Government Printing Office: Advancing GPO's Transformation Effort
through Strategic Human Capital Management (20-OCT-03,
GAO-04-85).
The Government Printing Office (GPO) has undertaken the task of
transforming itself in response to pressing fiscal and other
realities in the 21st century. This report focuses on actions
GPO's leaders can take to advance its transformation efforts
through strategic human capital management and is a part of GAO's
response to a congressional request that GAO conduct a general
management review of GPO that focuses on issues related to GPO's
management and transformation. GAO plans to address other
management topics, including strategic planning and financial
management, in a series of reports that may assist GPO in its
ongoing transformation efforts.
-------------------------Indexing Terms-------------------------
REPORTNUM: GAO-04-85
ACCNO: A08763
TITLE: Government Printing Office: Advancing GPO's
Transformation Effort through Strategic Human Capital Management
DATE: 10/20/2003
SUBJECT: Federal agency reorganization
Financial management
Human resources utilization
Internal controls
Personnel evaluation systems
Strategic planning
General management reviews
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GAO-04-85
United States General Accounting Office
GAO
Report to the Subcommittee on
Legislative Branch, Committee on Appropriations, U.S. Senate
October 2003
GOVERNMENT PRINTING OFFICE
Advancing GPO's Transformation Effort through Strategic Human Capital Management
a
GAO-04-85
Highlights of GAO-04-85, a report to the Subcommittee on Legislative
Branch, Committee on Appropriations, U.S. Senate
The Government Printing Office (GPO) has undertaken the task of
transforming itself in response to pressing fiscal and other realities in
the 21st century. This report focuses on actions GPO's leaders can take to
advance its transformation efforts through strategic human capital
management and is a part of GAO's response to a congressional request that
GAO conduct a general management review of GPO that focuses on issues
related to GPO's management and transformation. GAO plans to address other
management topics, including strategic planning and financial management,
in a series of reports that may assist GPO in its ongoing transformation
efforts.
GAO makes many interrelated recommendations that reflect the important
role of human capital in GPO's ongoing transformation. These
recommendations provide a framework to reinforce GPO's initial
transformation efforts and enhance its future efforts.
We provided a draft of this report in September 2003 to the Public Printer
for review and comment. GPO's Chief of Staff, Deputy Chief of Staff, and
Chief Human Capital Officer provided comments orally and by e-mail on
behalf of GPO generally agreeing with the content, findings, and
recommendations in the draft report.
www.gao.gov/cgi-bin/getrpt?GAO-04-85.
To view the full product, including the scope and methodology, click on
the link above. For more information, contact J. Christopher Mihm at (202)
512-6806 or [email protected].
October 2003
GOVERNMENT PRINTING OFFICE
Advancing GPO's Transformation Effort through Strategic Human Capital Management
The Public Printer has demonstrated the leadership commitment that is
essential to transforming GPO, stating that GPO is going to have to
reengineer itself to remain relevant and viable for the future. Under the
Public Printer's direction, GPO has taken several steps that recognize the
important role strategic human capital management plays in its
transformation. For example, GPO created and filled the position of Chief
Human Capital Officer (CHCO), shifted the focus of existing training and
expanded opportunities for more staff to attend needed training, enhanced
recruitment strategies, and initiated a process to develop an agency
strategic plan and an accompanying strategic workforce plan.
To sustain its transformation efforts, GPO's leadership needs to ensure
that managers throughout the agency appreciate the importance of their
role in managing GPO's workforce and helping transform the agency.
Furthermore, now that GPO has hired a CHCO, it can begin to restructure
its human resources office to better support its transformation by
adopting a more strategic view of human capital management and by having
human resources officials work collaboratively with GPO managers. To
further support its transformation, GPO should use strategic workforce
planning to help ensure that its staff has the skills needed to meet
emerging needs. A workforce plan that includes both an inventory of
current GPO employees' knowledge and skills and an identification of the
knowledge and skills GPO needs in the future will best support GPO's
transformation. Finally, a modern, effective, and credible performance
management system can help GPO facilitate the transformation process and
serve as the basis for establishing individuals' roles and accountability
in the transformation. Performance management can also help GPO achieve
results, accelerate change, and facilitate two-way communication between
managers and employees.
GAO makes numerous recommendations to GPO on the steps it should take to
strengthen its human capital management in support of its transformation.
These recommendations can guide GPO as it seeks to meet the changing and
emerging information needs of its customers. The focus of GAO's
recommendations is on the following four interrelated areas:
o communicating the role of managers in GPO's transformation,
o strengthening the role of the human resources office,
o developing a strategic workforce plan to ensure GPO has the skills and
knowledge it needs for the future, and
o using a strategic performance management system to drive change.
By implementing the recommendations in these four areas, GPO can build the
strong human capital foundation needed to reinforce the transformation now
under way.
Contents
Letter 1
Results in Brief 3
Background 5
Communicating the Role of Managers and Following
Up on
Employees' Stated Concerns Is Vital to GPO's 9
Transformation
Developing a Strategic Human Capital Office 12
Strategic Workforce Planning Can Assist GPO's 19
Transformation
Performance Management Can Help GPO Drive Internal
Change and
Achieve External Results 26
Concluding Observations 34
Agency Comments 35
Appendix
Appendix I: Objective, Scope, and Methodology
Table 1: Key Agency Actions to Integrate Human
Table Capital
Approaches with Strategies for Accomplishing
Agency
Missions
Figures Figure 1:
Figure 2: Figure 3: Figure 4:
Figure 5:
Figure 6: Figure 7:
The Net Operating Income (Loss) for GPO's Major
Operations (in Thousands of Dollars) 7
GPO's Net Operating Income 8
GPO's New Organizational Structure 16
Critical Elements to Include in the Workforce Planning
Process 20
Examples of Workforce Data That Are Collected and
Analyzed by Other Federal Agencies 22
Key Practices for Effective Performance Management 28
2001 Performance Ratings for Current GPO
Employees 31
This is a work of the U.S. government and is not subject to copyright
protection in the United States. It may be reproduced and distributed in
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separately.
A
United States General Accounting Office Washington, D.C. 20548
October 20, 2003
The Honorable Ben Nighthorse Campbell
Chairman
The Honorable Richard J. Durbin
Ranking Minority Member
Subcommittee on Legislative Branch
Committee on Appropriations
United States Senate
Like other public and private organizations, the Government Printing
Office (GPO) has undertaken the enormous task of transforming itself in
response to the pressing fiscal and other realities of the 21st century.
This
transformation process will eventually lead the organization to make some
fundamental program and cultural changes. During his nomination hearing
on October 3, 2002, the Public Printer emphasized GPO's need to transform
itself by stating that ". . . like every other manufacturing business in
America, the GPO is going to have to reengineer itself if it is to remain
relevant and viable for the future." On several occasions, the Public
Printer
has reiterated the need for GPO to move from the 19th century to the 21st
century by looking at ". . . the changing and emerging information needs
of
our customers and develop a deeper understanding of our true strengths so
that we can plan for and build a new business model that will allow us to
meet the information demands of our customers." To underscore these
statements, the Public Printer has taken actions to transform GPO by
creating a new management structure, launching a major reorganization of
GPO's divisions, and initiating a demonstration project to allow federal
agencies more flexibility in contracting for printing services. The Public
Printer has also taken steps to reduce GPO's persistent financial losses
by
closing bookstores1 and reducing staffing levels. Finally, the Public
Printer
has initiated a process to develop an agency strategic plan and an
accompanying strategic workforce plan.
GPO leadership already recognizes that implementing large-scale
organizational transformations are not simple endeavors. As we have
noted, it typically takes at least 5 to 7 years until an organization's
change
initiatives are fully implemented, and the related culture is transformed
in a
1GPO closed all of its bookstores except for its Washington, D.C.
bookstore.
sustainable manner.2 Further, successful transformations require the
concentrated efforts of both leadership and employees to accomplish the
organization's new goals.3 To sustain and focus the transformation effort,
organizations need to concentrate on how effectively they use their
people, or human capital.
