Post-Hearing Questions Related to the Department of Defense's	 
National Security Personnel System (29-APR-05, GAO-05-641R).	 
                                                                 
GAO was asked to respond to congressional requests regarding	 
questions about a previous testimony entitled, "Critical Mission:
Ensuring the Success of the National Security Personnel System." 
-------------------------Indexing Terms------------------------- 
REPORTNUM:   GAO-05-641R					        
    ACCNO:   A23081						        
  TITLE:     Post-Hearing Questions Related to the Department of      
Defense's National Security Personnel System			 
     DATE:   04/29/2005 
  SUBJECT:   Employee training					 
	     Federal employees					 
	     Human capital management				 
	     Personnel management				 
	     Program evaluation 				 
	     Federal agency reorganization			 
	     Employee relations 				 
	     Stakeholder consultations				 
	     Business operations				 
	     DOD National Security Personnel System		 

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GAO-05-641R

United States Government Accountability Office Washington, DC 20548

April 29, 2005

The Honorable George V. Voinovich
Chairman
The Honorable Daniel K. Akaka
Ranking Member
Subcommittee on Oversight of Government Management,

the Federal Workforce, and the District of Columbia
Committee on Homeland Security and Governmental Affairs
United States Senate

Subject: Post-hearing Questions Related to the Department of Defense's
National Security Personnel System

On March 15, 2005, I testified before your Subcommittee at a hearing
entitled "Critical Mission: Ensuring the Success of the National Security
Personnel System."1 This report responds to requests from each of you that
I provide answers to questions for the record from the hearing. The
questions, along with my responses, follow.

Question from Chairman Voinovich

What recommendations or suggestions do you have for the Department of
Defense and the Office of Personnel Management in order for them to earn
employee acceptance of NSPS?

Human capital reform is a critical element in the Department of Defense's
(DOD) overall business transformation effort. Therefore, top DOD
leadership must play a direct and continuing role in this effort.
Appropriate presidential appointees need to take the lead in selected
meetings and communications. This will be necessary in order to assure
that top union and other officials also participate in key activities
(e.g., selected meet and confer sessions).

As we noted in our statement, the active involvement of employees and
employee representatives will be critical to the success of DOD's National
Security Personnel System (NSPS). We have reported that the involvement of
employees and their representatives both directly and indirectly is
crucial to the success of new initiatives, including implementing a
pay-for-performance system. 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

1 GAO, Human Capital: Preliminary Observations on Proposed DOD National
Security Personnel System Regulations, GAO-05-432T (Washington, D.C.: Mar.
15, 2005).

                        Page 1 GAO-05-641R Human Capital

in the fairness of the system and increases their understanding and
ownership of organizational goals and objectives. This involvement must be
early, active, and continuing if DOD employees are to gain a sense of
understanding and ownership of the changes that are being made through
NSPS. Further, we believe that this involvement needs to be meaningful,
not just pro forma.

Implementing large-scale change management initiatives, such as the
Department of Homeland Security's (DHS) new personnel system and DOD's
NSPS, are not simple endeavors and require the direct involvement and
concentrated efforts of both leadership, including top political
leadership, and employees to realize intended synergies and to accomplish
new organizational goals. People are at the center of any serious change
management initiative. People define the organization's culture, drive its
performance, and embody its knowledge base. Experience shows that failure
to adequately address-and often even consider-a wide variety of people and
cultural issues is at the heart of unsuccessful transformations.
Recognizing the "people" element in these two initiatives and implementing
strategies to help individuals maximize their full potential in the new
organization, while simultaneously managing the risk of reduced
productivity and effectiveness that often occurs as a result of the
changes, is the key to a successful transformation.2

We have found that because people are the drivers of any transformation,
it is vital to monitor their attitudes. Especially at the outset of the
transformation, 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.
While monitoring employee attitudes provides good information, it is most
important for employees to see that top leadership not only listens to
their concerns, but also takes action and makes appropriate adjustments to
the transformation in a visible way. By not taking appropriate follow-up
action, negative attitudes may translate into actions, such as employee
departures, among other things, that could have a detrimental effect on
the transformation.3 According to the Office of Personnel Management
(OPM), alternative personnel systems require employee buy-in to be
effective.4 Thus, DOD employees and their representatives should be
involved from the beginning, and without early consultation with DOD
employees and their representatives, NSPS buy-in probably will not occur.

Questions from Senator Akaka

1.	The Government Accountability Office (GAO) has often reported on the
importance of employee buy-in for any reorganization to be successful.
However, the four largest unions at the Department of Homeland Security
have filed a lawsuit to stop implementation of the new personnel system,
and, based on testimony from Mr. Gage and Mr. Junemann, employees are not
supportive of the new National Security Personnel System (NSPS)

2 GAO, Results-Oriented Cultures: Implementation Steps to Assist Mergers
and Organizational Transformations, GAO-03-669 (Washington, D.C.: July 2,
2003).

