation and border 
security, emergency response, cybersecurity analysis, and chemical 
facility inspection. The DHS workforce is situated throughout the 
Nation, carrying out activities to support DHS's mission to: (1) 
Prevent terrorism and enhance security, (2) secure and manage the 
Nation's borders, (3) enforce and administer immigration laws, (4) 
safeguard and secure cyberspace, and (5) ensure resilience from 
disasters. DHS carries out an additional set of activities to provide 
essential support to National and economic security.
    Since its creation in 2003, DHS has faced challenges implementing 
its human capital functions, and its employees have reported having low 
job satisfaction. For example, DHS's scores on the 2011 Office of 
Personnel Management (OPM) Federal Employee Viewpoint Survey (FEVS)--a 
tool that measures employees' perceptions of whether and to what extent 
conditions characterizing successful organizations are present in their 
agency--and the Partnership for Public Service's (Partnership) 2011 
rankings of the Best Places to Work in the Federal Government were 
lower than Government-wide averages.\1\ In the 2011 FEVS survey, DHS's 
percentage of positive responses was 64 percent for the job 
satisfaction index, 33rd out of 37 agencies surveyed, and 4 percentage 
points below the Government-wide average.\2\ In addition, in 2011, DHS 
was ranked 31st out of 33 agencies in the Best Places to Work ranking 
on overall scores for employee satisfaction and commitment, which is 
similar to its ranking in past years.\3\
---------------------------------------------------------------------------
    \1\ OPM conducted the FEVS in April/May 2011. The survey sample 
included employees from 29 major Federal agencies, as well as 54 small 
and large independent agencies. The survey results represent a snapshot 
in time of the perceptions of the Federal workforce.
    \2\ The job satisfaction index, comprising seven FEVS questions, 
indicates the extent to which employees are satisfied with their jobs 
and various aspects thereof.
    \3\ Partnership for Public Service and the Institute for the Study 
of Public Policy Implementation at the American University School of 
Public Affairs, The Best Places to Work in the Federal Government.
---------------------------------------------------------------------------
    DHS employee concerns about job satisfaction are one example of the 
challenges the Department faces across its management functions. In 
January 2003, we designated the implementation and transformation of 
DHS as high-risk because it represented an enormous and complex 
undertaking that would require time to achieve in an effective and 
efficient manner, and it has remained on our high-risk list since that 
time.\4\ This high-risk area includes challenges in strengthening DHS's 
management functions--financial management, information technology, 
acquisition management, and human capital.\5\ DHS has issued various 
strategies and plans for its human capital activities and functions, 
such as a human capital strategic plan for fiscal years 2009 through 
2013 \6\ and a workforce strategy for fiscal years 2011 through 2016, 
which contains the Department's workforce goals, objectives, and 
performance measures for human capital management.\7\ In addition, DHS 
recently updated its plans for improving the Department's scores on the 
FEVS.
---------------------------------------------------------------------------
    \4\ We have identified six high-risk areas involving DHS that need 
broad-based transformation to address major economy, efficiency, or 
effectiveness challenges. DHS has key responsibility for four of these 
six areas: (1) Implementing and Transforming DHS, (2) The National 
Flood Insurance Program, (3) Protecting the Federal Government's 
Information Systems and the Nation's Critical Infrastructure, and (4) 
Establishing Effective Mechanisms for Sharing Terrorism-Related 
Information to Protect the Homeland. DHS does not have primary 
responsibility for the other two areas: (1) Strategic Human Capital 
Management and (2) Managing Federal Real Property. GAO, Department of 
Homeland Security: Progress Made in Implementation and Transformation 
of Management Functions, but More Work Remains, GAO-10-911T 
(Washington, DC: Sept. 30, 2010).
    \5\ GAO, Department of Homeland Security: Continued Progress Made 
Improving and Integrating Management Areas, but More Work Remains, GAO-
12-365T (Washington, DC: Mar. 1, 2012).
    \6\ DHS, Human Capital Strategic Plan, Fiscal Years 2009-2013 
(Washington, DC).
    \7\ DHS, Workforce Strategy for Fiscal Year 2011-2016 (Washington, 
DC).
---------------------------------------------------------------------------
    We have previously reported that successful organizations empower 
and involve their employees to gain insights about operations from a 
front-line perspective, increase their understanding and acceptance of 
organizational goals and objectives, and improve motivation and 
morale.\8\ DHS has consistently been behind the rest of the Federal 
Government in key measures of workforce satisfaction, but it is taking 
actions aimed at improvement. As requested, my testimony presents 
preliminary observations regarding: (1) How DHS's employees' workforce 
satisfaction compares with that of other Federal Government employees 
and (2) the extent to which DHS is taking steps to improve employee job 
satisfaction.
---------------------------------------------------------------------------
    \8\ GAO, High-Risk Series: Strategic Human Capital Management, GAO-
03-120 (Washington, DC: January 2003).
---------------------------------------------------------------------------
    My statement is based on on-going work for your committee regarding 
DHS's employee job satisfaction survey results and its actions and 
plans to improve them as well as prior reports we issued from January 
2003 through February 2012 on high-risk and morale issues in the 
Federal Government and at DHS.\9\ Detailed information on our scope and 
methodology for our prior work can be found in these reports. We plan 
to issue a report on the final results from our on-going work in 
September 2012. For our on-going work, among other things, we analyzed 
DHS and component planning documents relevant to employee morale, 
interviewed DHS officials about employee morale, and analyzed 2011 FEVS 
results. We shared the information in this statement with DHS and 
incorporated its comments where appropriate.
---------------------------------------------------------------------------
    \9\ See related GAO products at the end of this statement.
---------------------------------------------------------------------------
    All of our work was conducted in accordance with generally accepted 
Government auditing standards. Those standards require that we plan and 
perform the audit to obtain sufficient, appropriate evidence to provide 
a reasonable basis for our findings and conclusions based on our audit 
objectives. We believe that the evidence obtained provides a reasonable 
basis for our findings and conclusions based on our audit objectives.
  dhs employees indicated less job satisfaction than the rest of the 
                           federal government
    Over time, Federal surveys have consistently found that DHS 
employees are less satisfied with their jobs than the Government-wide 
average.\10\ Shortly after DHS was formed, 2004 Federal survey data 
indicated a disparity between DHS and Government-wide averages in job 
satisfaction. At that time, 56 percent of DHS employees responded that 
they were satisfied with their jobs, compared to the 68 percent 
Government-wide.\11\ In subsequent years when comparative data were 
available using the job satisfaction index, the disparity continued--
ranging from a difference of 8 percentage points in 2006 to a 4 
percentage point difference in 2008, 2010, and 2011.
---------------------------------------------------------------------------
    \10\ The annual employee surveys cited in this testimony are 
overall assessments of an agency's climate and culture. While measures 
of job satisfaction were part of over 80 survey questions asked, 
according to OPM, the surveys are a comprehensive analysis of an 
employee's experience in his or her agency covering areas including 
leadership, work/life balance, training, and performance management. 
However, responses from a single survey provide only a partial picture 
of the level of job satisfaction and other concerns among employees.
    \11\ OPM's job satisfaction index was not used in 2004; as a gauge 
of job satisfaction, the figures reported here are responses to the 
following question: Considering everything, how satisfied are you with 
your job? The index and DHS versus Government-wide averages are 
available for 2006, 2008, 2010, and 2011.
---------------------------------------------------------------------------
    In 2011, DHS employees also consistently indicated less 
satisfaction on key items in OPM's 2011 FEVS than employees in the rest 
of the Federal Government. On the basis of its analysis of its FEVS, 
OPM determined that responses to these items--called impact items--make 
a difference in whether people want to come, stay, and contribute their 
fullest to an agency. Specifically, DHS employees were less positive on 
14 of the 16 impact items. In some key areas, DHS's percentage of 
positive responses was lower than the rest of the Federal Government 
averages. For example:
   Slightly less than half of the DHS employees surveyed 
        reported positive responses to the statement ``My talents are 
        used well in the workplace,'' nearly 12 percentage points less 
        than the rest of the Federal Government average of 61.6 
        percent.
   DHS employees had nearly 10 percentage points fewer positive 
        responses to the statements ``I am given a real opportunity to 
        improve my skills in my organization'' and ``Managers 
        communicate the goals and priorities of the organization'' than 
        the rest of the Federal Government averages of 66.0 and 65.3 
        percent respectively.
    In two areas, DHS's percentage of positive responses was nearly the 
same or higher than the rest of the Federal Government average. 
Specifically:
   DHS's percentage of positive responses to the statement 
        ``Considering everything, how satisfied are you with your 
        pay?'' was not statistically different than the rest of the 
        Federal Government average, with responses of 62 percent for 
        DHS and 63 percent for the rest of the Federal Government.
   DHS was nearly 2 percentage points higher than the rest of 
        the Federal Government average for the statement ``My workload 
        is reasonable.''
    The percentage of DHS respondents with positive responses on each 
of 16 impact items and the difference between DHS and the rest of the 
Federal Government appear in appendix I. OPM calls for Federal leaders 
to pay attention to the 16 impact items as key indicators of engagement 
and commitment to continued service. While improvement in any of the 
impact items that OPM identified could help DHS improve its 
attractiveness as an employer of choice, the items for which DHS is 
farthest behind the rest of the Federal Government could provide a 
focus for targeting improvement efforts.
    The 2011 job satisfaction data also indicate that satisfaction 
levels vary across components within DHS. For example, as shown in 
table 1, job satisfaction index results for the 2011 FEVS show the 
Transportation Security Administration (TSA) as 11 percentage points 
below Government-wide averages while other large components, such as 
U.S. Customs and Border Protection (CBP) and the U.S. Coast Guard 
(Coast Guard), posted above-average results. Identifying this variation 
across components could help target efforts to improve employee 
satisfaction.

          TABLE 1.--DHS COMPONENT JOB SATISFACTION SCORES, 2011
------------------------------------------------------------------------
                                                              Difference
                                                                 From
                                                    Job      Government-
                DHS Component                  Satisfaction      wide
                                                   Score       Average
                                               (Percentage)  (Percentage
                                                               Points)
------------------------------------------------------------------------
Federal Law Enforcement Training Center......            72            4
Office of the Inspector General..............            71            3
U.S. Coast Guard.............................            70            2
U.S. Secret Service..........................            69            1
U.S. Customs and Border Protection...........            69            1
U.S. Citizenship and Immigration Services....            67           -1
Management Directorate.......................            66           -2
Office of the Secretary......................            63           -5
Federal Emergency Management Administration..            63           -5
National Protection and Programs Directorate.            62           -6
Immigration and Customs Enforcement..........            61           -7
Undersecretary for Science and Technology....            60           -8
Undersecretary for Intelligence and Analysis.            58          -10
Transportation Security Administration.......            57          -11
Government-wide (average score)..............            68            0
DHS (average score)..........................            64          -4
------------------------------------------------------------------------
Source: GAO analysis of DHS data.

    TSA performed analysis of its 2011 FEVS results to gain a better 
understanding of whether employee satisfaction varies across location, 
program office, or level. This analysis identified variation in job 
satisfaction within the component; specifically, with Federal Security 
Director staff at airports providing more positive responses for job 
satisfaction (69 percent positive) than the airport screening workforce 
(54 percent positive), as shown in figure 1. 