As agreed with your Subcommittee, this report focuses on actions GPO's
leadership could take to advance its transformation efforts through
strategic human capital management. To examine GPO's transformation
efforts, we used our Model of Strategic Human Capital Management released
in March 20024 as the analytical framework for collecting data and
reviewing GPO's human capital management. This model is designed to help
agency leaders effectively use their human capital and determine how well
they integrate human capital considerations into daily decision making and
planning for the program results they seek to achieve. We focused our
review on the human capital issues that are of most immediate concern and
significance to GPO's transformation initiative, such as the recent hiring
of a Chief Human Capital Officer (CHCO), the desire to restructure GPO's
workforce, and the use of a performance management system. We reviewed GPO
documentation describing its personnel practices and transformation
initiatives and interviewed numerous GPO managers about GPO's human
capital practices. For additional information on our scope and
methodology, see appendix I.
This report is part of your request that we conduct a general management
review of GPO that examines GPO's human capital, financial management,
information management, strategic planning, organizational operations, as
well as its use of technology in printing and information dissemination.
The Subcommittee requested that our general management review be done in
conjunction with another GAO review mandated in the Committee on
Appropriation's report of legislative branch appropriations for fiscal
year 2003, which will examine the current state of printing and
dissemination of
2U.S. General Accounting Office, Highlights of a GAO Forum: Mergers and
Transformation: Lessons Learned for a Department of Homeland Security and
Other Federal Agencies, GAO-03-293SP (Washington, D.C.: Nov. 14, 2002).
3U.S. General Accounting Office, Results-Oriented Cultures: Implementation
Steps to Assist Mergers and Organizational Transformations, GAO-03-669
(Washington, D.C.: July 2, 2003).
4U.S. General Accounting Office, A Model of Strategic Human Capital
Management, GAO-02-373SP (Washington, D.C.: Mar. 15, 2002).
federal government information. We plan to address this topic and others
related to GPO's management as part of a series of reports to be issued
periodically to assist GPO in its ongoing transformation efforts. For
example, in the coming months, we plan to issue a report on legislative
and executive branch printing requirements and views of GPO, which will
provide GPO with important information it needs to develop its strategic
plan. In addition, we plan to continue working with GPO leaders
cooperatively, meeting regularly with them about the progress of their
transformation initiatives, and at their request, continuing to provide
them with information on our human capital efforts and related
initiatives.
Results in Brief The Public Printer clearly recognizes strategic human
capital management as critical to the success of GPO's transformation. To
strengthen GPO's human capital management, the Public Printer has
established and recently filled the position of CHCO, shifted the focus of
training, and enhanced recruitment strategies. GPO can build on these
important first steps by taking additional actions to further (1) enhance
communication with senior managers, (2) build a strategic human resources
office to help drive the transformation, (3) develop strategic workforce
plans, and (4) implement an individual performance management system that
aligns organizational goals with day-to-day operations and creates a line
of sight between individual and organizational performance.
o Communication: As part of their efforts to transform the organization,
GPO's leadership has shown commitment to improving human capital
management. To sustain this transformation, GPO's leadership needs to
ensure that managers throughout the organization appreciate the importance
of their roles in transforming the organization and managing GPO's
workforce. To this end, we recommend steps that the Public Printer and
GPO's CHCO should take to strengthen communications and hold managers
accountable for effectively managing people and leading change.
o Strategic human capital office: The appointment of the CHCO was a
critical first step. GPO can now support its transformation by adopting a
strategic view of human capital management that centers on the
contributions GPO's Human Resources Office can make to the long-term
accomplishment of GPO's mission. We recommend numerous steps GPO
leadership can take to strengthen the role of human capital and ensure
that it will be integrated with strategies for accomplishing GPO's mission
and program goals. For example, by involving the CHCO and
other human capital leaders in strategic planning, GPO can ensure that its
human capital approaches are integrated with its program strategies. The
Public Printer and CHCO will need to develop a new human capital
organization with a strong collaborative focus and culture. The Human
Resources Office should work in partnership with managers in all of GPO's
divisions to integrate human capital approaches with GPO's program
strategies.
o Strategic workforce planning: GPO should use strategic workforce
planning to integrate its human capital approaches with its programs and
ensure that it recruits and develops staff needed to meet emerging needs.
We recommend several steps to assist GPO leadership in preparing for GPO's
future. Specifically, to implement effective workforce planning, GPO will
need to analyze workforce skills gaps based on the decisions it is making
as part of its ongoing efforts to set a strategic direction, develop human
capital strategies to fill the gaps, build the capability to support
workforce planning, and evaluate and revise its human capital strategies.
GPO collects some data on its workforce, including the number of people
eligible for retirement and the results of employees' performance reviews.
However, GPO needs to develop a system to collect and analyze data on the
knowledge and skills of its workforce and develop performance measures for
its human capital strategies in order to evaluate them.
o Performance management: Effective performance management is one of the
nine key practices we identified for effective mergers and
transformations.5 The performance management system can help manage and
direct the transformation process and serve as the basis for setting
expectations for individuals' roles in the transformation process. GPO is
developing a strategic plan and organizational goals that, when completed,
can serve as the basis for setting individual performance expectations and
ensuring accountability. However, GPO can begin to use the performance
management system now to drive its transformation and help achieve
critical organizational imperatives, such as improving its financial
condition. We recommend several steps through which GPO can develop a
performance management system to help achieve results, accelerate change,
and facilitate two-way communication between managers and employees so
that discussions
5GAO-03-669.
about individual and organizational performance are integrated and
ongoing.
We provided a draft of this report in September 2003 to the Public Printer
for review and comment. GPO's Chief of Staff, Deputy Chief of Staff, and
Chief Human Capital Officer provided comments orally and by e-mail. The
GPO officials generally agreed with the content, findings, and
recommendations of the draft report. The officials also provided minor
technical clarifications, and we made those changes where appropriate.
Background Under the public printing and documents statutes of Title 44,
United States Code, GPO's mission is to fulfill the needs of the federal
government for information products and to distribute those products to
the public.6 GPO was created in 1860 as part of the legislative branch
primarily to satisfy the printing needs of Congress but eventually became
the focal point for printing, binding, and information dissemination
services across the federal government. GPO publishes the Congressional
Record overnight when Congress is in session and produces the Federal
Register, the Code of Federal Regulations, and other key federal
government documents, such as the annual U.S. Budget. In addition,
approximately 130 federal departments and agencies use GPO's in-plant
printing facility, electronic information systems, or printing-buying
operations to produce a variety of government information products, such
as census and tax forms, U.S. passports, and federal regulations and
reports. Through its Information Dissemination programs (formerly
Superintendent of Documents), GPO disseminates these government
information products via a system of 1,200 depository libraries located
around the country (the Federal Depository Library Program), its Web site
(http://www.gpoaccess.gov), telephone and fax ordering, an online ordering
site, and a bookstore.
GPO's role as the principal agent for printing and distributing federal
government information currently faces two major challenges. First, in a
memorandum dated May 3, 2002, the Office of Management and Budget (OMB)
recommended that the Federal Acquisition Regulatory Council eliminate
restrictions mandating the use of GPO as the federal government's single
source for obtaining printing services and related supplies. After this
proposed rule change was issued in the Federal
6These are chapters 1, 3, 5, 7, 9, 11, 13, 15, 17, 19, 39, and 41 of Title
44, U.S.C..
Register on November 13, 2002,7 GPO and OMB entered a compact on June 6,
2003, in which GPO would create a demonstration project designed to
provide federal agencies flexibility in choosing their own printing
services. According to GPO, the demonstration project would be a print
procurement contract, which would function similar to the General Services
Administration's (GSA) Federal Supply Schedule8 and be tested for 1 year,
beginning on October 1, 2003, with the Department of Labor serving as the
federal agency customer. The demonstration project is expected to result
in GPO adopting the role of registering and qualifying printers to
participate in the contract as well as offering customer support and in
federal agencies being able to select qualified printers, using either
lowest price or best value techniques.