3 GAO-03-669.

4 OPM, Demonstration Projects and Alternative Personnel Systems: HR
Flexibilities and Lessons Learned (Washington, D.C.: September 2001).

                        Page 2 GAO-05-641R Human Capital

either. In your opinion, can either of these systems be successful given
the lack of employee support?

Active and ongoing engagement and communication is critical for the
successful development and implementation of both DHS's new personnel
management system and DOD's human resources management system. Like DHS,
DOD's efforts to date to involve labor unions have not been without
controversy. In fact, 10 federal labor unions also have filed suit
alleging that DOD failed to abide by the statutory requirements to include
employee representatives in the development of DOD's new labor relations
system authorized as part of NSPS.5 Since these suits currently are
pending in federal court, I do not believe it would be appropriate to
comment further on them at this time.

By including employees and their representatives in the planning process,
organizations can increase their acceptance of organizational goals as
well as improve motivation and morale.6 For NSPS to be a successful
transformation, it must involve DOD employees and their representatives
from the beginning of the process to gain their ownership for the changes
that are occurring within the department. Employee involvement strengthens
the transformation process by including frontline perspective and
experiences. Further employee involvement helps to create the opportunity
to establish new networks and break down existing organizational silos,
increase employees' understanding and acceptance of organizational goals
and objectives, gain ownership for new policies and procedures, and reduce
related implementation risks.

Our prior work also indicates that engaging employee unions is a key
practice to help

                                       7

involve employees and is crucial to achieving success. Thus, obtaining DOD
union cooperation and support through effective labor-management relations
can help achieve consensus on the planned changes, avoid
misunderstandings, and more expeditiously resolve problems that occur.
Organizations we studied involved unions and incorporated their input
before finalizing decisions in such areas as redesigning work processes,
changing work rules, or developing new job descriptions.

We have found that organizations undergoing a transformation should
establish a communications strategy that creates shared expectations and
seeks to genuinely involve stakeholders in the process. As we have noted
in our prior testimonies on DHS's personnel management system and DOD's
human resources management system,8 both departments will face multiple
implementation challenges that include establishing overall communications
strategies and involving employees in

5 See American Federation of Government Employees, AFL-CIO et al v.
Rumsfeld et al, No. 1:05cv00367 (D.D.C. filed Feb. 23, 2005).

6 GAO, Human Capital: Practices that Empowered and Involved Employees,
GAO-01-1070 (Washington, D.C.: Sept. 14, 2001).

7 GAO, A Model of Strategic Human Capital Management, GAO-02-373SP
(Washington, D.C.: Mar. 15, 2002).

8 GAO, Human Capital: Observations on Final DHS Human Capital Regulations,
GAO-05-391T (Washington, D.C.: Mar. 2, 2005) and GAO-05-432T.

                        Page 3 GAO-05-641R Human Capital

implementing the new systems. We believe that one of the most relevant
implementation steps is for DHS and DOD to enhance two-way communication
between employees, employee representatives, and management, including
enhancing communication between top political appointees and labor
leaders. Frequent and timely communication cultivates a strong
relationship with management and helps gain employee ownership for a
transformation like NSPS. But communication is not about just "pushing the
message out" or seeking information without any meaningful response. It
should facilitate a two-way honest exchange with and allow feedback from
employees, employee representatives, customers, and stakeholders. Once
employee feedback is received, it is important to acknowledge, consider,
and use it to make any appropriate changes to the implementation of the
transformation.

2. 	Mr. Junemann's written testimony proposes that GAO audit the training
program for managers and employees for the performance appraisal process.
What is your opinion of this recommendation, and would GAO be open to
auditing the performance management training offered by all agencies?

The recommendation that GAO audit the training program for managers and
employees has merit. GAO is willing to entertain a congressional request
to evaluate DOD's training plan for the implementation and operations of
NSPS. As part of our ongoing reviews of agencies' efforts to address their
human capital challenges, we developed a framework to serve as a flexible
and useful guide in assessing how agencies plan, design, implement, and
evaluate effective training and development

9

programs. We believe that these guides could prove helpful to DOD as it
develops its NSPS training and development program.

For additional information on our work on human capital issues at DOD,
please contact me on (202) 512-5500 or Derek B. Stewart, Director, Defense
Capabilities and Management, on (202) 512-5559 or [email protected]. For
further information on governmentwide human capital issues, please contact
Eileen R. Larence, Director, Strategic Issues, at (202) 512-6510 or
[email protected].

David M. Walker Comptroller General of the United States

(350706)

9 GAO, Human Capital: A Guide for Assessing Strategic Training and
Development Efforts in the Federal Government, GAO-04-546G (Washington,
D.C.: March 2004) and Human Capital: Selected Agencies' Experiences and
Lessons Learned in Designing Training and Development Programs, GAO-04-291
(Washington, D.C.: Jan. 30, 2004).

                        Page 4 GAO-05-641R Human Capital

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