 dhs has on-going actions to address job satisfaction, but has not yet 
                 improved employee satisfaction results
    DHS has taken steps to identify where it has the most significant 
employee satisfaction problems and has developed plans for addressing 
those problem areas. DHS has conducted some analysis of employee survey 
results and developed action plans to address some employee 
satisfaction problems, but it has not yet addressed the key goals 
related to job satisfaction--to improve DHS's scores on OPM's job 
satisfaction index, among other indexes, and to improve its ranking on 
the Partnership's Best Places to Work in the Federal Government. The 
results from our prior work at DHS and other departments identify a 
wide variety of issues that can lead to employee morale problems. Thus, 
conducting an analysis of the root causes of employee satisfaction 
problems and developing plans to address them are important.
DHS Has Taken Action to Address Employee Satisfaction Problems
    DHS's job satisfaction scores could pose challenges to DHS in 
recruiting, motivating, and retaining talented employees that DHS needs 
to meet its mission requirements. Specifically, an agency's reputation 
is a key factor in recruiting and hiring applicants. A Partnership for 
Public Service report published in 2010 noted that a good reputation is 
the most frequently-mentioned factor in choosing potential employers, 
and agencies with high satisfaction and engagement scores were seen as 
desirable by college graduates seeking employment.\12\ Similarly, the 
Merit Systems Protection Board (MSPB) reported that employees' 
willingness to recommend the Federal Government or their agency as a 
place to work can directly affect an agency's recruitment efforts, the 
quality of the resulting applicant pool, and the acceptance of 
employment offers.\13\ In addition, MSPB noted that prospective 
employees would rather work for an agency billed as one of the best 
places to work compared to an agency at the bottom of the list.
---------------------------------------------------------------------------
    \12\ Partnership for Public Service, Great Expectations: What 
Students Want in an Employer, and How Federal Agencies can Deliver It 
(Washington, DC: January 2009).
    \13\ Merit Systems Protection Board, The Federal Government: A 
Model Employer or a Work in Progress? Perspectives from 25 Years of the 
Merit Principles Survey (Washington, DC: September 2008).
---------------------------------------------------------------------------
    DHS has taken or has a variety of actions under way or planned to 
address employee satisfaction problems, including analyzing the results 
of employee surveys and developing action plans to improve employee 
satisfaction.
            Survey Analyses
    Components and DHS have used a variety of approaches to analyze 
survey results to gain insight about employee satisfaction. As part of 
our on-going work on employee morale, we reviewed survey analyses 
conducted by DHS's Office of the Chief Human Capital Officer, TSA, and 
U.S. Immigration and Customs Enforcement (ICE).
    DHS.--DHS completed an evaluation of the 2008 Federal Human Capital 
Survey results to determine root causes of job satisfaction Department-
wide, according to DHS officials.\14\ In that analysis, DHS determined 
that the drivers of employee satisfaction across DHS included the DHS 
mission, senior leadership effectiveness, and supervisor support. 
According to DHS officials, DHS is currently working with a contractor 
on a Department-wide analysis of root causes of employee morale. As of 
March 2012, this analysis was not complete.
---------------------------------------------------------------------------
    \14\ The FEVS was preceded by the Federal Human Capital Survey, 
which included the same questions asked in the FEVS.
---------------------------------------------------------------------------
    TSA.--TSA's analysis focused on areas of difficulty across groups, 
such as pay and performance appraisal concerns, and also provides 
insight on which employee groups within TSA may be more dissatisfied 
with their jobs than others. The analysis results are descriptive, 
showing where job satisfaction problem areas may exist, and do not 
identify the causes of dissatisfaction within employee groups. For the 
2011 FEVS, TSA benchmarked its results against CBP results, as well as 
against DHS and Government-wide results. When comparing CBP and TSA 
scores, TSA found that the greatest differences in scores were on 
questions related to satisfaction with pay and with whether performance 
appraisals were a fair reflection of performance. TSA scored 40 
percentage points lower on pay satisfaction and 25 percentage points 
lower on performance appraisal satisfaction. In comparing TSA results 
to DHS and Government-wide results, TSA found that TSA was below the 
averages for all FEVS dimensions.\15\ TSA also evaluated FEVS results 
across employee groups by comparing dimension scores for headquarters 
staff, the Federal Air Marshals, Federal Security Director staff, and 
the screening workforce. TSA found that the screening workforce scored 
at or below scores for all other groups across all of the dimensions.
---------------------------------------------------------------------------
    \15\ The FEVS includes questions grouped into the following 
dimensions: Work experiences, supervisor/team leader, agency, work 
unit, leadership, satisfaction, and work/life.
---------------------------------------------------------------------------
    ICE.--ICE analyzed the 2011 FEVS results by identifying ICE's top 
FEVS questions with high positive and negative responses. ICE found 
that its top strength was employees' willingness to put in the extra 
effort to get a job done. ICE's top negative result was employees' 
perception that pay raises did not depend on how well employees perform 
their jobs. ICE did not perform demographic analysis of the survey 
results or identify the roots causes of employee satisfaction problems, 
but did benchmark its results against DHS and Government-wide results, 
identifying those questions and Human Capital Assessment and 
Accountability Framework (HCAAF) indices where ICE led or trailed DHS 
and the Government.\16\ ICE found, among other things, that employee 
views on the fairness of its performance appraisals were above DHS's 
average but that views on employee preparation for potential security 
threats were lower. When comparing ICE's results with Government-wide 
figures, ICE found, among other things, that ICE was lower on all of 
the HCAAF indices, including job satisfaction.
---------------------------------------------------------------------------
    \16\ The HCAAF indices provide metrics for measuring progress 
toward OPM goals for Federal agencies, which include employee job 
satisfaction, leadership effectiveness and knowledge management, a 
results-oriented performance culture, and effective talent management.
---------------------------------------------------------------------------
            Action Plans
    DHS and the components are taking actions that could improve 
employee satisfaction, with a focus on improving components' positive 
responses to selected survey items.
    DHS's Integrated Strategy for High-Risk Management.--In December 
2011, DHS provided us with its updated Integrated Strategy for High-
Risk Management (Integrated Strategy), which summarized the 
Department's plans for addressing its implementation and transformation 
high-risk designation. In the Integrated Strategy, DHS identified 
corrective actions to improve employee job satisfaction scores, among 
other things. The corrective actions include the Secretary issuing 
guidance to component heads to address gaps in the 2011 FEVS results; 
launch of an Employee Engagement Executive Steering Committee, which 
held its first meeting in February 2012; implementation in June 2009 of 
an on-line reporting and action planning tool for components; and 
execution of a DHS-wide exit survey in January 2011 for departing 
employees to gain additional insight into why employees are leaving the 
Department.\17\ According to the Integrated Strategy, DHS has begun 
implementing corrective actions but has not yet achieved its key 
outcome related to job satisfaction--to improve DHS's scores on OPM's 
job satisfaction index, among other indexes, and to improve its ranking 
on the Partnership's Best Places to Work in the Federal Government. 
According to the Integrated Strategy, FEVS index scores did not improve 
appreciably relative to Government-wide averages from 2010 to 2011. 
DHS's Partnership ranking also remains near last among Federal 
agencies.
---------------------------------------------------------------------------
    \17\ The Employee Engagement Executive Steering Committee's purpose 
is to address areas of improvement identified in the 2011 FEVS.
---------------------------------------------------------------------------
    Within the Integrated Strategy action plan for improving job 
satisfaction scores, DHS reported that three of six efforts were 
hindered by a lack of resources. For example, fewer resources were 
available than anticipated for DHS's Office of the Chief Human Capital 
Officer to consult with components in developing action plans in 
response to 2011 FEVS results. Similarly, fewer resources were 
available than planned to deploy on-line focus discussions on job 
satisfaction-related issues. Sufficient resource planning to address 
the key high-risk human capital outcome of enhanced employee 
satisfaction scores is essential as DHS works to transform itself into 
a high-performing department.
    DHS and component action plans.--We reviewed the most recent DHS 
action plans to address 2011 FEVS outcomes Department-wide as well as 
component plans for TSA, the Coast Guard, CBP, and ICE. The plans state 
objectives and identify actions to be taken, among other things. 
Examples of initiatives from the plans are listed in table 2.

    TABLE 2.--DHS-WIDE AND TSA, COAST GUARD, CBP, AND ICE ACTION PLAN
                               INITIATIVES
------------------------------------------------------------------------
                DHS Unit                     Action Plan Initiatives
------------------------------------------------------------------------
DHS-wide...............................  Enhance leadership,
                                          recruitment, employee
                                          retention, and DHS
                                          unification.
TSA....................................  Launch a corporate action
                                          planning team to study
                                          employee issues and develop
                                          recommendations, enhance
                                          employee performance
                                          management, and improve TSA
                                          communication mechanisms.
ICE....................................  Advance telework opportunities,
                                          increase communication between
                                          employees and management, and
                                          develop an awards handbook for
                                          distribution to employees.
CBP....................................  Address results, enhance
                                          communication between
                                          management and employees,
                                          create career and leadership
                                          development opportunities,
                                          replace pass/fail performance
                                          appraisal with multi-leveled
                                          performance management system,
                                          implement training
                                          improvements, and maintain an
                                          existing virtual focus group
                                          to enable upward feedback to
                                          senior leaders.
Coast Guard............................  Improve communication with
                                          employees and training
                                          options.
------------------------------------------------------------------------
Source: GAO analysis of DHS-wide TSA, Coast Guard, CBP, and ICE 2011
  action plans based on FEVS results.

    As part of our on-going work, we are comparing DHS and component 
action plans with OPM guidance for action planning and will report on 
our results in September 2012.
Several Issues Can Contribute to Employee Dissatisfaction
    Our prior work at DHS and other departments and agencies 
illustrates the variety of issues that can lead to morale problems.
   In July 2009, we reported that the funding challenges FPS 
        faced in fiscal year 2008 and its cost savings actions to 
        address them resulted in adverse implications for its 
        workforce, primarily low morale among staff and increase 
        attrition.\18\
---------------------------------------------------------------------------
    \18\ GAO, Homeland Security: Federal Protective Service Should 
Improve Human Capital Planning and Better Communicate with Tenants, 
GAO-09-749 (Washington, DC: July 30, 2009).
---------------------------------------------------------------------------
   In June 2011, we reported that the Federal Emergency 
        Management Agency's (FEMA) human capital plan did not have 
        strategies to address retention challenges, among other 
        things.\19\ FEMA experienced frequent turnover in key positions 
        and divisions that could result in lost productivity, a decline 
        in institutional knowledge, and a lack of continuity for 
        remaining staff. We recommended that FEMA develop a 
        comprehensive workforce plan that addressed retention issues, 
        among other things. FEMA concurred with the recommendation and 
        noted that a contractor had begun work on a new human capital 
        plan.
---------------------------------------------------------------------------
    \19\ GAO, FEMA: Action Needed to Improve Administration of the 
National Flood Insurance Program, GAO-11-297 (Washington, DC: June 9, 
2011).
---------------------------------------------------------------------------
   In August 2011, we reported that the Forest Service's 
        centralization of human resources management and information 
        technology services contributed to several agency-wide 
        improvements, but it has also had widespread, largely negative 
        effects on field-unit employees. Under centralization, the 
        agency relies on a self-service approach whereby employees are 
        generally responsible for independently initiating or carrying 
        out many related business service tasks. Field-unit employees 
        consistently told us that these increased administrative 
        responsibilities, coupled with problems with automated systems 
        and customer support, have negatively affected their ability to 
        carry out their mission work and have led to lower employee 
        morale.\20\
---------------------------------------------------------------------------
    \20\ GAO, Forest Service Business Services: Further Actions Needed 
to Re-examine Centralization Approach and to Better Document Associated 
Costs, GAO-11-769 (Washington, DC: Aug. 25, 2011).
---------------------------------------------------------------------------
   In June 2009, we reported that employees from a number of 
        different agencies and pay systems worked overseas in proximity 
        to one another. Each of these pay systems was authorized by a 
        separate statute that outlines the compensation to which 
        employees under that system are entitled, certain elements of 
        which are set without regard to the location in which the 
        employees are working. We reported that when these employees 
        are assigned overseas and serve side-by-side, the differences 
        in pay systems may become more apparent and may adversely 
        affect morale.\21\
---------------------------------------------------------------------------
    \21\ GAO, Human Capital: Actions Needed to Better Track and Provide 
Timely and Accurate Compensation and Medical Benefits to Deployed 
Federal Civilians, GAO-09-562 (Washington, DC: June 26, 2009).
---------------------------------------------------------------------------
   In September 2008, we reported that the 2004 and 2006 
        employee survey results for the Small Business Administration 
        (SBA) showed a lack of respect for and trust in SBA leadership 
        and a concern about training opportunities.\22\ The SBA 
        Administrator's efforts to address the survey results included 
        soliciting information from employees and visiting field 
        locations to obtain their input on how to improve agency 
        operations and morale.
---------------------------------------------------------------------------
    \22\ GAO, Small Business Administration: Opportunities Exist to 
Build on Leadership's Efforts to Improve Agency Performance and 
Employee Morale, GAO-08-995 (Washington, DC: Sept. 24, 2008).
---------------------------------------------------------------------------
    The variation in potential issues that can result in morale 
problems underscores the importance of looking beyond survey scores to 
understand where problems, such as low employee satisfaction, are 
taking place within the organization, along with the root causes of 
those problems. Effective root cause analysis can help agencies better 
target efforts to develop action plans and programs to address the key 
drivers of employee satisfaction.
    Given the critical nature of DHS's mission to protect the security 
and economy of our Nation, it is important that DHS employees are 
satisfied with their jobs so that DHS can retain and attract the talent 
required to complete its work. We will continue to monitor and assess 
DHS's efforts to address employee job satisfaction through our on-going 
work and expect to issue a report on our final results in September 
2012.
    Chairman McCaul, Ranking Member Keating, and Members of the 
subcommittee, this concludes my prepared statement. I would be pleased 
to respond to any questions that you may have at this time.
  Appendix I.--Comparison of DHS and Non-DHS Responses to Key Survey 
                               Questions

------------------------------------------------------------------------
                                     Percentage
                                      Positive:  Percentage  Difference:
          Survey Question             Excluding   Positive:   DHS Minus
                                         DHS         DHS       Non-DHS
------------------------------------------------------------------------
My talents are used well in the            61.6        49.7       -11.8
 workplace.........................
I am given a real opportunity to           66.0        56.0        -9.9
 improve my skills in my
 organization......................
Managers communicate the goals and         65.3        55.7        -9.6
 priorities of the organization....
Employees have a feeling of                49.2        39.6        -9.6
 personal empowerment with respect
 to work processes.................
How satisfied are you with your            54.2        44.7        -9.5
 involvement in decisions that
 affect your work?.................
How satisfied are you with the             46.4        37.1        -9.3
 policies and practices of your
 senior leaders?...................
My work gives me a feeling of              74.6        65.9        -8.7
 personal accomplishment...........
How satisfied are you with the             51.4        42.9        -8.6
 information you receive from
 management on what's going on in
 your organization?................
How satisfied are you with the             51.4        42.9        -8.6
 recognition you receive for doing
 a good job?.......................
I have a high level of respect for         57.3        49.4        -7.9
 my organization's senior leaders..
How satisfied are you with your            40.1        35.1        -5.0
 opportunity to get a better job in
 your organization?................
How satisfied are you with the             55.3        50.7        -4.6
 training you receive for your
 present job?......................
Overall, how good a job do you feel        69.6        66.1        -3.5
 is being done by your immediate
 supervisor/team leader?...........
Considering everything, how                62.6        61.6           *
 satisfied are you with your pay?..
I like the kind of work I do.......        85.0        84.1        -1.0
My workload is reasonable..........        58.9        60.6        1.7
------------------------------------------------------------------------
* Not statistically significant.
Source: GAO analysis of 2011 Federal Employee Viewpoint Survey.
Note: All percentage estimates have 95 percent margins of error equal to
  +/- 1 percentage point. Percentage differences between DHS and the
  rest of Government are statistically distinguishable from zero at the
  .02 level, except where noted.


    Mr. McCaul. Thank you, Mr. Maurer.
    The Chairman now recognizes Mr. Stier for his testimony.