Second, the demand from federal agencies for ink-on-paper printing has
declined in recent years because the public has increasingly accessed
government information through the Internet and obtained GPO's products
through electronic publishing technologies. This trend has affected all of
GPO's programs, reducing the production, procurement, and sales of printed
products. As a result, over the past 5 fiscal years, GPO has sustained
losses in all of its major operations except for its in-house printing. As
shown in figure 1, since 1998, in-house printing, which includes the
Federal Register and Code of Federal Regulations, has raised $39,814,000
in income; purchased printing, which includes most of the printing done
for federal agencies, lost $12,299,000; the sales program, which includes
sales from the recently closed bookstores, as well as online and telephone
sales, lost $48,275,000; and agency distribution services, which
distributes executive branch publications, lost $274,000.
767 Fed. Reg. 68,914-68,918 (2002).
8Under the Federal Supply Schedule Program, GSA enters into contracts with
commercial firms to provide supplies and services at stated prices for
given periods. Orders are placed directly with the schedule contractor and
deliveries are made directly to the customer.
Figure 1: The Net Operating Income (Loss) for GPO's Major Operations (in
Thousands of Dollars)
Source: GAO.
As shown in figure 2, GPO's losses for its major operations during the
5-year period were $21 million, with the greatest net loss at
approximately $17 million from operations in fiscal year 2002.
Figure 2: GPO's Net Operating Income
Dollars in thousands
4,000 3,133
2,000 0 2,000
4,000
6,000
8,000
10,000
12,000
14,000
16,000 18,000
-16,997
1998 1999 2000 2001 2002
Fiscal year
Source: GAO.
5-year total: -$21,034
Note: Net operating income before eliminations.
The decline in the demand for GPO's ink-on-paper products and the shift
toward using its electronically disseminated products has led to a decline
in GPO's workforce. Over the past 6 years, GPO's total number of full-time
equivalent (FTE) employees has declined by 13 percent, from 3,430 FTEs in
1998 to 2,978 FTEs in 2003. The workforce will experience additional
decreases through GPO's retirement separation incentive program, which was
announced on April 29, 2003. The program, based on authority provided in
the Legislative Branch Appropriations Act, 1999, as amended, seeks to
generate payroll savings by reducing GPO's existing staffing levels by
approximately 300 employees.9
GPO's current workforce represents a diverse set of skills, ranging from
electricians to printing machinists to information technology specialists.
About 47 percent of GPO's employees are in blue-collar occupations, such
as platemakers and electricians, which are represented by 16 different
unions. As of August 2003, almost half of GPO's workforce was eligible for
944 U.S.C. 305 note.
retirement, while about 5 percent of the workforce was under the age of
30. As we have reported before,10 it is important to consider the number
and type of employees an agency will lose to retirement because retirees
often represent an agency's most experienced and knowledgeable staff.
In January 2003, the Public Printer initiated a process to develop a
strategic plan and an accompanying strategic workforce plan. The process
includes a year of data gathering to assess GPO's current status; a year
to develop and write the plan, which will include input from employees,
Congress, customers, and other stakeholders; and 3 to 5 years to fully
implement the plan. Currently, GPO is in the data-gathering phase of its
strategic planning process.
Communicating the Role of Managers and Following Up on Employees' Stated
Concerns Is Vital to GPO's Transformation
Creating an effective, ongoing communication strategy is essential when
defining and implementing any transformation effort. More specifically,
for GPO it is important to communicate the role that managers should play
in managing people and implementing human capital initiatives in the
agency's transformation. A comprehensive communication strategy that
reaches out to employees, unions, Congress, customers, and stakeholders
and seeks to engage them in the transformation process could help GPO's
leaders convey an understanding of the purpose of planned changes and
build trust, cultivating a strong relationship with management and gaining
employee ownership for the transformation. Additionally, communication
should facilitate a two-way honest exchange between managers and employees
and allow for constructive feedback from employees.
This communication is central to forming the effective partnerships that
are crucial to the success of any organization. Because an organization's
people are the drivers of any transformation, it is vital to solicit their
input and monitor their attitudes. Obtaining employees' attitudes through
pulse surveys, focus groups, or confidential hotlines can serve as a quick
check of how employees are feeling about the large-scale changes that are
occurring and the new organization as a whole. Most important, employees
should see that top leadership not only listens to their concerns, but
also takes action and makes appropriate adjustments to the transformation
effort based on them.
10U.S. General Accounting Office, Federal Employee Retirements: Expected
Increase Over the Next 5 Years Illustrates Need for Workforce Planning,
GAO-01-509 (Washington, D.C.: Apr. 27, 2001).
Status of GPO's Communication and Follow-up Efforts
GPO's leaders have demonstrated that they are committed to a strategic
human capital approach and understand that implementing a large-scale
management initiative, such as GPO's transformation, requires the
concentrated efforts of both leadership and employees. GPO leadership has
communicated to employees the need for a transformed GPO through several
channels, including holding town hall meetings with question and answer
sessions for all employees. In addition, GPO has established an Employee
Communications Office to disseminate information to the employees
regarding GPO's ongoing changes through a recently created intranet site,
newsletters, and mailings to employees' homes. Overall, managers say that
communication has improved dramatically since the arrival of GPO's new
leadership team.
To indicate his commitment to GPO's human capital, the Public Printer has
o shifted the focus of existing training and expanded opportunities for
more staff to attend needed training;
o instituted a new time-off awards program, the first such program
instituted at GPO in a decade;
o implemented a new executive development program, demonstrating GPO's
investment in its future leaders; and
o initiated an employee climate survey to get GPO employees' views on
issues requiring management attention.
Although GPO leadership demonstrated commitment to communication and human
capital, we found that GPO's managers did not consistently understand the
roles they should play in the transformation. For example, some managers
expressed the need to have additional details about the direction of their
units within the context of GPO's transformation and were unclear about
what training requests they should accept. A key factor in the success of
any strategic human capital initiative is the sustained attention of
senior leaders and managers at all levels of the agency to valuing and
investing in their employees. As GPO's leadership communicates with
employees regarding its transformation efforts, it also needs to inform
managers about their roles in managing people and in monitoring and
refining human capital initiatives. Establishing a performance expectation
that holds managers accountable for the effective management of people can
help clarify the roles of managers and further demonstrate leadership's
commitment to human capital management.
Follow-up action on GPO's employee climate survey, conducted in February
2003, has been slow. Planned focus groups with employees to discuss the
findings and develop actions that could be taken to address some of the
issues raised by the survey results were delayed until the new CHCO was
hired to ensure that the follow-up and the implementation of any
recommendations resulting from the survey received the appropriate level
of attention. Moreover, while GPO's employee climate survey identified
several issues for immediate attention, such as communications,
performance management, and training, managers we interviewed, both within
the Human Resources Office and in other areas of GPO, said they did not
believe that it was their responsibility to address issues identified in
the employee survey. To address these issues, all GPO managers should have
performance expectations making them responsible and accountable for
taking actions to change GPO's work environment. While monitoring employee
attitudes provides good information, it is most important that employees
see that top leadership not only listens to their concerns but also takes
action on them.
Recommended Next Steps GPO's leaders have communicated a clear message
about the need to transform GPO. To build on their progress by
strengthening two-way communications and employee involvement, the Public
Printer should take the following actions:
o Communicate with managers about their roles in strengthening GPO's
human capital management in support of mission needs. GPO leadership
should continue to hold town hall meetings and use the Employee
Communication Office to reach out to employees and engage them in a
two-way exchange so that they understand how they may be able to help with
the transformation.
o Ensure that managers are held accountable, through GPO's performance
management system and other mechanisms, for effectively managing people
and leading change.