STATEMENT OF MAX STIER, PRESIDENT AND CEO, THE PARTNERSHIP FOR 
                         PUBLIC SERVICE

    Mr. Stier. Thank you, Mr. Chairman, and thanks for the 
opportunity to be here. It is a very important issue that you 
are focusing on and I do want to just highlight two things.
    First, Admiral Allen is on the board of the Partnership for 
Public Service, so that ought to be disclosed. Second, this 
really is critical that you are focusing on--this is not about 
happy employees; it ultimately is about performance. So as 
Admiral Allen says, you see morale challenges as a byproduct of 
other issues that are going on, but in the environment we are 
in right now in the public sector you don't have financial 
metrics where you can measure end outcome; you are trying to 
do--trying to pursue public goods. So actually, employee 
engagement numbers--satisfaction numbers are quite important in 
understanding what is actually going on inside these 
organizations.
    What is also really important to recognize is that many of 
the problems that exist at DHS are problems that exist 
Government-wide. One of the attractive things to note, though, 
is that other agencies are doing some extraordinary things.
    An example, Secretary Ray LaHood at Department of 
Transportation was the most improved agency in 2010, saw almost 
a 16 percent increase in their scores. At the end of the day it 
was all about his taking this issue on personally. He talks 
about employee morale; he acts on it; and as I will mention 
later on in my comments, he has done some very specific things 
that have turned things around.
    FDIC is another great example. They were near the bottom of 
our rankings in 2005; they are now the No. 1 ranked agency. 
Sheila Bair--again, top leadership--said this is something I 
want to do something about. It was a 5-year program and she 
made a very real difference.
    So there are other agencies where you can see some real 
change.
    You asked earlier, what can Congress do about this? There 
are four things that I want to focus on.
    The first is--coming back to your example of the Defense 
Department and Goldwater-Nichols--the joint duty requirement 
for the military is one of the things that had the most 
substantial changes in the culture of DOD--the requirement that 
in order to become a flag officer you actually had to work on a 
joint duty assignment with others from other services. Mobility 
is a real challenge in the Federal environment at the senior 
executive service level.
    At DHS specifically, I think it is only 6 percent of the 
SES had actually come from outside of Government; only 12 
percent of those that are in the SES at DHS have worked in 
multiple agencies. Some--more than half--have never worked in 
any job than they are in currently right now, as an SES member.
    In order to have the real executive group, in order to 
bring components together, in order to connect to other 
organizations, having worked in those other organizations is 
absolutely critical and we believe that pushing mobility is one 
way that you could actually create some real change, and I 
think very powerfully trying to think about exchange with the 
private sector, as well. FEMA has a very interesting program 
where they bring some private executives--sector executives in. 
We need to see that flow and I think that will improve things a 
great deal.
    No. 2, we need continuity of focus. Again, you mentioned 
earlier the turnover in the chief human capital officer 
position--eight different members. Capital is a great--it is 
great to have Catherine Emerson here as a career CHCO in this 
position as a career person.
    I would argue that all the management positions ought to be 
career positions. You can set your policy on a political level, 
but if you really want to see change it is going to take a long 
time. You need a long runway. If people turn over real quickly 
at those top positions it is not going to happen, so actually 
converting the positions formally into career positions--CHCO, 
CFO, which they still don't have--would make a very, very big 
difference.
    No. 3, we need accountability. I mentioned Secretary LaHood 
at Transportation. He has actually built in requirements in all 
their career and non-career SES--that means the political, as 
well--requirements around performance standards and engaging 
employees, and he has built it into how they are evaluated, 
which means they actually really pay attention to it. There are 
a whole bunch of things we can talk about if you want that they 
have done that I think could be replicated.
    Clearly, your oversight here matters a huge amount. It has 
to be a regular thing that you are looking at. That will 
actually generate, I think, continuous interest in the 
Executive branch, and that is absolutely vital.
    No. 4, and that is we need improved data. One of the 
challenges right now is we are asking these employees--Federal 
employees--you know, their opinion about what is happening 
inside their agencies in April; the information is not coming 
out until September, sometimes even later than that. That is a 
real problem.
    We also need more data. We ought to be able to get 
information by occupation. It would be terrific to be able to 
compare the IT shops at DHS versus other agencies, and that 
would actually be a very powerful indicator about where things 
that are happening well could be replicated and where there are 
real challenges.
    You look at organizations like IBM. They do 400,000 
surveys; they produce 40,000 reports. Smart private sector 
organizations use this information to drive their management, 
and that is what we ought to see here.
    Finally, we do have some real bright spots in the 
Department of Homeland Security. The Coast Guard, at Secret 
Service--there is a lot to be learned from what is already 
happening. My view is almost everything that should be 
happening in Government is happening some places, just not 
everywhere, and the key is how do we spread it?
    But thank you very much for this opportunity.
    [The statement of Mr. Stier follows:]
                    Prepared Statement of Max Stier
                             March 22, 2012
    Chairman McCaul, Ranking Member Keating, and Members of the 
subcommittee, thank you for the opportunity to appear before you today. 
I am Max Stier, President and CEO of the Partnership for Public 
Service, a nonpartisan, nonprofit organization dedicated to 
revitalizing the Federal civil service and to transforming the way the 
Federal Government works. I was honored to testify before this 
subcommittee both in 2007 and in 2009 on the human capital challenges 
facing the Department of Homeland Security (DHS) and the morale of the 
Department's employees. I appreciate you inviting me back today to 
discuss the current state of the Department's workforce and to suggest 
areas which I believe would benefit most from this subcommittee's 
attention.
    The Partnership has two principal areas of focus. First, we work to 
inspire and educate mission-critical talent about the benefits of 
Federal service. Second, we work with Government leaders to prepare 
them to build strong teams, drive innovation, and work across 
organizational boundaries to deliver results for America. Our work 
includes all aspects of how the Federal Government manages people--
attracting them to Government, leading and engaging them, supporting 
their development, managing performance--all the essential ingredients 
for creating, developing, and maintaining a world-class workforce.
    You have charged the witnesses for today's hearing with discussing 
challenges at the Department of Homeland Security, including low morale 
and consistent scores near the bottom of the Partnership's Best Places 
to Work in the Federal Government rankings. Since starting the Best 
Places to Work rankings in 2003, the Partnership has seen how employee 
morale affects an agency's ability to execute on its mission. A low 
ranking may be a warning that serious management attention is needed, 
sometimes urgently. An unfortunate but noteworthy example is the 
Federal Emergency Management Agency (FEMA), which was an independent 
agency in 2003 when it ranked last in the rankings just 2 years before 
Hurricane Katrina. In hindsight, given the low level of satisfaction 
and engagement of FEMA employees, it seems unsurprising that the agency 
was roundly criticized for its response to that disaster.
    Highly engaged employees are likely to be more motivated and 
productive in achieving agency goals, leading to greater efficiency, 
more innovation, and better results. Therefore, increasing employee 
engagement is important for driving performance. The Partnership's 
annual Best Places to Work in the Federal Government rankings quantify 
and analyze employee satisfaction levels across the Federal Government, 
providing measurable indicators of employee satisfaction and commitment 
and offering an important tool by which Congress and the administration 
can hold agency leaders accountable for the health and performance of 
their workforces. This is especially important at DHS, where failure to 
execute on the agency's mission to secure the Nation could mean 
widespread disaster.
        about ``best places to work in the federal government''
    Designed to help a broad audience of Government leaders, employees, 
Members of Congress, job seekers and researchers, the 2011 Best Places 
to Work in the Federal Government rankings were produced by the 
Partnership for Public Service with support from Deloitte and Hay 
Group. This year's rankings draw on responses from more than 266,000 
civil servants to produce a detailed view of employee satisfaction and 
commitment across 308 Federal agencies and subcomponents.
    The Partnership for Public Service uses data from the Office of 
Personnel Management's Federal Employee Viewpoint Survey (FEVS) to rank 
agencies and their subcomponents according to a Best Places to Work 
index score. A few organizations, such as the Government Accountability 
Office, are not covered by the FEVS but independently conduct valid 
surveys and provide the data to the Partnership. Agencies and 
subcomponents are not only measured on overall employee satisfaction, 
but are scored in ten workplace categories, such as effective 
leadership, employee skills/mission match, pay, and work/life balance.
    The Best Places to Work rankings are an important tool for 
Congressional oversight and for ensuring that employee satisfaction is 
a top priority for Government managers and leaders. The rankings 
provide a mechanism to hold agency leaders accountable for the health 
of their organizations, serve as an early warning sign for agencies in 
trouble, offer a roadmap for improvement and give job seekers insights 
into how Federal employees view their agencies.
    Ideally, the Best Places to Work rankings can aid Congress in 
fulfilling its oversight responsibilities by highlighting the Federal 
Government's high-performing agencies and raising a red flag when 
agencies suffer from conditions that lead to low employee satisfaction 
and, consequently, poor performance.
                            the big picture
    Last November, the Partnership for Public Service released the 
scores for the 2011 Best Places to Work in the Federal Government 
rankings.\1\ The 2011 rankings include 33 large agencies, 35 small 
agencies, and 240 agency subcomponents. In looking at the big picture, 
the 2011 Best Places to Work results show a Government-wide decline in 
employee satisfaction compared to 2010, but not as big a drop as one 
might have expected given the difficult economic and political climate 
that has led to a Federal pay freeze, the possibility of reduced worker 
benefits, threats of Government shutdowns, and the certainty of 
significant agency budget reductions.
---------------------------------------------------------------------------
    \1\ Visit bestplacestowork.org to access the complete 2011 
rankings.
---------------------------------------------------------------------------
    The Best Places to Work Government-wide employee satisfaction score 
for 2011 stood at 64 out of 100, representing a 1.5 percent decrease 
from 2010, but still 5.7 percent higher than 2003 when our rankings 
were first published.
    The new rankings show improvement in worker satisfaction scores for 
only 31 percent of Federal organizations, compared with 68 percent in 
2010, demonstrating that 2011 was a challenging year for most agencies. 
At the same time, the rise in employee satisfaction at some agencies 
suggests that a determined focus on good management can have a positive 
workplace impact in the workplace even in tough times.
    Generally, for an agency to successfully improve its Best Places to 
Work ranking and overall employee morale, the Partnership has found 
that several things need to happen:
    (1) The agency needs to understand its survey data through careful 
        analysis and discover what may be driving the perceptions 
        reported.
    (2) Senior agency leaders must create a powerful vision around the 
        change they want to see and paint a clear vision for the 
        future.
    (3) The agency should actively work with managers, employees, and 
        other stakeholders to translate the vision into action plans 
        and manage the change effort.
    (4) The agency needs to develop a credible communications strategy 
        to ensure information and goals are understood at all levels.
    (5) Senior political and career leaders are held accountable for 
        actions and results in their performance plans.
    (6) The agency celebrates success.
    Mr. Chairman, this year's results tell a compelling story about 
DHS. The Department is fortunate to have a workforce that is committed 
to its mission, yet varying degrees of weakness in all ten workplace 
categories, as well as a few low-scoring subcomponents, keep the 
Department and its employees from performing at their best. As one of 
the largest agencies in the Federal Government (behind only the 
Departments of Defense and Veterans' Affairs), DHS has challenges that 
some smaller agencies do not. In essence, DHS is a large ship and will 
take longer than many smaller agencies to change course. However, it is 
also worth noting that there are ten DHS subcomponents in the rankings 
(plus an ``All Other'' category) and their scores range from a low of 
41.0 to a high of 70.9. So, while DHS is large, it is not monolithic. 
There are undoubtedly some ``lessons learned'' that can be shared 
profitably among the subcomponents.
    Overall, the Department again finds itself near the bottom of the 
2011 Best Places to Work rankings. While steady progress had been made 
each year since the first rankings came out, DHS went down on its 
overall index score in 2011. The Department's scores on its ``effective 
leadership'' dimension are troubling and deserve this subcommittee's 
sustained attention. The effective leadership category measures the 
extent to which employees believe leadership at all levels of the 
organization generates motivation and commitment, encourages integrity, 
and manages people fairly, while also promoting the professional 
development, creativity, and empowerment of employees. While the 
Department's current score of 47.6 is up substantially from its score 
of 40.1 in 2005, it still ranks at the bottom of all the large agencies 
ranked on this dimension.
    Among DHS subcomponents, FEMA and the Transportation Security 
Administration (TSA) stand out as two of the lowest-scoring 
subcomponents and continue to have low employee satisfaction. On the 
other hand, there is positive news in this year's results at the U.S. 
Coast Guard and the Secret Service. Both subcomponents saw their index 
scores rise, and Secret Service improved in nearly every category.
                          overall dhs rankings
    This year, DHS ranks 31 of 33 among large agencies. The 
Department's overall index score decreased 3.5 percent from 58.6 in 
2010 to 56.6 in 2011. Prior to this year, the Department was trending 
steadily upward, showing gains from a score of 49.1 in 2005 to a high 
of 58.6 in 2010.
    In addition to the index score, agencies and subcomponents are 
ranked by ten workplace categories: Employee skills/mission match, 
effective leadership, work/life balance, teamwork, pay, training and 
development, support for diversity, strategic management, performance-
based rewards and advancement, and family-friendly culture and 
benefits. DHS decreased in each of these categories, and ranked last 
for all large agencies in the categories of effective leadership and 
family-friendly culture and benefits.
    The effective leadership category is particularly noteworthy and 
troubling. A regression analysis conducted each year by the 
Partnership's partner, the Hay Group, determines which workplace 
categories are the best predictors of the Best Places to Work index 
score. Government-wide, and for DHS, the No. 1 driver of employee 
satisfaction in 2011--and for the sixth time in a row--was effective 
leadership. As previously noted, there was a decrease of 2.2 percent in 
the score given to effective leadership by employees at DHS, putting 
the Department last of all large agencies with a score of 47.6. It is 
important to note that prior to this year's survey, DHS had been making 
steady progress in this category, up from a score of 40.1 in 2005 to 
48.7 in 2010.
    One positive trend to highlight is in the subcategory of fairness, 
one of four subcategories under effective leadership. DHS increased its 
score 1.6 percent this year, indicating that employees feel an 
increased belief that arbitrary action and personal favoritism is not 
tolerated.
    In addition to effective leadership, employee skills/mission match 
and pay are the other two key drivers of employee satisfaction at DHS. 
This matches the Government-wide key drivers. Subcomponents at DHS all 
showed effective leadership and employee skills/mission match as the 
top two drivers, although the third driver was something other than pay 
for eight of the subcomponents.\2\ The key driver analysis is useful 
for agencies and subcomponents looking for high-impact areas to focus 
their transformation efforts; in other words, improving in the 
workplace dimensions that are key drivers of employee satisfaction, 
like leadership or skills/mission match, is most likely to impact 
overall employee satisfaction scores.
---------------------------------------------------------------------------
    \2\ FEMA's third key driver was work/life, while Immigration and 
Customs Enforcement, Citizenship and Immigration Services, and the 
United States Coast Guard had strategic management as a third key 
driver. Secret Service had training as a third key driver.
---------------------------------------------------------------------------
    Private sector employee satisfaction scores offer another benchmark 
by which to measure the Department's progress on improving workforce 
morale. The Partnership has access to data that allows for some 
comparison between Federal Government employee satisfaction and private 
sector employee satisfaction.\3\ Both for DHS and for Government as a 
whole, the news is not great. The Federal Government lags behind the 
private sector in employee satisfaction, and this is certainly true at 
DHS.
---------------------------------------------------------------------------
    \3\ Private sector comparison data is provided by the Office of 
Personnel Management.
---------------------------------------------------------------------------
    Comparative data with the private sector is available for 13 
questions that are in the Office of Personnel Management's Federal 
Employee Viewpoint Survey. One question that covers satisfaction with 
leadership is, ``How satisfied are you with the information you receive 
from management on what's going on in your organization?'' The 
Government falls 14 points behind the private sector on this question, 
while DHS falls 25 points behind. Satisfaction with leadership is just 
one area where Government--DHS in particular--needs to close the gap. A 
Federal Government workforce that is less engaged and less satisfied 
will not be able to match the private sector in delivering on its 
mission.
                       dhs subcomponent rankings
    Of the 11 DHS subcomponents that were included in the Best Places 
to Work rankings in 2011, only the United States Coast Guard and Secret 
Service saw their overall index score increase. The subcomponent data 
provides a fascinating look at where things are going well, or are not 
going well, in the Department. Some of the more troubling data points 
for DHS subcomponents include the following:
Transportation Security Administration (TSA)
   TSA is ranked 227 of 228 \4\ agency subcomponents in the 
        workplace categories of effective leadership and fairness.
---------------------------------------------------------------------------
    \4\ Not all 240 ranked agency subcomponents have data available for 
the various workplace categories.
---------------------------------------------------------------------------
   TSA is ranked last of all 228 agency subcomponents in the 
        workplace categories of pay, performance-based rewards and 
        advancement, and family-friendly culture and benefits. Each of 
        these categories decreased by more than 10 percent.
   Overall, TSA is ranked 232 of 240 agency subcomponents, down 
        6.4 percent from 2010 with an overall index score of 48.0.
   It should be noted that TSA was in the midst of union 
        elections at the time the survey was administered.
Federal Emergency Management Agency (FEMA)
   FEMA is ranked 223 of 228 agency subcomponents in the 
        workplace category of effective leadership.
   FEMA is ranked 222 of 228 agency subcomponents in the 
        workplace subcategory of leaders (one of four subcategories 
        under effective leadership). FEMA is down between 7-13 percent 
        in all four leadership subcategories, and in leadership 
        overall.
   Overall, FEMA is ranked 231 of 240 agency subcomponents, 
        down 13.7 percent from 2010 with an overall index score of 
        48.3.
    When asked if they believe the results of the survey will be used 
to make their agency a better place to work, only 33.2 percent of 
employees at FEMA responded favorably. The response was similar at TSA, 
with only 37.9 percent of employees responding favorably to the same 
question. Both subcomponents saw a decrease on this question this year, 
with FEMA's score going down 6 percent and TSA's score declining 2 
percent. The subcommittee should use this Best Places to Work data to 
ask the leadership at these agencies about action planning and efforts 
to communicate to staff. For example, what means is the agency using to 
hear from employees directly? What is the agency doing to understand 
the ``why'' behind the scores, and how are they addressing responses 
and measuring results?
    There is also encouraging data in this year's survey results. Eight 
of the DHS subcomponents saw an improved score on the question, ``My 
agency is successful at accomplishing its mission.'' The Secret Service 
is the most notable, raising its score a full 10 percent to make it the 
highest-scoring DHS subcomponent on this question at 88.1 percent 
favorable. Compared to all other agency subcomponents, Secret Service 
ranks 6 of 228 on this question.
    The Secret Service saw its overall index score increase 11.5 
percent this year, making it the most improved DHS subcomponent. The 
agency also saw an increase in nine of the ten workplace categories, 
including each of the four leadership subcategories. Impressively, the 
Secret Service saw a 22.6 percent increase in employee satisfaction for 
employees under age 40. The subcommittee should find out more about 
what the Secret Service is doing to improve employee satisfaction.
                 current efforts to address low morale
    Working in the Department's favor is Secretary Napolitano's 
personal attention to improving employee morale. The Partnership has 
learned that Secretary Napolitano has established an Employee 
Engagement Executive Steering Committee to address the Federal Employee 
Viewpoint Survey results and has tasked the individual DHS 
subcomponents with reviewing their results and assuming responsibility 
for improving employee engagement. We believe top leadership support is 
an essential first step in bringing about change, and we commend the 
Secretary and the Office of the Chief Human Capital Officer for 
recognizing the importance of employee engagement in achieving agency 
goals.
    We also know that the Department is taking steps to improve 
leadership, which is the No. 1 driver of employee satisfaction. The 
agency has created a Department-wide leadership development program 
which the Department plans to implement this year. The program 
prioritizes developing and training first-line supervisors, followed by 
executives. The program identifies 44 leadership competencies for all 
of DHS, with special considerations for the operational side of the 
Department.
    The Partnership runs a leadership program called the DHS Fellows 
program, which will now become part of the Department-wide leadership 
development structure. The DHS Fellows program strengthens the 
leadership skills of GS-14 and GS-15 employees through a proven 
combination of innovative coursework, best practices benchmarking, 
challenging action-learning projects, executive coaching, and DHS-wide 
networking. The program was launched in 2007 and has proven to be a 
popular, and successful, professional development opportunity for DHS's 
next generation of leaders.
    The Department has also made strides to understand why its 
employees leave. The DHS Human Capital Strategic Plan for fiscal year 
2009-2013 noted that 72 percent of DHS career executives left the 
Department from October 1, 2003 to September 20, 2007, the highest rate 
of any Cabinet department. At the time, no one knew why executives were 
leaving and no process existed to find out. More recently, the rate of 
career executives leaving the Department has declined, and DHS has 
implemented a new exit survey that can help identify the reasons DHS 
senior leaders leave the Department. This is a positive change that 
will reveal valuable insight into why talented people leave DHS and 
what it might take to keep them.
    We are encouraged by the steps that DHS is already taking to tackle 
some of its challenges, although there is still much to be done. We 
urge the subcommittee to monitor the steps DHS is taking to improve 
satisfaction and pay attention to the impact and results of Department 
efforts to improve.
                    case studies on improving scores
    One way to identify a path forward is to look at the successes of 
other agencies and apply best practices at the Department of Homeland 
Security. The Partnership has worked with several agencies that have 
dramatically improved their Best Places to Work rankings, and I will 
highlight their keys to success here.
Federal Deposit Insurance Corporation (FDIC)
    Amid enormous pressures and greatly increased workloads stemming 
from the Nation's financial crisis, the Federal Deposit Insurance 
Corporation (FDIC) has risen to the top of the 2011 Best Places to Work 
in the Federal Government rankings.
    The FDIC moved from third place in 2010 to first place among large 
agencies in the 2011 rankings. The FDIC recorded a Best Places to Work 
score of 85.9 out of 100, an 8.5 percent jump from 2010. The 2011 score 
represented the largest percentage improvement for any large agency 
that year. The new rankings also placed the FDIC first among large 
agencies when it comes to employee views on overall effective 
leadership, senior leaders, the match between skills and mission, 
strategic management, teamwork, and pay.
    The FDIC began a multi-year culture change program in 2008 after 
being ranked 21 of 30 large agencies in 2007. The culture change 
program included the development of a core set of values to guide the 
agency, clear and repeated messages from agency leaders that they were 
dedicated to improving workplace conditions, and a commitment to 
soliciting staff input and communicating how and why decisions are 
made.
    The FDIC established an internal ombudsman who reports directly to 
the chairman and handles problems and grievances; created a website for 
employees to submit questions and get answers on workplace issues; held 
town hall meetings; instituted conference calls with the chairman and 
all employees to answer questions and get direct input; and established 
a culture change council and teams to explore workplace improvements.
Department of the Treasury
    The U.S. Mint and the Bureau of Engraving and Printing (BEP), both 
part of the Department of the Treasury, registered significant gains in 
employee job satisfaction and commitment in 2011, showing improvements 
on a wide range of workplace issues that include leadership and 
opportunities for rewards and advancement.
    Both the Mint and BEP were at the bottom of the rankings for 
Federal agency subcomponents in 2010, and made dedicated efforts to 
engage employees, and improve morale and workplace conditions--
strategies that were undertaken at the behest of the leadership of the 
Treasury. The leaders of the bureaus are held accountable for making 
progress on workplace issues, with goals embedded in their performance 
plans.
    The Mint was the most improved agency subcomponent in the 2011 Best 
Places to Work rankings. The organization recorded a Best Places to 
Work score of 68.5 out of 100, up from 56.5 in 2010, for a 21.2 percent 
gain. It also catapulted in the rankings from 201 of 224 in 2010 to the 
57th spot in 2011 out of 240 agency subcomponents.
    At the Mint, there was a focus on increasing communication with 
employees to explain the challenges faced by the organization and the 
reasons for various decisions. Mint executives are now working more 
cooperatively with labor unions to bring about change and resolve 
outstanding issues, and are seeking to empower employees with greater 
flexibility to do their jobs.
    The Mint has held regular town hall meetings in concert with the 
president of the Mint's chapter of the American Federation of 
Government Employees, and the deputy director of the Mint has visited 
all of the Mint's facilities to hear employee concerns. In addition, 
the senior leaders are pulling together as a team and providing a 
unified sense of direction for the organization.
    The Bureau of Engraving and Printing was the third-most improved 
agency subcomponent in 2011, raising its Best Places to Work employee 
satisfaction and commitment score from 51.5 out of 100 in 2010 to 60 in 
2011. This represents a 16.6 percent increase. In addition, the BEP's 
ranking rose to 174 out of 240 agency subcomponents in 2011. While 
still low, it marked a positive step from being ranked 219 out of 224 
in 2010.
    The BEP was given improved marks by employees for effective 
leadership, including a 25.7 percent improvement in the scores for the 
senior leaders. The scores went up in every workplace category 
surveyed, including opportunities for training and development and 
support for diversity.
    The agency held focus groups that included white-collar workers and 
those doing manual labor, mid-level managers, and entry-level employees 
to take the pulse of the workforce, and to find out the reasons behind 
the historically low employee ratings.
    The No. 1 concern was lack of communication, which resulted in 
development of an action plan to let employees know what was happening 
in the organization and why decisions were being made. Mechanisms have 
been put in place to get feedback, to act on concerns, and to let 
employees know that they are being heard.
    Supervisors meet regularly with employees as part of their 
performance requirements to discuss and address workplace issues, to 
understand what motivates the workforce, and to ensure active 
engagement. The leadership also has worked closely with union leaders 
and held off-site meetings to find areas where all parties can 
collectively improve the work environment.
    In addition, senior executives regularly take part in the ``Walking 
in Your Shoes'' program by spending a day doing line work in the 
printing plants to better understand the nature and stresses of the 
jobs, and to get suggestions on ways to make improvements. BEP has 
undertaken skill assessments of many of its workers, increased internal 
training programs to address skill gaps and helped workers adapt to new 
technologies being introduced into the printing process.
Department of Transportation (DOT)
    The Department of Transportation (DOT) has taken a number of steps 
to improve its Best Places to Work scores. DOT has embedded senior 
executive performance plans with a requirement that executives model 
leadership behaviors that will reduce communication barriers, build 
employee trust, address employee concerns and more effectively engage 
employees. All other things being equal, such behaviors should lead to 
increases in positive responses on the Federal Employee Viewpoint 
Survey.
    DOT has also developed a ``Leadership Quick Wins'' document to give 
senior leaders ideas on how to improve employee satisfaction and 
commitment. The ideas include having an open-door policy, engaging 
regional and field employees outside of Washington, and perusing 
employee suggestions on DOT's IdeaHub. IdeaHub was created in 2010 to 
give leaders an easy and simple way of hearing what employees have to 
say about DOT and how to improve it.
    As the case studies show, agencies that actively participate in 
raising employee satisfaction and commitment can and most often will 
have success. It starts with top leadership engagement and commitment 
to change and is executed at every level of the agency. In each of 
these case studies, agency leaders took actions consistent with the 
model the Partnership has found to be most effective. Agencies leaders 
created a vision, led a culture change initiative headed by influential 
leaders across the agency, communicated frequently to all employees 
about the effort and progress, held senior staff accountable for 
results and celebrated success.
                partnership recommendations to congress
    Congress has a vital role to play in overseeing the Department of 
Homeland Security's efforts to improve employee satisfaction. The 
Department is taking steps to understand its data, bring together 
senior leaders to create a vision for change and develop action plans, 
but change at the Department has come slowly and with only sporadic 
leadership focus.
    Improving the performance of DHS depends on having an engaged 
workforce. That will only come if the Department's leaders communicate 
a clear vision that resonates with employees and hold themselves 
accountable for action and results over the long-term. Change is hard, 
and it will require sustained attention from the Department's 
leadership team. We commend the subcommittee for your needed and 
thoughtful attention to the role of employee morale in the Department's 
performance, and we encourage your on-going oversight keep the 
Department moving in the right direction. To that end, we offer the 
following recommendations:
Strengthen Leaders
    (1) Given the importance of having great leadership at DHS, 
        Congress should encourage and fund leadership development 
        programs for DHS employees at all levels. Improving the skills 
        of existing leaders and developing the next generation of 
        leaders will improve employee engagement and organizational 
        performance.