In addition, the CHCO should follow up on the completed employee climate
survey by holding focus groups that work to develop recommended solutions
to issues raised in the survey results, including adjustments to GPO's
transformation and human capital approaches.
Developing a Strategic
Human Capital Office
Our work and that of others has shown that over the past decade,
high-performing organizations have increasingly adopted a strategic view
of human capital management in helping to achieve organizational missions
and program goals.11 This new strategic view centers on the contributions
that human capital management can make to the long-term accomplishment of
the agency's mission. As such, the function traditionally called personnel
or human resources needs to be fundamentally transformed, from being a
strictly support function involved in managing personnel processes and
ensuring compliance with rules and regulations to designing and
implementing human capital approaches that are aimed at supporting the
agency's strategic goals. Human capital professionals must have the
appropriate preparation not just to provide effective support services,
but also to consult effectively with line managers in tailoring human
capital strategies to the unique needs of the agency.
In April 2003, we reported on key actions that selected agencies had taken
to integrate their human capital approaches with their strategies for
accomplishing organizational missions and to shift the focus of their
Human Resources Office from performing primarily compliance activities to
performing consulting activities.12 These actions can be particularly
instructive to GPO as it strengthens the role of human capital in support
of its transformation. Table 1 identifies the actions taken and who within
each agency initiated them.
11GAO-03-446. 12 GAO-03-446.
Table 1: Key Agency Actions to Integrate Human Capital Approaches with
Strategies for Accomplishing Agency Missions
Action initiators Description of action
Agency leaders o Agency leaders included human capital leaders in key
agency decision-making. For example, United States Coast Guard's (USCG)
agency leadership has engaged its human capital organization earlier in
the strategic planning and decision-making process by appointing its
Assistant Commandant for Human Resources as a member of the agency's
senior management team and a full partner in the development of key USCG
management decisions.
o Agency leaders also established entities, such as human capital
councils, accountable for integrating human capital approaches with
strategies for achieving programmatic goals. The groups' members include
both program leaders and human capital leaders. For example, the GSA
created a Human Capital Council to ensure, among other objectives, that
the agency's human capital strategic plan was integrated within GSA's
strategic plan and supported the agency's program strategies.
Human capital leaders
o Human capital leaders are establishing and communicating clear human
capital strategic visions. For example, GSA's Chief People Officer's
vision is for GSA's Chief People Office (CPO) to become a partner in GSA's
business success. To do so, she explained that CPO must deliver products
and services that enable its customers to focus on their core business.
Similarly, Internal Revenue Service's (IRS) former Chief Human Resource
Officer's vision is for the human capital professionals in IRS to become
more proactive in providing human capital strategies and solutions that
directly enhance the agency's performance.
o Human capital leaders are restructuring their human capital
organizations to improve their alignment with their vision. For example,
IRS's restructured human capital management function includes, as one of
three major components, a national headquarters strategic human resources
organization.
o Human capital leaders are using technological advances to provide
opportunities to free organizational resources that can be redeployed for
strategic purposes. For example, the United States Geological Survey
(USGS) partnered with QuickHire, a commercial off-the-shelf software
developer, to develop an on-line automated recruitment system (OARS) that
allows USGS's human capital staff to enter job vacancies into a
centralized database and develop rating and ranking criteria by selecting
and weighting questions from an extensive question library organized by
job series. According to USGS, as the agency continues to gain experience
and efficiencies using OARS, it hopes to divert an increasing number of
human capital staff members to other strategic efforts.
o Human capital leaders are promoting a more strategic role for human
capital professionals and are investing in the development of new
competencies for human capital professionals to support their increased
strategic engagement. For example, in response to the changing role and
functions of its human capital community, GSA has developed new core
competencies needed by its human capital staff. Included in these
competencies are the new skills GSA's Chief People Officer believes the
agency's human capital staff members must develop to become business
partners.
Agency leaders o Jointly, agency leaders and human capital leaders are
having human capital professionals and agency line and human managers
share the accountability for successfully integrating strategic human
capital approaches into the capitalleaders planning and decision making of
the agency. For example, Federal Emergency Management Agency's (FEMA)
human capital leaders and program officials have implemented an innovative
employee staffing effort. According to
FEMA officials, this greatly enhanced the agency's emergency response
capability by providing the human capital
staff and the line managers the ability to collaborate in identifying
available deployment candidates for assignment
as soon as federal disasters are declared.
Source: GAO.
Status of GPO's Efforts to Create a Strategic Human Capital Function
GPO's new leaders recognize that its Human Resources Office has been
characterized by the following weaknesses:
o Lacking a strategic focus. Managers in both the Human Resources Office
and GPO's program divisions acknowledged the need to improve collaboration
in support of agency goals and the transformation and indicated that
efforts should be more proactive. One official in the Human Resources
Office indicated the need for the new CHCO to dramatically improve
communication with GPO program managers so that the Human Resources Office
can better understand and anticipate their needs.
o Viewing human capital as costs to be cut rather than as assets needed
to achieve results. Managers told us that the Human Resources Office had
been used to reduce and control salary costs by restricting promotions,
denying managers requests to increase the grade levels of positions so
that they would reflect increased responsibilities, and downgrading vacant
positions. Managers said that these actions contributed to good employees
leaving GPO for positions in other federal agencies where they had more
opportunities for advancement.
o Focusing more on processing transactions rather than strategically
managing human capital to help achieve results. Program managers viewed
the Human Resources Office's assistance in such efforts as filling
recruitment needs and providing requested employee data as positive but
very limited and falling far short of their expectations for assistance.
o Being an obstacle to rather than supporting manager's needs. For
example, we were told that the Human Resources Office has not provided
adequate assistance or guidance to managers in writing position
descriptions needed to fill critical vacancies or get positions
reclassified. A few managers told us that, as a result, they found the
hiring process took longer than necessary and caused significant
frustration and rework, taking attention away from other higher
priorities.
GPO's Human Resources Office faces substantial challenges resulting from
the many changes accompanying GPO's transformation. For example, the
Information Dissemination Division, formerly the Superintendent of
Documents Division, is undergoing a major reorganization to better
position it to address GPO's increasing emphasis on electronic information
dissemination. This divisional reorganization has created four major
sections within the division, which will require the Human Resources
Office to perform additional work reclassifying positions, developing
position descriptions, and recruiting people for new positions. GPO
managers expressed concerns about the Human Resources Office's ability to
respond to the increased demands for support due to other divisional
reorganizations and transformation-related initiatives on the horizon. In
addition, some managers questioned whether the Human Resources Office had
sufficient staff with the competencies needed to effectively serve as
advisors to and partners with senior leaders and managers.
As an important first step in changing the role of the Human Resources
Office at GPO, the Public Printer created a new organizational structure
that establishes the position of CHCO, equivalent to the heads of the
other administrative and operating divisions. (See fig. 3.) This structure
is consistent with executive branch agencies, many of which have now
established CHCO positions. The creation of the Human Resources Office
establishes accountability for the cross-functional area of human capital
management within GPO and may help GPO use resources driven by the Public
Printer's strategic vision more efficiently.
Figure 3: GPO's New Organizational Structure
Source: GAO.
GPO's new CHCO has the opportunity to transform GPO's Human Resources
Office into one that integrates GPO's human capital approaches with
strategies for achieving programmatic results. The new CHCO realizes that
this transformation is critical to the success of GPO's strategic human
capital efforts and told us that his vision for the Human Resources Office
includes human capital professionals working strategically with GPO's line
managers to integrate the human capital function throughout the agency.
As the CHCO begins his efforts, he can build on the Human Resources
Office's ongoing efforts to streamline operations and employ technology to
meet customer needs and free organizational resources that can be
redeployed for strategic purposes. GPO's Human Resources Office is
streamlining and moving its payroll functions from within GPO to the
National Finance Center, which handles payroll functions for many federal
agencies. The Human Resources Office has also developed an automated
system that alerts managers when employees under their supervision are due
in-grade promotions and is working to convert employee performance ratings
into an online/automated format. GPO managers have viewed these efforts
positively and have indicated that there may be other opportunities to
further automate and streamline human capital processes.
Recommended Next Steps GPO's hiring of a CHCO, concurrent with its efforts
to begin developing an overall agency strategic plan and a complementary
strategic workforce plan, creates the opportunity for GPO leadership and
human capital leaders to work together to strengthen the role of human
capital and ensure that it will be integrated with strategies for
accomplishing GPO's mission and program goals. To effectively support
GPO's overall transformation efforts, the CHCO will need to develop a new
human capital organization with a strong collaborative focus and culture.
This may involve a number of steps, such as establishing a strategic
vision for the Human Resources Office and ensuring that human capital
professionals have the competencies needed to collaborate with GPO's
managers. The final result should be a Human Resources Office that helps
integrate human capital approaches with GPO's program strategies
throughout the organization by working in partnership with managers of all
divisions.
To enhance the role of strategic human capital in support of GPO's
transformation efforts, the Public Printer should take the following
actions:
o Include human capital leaders in agency strategic planning and decision
making. Involving these leaders as full partners would acknowledge
both the commitment of the Public Printer to strategically managing GPO's
people and create the expectation that human capital professionals will
contribute to organizational success.
o Establish an entity, such as a human capital council, that is
accountable for integrating human capital approaches with strategies for
achieving programmatic goals. The group's members should include both
program managers and human capital professionals. As GPO develops and
implements its strategic plan and human capital plan, the group can help
ensure that the plans are integrated.
o Communicate clearly that the CHCO should create a Human Resources
Office that is not solely focused on routine processing and compliance
issues but is also focused on strategic human capital planning and
management.
To further the integration of human capital with GPO's strategies for
transformation and mission accomplishment, the CHCO should take the
following actions:
o Establish a human capital strategic vision, and a mission for the Human
Resources Office, and define goals and expectations for human capital
professionals as well as the Human Resources Office that can be used to
hold human capital professionals accountable.
o Strengthen communication between human capital officials and program
managers to enhance the understanding of how they can work together to
achieve organizational goals. As a key part of strengthening
communication, the CHCO should routinely solicit the feedback of GPO
managers to identify how the Human Resources Office can best meet
managers' needs and help them uphold federal merit principles.
o Consider how to organize the Human Resources Office to align it with
the strategic vision and best achieve integration of GPO's human capital
approaches and mission strategies. One potential approach used
successfully in other federal agencies is to integrate human capital
professionals throughout the agency's operational divisions. Each of these
human capital professionals reports to a particular operating division
leader and is tasked with implementing and customizing human capital
policies, procedures, and strategies to fit the division's unique needs.
o Ensure that human capital professionals have the skills needed to
implement the Human Resources Office's mission, thereby helping to achieve
the goals of the Human Resources Office and the agency as a whole. This
will include providing necessary training for current human capital
professionals and hiring new human capital professionals with the
appropriate skills to help implement the Human Resources Office's mission.
o Further explore how technological advances can provide opportunities to
better serve managers and free organizational resources that can be
redeployed for strategic purposes.
Together, the Public Printer and the CHCO should clearly define and
communicate to the human capital professionals, as well as throughout GPO,
that the role of the Human Resources Office is to partner with the other
units within GPO to achieve the agency's mission. The town hall meetings
initiated by the Public Printer are one forum in which this type of
communication can happen. It should be made clear that agency and human
capital leaders, human capital professionals, and line managers share
responsibility for advancing agency programmatic and human capital goals.
Strategic Workforce Planning Can Assist GPO's Transformation
A key factor in successfully transforming GPO and sustaining high
performance is the effective integration and alignment of GPO's human
capital approaches with its strategies for achieving mission and
programmatic goals and results. GPO should use strategic workforce
planning to integrate and align its human capital approaches with its
mission strategies. Strategic workforce planning focuses on developing
long-term strategies for acquiring, developing, and retaining an
organization's workforce to meet future needs. It is an essential element
of GPO's management infrastructure, which is needed to ensure that its
human capital program addresses workforce issues in a manner that is
clearly linked to achieving the agency's mission and goals.
The goal of strategic workforce planning is to ensure that the right
people with the right skills are in the right place at the right time.
Agency approaches to workforce planning can vary with their particular
needs and missions. Nevertheless, looking across existing successful
public and private organizations, certain critical elements recur as part
of a successful workforce plan and workforce planning process. Although
fluid, this process starts with an organization setting a strategic
direction that
includes program goals and strategies to achieve those goals. The process
consists of five critical elements that frame successful workforce
planning efforts. Figure 4 uses a simple model to show these critical
elements and their relationships to the agency's overall strategic
direction and goals.
Figure 4: Critical Elements to Include in the Workforce Planning Process
Source: GAO.
These five elements may be helpful to GPO in developing its plan:
o involve top management, employees, and other stakeholders in
developing, communicating, implementing, and evaluating the strategic
workforce plan;
o determine workforce gaps by identifying the critical skills and
competencies that will be needed to achieve the future programmatic
results, inventorying the skills and competencies of the existing
workforce, and analyzing the gaps;
o develop strategies to address gaps in number, deployment, and the
alignment of human capital approaches that enable and sustain the
contributions of all critical skills and competencies;
o build the capability needed to address administrative, educational, and
other requirements important to support workforce strategies; and
o monitor and evaluate the agency's progress toward its human capital
goals and the contribution that human capital results have made toward
achieving programmatic goals.
Additionally, collecting and analyzing data is a fundamental building
block for measuring the effectiveness of human capital approaches in
support of the mission and goals of an agency. Having complete and
reliable data is particularly important to doing a workforce gap analysis.
Early development of the data provides a baseline by which an agency can
identify current workforce problems, and regular updating of the data
enables agencies to plan for improvements, manage changes in the programs
and workforce, and track the effects of changes on achieving program
goals. As shown in figure 5, agencies can collect and analyze a variety of
information to support their workforce planning efforts.
Figure 5: Examples of Workforce Data That Are Collected and Analyzed by
Other Federal Agencies
0M Actual and projected attrition rates (including retirements) showing
how many people have left the agency in the past and the estimated number
who will leave in the future.
0M Exit surveys or interviews with departing employees to better
understand the reasons that people leave.
0M Knowledge, skills, and experiences of the current workforce.
0M Size and shape of the workforce including information such as, the
distribution of employees by pay level and ratio of managers to employees.
0M Dispersal of performance appraisal ratings, such as the mean, mode, and
standard deviation of scores.
0M Number of performance awards and their distribution among divisions and
offices.
0M Total human capital cost in dollars and as a percentage of total
operating budget.
0M Average period required to fill vacancies, and trends over time.
0M Acceptance rates among job candidates to whom positions are offered.
0M Costs of promotion, grade increase, and within-grade increases.
Source: GAO.
Status of GPO's Workforce Planning Efforts
GPO leaders have shown that they understand the benefits of involving
managers and employees in developing human capital initiatives and have
the opportunity to continue this practice to support GPO's workforce
planning efforts. GPO has included both managers and employees in newly
created task forces that are examining the training needed for the new
Information Dissemination Division, exploring the creation of a
gainsharing program, and making decisions to implement the time off awards
program. GPO managers and labor leaders told us that they view
participation in these efforts favorably and want more specific
information about the role that they could play in GPO's transformation.
GPO leadership can build on its experiences in using management and
employee task forces and on the interest and support shown by these
managers and employees by involving them in workforce planning. Involving
GPO
employees in strategic workforce planning can build support and foster a
clear understanding of how managers and employees can contribute to the
overall transformation of GPO by doing their part to help develop and
implement human capital approaches.