    More specifically, Congress should focus on developing leaders for 
        the Senior Executive Service (SES). Currently, 27 percent of 
        the senior executives at DHS are eligible to retire, and by 
        2016 that number increases to 59 percent. With this knowledge, 
        DHS has a unique opportunity to invest in future executive 
        leaders to build a highly effective leadership cadre.

    To ensure that DHS recruits executives with a diversity of 
        experiences and perspectives, Congress should require that 
        prior to being selected for a position in the SES, an 
        individual must have had significant experience in another 
        agency, level of government or sector, or must have 
        participated in a CDP, IPA, extended detail, sabbatical, or 
        other agency rotation program.

    In addition, DHS should provide more mobility opportunities for 
        current members of the SES. Currently, only 49 percent of the 
        SES at DHS has ever changed positions and only 12 percent has 
        ever changed agencies. Mobility helps agencies build executive 
        managerial skills, fill vacancies strategically, and infuse new 
        thinking into the organization. Mobility also has a Government-
        wide impact, as it increases the Government's ability to 
        fulfill cross-agency mission and promotes greater sharing of 
        information and resources. Congress should direct DHS to submit 
        a plan that outlines steps the agency will take to advance 
        mobility, including efforts to reduce barriers and create 
        greater incentives.

    Further, Congress should consider establishing a public/private 
        sector talent exchange at DHS to provide developmental 
        opportunities for DHS executives and expose them to private 
        sector best practices. In these arrangements, business and 
        Government exchange key managers, executives, specialists, or 
        operational experts for limited periods so that each side can 
        benefit from the other's expertise and perspective. For 
        business, the direct benefits include gaining a better 
        understanding of how Government operates; for Government, the 
        primary benefit is exposure to cutting-edge operational 
        techniques and best practices in the areas of strategy, talent 
        management, work processes and systems, and leadership 
        development.

    (2) Political appointees at DHS and across Government need 
        orientation, training, and mentoring (collectively known as 
        ``onboarding'') to maximize their effectiveness in the Federal 
        environment. The Partnership's Ready to Govern report \5\ found 
        that many political appointees are unfamiliar with the workings 
        of their departments and agencies, and many are schooled more 
        in policy than management. Congress should seek information 
        regarding how DHS appointees are prepared to succeed in their 
        new roles, including what training and orientation activities 
        are available. Ultimately, Congress should be satisfied that a 
        robust on-boarding program exists to improve political 
        appointees' ability to increase employee engagement, improve 
        retention, enhance performance, and work within and across the 
        Department to achieve results.
---------------------------------------------------------------------------
    \5\ Partnership for Public Service, Ready to Govern: Improving the 
Presidential Transition, January 2010.
---------------------------------------------------------------------------
Improve Management and Hold Agencies Accountable
    (1) Frequent turnover in senior political leadership causes a lack 
        of continuous focus on employee satisfaction and commitment 
        issues. We propose converting a number of appointed positions 
        from political to career positions with fixed terms and 
        performance contracts. This makes sense for positions that are 
        truly of a managerial nature, and would enable a longer time 
        horizon to address agency management challenges. For example, 
        the current Chief Human Capital Officer (CHCO), Catherine 
        Emerson, is the first real career CHCO at DHS. Having career 
        experts serving in key management positions allows an agency to 
        retain institutional knowledge and ensure continuity between 
        administrations.

    (2) The Federal Employee Viewpoint Survey is a critical source of 
        data about the health of an organization, but it is not enough 
        by itself. A lack of real-time information hinders an agency 
        from moving swiftly to address challenges. Additional 
        instruments, such as pulse surveys and focus groups, are 
        effective sources of information that the subcommittee should 
        encourage DHS to use to focus attention on critical management 
        issues. The subcommittee should encourage DHS to use the data 
        it collects from FEVS, exit surveys, and other instruments to 
        drive change and hold the Department accountable for results.

    (3) While the Federal Employee Viewpoint Survey is a rich source of 
        information, the legislation on which it is based needs 
        updating. For example, Congress should update the 2003 language 
        to give OPM responsibility for conducting the annual survey, 
        and should direct that the data is collected and reported by 
        occupation to the extent feasible. This latter change would 
        allow Congress to view the survey results for particular 
        occupations--those engaged in law enforcement, for example--and 
        would enhance the richness and usefulness of the data.