GPO leaders acknowledge the importance of strategic workforce planning,
including workforce gap analysis, to help GPO transform itself. They
understand that they need to identify, in greater detail, the new skills
and competencies that GPO will need and develop an inventory of the skills
and competencies of its existing workforce to analyze workforce gaps. GPO
leadership has told us that, currently, it is difficult for leaders to
identify all of the specific skills and competencies GPO will need because
they are still working to better define GPO's future mission and
strategies as part of its recently initiated strategic planning effort.
Although uncertainty about GPO's future may complicate the identification
of future workforce needs, GPO may find it useful to begin producing an
inventory of its employees' skills and competencies and work with its
senior managers to identify some obvious gaps and establish a more
systematic process for analyzing workforce gaps as it develops its
strategic plan.
More specifically, although GPO leadership has not systematically
determined the specific skills it will need to effectively carry out its
shifting role, it has indicated that GPO's emphasis will increasingly
shift from printed information dissemination to more electronic
dissemination, and in some areas GPO has begun to identify some potential
skills gaps. For example, the Superintendent of Documents said that the
skills needed to complete GPO's document cataloging function are changing
rapidly as the number of electronic documents increases. Cataloging now
requires Internet searching skills and greater sophistication to locate
documents that are available on agency Web sites. While GPO currently
lacks a fact-based systematic approach to define the critical skills and
competencies required to meet its strategic program goals, it can use
available information about skills gaps as a starting point for its
workforce planning activities.
To help meet its skills gaps, GPO has begun by strengthening its ability
to recruit and develop staff. GPO formed a strategic partnership with
leading universities in the areas of printing and graphic communications
and initiated a recruiting drive to attract graduates in other
disciplines, such as business administration and electrical, mechanical,
and chemical engineering. Also, GPO hired experts who possess skills and
competencies for addressing immediate needs, such as developing new sales
and
marketing strategies, to serve in temporary positions. To develop its
existing workforce, GPO has shifted the focus of existing training and
expanded opportunities for more staff to attend needed training.
Recent actions by GPO's leaders demonstrate an understanding of the need
to consider workforce skills and knowledge when making business decisions
and implementing human capital approaches. For example, GPO made the
business decision that it needed to decrease its staff by about 300 people
to reduce its costs. To achieve this reduction, GPO initiated a retirement
separation incentive program, which included an approach to ensure that
GPO retained employees with critical knowledge and skills. This approach
involved GPO's executive committee screening employees to separate early
retirement applicants into two groups, priority 1 and priority 2. Priority
1 applicants held positions that would not be filled because the positions
were no longer necessary. Priority 2 applicants held positions that would
be filled by other GPO employees, who would leave positions that would not
be filled. Thus, GPO took a step toward stemming its operating losses
while ensuring the retention of needed knowledge and skills.
Workforce planning includes building the capability to support workforce
strategies by addressing administrative, educational, and other
requirements. For example, it is important for GPO to educate managers on
the use of available human capital flexibilities, such as the time-off
awards program recently introduced at GPO. Educating managers and
employees on the availability and use of such flexibilities is one way for
GPO to integrate human capital approaches throughout the organization.
Managers and supervisors can be more effective in using time off awards
and other authorities if they are properly trained on when they can be
used and how to ensure consistency, fairness, and transparency for their
use.
GPO collects some data on its workforce, including the number of people
eligible for retirement and the results of employees' performance reviews.
However, GPO lacks information necessary to evaluate the effectiveness of
its workforce strategies. Attention to the development and collection of
workforce data could help ensure that GPO's human capital approaches are
supporting its strategies for achieving results and transforming the
organization.
GPO's managers can use human capital data like those shown in figure 5 to
help them identify human capital challenges, develop strategies to address
them, and create measures to assess the strategies' success. For example,
exit interviews can help GPO develop effective workforce strategies to
address the reasons why top performing staff leave. Although overall
attrition may not be a problem for GPO given its current downsizing
efforts, it is important for GPO to retain top performers who have the
skills it needs in the future. Some managers told us that high-performing
staff have left GPO for comparable positions at other federal agencies
because GPO's promotion possibilities were limited, often resulting from
difficulties in reclassifying these positions. However, GPO has not
conducted interviews with its departing employees to confirm their reasons
for leaving. Without comprehensive data on why people leave GPO, it cannot
determine what types of actions it should take, if any, to retain top
performers.
Recommended Next Steps To ensure that human capital strategies are
integrated throughout the agency, GPO should develop a strategic workforce
plan that can guide its transformation and support mission accomplishment.
The Public Printer and the CHCO should take the following actions:
o Involve staff in all phases of workforce planning to help improve the
quality of the plan and build support needed to successfully implement it.
Specifically, GPO should (1) ensure that top management sets the overall
direction and goals of workforce planning, (2) involve employees and other
stakeholders in developing, implementing, and evaluating future workforce
strategies, and (3) establish a communication strategy to create shared
expectations, promote transparency, and report progress.
o Complete a workforce gap analysis to identify critical skills and
competency gaps that could affect GPO's ability to achieve its mission and
transform the organization. The workforce gap analysis should include (1)
an analysis of the current workforce to develop an inventory of employees'
skills and competencies and (2) a systematic identification of the new
skills and competencies that GPO will need in the future so that it can
pinpoint any gaps that could affect its mission accomplishment and
transformation.
o Develop strategies to address any identified workforce gaps and move
from the current to the future workforce needed to achieve GPO's mission
and transformation. These strategies, consistent with recent efforts at
GPO, should include the programs, policies, and practices that will enable
an agency to recruit, develop, and retain critical staff.
o Build the capability to support workforce strategies by addressing
administrative, educational, and other requirements. To this end, managers
and employees need training to understand how to use available human
capital authorities and flexibilities effectively so that they are
implemented equitably and their strategic purpose is fulfilled.
o Evaluate the results of current human capital strategies and make any
needed revisions to ensure that the strategies work as intended and
support the transformation. This will provide a baseline by which to
evaluate these strategies to ensure alignment with its mission and
transformation efforts.
o Develop performance measures for GPO's human capital strategies. Such
measures are a first step in holding managers accountable for their
management of human capital and provide valuable data for future workforce
planning efforts. GPO could benchmark its human capital data against the
data of high-performing organizations.
o Periodically survey managers and employees regarding human capital
strategies to ensure that they are being implemented fairly, observing
federal merit principles, and being used appropriately.
Performance Management Can Help GPO Drive Internal Change and Achieve
External Results
In July 2003, we reported that an organization's performance management
system can be a vital tool for aligning the organization with desired
results and creating a "line of sight" showing how team, unit, and
individual performance can contribute to overall organizational results.
The performance management system can help manage and direct the
transformation process. The system serves as the basis for setting
expectations for individuals' roles in the transformation process.13
Effective performance management systems are not merely used for once-or
twice-yearly individual expectation setting and rating processes, but are
tools to help the organization manage day to day. These systems are used
to achieve results, accelerate change, and facilitate two-way
communication throughout the year so that discussions about individual and
organizational performance are integrated and ongoing.
13 GAO-03-669.
In March 2003, we reported on key practices for federal agencies to
consider when developing modern, effective, and credible performance
management systems.14 While it is important that organizations develop
performance management systems that reflect their specific structures,
priorities, and cultures, these systems also reinforce individual
accountability for results, and therefore, can strengthen overall agency
performance. Figure 6 lists nine key practices for effective performance
management that GPO may find instructive as it develops a more robust
performance management system.
14 U.S. General Accounting Office, Results-Oriented Cultures: Creating a
Clear Linkage between Individual Performance and Organizational Success,
GAO-03-488 (Washington, D.C.: Mar. 14, 2003).
Figure 6: Key Practices for Effective Performance Management
1. Align individual performance expectations with organizational goals. An
explicit alignment of daily activities with broader results helps
individuals see the connection between their daily activities and
organizational goals and encourages individuals to focus on their roles
and responsibilities to help achieve those goals.