    (4) DHS should hold executives accountable for addressing employee 
        satisfaction and morale issues in their agency, as identified 
        through employee surveys and feedback. To ensure this happens, 
        Congress should pass legislation requiring that performance 
        plans for senior executives include an objective for holding 
        executives accountable for taking steps to improve satisfaction 
        in their workplace. Such efforts might include reducing 
        communication barriers, building employee trust and confidence 
        through open communication, holding employee listening 
        sessions, improving internal communication, and implementing at 
        least one ``quick-win''.

    (5) The large number of Congressional committees with jurisdiction 
        over DHS complicates the prioritization of programs and 
        funding. With approximately 88 committees and subcommittees 
        having authority over DHS, its leaders often receive 
        conflicting directives that hinder the functioning of the 
        Department. Congress has taken steps to consolidate oversight 
        of the Department--including the creation of this committee--
        but further reorganization is possible and highly encouraged.
                               conclusion
    Chairman McCaul, Ranking Member Keating, and Members of the 
subcommittee, thank you again for the opportunity to share the 
Partnership's views on the personnel challenges facing the Department 
of Homeland Security and our recommendations for the best way forward. 
We look forward to being of assistance to this subcommittee and to 
Congress as you consider the future of the Department.

    Mr. McCaul. Thank you. You made some excellent points and I 
appreciate your testimony.
    The Chairman now recognizes Dr. Pon.

  STATEMENT OF JEFF T.H. PON, CHIEF HUMAN RESOURCES OFFICER, 
             SOCIETY FOR HUMAN RESOURCE MANAGEMENT

    Mr. Pon. Good morning, Mr. Chairman. Thank you for inviting 
me to testify.
    My name is Jeff Pon. I am the human resources and strategy 
officer for the Society for Human Resources Management. With 
more than 260,000 members, SHRM is the world's largest 
organization dedicated to the HR profession.
    Having served in the Federal Government before, I 
understand and appreciate the organizational challenges and 
their impact on morale by relatively a new agency and so many 
assimilating their 22 subcomponents. As a citizen I feel 
privileged today here, along with the Partnership for Public 
Service, Government Accountability Office, and DHS. I hope that 
I and SHRM can help serve the people who serve us.
    My Federal service began in 2003 as the deputy director for 
e-Government, a lot of the HR IT initiatives, such as USAJobs. 
In 2006 I was appointed to be the chief human capital officer 
for the Department of Energy and I have worked with Partnership 
for Public Service in the past.
    I have transformed workplaces in--with challenging 
predicaments like DHS. I know the domino effect that low morale 
has on loyalty, engagement, and productivity.
    Energy had to put together five separate organizations in 
the last 1970s with the very distinct history, cultures, and 
origins under one Secretary and under one organization. The 
roller-coaster ride of employee morale is a Government-wide 
issue, not one unique to DHS.
    At a technology manufacturing organization once I worked 
for it had 13 layers of management and 57 EVPs and SVPs. Due to 
the lack of proper integration of acquiring companies there was 
a lack of coordination, increased duplication, slower 
communication, decision-making, and confusion about the 
organization's purpose.
    Transformation helped alleviate many of those things. It 
was an example of how an organization is put together and it 
often defines behavior of an organization.
    In a book called ``The Heart of Change'' by John P. Kotter, 
of Harvard Business School, he presents the steps for 
successful change. It is a framework that has been used by many 
public and private organizations to address challenges similar 
to those facing DHS. Briefly: Form a strong cross-functional 
change team, create a vision, communicate honestly, break down 
the barriers for impeding success, and demonstrate progress 
that shows changes are making a difference, and celebrate with 
resistance the short-term wins and don't exaggerate and spin 
those successes.
    Finally, don't give up. Exhaustion can be the enemy. DHS is 
in its ninth year of evolving as an organization. It is 
relatively new to the Federal Government still.
    SHRM's most recent annual survey of employee satisfaction 
actually shows a decrease in overall satisfaction in the 
private sector and public sector. It found that compensation 
and benefits was somewhat low on the list, so pay is not 
clearly the Holy Grail of employee satisfaction. Among factors 
related was relationship with employees had with their 
immediate supervisor, as some people have previously stated.
    Employees also want to recognize--have a recognition of 
contributions to the organization's mission. Because of the 
integration challenges DHS may see some employees as lacking in 
clear understanding of the mission that inspires a--core.
    The gold standard is to move satisfaction to a higher plane 
of engagement. That is when people find meaning in their work, 
when they stop watching the clock and start embracing their 
role in moving the organization forward.
    At SHRM we believe that workforce flexibility and 
reimagining the workplace is the next major strategic 
competitive advantage for all organizations and the way to 
engage employees. It is the next business imperative.
    No organization will be able to cut enough, streamline 
enough, and boost effectiveness enough to come close to what 
happens when you optimize talent and allow staff to flourish. 
Then employees have a sense of pride and sense of connection to 
a sense of passion.
    A successful culture can be--can happen at DHS and SHRM 
stands ready to serve by reimagining and redesigning the 
workplace and the Department for transformation for the present 
and the future. Thank you.
    [The statement of Mr. Pon follows:]
                  Prepared Statement of Jeff T.H. Pon
                             March 22, 2012
    Good morning Chairman McCaul, Ranking Member Keating, and 
distinguished Representatives. I am Dr. Jeff T.H. Pon, Chief Human 
Resources and Strategy Officer of the Society for Human Resource 
Management (SHRM). I will describe SHRM and summarize my experience in 
just a moment, but first, with the panel's indulgence, I would like to 
acknowledge the importance of this discussion. Notably, I must 
emphasize that I am here to support DHS, not to criticize DHS.
    Having served in Federal Government myself, I can understand and 
appreciate the organizational challenges--and their related impact on 
morale--faced by a relatively new agency working to assimilate more 
than 10 subcomponents. Just as important, as a citizen, I have enormous 
respect and admiration for the men and women of DHS, and the vital role 
they play in protecting our Nation and its people.
    It is the DHS that leads the Federal Government's efforts to guard 
against terrorist attacks on our soil, to protect and secure our 
borders, and to prevent or respond to all nature of threats to our 
Nation. In doing that, DHS employees may at times be asked to place the 
Nation's safety above their own. They accept that responsibility with 
courage, professionalism, and love of country. For all these reasons, I 
feel privileged to be here today, along with the Partnership for Public 
Service, the Government Accountability Office, and the DHS. I hope that 
I and SHRM can play some role in serving the people who serve us.
    Recently, I joined the executive staff of the Society for Human 
Resource Management. With more than 260,000 members, SHRM is the 
world's largest organization dedicated to the HR profession. A non-
partisan organization, we advocate for workforce laws and regulations 
that are fair to employers and employees alike, and it has been our 
honor to be asked to testify before Congressional panels many times in 
the past.
    Our top priority, however, is serving each of our members. Through 
a broad array of research products, individual assistance, professional 
development opportunities, and other resources, the Society helps HR 
professionals advance their careers through the creation of fair, 
productive, and forward-thinking workplaces.
    More broadly, inclusive human asset utilization, along with 
priority attention to employee satisfaction and engagement, will be 
critical to our Nation as we continue recovering from economic storms 
while staying competitive globally. Across the globe, HR professionals 
know that the success of their organizations, public or private, rides 
on the success of their people, more than any other asset.
    Those professionals recognize the importance of recruiting and 
retaining employees with the highest value that can be brought to each 
individual job. They know that successful recruitment and retention is 
heavily dependent on executive dedication to creating and maintaining a 
fair, flexible, inclusive, and engaging workplace culture.
    As for myself, I have spent more than 20 years leading 
organizations and transforming talent management, in both the private 
and public sectors. For instance, I helped develop a National human 
resource standard for the National Academy of Public Administration, 
and I helped the Corporate Leadership Council develop courses for HR 
business partners.
    As a principal at Booz Allen Hamilton, I provided strategic human 
capital management services, with a special focus on change management, 
to such Federal agencies as the Department of Defense, the Department 
of Energy, General Services Administration, the Office of Personnel 
Management, the IRS, and Social Security. Similarly, I have assisted 
such companies as Federal Express, Hewlett-Packard, Seagate Technology, 
Hyperion Solutions, and Williams-Sonoma.
    My Federal service began in 2003, when I was named Deputy Director 
of e-Government at the Office of Personnel Management. Key HR 
initiatives such as USAJobs, e-Payroll, and the Human Resources Line of 
Business I led there that have resulted in saving taxpayers an 
estimated $2.6 billion. During my service with OPM, I was awarded the 
Grace Hopper Award, e-Gov Explorers Award, and the Federal 100 Award.
    In 2006, I was appointed to the Senior Executive Service as the 
Chief Human Capital Officer for the Department of Energy. During my 
tenure there, I played a key role in implementing a top priority for 
the department--re-inventing its human capital management. I helped 
develop increased capability, capacity, and individual and departmental 
performance accountability. While with Energy, I was awarded the 
Secretary's Distinguished Service Award and the Career Achievement 
Award. In recognition for other Federal HR assistance I provided, I 
received the Gold Medal from the Director of National Intelligence, and 
the Distinguished Service Award from the Administrator for the National 
Nuclear Security Administration.
    And, I should add that I have worked with the Partnership for 
Public Service before, helping them advise Government executives, and 
celebrate and recognize the unsung heroes of Federal Government staffs.
    I outline my experience only to illustrate that I have been in--and 
transformed--workplaces with challenges not unlike those now being 
faced by the DHS. I have seen similar instances of low morale, and the 
domino-like effect that it has on loyalty, engagement, and 
productivity. What I've seen is that there is sometimes less concern 
about the abilities and professional qualities of employees, and more 
worry about placing square pegs in square holes.
    The Department of Energy was organized in the late seventies. Like 
DHS it put together five separate organizations that were under one 
Secretary, but had very distinct history, cultures, and origins. The 
challenge has been to clarify what you are trying to accomplish as an 
organization, and how to tie-in each member of the organization with 
his or her role and relevance in achieving that culture, mission, and 
purpose.
    As evident today in the lobby of the Forrestal Building on 
Independence Avenue, you can see the department's shared history. 
Starting from Einstein's letter to President Franklin Delano Roosevelt, 
to the latest research on alternative fuels, Energy is about National 
Security, Energy Security, Scientific Discovery, Environmental 
Responsibility, and Management Excellence--engaging each with a shared 
purpose and mission.
    Obviously, DHS faces challenges of low morale, satisfaction, and 
engagement within its ranks--that's why you have called this hearing. 
My colleague from the Partnership for Public Service is more versed in 
the fine details, but I've seen enough from their annual ranking of the 
``Best Places to Work in Federal Government'' to know that there's work 
to be done at DHS.
    Based on responses from 266,000 Federal employees, not only did the 
2011 rating for DHS drop 3.5 percent from the prior year, the 
Department is now ranked 31 out of 33 large Federal agencies. If its 
rating is compared to those of all large and small agencies, plus their 
subcomponents, DHS would rank 268 among those 308 organizations. As was 
the case in what I saw at the Department of Energy, much of that 
employee assessment can be attributed to difficulties a relatively new 
agency has in the integration of seemingly disparate subcomponents. Not 
surprisingly, it has not been a smooth journey for DHS. Additionally, 
the roller coaster of employee morale is a Government-wide issue, one 
that each agency must address in its most appropriate and mission-
specific way.
    However, even considering inherent differences in workplaces within 
both sectors, there are lessons that the public sector can learn from 
the experience of the private sector. My role here today, representing 
SHRM and its 260,000 HR professionals, is to talk about what works in 
the private sector, not to critique DHS for what hasn't worked there. 
Not every approach or solution is transferable to the public-sector 
workplace, but each contains at least a seed for growing improvement.
    Typically, when private organizations face similar challenges to 
those being addressed by DHS, those situations can be traced back to 
uncertainty and disconnects within a weak organizational culture. A 
strong and enriching culture is not just about the people themselves. 
It's about creating the right environment for them to flourish, 
incorporating shared experience, beliefs, artifacts, and the power of 
teamwork. It's about identifying who and what the organization is, why 
it's here, and about everyone embracing its mission. It's about the 
limited and judicious reliance on silos.
    Within DHS, there may be silos that are important for many critical 
missions, but there could also be competitive silos, built for the 
quest for critical limited resources. When that happens in any 
organization, there is not enough sharing of information, inter-
department collaboration, and respect for both commonalities and 
differences.
    For example, one of the private-sector technology manufacturing 
organizations I worked with matured after 25 years into 13 layers of 
management, and 57 general ledgers (57 EVPs and SVPs with their own 
budget bowls). The lack of integrating acquired companies, and the 
accompanying growth, organically resulted in unintended silos and 
layers. This organization had business units competing for resources, a 
lack of coordination, increased duplication, slower communication, 
slower decision-making, and confusion on the organization's purpose.
    The organization moved toward seven layers, and started to manage 
across product sets--three product groups, not 57 general ledgers. This 
provided greater speed, and a sense of increased control over sourcing 
materials, production, and distribution. Although DHS is very different 
than this example, what remains is an example of how an organization is 
put together often defines how it behaves.
    In both the private and public sectors, smart organizations--those 
that want to be successful, meet goals, and be an employer of choice--
often come to the realization that they must make intrinsic change. 
They have to change the way they operate, and they must commit to 
improving the organization's root culture.
    At a glance, it would seem logical that change management is all 
about gathering and analyzing information, and making change based on 
that information. Certainly, that is part of change management, but 
it's far from everything that's needed. Information can bring a change 
intellectually, but true change can only come when individuals are 
touched emotionally.
    In his book, ``The Heart of Change,'' John P. Kotter, instructor at 
the Harvard Business School for 40 years and respected author on the 
subject of change, has analyzed many successful organizational 
transformations and suggests that the path to change within the 
``hearts'' of a staff is one of eight steps. I'll paraphrase him in 
explaining just some of those steps, which have been followed by 
countless private-sector and public-sector organizations to improve 
morale and productivity. It's a simple framework that has been used to 
address challenges similar to those facing the DHS.
                       form a strong change team
    To lead the effort, start by selecting a cross-functional change 
team from throughout the organization, including both people who can 
inspire other team members, and those who may need to be redirected 
because they are ineffective in old ways but entrenched in them. This 
selection process won't be easy. As Professor Kotter says, in a 
reference that could well be applied to DHS, ``An organization's 
politics and history, especially if it has undergone mergers, can 
undermine efforts to construct a strong team.''
                            create a vision
    With the team in place, it must create a common vision for the 
organization, and identify goals that everyone can rally behind. A 
vision isn't a strategic plan, or an extension of status quo. Professor 
Kotter suggests, rightly, that developing a workable vision requires 
venturing into unknown territory, and exploring ways that a good vision 
can motivate people. Simply laying down the law with managers won't 
motivate them; it may even impede their growth. Find a vision that 
inspires--that touches the heart--and then start removing the 
impediments to achieving that vision.
                          communicate honestly
    Direct communication creates trust. Communicate early and often 
about the change initiative. Early responses might include fear, 
cynicism, and anxiety. Those realities cannot be ignored; they must be 
addressed. Present the vision clearly and honestly, and then treat 
every response with respect and consideration. As communication 
spreads, there must be evidence that it's not just talk--executives and 
managers must ``walk the walk.'' Demonstrate that leadership takes 
transformation seriously, even if that change creates some discomfort 
for those at the top of the pyramid.
                          break down barriers
    With a full-communication philosophy in place, along with proof of 
executive buy-in, focus more attention to the impediments mentioned 
earlier. A typical barrier is a stubborn manager who greets the vision 
with a declaration that, ``We tried that once and it didn't work.'' 
Don't give up on that manager, or assume that he or she is impossible 
to convince. Consider steps such as a temporary change of venue--change 
may come when the manager is allowed to see things differently through 
the prism of a new experience. Also, fear of failure is an impediment. 
Don't ask people to take risks and make change in return for modest 
rewards, yet maintain a culture in which they're conditioned to expect 
punishment if they fail. Break down the silos that keep employees from 
full engagement.
                          demonstrate progress
    Show that the changes are making a difference. Celebrate--with 
restraint--short-term wins. Although a good vision is long-term, short-
term successes reaffirm the vision, boost those employees who helped 
achieve them, and help to turn around skeptics. But don't exaggerate, 
or ``spin'' the wins for anything more than what they are. Employees 
see through that, and then mistrust news of even more important and 
better documented achievements.
                             don't give up
    Stick with the course of change. Don't let up; be tenacious and 
fully engaged with the process. Even when short-term successes are 
recognized, it still emphasizes that much more needs to be done. With 
those early successes on-board, heighten urgency, and keep alive the 
initial flame of the change campaign. At this point in the campaign, 
exhaustion can be an enemy--people are making rapid change while still 
doing all of their old work. They may feel there is no hope, and 
abandon the new work. The solution is to intensely analyze some of the 
old work, and streamline or eliminate what isn't really critical. A 
manager's mandatory 25-page monthly report may be just as effective in 
2 pages.
    When change management is employed correctly, there will be not 
only acceptance of and comfort with the transformation, but also higher 
employee satisfaction. Every step of the process, as I've just 
outlined, conveys messages of team, commonality of mission, and 
fairness in the workplace.
    Those elements lead to employee satisfaction, and advances from 
there to the highest achievement--employee engagement. For the last 10 
years, the Society for Human Resource Management has conducted an 
annual National survey focusing on levels of employee satisfaction and 
engagement.
    According to our 2011 findings, there is evidence of both good and 
bad news. We found that 83 percent of U.S. employees reported overall 
satisfaction with their current job, with 41 percent of employees 
indicating they were ``very satisfied,'' and 42 percent ``somewhat 
satisfied.'' However, despite the seemingly positive findings, there 
has been a steady decrease in overall satisfaction since 2009.
    In most cases, job security ranked among the top two ``very 
important'' aspects of job satisfaction, regardless of the 
organization's staff size or employees' tenure, age, or gender. Farther 
down the list was compensation and benefits (54 percent and 53 percent, 
respectively), so pay is clearly not the Holy Grail of employee 
satisfaction.
    That corresponds with surveys completed in 2011 by the staffing 
firm OfficeTeam. Workers were asked, ``Aside from salary, which aspect 
of your job is most tied to your satisfaction?'' The top response was 
``work-life balance.'' When managers were asked what aspect, aside from 
pay, affected their employees' morale, work-life balance was again the 
leading choice.
    In the SHRM research, among the factors that employees rated higher 
than benefits and compensation in affecting their satisfaction was the 
relationship they had with their immediate supervisors. This finding 
could be particularly relevant to DHS, which has experienced a high 
frequency of turnover among senior-level management.
    Similarly, 71 percent of employees said that acknowledgment of 
their contribution to the organization's business goals satisfies and 
engages them. Because of its integration challenges since the agency 
was formed, DHS may be seen by some of its employees as lacking a clear 
and unified mission.
    Effective communication from senior management, especially during 
times of uncertainty, can provide the workforce with direction. Our 
research in 2011 found that 53 percent of employees said communication 
between employees and senior management was very important to their job 
satisfaction. And a full 60 percent said a proper organizational 
culture could engage them.
            moving from employee satisfaction to engagement
    If there is a gold standard in human capital management, it's to 
move a workforce from employee satisfaction to the higher achievement 
of employee engagement. That's when people find meaning in their work. 
It's when they stop watching the clock, and start embracing their role 
in moving the organization forward.
    Rising to that plane is not easy, whether in the private or public 
sector. Nor is doing so a guarantee of key staff retention. For 
instance, we can't assume that an era of financial uncertainty is going 
to lock in our staffs, and keep key members from going elsewhere. Many 
employees will still feel anxious, alienated, adrift--and maybe even a 
little distrustful of management. That's why, even in a still uncertain 
market, many of them are poised to flee. In the fall of 2009--before 
the economic skies started to brighten a little bit--staffing firm 
CareerBuilder surveyed 5,200 U.S. workers and found that nearly one in 
five, or about 20 percent, said they planned to get a new job in 2010.
    And, last fall, Randstad U.S. released its Employee Attachment 
Index. It showed that nearly 30 percent of the most engaged employees--
the ones who say they like working for their employers--said they would 
seriously consider a new job offer in 2011. Plus, one out of five of 
those same people said they would accept one, if offered.
    Last year, SHRM did a webcast with Mike Ryan, an expert on 
workforce engagement and recognition. He said that high unemployment 
levels are giving employers a false sense of security--they assume 
people are happy to simply have a job.
    But, he said, the willingness of employees to put in discretionary 
effort--to go the extra mile--has declined; employees are feeling like 
disposable commodities. He said, ``Emotionally, many of them have 
checked out.'' They're simply waiting for the economy to improve in 
order to find a better environment.
    Despite the lack of any guarantees, achieving employee satisfaction 
is still the top priority for HR professionals. The first step is to 
recognize the distinction between satisfaction and engagement. 
Satisfaction is fickle, and can vary from day to day. But true 
engagement is steady and locked in.
    An engaged employee has an understanding of what must be done to 
add value to his or her organization. That understanding is accompanied 
by a sense of pride, a sense of passion, and a connection to the 
organization's mission. A little farther down the scale, a non-engaged 
employee has checked out, with no energy or passion.
    Finally comes the actively dis-engaged employee, who acts out his 
or her unhappiness and undermines the spirit and accomplishments of 
others. This is the toxic employee; one who poisons the organization's 
culture. A recent Gallup poll of 42,000 workers determined that only a 
third of U.S. workers feel engaged. Gallop estimated that lack of 
engagement--and resulting lack of productivity--costs U.S. businesses 
$350 billion every year. That's more than the annual GDP of Israel, 
Portugal, or Singapore.
    We're conditioned to think that ``recognition for good work'' is 
the best way of engaging employees. That helps, but it's not the No. 1 
driver. Research shows that progress is. Employees feel most engaged 
when they can make headway--when the challenge is neither too easy nor 
too hard--and when they receive the support they need to overcome 
obstacles.
    Progressive employers have concluded that engaged employees and the 
management philosophy of command-and-control aren't good cubicle 
partners. As noted author Daniel Pink says, blind compliance can be an 
effective strategy for physical survival, but it's a lousy one for 
personal fulfillment. In a recent best-selling book, ``Drive: The 
Surprising Truth about What Motivates Us,'' he said, ``We have way too 
much compliance and way too little engagement. The former might get you 
through the day, but only the latter will get you through the night.'' 
Engagement could get any organization through the night--when it's 
darkest, and when everything is just a little more unknown and 
challenging.
    Dr. Mihaly Csikszentmihalyi, noted psychologist, author and expert 
on well-being, analyzed people who were totally engaged in free-time 
activity. He labeled what they were enjoying as autotelic experiences--
effort in which the activity itself is its own reward. Later he re-
labeled that simply as flow--a place where goals are clear and commonly 
reached, where feedback is immediate. He said that in a state of flow, 
``the effort itself is the most delicious reward.''
    Human resource professionals have found that the costs are high 
when a workplace is a no-flow zone. Leading innovators like Microsoft 
and others have realized that flow-friendly workplaces help people move 
toward satisfaction, engagement, and higher productivity.
                   the power of a flexible workplace
    Not long ago, SHRM surveyed its members globally and asked them 
what will be their biggest challenges in the next 10 years. The No. 1 
response was retaining and rewarding their best talent to achieve their 
organizational mission, the type of people who could be satisfied with 
their work, and eventually engaged with it. The No. 2 response was 
attracting those types of people to their organizations.
    Then we asked, what is the most important factor in achieving those 
goals? Nearly 60 percent of those polled, in organizations large and 
small, said the creation of flexible work arrangements--that is, 
creating work environments that don't focus on where, when, or how 
people do their work, as long as the results the organization needs are 
met; work settings in which employees are also offered opportunities 
for self-improvement, either through employer-funded education, 
personal finance education, or others. ``Compensation,'' was much 
farther down the list.
    At SHRM, we believe that workplace flexibility--re-imagining the 
workplace--is the next major strategic competitive advantage for the 
business of both private-sector and public-sector organizations. It is 
the next business imperative.
    A flexible workplace is one where human capital is held with 
esteem, and where personal priorities and responsibilities don't have 
to compete with organizational vision. And, for the employer, flexible 
arrangements increase productivity; boost engagement and loyalty; 
reduce absenteeism; save money on overhead; attract new employees; and 
help retrain the best talent the employer already has.
    We at SHRM feel so strongly about this issue that we have partnered 
with the Families & Work Institute, the preeminent research 
organization on workplace flexibility, to promote this new paradigm 
through research and experience-based advice on implementation. We feel 
that any organization will never be able to cut enough, streamline 
enough, or boost efficiency enough, to come close to what happens when 
you optimize the talents of the workforce and allow employees the 
freedom to flourish. All of us want work that is meaningful and 
rewarding, and a work setting that reflects the best of who we are.
    The Federal Government and its agencies deserve credit for the 
strides they have already made in creating flexible work settings, but 
even more can be done. Every workplace in 21st Century must be adaptive 
enough to benefit employers and employees alike. Every workplace must 
be free from discrimination of any kind, a place where we celebrate--
and take full advantage of--our differences, the wonderful mix of our 
ethnic, cultural, religious, and societal influences. In such a 
workplace, both the organization and every one of its employees can 
realize their goals, and become the best they can be, all due to a 
place where workers have a sense of pride, a sense of connection--a 
sense of passion.
                other challenges faced by every employer
    In today's challenging environment, it's little wonder that an 
organization such as DHS can be facing human capital issues, 
particularly within an agency that has been in flux since its creation 
under National crisis. Similarly, human resources professionals have a 
lot on their plates specifically the following issues.
    There is an unprecedented mix of generations in the workforce. For 
the first time in history, we have four generations in the workforce, 
and in just a few years, there will be five. The work behaviors and 
motivations of such a diverse mix need accommodation. All of these 
people have different needs, different ways of communicating, and 
different expectations of their employing organization. The 
organization's challenge is to align them, to help them collaborate, 
and to work together toward the common interests and goals of the 
organization.
    A boomer brain drain is looming on the horizon. The first wave of 
baby boomers started turning 65 last year, and 10,000 more will be 
turning 65 every day for the next 20 years. Both private and public 
employers don't want to suddenly lose that reservoir of experience, 
maturity, and judgment--especially when they will need someone to help 
foster a positive work environment among those four or five generations 
in the workplace.
    Also, despite unemployment levels, we are facing a major skills 
shortage. Recruiters in both the public and private sectors are having 
difficulty in finding the necessary talent to do the job. A survey not 
long ago by the staffing firm Manpower found that 52 percent of U.S. 
employers have a hard time filling critical positions with necessary 
skills sets, up 14 percentage points from the previous year.
    In SHRM's own research, we have found that our members' employers 
have more than 3 million jobs today that simply can't be filled, or 
what is called ``structural unemployment.'' If we could fill these jobs 
alone, the National unemployment rate could be lowered a full 
percentage point. We match 100-percent fits, as opposed to connecting 
the 70-80-percent fits to development opportunity, and then to 
employment.
    Finally, due to an education gap, our schools are not adequately 
preparing the workforce of tomorrow. The Georgetown University Center 
on Education and the Workforce says that by 2018, the Nation will need 
22 million new college degrees to remain competitive--but we will fall 
short of that number by at least 3 million.
    Forty years ago, in 1973, only 28 percent--or one out of four--jobs 
in the United States required a post-secondary education. That number 
is expected to rise to 63 percent over the next decade. If something is 
not done soon to address this problem, high school graduates and 
dropouts will be largely left behind--unemployable. And, as a Nation, 
we will not have the workforce we need to fill our jobs. As a result, 
the competition for skilled talent will become even fiercer, and 
organizations like DHS and others will need to develop new strategies 
to differentiate their organizations in order to recruit and keep the 
best workers.
                               conclusion
    Admittedly, we at SHRM are biased in focusing on the human 
resources staff of DHS, knowing that successful change management will 
come from their creativity. Their wisdom is in anticipation, in knowing 
what comes next, because that's what HR does--and then building the 
right workforce to seize the opportunities that come with change.
    There's a reason we so often hear the line that an organization's 
most important assets walk out the door at end of every work day. The 
reason is because it's true. There is ample evidence from both the 
private sector and public sector that a culture change at DHS can be 
successfully implemented, and the Society for Human Resource Management 
stands ready to serve.
    With the right vision, a bold and tenacious commitment to change at 
every executive level, and with honest and open communication, DHS will 
be able to look over the horizon and foresee more changes. By re-
imagining and re-designing the workplace and the workforce, it will be 
able to transform the present, and plan for the future.