2. Connect performance expectations to crosscutting goals. High-performing
organizations use their performance management systems to strengthen
accountability for results, specifically by placing greater emphasis on
fostering the necessary collaboration, interaction, and teamwork across
organizational boundaries to achieve these results.
3. Provide and routinely use performance information to track
organizational priorities. High-performing organizations provide objective
performance information to individuals to show progress in achieving
organizational results and other priorities and help them manage during
the year, to identify performance gaps, and to pinpoint improvement
opportunities.
4. Require follow-up actions to address organizational priorities.
High-performing organizations require individuals to take follow-up
actions based on performance information available to them. By requiring
and tracking such follow-up actions on performance gaps, these
organizations underscore the importance of holding individuals accountable
for making progress on their priorities.
5. Use competencies to provide a fuller assessment of performance.
High-performing organizations use competencies, which define the skills
and supporting behaviors that individuals need to effectively contribute
to organizational results, and are based on valid, reliable, and
transparent performance management systems.
6. Link pay to individual and organizational performance. High-performing
organizations seek to create pay, incentive, and reward systems that link
employee knowledge, skills, and contributions to organizational results.
7. Make meaningful distinctions in performance. Effective performance
management systems seek to achieve three key objectives to help make
meaningful distinctions in performance. First, they strive to provide
candid and constructive feedback to help individuals maximize their
contribution and potential in understanding and realizing the goals and
objectives of the organization. Second, they seek to provide management
with the objective and fact-based information it needs to reward top
performers. Third, they provide the necessary information and
documentation to deal with poor performers.
8. Involve employees and stakeholders to gain ownership of performance
management systems. High-performing organizations have found that actively
involving employees and stakeholders in developing the performance
management systems and providing ongoing training on the systems helps
increase their understanding and ownership of the organizational goals and
objectives.
9. Maintain continuity during transitions. High-performing organizations
recognize that because cultural transformations take time, they need to
reinforce accountability for organizational goals.
Source: GAO.
Analysis of GPO's Performance Management Efforts
GPO has begun to make progress on two of the key practices for effective
performance management. GPO has taken a first step toward aligning
individual performance expectations with organizational goals by beginning
to develop an agency strategic plan and complementary workforce plan. GPO
is also beginning to explore the use of competencies to provide a fuller
assessment of performance. The other seven key practices present
opportunities for GPO to strengthen its performance management system. For
example, GPO presently does not make meaningful distinctions in
performance or link pay to individual and organizational performance. As
GPO explores actions to strengthen its performance management, it has the
opportunity to involve employees and stakeholders so that they gain
ownership of the performance management system.
An explicit alignment of daily activities with broader results is one of
the defining features of effective performance management systems in
high-performing organizations. These organizations use their performance
management systems to improve performance by helping individuals see the
connection between their daily activities and organizational goals and
encouraging individuals to focus on their roles and responsibilities to
help achieve these goals. Such organizations continuously review and
revise their performance management systems to support their strategic and
performance goals, as well as their core values and transformational
objectives.
Currently, GPO requires that supervisors set annual performance
expectations for all staff that are linked to employees' position
descriptions rather than unit goals. Once GPO's strategic plan and
organizational goals are established, GPO can use them as the basis for
setting individual performance expectations and ensuring related
accountability. However, GPO can begin to use the performance management
system now to drive its transformation and hold individuals accountable
for helping to achieve critical organizational priorities, such as
improving GPO's financial condition and customer service. For example, we
were told that employees in GPO's Information Dissemination Division lack
basic sales techniques, like matching customer needs with available
products. GPO could create a performance expectation for its sales staff
related to their knowledge of GPO products. The performance expectation
could help GPO improve its financial condition and customer service as
staff become more familiar with the types of products GPO offers and
matching these products to customers' needs.
Further, GPO could help staff achieve organizational goals by requiring
that managers take follow-up actions to address performance gaps. For
example, GPO could routinely collect and analyze information from its
customers to determine their views on the quality and timeliness of the
products and services GPO provides as well as their current and future
needs. Through the performance management system, managers in GPO's
in-house printing operation could be required to use this information to
follow up on recurring issues and plan for its customers' future needs.
High-performing organizations use competencies to examine how the
performance of individual employees contributes to the organization's
results. Competencies, which define the skills and supporting behaviors
that individuals are expected to exhibit to carry out their work
effectively, can provide a fuller picture of an individual's performance.
Because GPO is developing its agency strategic plan and related workforce
plan, identifying core competencies for employees will necessarily lag.
However, some GPO managers have started to identify critical competencies
for employees in their units. For example, one manager in the Human
Resources Office plans to revise the performance expectations for her
staff to include a focus on customer service in order to improve the
collaboration between her staff and managers throughout GPO. More
generally, GPO is identifying competencies for senior managers to be
included in their performance contracts.
Effective performance management requires the organization's leadership to
make meaningful distinctions between acceptable and outstanding
performance of individuals and to appropriately reward those who perform
at the highest level. In doing so, performance management systems in
high-performing organizations typically seek to achieve three key
objectives: (1) they strive to provide candid and constructive feedback to
help individuals maximize their contribution and potential in
understanding and realizing the goals and objectives of the organization,
(2) they seek to provide management with the objective and fact-based
information it needs to reward top performers, and (3) they provide the
necessary information and documentation to deal with poor performers.
GPO's performance management system does not make meaningful distinctions
among employees' performance in the performance appraisal process.
Managers told us that attention given to preparing individual performance
ratings had decreased over the past decade due to the lack of performance
awards. In addition, they said that since the ratings were not used as the
basis for employee recognition, there was little incentive for
mangers to make distinctions among their employees' performance when
rating their staff. As a result, managers said that they rated large
numbers of their staff as outstanding to boost morale and to avoid
employee complaints. Figure 7 shows that over 94 percent of the employees
who were rated in 2001 received an overall rating of outstanding or
excellent.
Figure 7: 2001 Performance Ratings for Current GPO Employees
100%
2,283 employeesa
Source: GPO.
Note: Data are 2001 ratings of on-board employees as of August 7, 2003.
Data for 2002 are not yet available.
aThis number is less than GPO's current number of staff, or 2,928, because
it does not include employees hired since 2001 and those not rated because
they were not covered by performance standards for a minimum of 90 days.
The lack of identified distinctions among employee's performance
compromises GPO's ability to select among employees for development and
advancement opportunities. In the absence of objective and fact-based
performance information, managers rely on their personal knowledge of
employee performance and employees' reputations. Having objective and
fact-based information and related documentation on which to justify
personnel decisions is fundamental to ensuring that managers can
effectively fulfill their responsibilities to uphold federal merit system
principles. Further, without this information, managers lack the basic
tools to motivate and reward staff for their performance.
Seniority rather than performance is the basis for most pay decisions by
GPO managers, and financial awards are not used to reward GPO's top
performers. However, GPO's leadership recognizes the need to strengthen
incentives for individual and organizational performance and has taken
some actions to stimulate higher performance. On February 10, 2003, GPO
instituted a time-off awards program to recognize outstanding effort by
rewarding productivity, dedication, creativity, and superior
accomplishment. Before the time-off awards program was introduced, GPO had
been without any mechanism to recognize and reward outstanding performance
since 1992 when funding for its incentive awards and recognition system
was removed due to financial constraints and equity concerns. While the
time-off awards program represents an improvement in GPO's rewarding of
employees for good performance, several managers told us that GPO needs to
do more to reward performance through financial mechanisms. Consistent
with this view, GPO leadership recently formed a task force to determine
the feasibility of developing a gainsharing program modeled after the
program at the Bureau of Engraving and Printing, which rewards employees
for meeting organizational goals. Under the program, all employees share
in the gains from proven savings according to predetermined standards and
payout formulas.