    Mr. McCaul. Thank you, Dr. Pon.
    The Chairman now recognizes himself for 5 minutes. I just 
want to start by saying, you know, this is a bad report card. 
It is a referendum on leadership within the Department.
    Mr. Stier, I thought you made an excellent point about 
leadership at the top. Ray LaHood, who I served with in the 
Congress and the House, has turned around the Department of 
Transportation and the morale has gone up.
    I remember working in the Department of Justice for many 
years--over a decade--and a lot of it--you know, we believed in 
the mission but whoever was appointed at the top as attorney 
general had a lot--a very big impact on our morale, whether we 
believed in that attorney general or not, whether we thought 
that attorney general was--were proud of that attorney general, 
for instance, whether that attorney general was being 
political. One thing we prided ourselves on was that we weren't 
political. We had integrity in the process because we were 
devoid of politics and we didn't look at things through that 
prism.
    We had--I have to be honest--a little bit of distrust for 
the political appointees within the Department because we 
thought they had a political agenda, and oftentimes they did. 
We felt that we were the ones who were really holding the 
standard of integrity within the Department of Justice by not 
being political. Certainly criminal prosecutions should be 
devoid of politics.
    So you mentioned I thought an excellent point, and it 
relates to Ms. Emerson as well, the idea of putting some of 
these positions out of the political appointee realm and rather 
as a career appointee.
    I think, Ms. Emerson, you being a career person gains the 
trust of the rank-and-file within the Department of Homeland 
Security. So I think that is a positive thing that I see.
    But could you--perhaps the two of you--expand upon what 
impact really does the top leadership have, and in this case 
Secretary Napolitano, within the Department of Homeland 
Security and some of the top leadership? Because again, this 
referendum is not a positive referendum. It basically says that 
the rank-and-file view the top leadership as really--there is a 
bit of distrust and the morale is low, and they don't approve 
of their leadership.
    What do you make of that and what needs to be done?
    Mr. Stier. Okay. So to begin with, there is no question 
that leadership--and we have very deep data on this--is the No. 
1 driver for employee engagement, and in the broader 
leadership, effectively leadership category, the old saw is, 
you don't leave your job; you leave your boss. But what we see 
in the data, actually, is that senior leadership is a more 
important component of employee engagement than the first line 
supervisor. Both are important.
    I say that. When we say senior leadership the data does not 
allow us to disaggregate political from career, so if you are 
a--you know, a GS-9 border patrol person senior leader is not 
going to just be the Secretary; it is going to be, you know, 
many layers down from that as well. So one of the things I 
would say--and this is the point that Greg made earlier, which 
is that this gives us a lot of ideas about questions that we 
should be asking. We need further follow-up information to 
understand. Frankly, we might even be able to improve the 
instrument of collecting information so we can understand 
better whether people are talking about the political 
leadership versus their career SES.
    But plainly, the focus on employee morale has to come from 
the very top. You see that with Secretary LaHood. You see that 
with, you know, Sheila Bair, who was head of FDIC. You are 
hearing that right now from Secretary Napolitano in the 
engagement that she is, you know, working on right now and the 
set of things that you heard from Catherine Emerson. That is 
vital.
    It is also critical that it be sustained, and I think the 
point that you make about career leadership is very important 
for a variety of reasons, one of which is that by design 
political leaders are going to be turning over fairly quickly 
and there is no way they are going to be able to maintain focus 
over time on a set of issues that require, you know, 4 or 5 
years, maybe more. That is one of the reasons why that makes a 
lot of sense to have these management positions actually be 
career positions--not just the chief human capital officer, but 
frankly, across the board. When we talked about acquisition 
issues; we talked about, you know, financial issues at the 
Department.
    They still don't have a--you know, a confirmed CFO. In 
fact, I believe only--there are only five of the Cabinet 
agencies that actually have confirmed CFOs. That is a real 
problem.
    So not only are these people not staying around a long 
time, it is hard for them to get into their job, and that means 
that there isn't the leadership that ultimately can focus on 
very challenging problems over time.
    The last thing I would say on this point, though, is that 
this is an issue that DHS has seen for its whole existence. 
Interestingly, though, when you dig beyond the Departmental 
level you see components that have made a very, very real 
difference with their employees, and those are the ones that we 
need to emulate.
    Mr. McCaul. That is a great point. I think that, you know, 
certainly any administration has, certainly, the right to place 
political appointees in trusted positions to move forward their 
agenda. But I think, having been a rank-and-file Federal 
employee myself, there is that sort of feeling that, as you 
said, it is a very short-term. You know, they are going to be 
around for a couple of years and they leave, and you are--you 
feel like you are really the one upholding the Department--
sustaining it over a long term.
    So the idea of maybe--I don't know if you convert some of 
these political appointees to career, necessarily, or perhaps 
under secretary positions you appoint a deputy who is a career 
person. Perhaps maybe that is a potential solution.
    Mr. Stier. My own view on that--and I am glad you mentioned 
the under secretary position as--obviously an under secretary 
for management, I think, actually Under Secretary Borras has 
done a very good job at DHS--and there are some real results of 
the work that he has done. I would love to see that position 
itself, frankly, be made career.
    At the end of the day, again, the reason why we have 
political appointees isn't to ensure that the policy choices 
that are being made reflect the will of the President. The 
management needs are independent of those policy choices, and 
if you don't have very senior people--there is, in fact, I 
believe, a career deputy in that office--if you don't have 
those--a very senior person themselves being career--it may 
even be a term appointment with a performance contract; doesn't 
have to be the same flavor of career. But you need them to be 
around long enough with the expectation that they are focusing 
on that long-term health of the organization so that the 
political team coming isn't going to be, in the--in that--rapid 
turnover, actually disruptive to those critical management 
issues.
    Mr. McCaul. I couldn't agree with you more.
    Ms. Emerson, do you have any comments on that?
    Ms. Emerson. Having recently come from FAA, which was part 
of Department of Transportation, and leading employee 
engagement there, I echo what you say, how important it is for 
top-level leadership to support employee engagement and morale 
initiatives. I have to tell you that Secretary Napolitano is 
very dedicated to improving employee morale and satisfaction in 
DHS. In fact, she was--one of the reasons I was hired was 
because of my work that I had done in employee engagement in--
at DOT.
    But also, she has recently sent out a memorandum and held 
meetings with the component heads regarding this very issue. In 
fact, we had Partnership for Public Service at our last meeting 
to come and talk about what we can do in DHS to improve 
employee morale and satisfaction.
    I have to say, the component heads were all very engaged 
themselves and reported out on action planning that they were 
doing in their components. The Secretary is holding them 
accountable for that, so----
    Mr. McCaul. Well, I do commend the Secretary for putting 
you in that position and making it a career position, as well. 
I think that is a positive development. I know you have only 
been in the job for less than a year so you have quite a 
challenge in front of you, and I wish you all the best success 
with it.
    Mr. Maurer, you know, as I mentioned earlier, DHS is--I 
really don't envy anybody who is appointed Secretary of 
Homeland Security. It is a real challenge; you are always in 
the bull's eye; it is always--you know, they call it step-
child, they call it a whipping boy.
    You know, Tom Ridge came in, I thought provided great 
leadership; Mr. Chertoff came in and had a lot of challenges on 
his plate. Now currently Secretary Napolitano has an enormous 
challenge.
    But when we hear about, you know SBInet, the failure of 
SBInet, which you and I have talked about, you know, I feel for 
TSA screeners because that is, in some respects, a thankless 
job. We hear the stories about patting down, you know, children 
and grandmothers and that sort of thing.
    In the last hearing we heard testimony about border patrol 
agents taking bribes and actually working with the drug 
cartels. We heard about the mismanagement of FEMA disaster 
funds, and that could go on and on.
    What impacts do you believe these issues have on the morale 
at the Department?
    Mr. Maurer. Thank you, Mr. Chairman.
    Certainly problems like that don't help morale at the 
Department, so that certainly is not a--doesn't create a kind 
of work environment where people are going to be necessarily 
looking forward to getting up every morning and going in and 
meeting those kind of challenges. Now, the good news is at DHS 
there is overwhelming support among the rank-and-file and they 
believe strongly in the mission that they are performing. I 
think that is a very good thing.
    But I think the--one of the--key after-effects of having 
low morale scores within the Department is that it affects the 
Department's ability to brand itself with the taxpayers and 
prospective employees. Because when people are thinking about 
where they want to work you would like them to think about DHS 
in a very positive light. You would like them to think about 
DHS as being a place where there is top-notch talent, it is a 
great place to work, there is great morale and I can make a 
difference in securing this Nation.
    They are making great strides, but having relatively low 
morale scores and being in the headlines for not having good 
morale certainly doesn't help with that. So that is one of the 
things that, you know, we sort of highlighted in some of our 
prior work.
    I think to address that--and the Department is on the right 
path--I mean, they do need to have this clear leadership 
commitment from the very top of the Department. I think it is 
certainly going to help if they can make progress in 
integrating the management functions to form a common support 
base across all of DHS.
    But I think the really critical thing they need to do is 
dig into, within the individual components and figure out, what 
are the root causes behind the morale issues? Because what they 
may find is that there is a wide variety of issues that are 
specific to individual components or even within components.
    I mean, a lot of these organizations within DHS are large 
in their own right. There are six major components within DHS 
that employ more than 10,000 people. So there are different 
stories embedded within DHS, and so we would like to see a 
combination of this high-level strategic support for addressing 
morale issues combined with a better, more granular 
understanding of the root causes.
    Mr. McCaul. It is a good point. You know, I look at when I 
went on a trip on Veterans Day to Afghanistan, Pakistan, and 
Iraq, and I see our military serving, and they have a great 
pride of service under very difficult circumstances, and they 
are protecting America's interests abroad.
    Yet, I think the Department--there is an opportunity to 
turn it around. I think when you look at the mission of the 
Department it is to protect the American people at home, and 
they should take great pride in that. I know a lot of them do. 
I applaud the efforts of the rank-and-file within the 
Department, and sometimes it is a thankless job.
    I think that we--I think the Department has a lot to learn 
from the Department of Defense and the military. If we could 
transpose that--that public--that, mission of service to 
protecting Americans as the military has--if we could somehow 
place that upon the Department of Homeland Security, protecting 
Americans at home, I think that would go a long way.
    Mr. Stier, you talked about, you know, the DOD model, and 
you talked about Goldwater-Nichols. Can you expand upon that, 
and what can the DHS learn from the Department of Defense?
    Mr. Stier. Thank you, Mr. Chairman.
    I think one of the most interesting stories at Department 
of Defense is that there really are two organizations there: 
There is the military, as you described, and there is also the 
civilian service. So there are close to 700,000 civilian 
employees at DOD and they are managed quite differently than 
those that are in uniform.
    Importantly, I think, that the military has a very 
different perspective on its investment in its talent. They 
have a strong culture and belief that they are going to develop 
their talent in all ways possible and leadership is, you know, 
No. 1 for them.
    So I think the No. 1 lesson that, frankly, could be learned 
is just the priority that is placed on viewing employees as an 
asset not a cost, and really growing their skills and 
abilities, and I think that has a lot to do with the success of 
our military.
    Interestingly, that same approach isn't, in fact, taken for 
the civilians at DOD. Their scores are better than DHS but they 
are still not at the top of the heap, and I think that is 
worth, you know, some further exploration and the opportunity 
is really there.
    There are some things that DOD has done historically with 
the military--and I mentioned joint duty as being one of them--
as a way of really integrating their services. I think they 
recognize you can move the boxes around as much as you want but 
you are going to actually create relationships and 
understanding much better by moving the people instead.
    So in order--they created an incentive and requirement--in 
order to become a flag officer you actually had to have worked 
with the other services. They are now taking that model and 
applying it to the civilian side. I believe this year is the 
first year they are going to have that requirement. So they are 
looking at a--from their--for their career executives on the 
civilian side--an expectation that they have the experience of 
having worked cross-organizationally.
    I believe that same opportunity exists at DHS. I think that 
having their folks there, you know, rotate through intra-
agency, but frankly, inter-governmentally, and even better, 
intra-sector--inter-sector--would create better skills, better 
understanding, better relationships. The challenges they have 
to address are multi-sector challenges and we need to have a 
workforce that reflects a knowledge base and an understanding 
of how those other sectors work better.
    So the mobility point, I think, is extraordinarily 
important and would have long-term impact on bringing the 
agency together and improving its ultimate performance.
    Mr. McCaul. Very good point. I think that is part of why 
the Coast Guard ranked so high in the survey, whereas the rest 
of the Department probably did not. So I think we have a lot--
and I think you are right, it is the culture.
    Mr. Stier. Yes.
    Mr. McCaul. It is the culture.
    I think that is the great challenge, Ms. Emerson, that you 
have and the Secretary has is to try to change the culture--
culture to inspire them that their mission is important, that 
they are protecting American lives at home.
    Dr. Pon, I want to give you the last word.
    Mr. Pon. Mr. Chairman, thank you. I appreciate the last 
word.
    Mr. McCaul. Course, the Ranking Member just showed up so 
you can have another word.
    Mr. Pon. Mr. Keating, you will have the last word, I 
believe.
    From my experience as the chief human capital officer of 
the U.S. Department of Energy many of the same issues occur, 
and you nailed it on the head, which is it is culture. It is 
shared mission and story.
    When I first started Department of Energy people in the 
complex talked about the Department of Energy as the DHS of the 
1970s. It was never integrated very well.
    But if you actually go in the lobby of the Forrestal 
Building, where the headquarters is, what we did was we made 
sure that we had a common history. It starts with walking to 
the left you have Einstein's letter to FDR warning about 
Germans actually acquiring different scientists around Eastern 
Europe and Western Europe for the harnessing of the atomic 
weapons. Then it goes on to celebrate the Nobel Prize winners, 
the nuclear complex, the scientific discovery of the 17 
National laboratories, the management excellence that we had.
    It really talked about how, under five things--defense, 
energy security, scientific discovery, environmental 
responsibility, and management excellence--everybody could hang 
their hat on. It made the people understand that they had 
relevance and role to the mission of the Department.
    With an organization like DHS you have 22 separate cultures 
and agencies, and as Admiral Allen previously stated, you have 
different cultures with different maturity levels. Also, you 
are compounding the complexity there because you have over 200 
occupations. We have addressed some of the things about the 
career professional being a CHCO in human resources or 
acquisition. There is another, you know, 190 different 
occupations you have to actually occur to.
    So having different types of standards for each and every 
one of the support professions may be a good way to ensure the 
continuity of the support functions there. What I have found is 
that many of my fellow CHCOs and many of the CFOs, political or 
whatnot, didn't really have qualifications--didn't grow up in 
HR functions or financial functions. That happens too often 
when you have the criteria of a chief human capital officer not 
having any HR background.
    As the Society for Human Resources Management what we are 
trying to do not only in the Government but elsewhere is to 
make sure the standards of practices is well known, make sure 
we can have a body of knowledge and a practice that can be 
certified eventually so that you will have common parallels to 
accounting.
    Mr. McCaul. Excellent point. I want to thank you for your 
testimony.
    The Chairman is pleased that the Ranking Member has arrived 
at this hearing, and I now recognize the Ranking Member.
    Mr. Keating. Thank you, Mr. Chairman. Quick housekeeping: I 
would just like to submit for the record a written statement 
submitted by the National Treasury Employees Union, if I could.
    Mr. McCaul. Without objection, so ordered.
    [The information follows:]
 Statement of Colleen M. Kelley, National President, National Treasury 
                            Employees Union
                             March 22, 2012
    Chairman McCaul, Ranking Member Keating, distinguished Members of 
the subcommittee: Thank you for the opportunity to provide this 
testimony on morale issues at the Department of Homeland Security 
(DHS). As President of the National Treasury Employees Union (NTEU), I 
have the honor of leading a union that represents over 24,000 DHS 
Customs and Border Protection (CBP) Officers and trade enforcement 
specialists in the Office of Field Operations (OFO) who are stationed 
at 331 land, sea, and air ports of entry (POEs) across the United 
States. CBP employees' mission is to protect the Nation's borders at 
the ports of entry from all threats while facilitating legitimate 
travel and trade. CBP trade compliance personnel enforce over 400 U.S. 
trade and tariff laws and regulations in order to ensure a fair and 
competitive trade environment pursuant to existing international 
agreements and treaties, as well as stemming the flow of illegal 
contraband such as child pornography, illegal arms, weapons of mass 
destruction, and laundered money. CBP is also a revenue collection 
agency, processing approximately $2 trillion in imports--28 million 
trade entries a year--at the POEs and collecting more than $32 billion 
in revenue for the U.S. Government in fiscal year 2010.
    According to the Partnership for Public Service's most recent Best 
Places to Work in the Federal Government ``Overall Index Scores for 
Employee Satisfaction and Commitment,'' DHS came in 31st out of the 33 
large Federal agencies surveyed. One of DHS' largest component 
agencies, CBP, ranked 145 of 228 Federal agency subcomponents surveyed 
and continues to rank near the bottom for strategic management, 
teamwork, effective leadership (all categories), support for diversity, 
and family-friendly culture and benefits (see Appendix 1.)
    A significant cause of low morale at CBP is the on-going staffing 
shortages at the ports of entry. Sufficient staffing should be provided 
to maintain expertise, ensure security, and promote trade and travel by 
reducing wait times at our Nation's air, sea, and land ports of entry. 
Despite demonstrated need--long lines and unmanned booths facing those 
waiting to deliver goods and services through commercial lanes and 
travelers in line for hours waiting to visit our country and spend 
money--there is no increase in the number of CBP employees at the ports 
of entry in the fiscal year 2013 budget submission.
    In October 2009, the Southwest Border Task Force, created by 
Homeland Security Secretary Janet Napolitano, presented the results of 
its staffing and resources review in a draft report. This draft report 
recommended that the ``federal government should hire more Customs [and 
Border Protection] officers.'' The report echoes the finding of the 
Border-Facilitation Working Group. (The U.S.-Mexico Border Facilitation 
Working Group was created during the bilateral meeting between 
President George W. Bush and President Felipe Calderon held in Merida 
in March 2007.) ``In order to more optimally operate the various ports 
of entry, CBP needs to increase the number of CBP Officers. According 
to its own estimate, the lack of human resources only for the San 
Ysidro POE is in the ``hundreds'' and the CBP Officer need at all ports 
of entry located along the border with Mexico is in the ``thousands.'' 
(``CBP: Challenges and Opportunities'' a memo prepared by Armand 
Peschard-Sverdrup for Mexico's Ministry of the Economy: U.S.-Mexico 
Border Facilitation Working Group, January 2008, pages 1 and 2.) An 
example of how staffing shortages affect morale can be found at the San 
Ysidro POE where many employees are assigned so many hours of overtime 
that they believe their own safety is endangered.
    Despite these independent studies that state that CBP is 
understaffed at ports of entry by thousands of officers, the fiscal 
year 2013 budget provides only enough personnel funding to maintain the 
current number of CBP Officer, CBP Agriculture Specialist, and CBP 
trade operations positions.
    Another significant cause of low morale and a result of continuing 
staffing shortages at CBP are the constant temporary duty assignments 
(TDYs) of employees to the Southwest Border, Iraq, Container Security 
Initiative ports, the National Targeting Center, and the Federal Law 
Enforcement Training Center to name a few locations. Employees realize 
that many CBP TDYs are designed to increase the security of our 
country. Nevertheless, there is an adverse impact on employee work and 
work-family balance as a result of these TDYs which disrupt the lives 
of many employees and are on-going. These impacts include a reduction 
in safety as a result of insufficient staffing, more forced overtime, 
tension in the annual leave approval process, violations of collective 
bargaining agreements and the law, in addition to the disruption caused 
to the employees and their families when they staff these TDYs.
    Another source of concern is the resistance by CBP managers to 
implementing expanded telework programs as authorized by Congress. Non-
uniformed trade operations personnel continue to be denied telework for 
reasons cited by management that have nothing to do with the telework 
program, such as short staffing, not enough work to justify telework, 
and the belief that they could not perform their job duties in a 
telework environment, for example, at their residence. Staffing issues 
are not a reason to deny telework in a non-uniform, office environment.
    Another area of concern for Customs and Border Protection Officers 
is the One Face at the Border initiative that consolidates immigration 
and customs inspection specialties into a single front-line border 
security position at ports of entry. Consolidating inspection functions 
has caused logistical and institutional weakness resulting in a loss of 
expertise in critical homeland security priorities and has contributed 
to undermining CBP Officers' morale.
    According to a recent DHS Inspector General report ``components 
that experienced difficulty . . . cited a loss of institutional 
knowledge of immigration law as the cause. In the 8 years since the 
creation of DHS, the percentage of CBP . . .  officers with prior 
experience in the former Immigration and Naturalization Service has 
declined because of attrition and retirements.'' (See page 16 of DHS 
OIG-12-39, February 2012.)
    It is clear that CBP sees its One Face at the Border Initiative as 
a means to increase management flexibility without increasing CBP 
Officer staffing levels. Congress must ensure that institutional 
expertise is retained by supporting immigration and customs specialties 
within the CBP Officer corps.
    Recently CBP began experimenting with a ``One Face One Border'' 
program in which supervisory personnel from OFO and the U.S. Border 
Patrol work at each other's respective locations. Border Patrol 
supervisors are temporarily assigned to manage CBP Officers at the 
ports and OFO supervisors are assigned to manage Border Patrol Agents 
operating between the POEs so that they ``experience the challenges of 
their respective CBP counterparts.''
    This experiment is disconcerting to CBP Officers because the U.S. 
Border Patrol's mission is to stop illegal crossings of people, drugs, 
and contraband between the POEs. The mission of CBP Officers is to 
facilitate legal trade and travel, while being trained to recognize 
illegal documents, counterfeit goods, and enforce customs and trade 
laws applicable to the expeditious movement of travelers and cargo 
through the air, sea, and land ports. In a time of extreme staffing 
shortages and long wait times at the ports, introducing Border Patrol 
supervisory personnel that are unfamiliar with the mission and skills 
of CBP front-line port personnel is incomprehensible. The ``One Face 
One Border'' experiment should also be abandoned.
    NTEU commends the Department for increasing journeyman pay for CBP 
Officers, Border Patrol Agents, and Agriculture Specialists. The 
majority of CBP employees received this increase and CBP reported one 
of its highest scores in the Best Places index (27 of 228 for pay.)
    Many deserving CBP trade and security positions, however, were left 
out of this pay increase, which has significantly damaged these 
workers' morale. NTEU strongly supports extending this same career 
ladder increase to additional CBP positions, including CBP trade 
operations specialists and CBP Seized Property Specialists. The 
journeyman pay level for the CBP Technicians who perform important 
commercial trade and administration duties should also be increased 
from GS-7 to GS-9.
    Finally, CBP is continuing to increase the number of supervisors 
when a much greater need exists for new front-line hires. In terms of 
real numbers, since CBP was created, the number of new managers has 
increased at a much higher rate than the number of new front-line CBP 
hires. According to GAO, between October 2003 and February 2006, CBP 
increased the number of managers by 17 percent, but increased the 
number of front-line CBP Officers by only 2 percent (See GAO-06-751R, 
page 11).
    According to NTEU's most recent data, of the 21,186 CBP Officers on 
board, nearly 5,600 are not in the bargaining unit. It is NTEU's 
understanding that nearly 1,000 CBP Officers are serving either at CBP 
headquarters or non-OFO field locations. This means that as many as 
4,600 CBP Officers are serving in supervisory positions. CBP's top-
heavy management structure contributes to the lack of adequate staffing 
at the ports, excessive overtime schedules, and flagging morale among 
the rank-and-file.
    The tremendous increase in CBP managers and supervisors has come at 
the expense of National security preparedness and front-line positions. 
Also, these highly-paid management positions are straining the CBP 
budget.
                            recommendations
    Sufficient CBP staffing must be provided to ensure security, 
mitigate prolonged wait times for both trade and travel at our Nation's 
ports of entry, and improve morale.
    Therefore, NTEU urges the committee to:
   significantly increase both port security and trade 
        enforcement staffing at the ports of entry;
   extend enhanced pay and retirement recognition to additional 
        CBP personnel, including Import and other Commercial Operations 
        Specialists, CBP Seized Property Specialists, and CBP 
        Technicians;
   expand inspectional expertise by ending the One Face at the 
        Border and One Face One Border programs; and
   examine the cost and necessity of CBP's top-heavy management 
        structure.
    The more than 24,000 CBP employees represented by NTEU are proud of 
their part in keeping our country free from terrorism, our 
neighborhoods safe from drugs, and our economy safe from illegal trade, 
while ensuring that legal trade and travelers move expeditiously though 
our air, sea, and land ports. These men and women are deserving of more 
resources to perform their jobs better and more efficiently.
                               APPENDIX I
                  Customs and Border Protection (DHS)
Index Score: 62.4 (Ranked No. 145 out of varied totals)
    To secure the homeland by preventing the illegal entry of people 
and goods while facilitating travel and trade.

                      SCORES AND RANKINGS BY CLASS
------------------------------------------------------------------------
                                                               Rank (out
                       Class                           2011    of varied
                                                      Score     totals)
------------------------------------------------------------------------
Employee Skills/Mission Match.....................       76.1        158
Strategic Management..............................       51.9        203
Teamwork..........................................       59.9        211
Effective Leadership..............................       50.1        201
Effective Leadership--Empowerment.................       41.9        206
Effective Leadership--Fairness....................       51.1        167
Effective Leadership--Leaders.....................       45.2        173
Effective Leadership--Supervisors.................       58.4        214
Performance-Based Rewards and Advancement.........       42.5        190
Training and Development..........................       56.1        173
Support for Diversity.............................       53.4        202
Pay...............................................       71.2         27
Family-Friendly Culture and Benefits..............       25.2        205
Work/Life Balance.................................       58.2        176
------------------------------------------------------------------------


                                          SCORES AND RANKINGS BY CLASS
----------------------------------------------------------------------------------------------------------------
                          Scores by Class                              2010     2009     2007     2005     2003
----------------------------------------------------------------------------------------------------------------
Employee Skills/Mission Match......................................     75.5     75.0     71.1     71.6  .......
Strategic Management...............................................     51.6     49.5     47.2     46.7  .......
Teamwork...........................................................     61.2     67.5     64.2     64.9  .......
Effective Leadership...............................................     49.9     46.9     41.9     43.7  .......
Performance-Based Rewards and Advancement..........................     42.7     37.8     31.9     33.9  .......
Training and Development...........................................     57.9     55.8     50.7     50.5  .......
Support for Diversity..............................................     52.5     54.9     49.4     54.1  .......
Pay................................................................     70.0     67.2     64.7  .......  .......
Family-Friendly Culture and Benefits...............................     27.9  .......  .......  .......  .......
Work/Life Balance..................................................     59.6     56.7     52.1     56.6  .......
----------------------------------------------------------------------------------------------------------------


                              INDEX SCORES
------------------------------------------------------------------------
                             Year                                Score
------------------------------------------------------------------------
2011.........................................................       62.4
2010.........................................................       63.3
2009.........................................................       58.2
2007.........................................................       53.2
2005.........................................................       55.0
2003.........................................................  .........
------------------------------------------------------------------------


    Mr. Keating. Thank you. Thank you.
    Ms. Emerson, just want to focus on the leadership 
development program and similar type of initiatives. We had 
hearings before that dealt with this. It is great to do it on 
the morale side and the human service--human resource side to 
see how we are doing specifically.
    As you are going through the program do you have any 
metrics in place to measure success with that at all, or----
    Ms. Emerson. It is my understanding that there are metrics 
in place. Right now what we have underway is our Cornerstone 
program that is providing leadership training to all first-line 
supervisors, and that is well underway in all the components. 
They have provided input on that and it is to be wrapped up the 
end of this fiscal year.
    Also, this summer we are going to be kicking off a pilot 
for our Capstone program, which is leadership training for our 
executives. So we will be getting feedback on that. It will be 
about 20 executives in DHS going through that program and then 
we will go ahead, measure that, get feedback, and we will tweak 
our program and go forward with Capstone.
    Mr. Keating. Thank you very much.
    Mr. Maurer, I just--sort of dealing with an issue that was 
brought up in the efficiency portion of the hearings we looked 
at before, in terms of the morale, when you have a situation 
where the chief human capital officer, or the CHCO, at the 
Department--it has been sort a revolving door back and forth. 
How has that affected the morale or other problems in that 
respect?
    Mr. Maurer. Well, it has certainly complicated efforts to 
have a common, consistent hand on the till in addressing human 
resources issues across the Department. I think it is a good 
step to having a more permanent--permanency in that position 
will certainly help in that regard.
    I know Ms. Emerson's predecessor was at the Department for 
about 2 years and I think that made him the longest-serving 
chief human capital officer in DHS history. That helps, because 
then you can have someone who is tied in with the leadership 
team at the Department and can help drive change throughout the 
organization on an on-going basis. If people are coming in and 
out of that position with less than 12 months there is not 
really much that they can accomplish and have those changes 
stick.
    Mr. Keating. Actually, I will throw this open to any of the 
panel members: How can we help in those regards so you don't 
have the revolving door occurring? What kind of things could 
you say that could be helpful in that regard, just 
institutionally?
    Mr. Pon. May I?
    I think some of the best practices out there is to make 
sure you have a succession plan, make sure you understand the 
talent that you have and have a workforce plan. I think a good 
executive is a replaceable executive. You have a good second 
bench, if you will.
    What we see in the Federal Government when I was there, you 
have a lot of good leaders but the people that are coming up 
are not rotating, finding the development in--you know, at 
Energy I often chided my counterparts, such as the CIO, for 
their prowess in budget because we actually spend more--at the 
time we spent more in IT support than we did in leadership 
development. That is a concern when you are spending more on 
your systems infrastructure than your people infrastructure.
    The focus on cutting budgets will actually compound the 
amount of funding that Ms. Emerson would have, as well as all 
the other components. So one of the things, if I were to 
recommend, is to make sure that you ensure that there are 
resources for developing talent in the organization.
    Without that you are going to have a lot of people ``get 
promoted'' without ever learning how to be managers, and that 
is why, as Max and others have stated, most people leave jobs. 
It is because of the managers and the supervisors that they 
have.
    Mr. Keating. Yes.
    Mr. Stier.
    Mr. Stier. Thank you.
    I think the place you started--which is what are your 
accountability metrics?--is a good one. If you have an accepted 
set of accountability metrics that this committee comes back to 
on a regular basis that will enable continuity of focus even if 
there is a change in personnel. So that would be the first 
thing.
    The second, as we discussed earlier, is converting 
permanently the management--the chief management positions of 
the Department to career or term appointment positions so that 
they don't roll over as quickly as the political appointees do. 
My proposition, that would be not only the chief human capital 
officer, the CFO, and frankly, I think, the under secretary for 
management, which all these folks should pull up to so that you 
have continuity of management. Policy can change but managers 
stay there in order to ensure that your organization has the 
capacity to perform.
    Mr. Keating. Great.
    My time is up, Mr. Chairman. Thank you very much.
    Mr. McCaul. Thank the Ranking Member.
    I want to thank the witnesses for your valuable testimony. 
I think this has been a very productive exercise and I have 
learned a great deal, and hopefully we can move forward and 
improve the morale within the Department.
    So thank you for your testimony. This hearing is adjourned
    [Whereupon, at 10:29 a.m., the subcommittee was adjourned.]

                                 