High-performing organizations have found that actively involving employees
and stakeholders, such as unions or other employee associations, when
developing results-oriented performance management systems helps improve
employees' confidence and belief in the fairness of the system and
increases their understanding and ownership of organizational goals and
objectives. Effective performance management systems depend on
individuals', their supervisors', and management's common understanding,
support, and use of these systems to reinforce the connection between
performance management and organizational results. These organizations
recognize that they must conduct frequent training for staff members at
all levels of the organization to maximize the effectiveness of the
performance management systems.15 Overall, employees and supervisors share
the responsibility for individual performance management. Both are
actively involved in identifying how they can contribute to organizational
results and are held accountable for their contributions.
15U.S. General Accounting Office, Human Capital: Practices That Empowered
and Involved Employees, GAO-01-1070 (Washington, D.C.: Sept. 14, 2001).
GPO leadership has demonstrated that it understands the importance of
working with employees at all levels of the organization to implement
human capital changes. As GPO moves forward to make additional needed
changes to its performance management system, it is vital that leaders
work to further strengthen the involvement of employees and stakeholders
such as GPO's unions and employee associations. GPO cannot successfully
improve its performance management system without the support and
commitment of its many unions, which have substantial influence over GPO's
human capital policies because of their right to bargain for wages. Given
that union leaders and GPO's leadership agree that GPO's performance
management system is ineffective, common ground exists from which GPO,
GPO's employees, and the employees' elected representatives can begin a
dialogue about how best to change the system. The constructive
relationship that currently exists between GPO's union leaders and GPO
management can facilitate this dialogue.
Recommended Next Steps Public sector organizations both in the United
States and abroad have used their performance management systems to create
a clear linkage-"line of sight"-between individual performance and
organizational success and, thus, transform their cultures to be more
results-oriented, customer-focused, and collaborative. GPO can obtain
similar benefits by adopting the practices of leading organizations'
performance management systems. Specifically, the Public Printer, in
conjunction with the CHCO should take the following actions:
o Align the individual performance expectations with organizational
goals, which helps individuals identify the connection between their daily
activities and organizational goals.
o Connect performance expectations to crosscutting organizational goals,
which would foster the necessary collaboration, interaction, and teamwork
across organizational boundaries to achieve these results.
o Provide and routinely use performance information to track
organizational priorities, which would help GPO identify performance gaps
and pinpoint improvement opportunities.
o Require individuals to take follow-up actions on identified performance
gaps to address organizational priorities, which underscores the
importance of holding individuals accountable for making progress on their
priorities.
o Use competencies, which define the skills and supporting behaviors that
individuals are expected to exhibit, to provide a fuller assessment of
performance.
o Link employee pay and awards to individual and organizational
performance, which establishes incentives for high performance.
o Make meaningful distinctions in performance, which provides a basis for
constructive feedback, rewarding top performers, and dealing with poor
performers.
o Involve employees and stakeholders in the development of the
performance management system which helps increase their ownership of the
organizational goals and objectives.
o Maintain continuity during leadership transitions by focusing on a
broad set of programmatic priorities.
Concluding Realizing the importance of effective human capital
management, the new Public Printer has taken several important steps to
establish the foundation
Observations needed to successfully transform GPO. However, there are
additional opportunities for GPO to strengthen human capital management to
support its progress into the 21st century.
We found that, although GPO's leadership recognizes the importance of
human capital management in GPO's transformation, it must ensure that
managers appreciate the importance of their roles in order to make the
entire workforce accountable for results. To achieve this transformation,
GPO will need to strengthen the role of human capital management and
ensure that it will be integrated with strategies for accomplishing GPO's
mission and program goals. In addition, to ensure that GPO's workforce has
the correct mix of skills and competencies for the future, GPO leadership
will need to establish a strategic workforce planning process. Finally, to
make GPO's units and workforce accountable for results, GPO will need to
strengthen its current performance management systems. GPO's future
success will depend largely on how well it is able to build and strengthen
its capacity to effectively manage human capital in support of results.
Agency Comments We provided a draft of this report in September 2003 to
the Public Printer for his review and comment. GPO's Chief of Staff,
Deputy Chief of Staff, and Chief Human Capital Officer provided comments
orally and by e-mail on behalf of GPO generally agreeing with the content,
findings, and recommendations of the draft report. They also provided
minor technical clarifications, and we made those changes where
appropriate.
The officials stated that GPO is committed to implementing the
recommendations that we made to strengthen its human capital management
and that the recommendations were fully consistent with the direction in
which GPO is already moving. The officials stated that they look forward
to continuing to work cooperatively with us throughout GPO's
transformation effort and that our ongoing work on legislative and
executive branch printing requirements will be an important input into
GPO's ongoing strategic planning efforts.
Unless you announce its contents earlier, we plan no further distribution
of this report until 7 days after its issuance date. At that time, we will
send copies to the Public Printer, GPO, as well as the Joint Committee on
Printing, and the House Appropriations Legislative Subcommittee, Senate
Committee on Rules and Administration, and House Committee on
Administration. We will also make copies available to others upon request.
In addition, the report will be available at no charge on GAO's Web site
at http://www.gao.gov.
If you have any questions about this report, please contact me or Steven
Lozano on (202) 512-6806 or on [email protected] and [email protected]. Major
contributors to this report were William Reinsberg, Benjamin Crawford,
Masha Pastuhov-Pastein, and Carole Cimitile.
J. Christopher Mihm Director, Strategic Issues
Appendix I
Objective, Scope, and Methodology
The objective of our review was to describe the Government Printing
Office's (GPO) actions and plans for strategically managing its workforce
and recommend next steps for GPO as it transforms. To identify strategic
human capital practices and recommend next steps, we reviewed our models,
guides, reports, and other products on strategic planning and performance
measurement, strategic human capital management, transformation efforts,
and other related areas. We used our Model of Strategic Human Capital
Management to guide our initial analysis. From that analysis, we
identified a set of human capital issues that could benefit GPO if
addressed in the short term. These issues include the role of GPO's Human
Resources Office and the Chief Human Capital Officer (CHCO), the desire to
restructure GPO's workforce as part of its transformation, and the use of
performance management systems. In order to address these immediate
issues, we narrowed our review to focus on five of the eight critical
success factors in our model:
o leadership's commitment to human capital management,
o the role of the human capital function,
o integration and alignment,
o data-driven human capital decisions, and
o unit and organizational performance linked to organizational goals.
To assess GPO's actions and plans related to these critical success
factors, we reviewed statements by the Public Printer; individual
performance standards, position descriptions, and vacancy announcements;
GPO policies and procedures; results from GPO's employee climate survey
taken in March 2003; studies of GPO human capital issues conducted by the
Office of Personnel Management and Booz-Allen and Hamilton; organizational
charts; information from GPO's intranet; and other relevant documentation.
To obtain additional information and perspectives on GPO's human capital
issues, we interviewed key senior GPO officials, including the Deputy
Public Printer; Chief of Staff; Deputy Chief of Staff; Superintendent of
Documents; Managing Director of Plant Operations; Managing Director of
Appendix I
Objective, Scope, and Methodology
Customer Services; the CHCO; former Personnel Director;1 Acting Personnel
Director; Director, Office of Employee and Labor Relations; General
Counsel; and Comptroller. We also interviewed GPO officials at the next
level of management responsible for human capital, information
dissemination, and customer service and union leaders. In addition, we
visited GPO headquarters in Washington, D.C., and a distribution center in
Laurel, Maryland, to talk with frontline managers about their
responsibilities and the responsibilities of their employees.
We developed the recommended next steps by referring to our models,
guides, reports, and other products on strategic human capital management
and identifying additional practices that were associated with and would
further complement or support current GPO efforts. We performed our work
from March through September 2003 in accordance with generally accepted
government auditing standards.
1 GPO's Personnel Director retired on July 3, 2003.
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