Human Capital: Observations on Final Regulations for DOD's
National Security Personnel System (17-NOV-05, GAO-06-227T).
People are critical to any agency transformation because they
define an agency's culture, develop its knowledge base, promote
innovation, and are its most important asset. Thus, strategic
human capital management at the Department of Defense (DOD) can
help it marshal, manage, and maintain the people and skills
needed to meet its critical mission. In November 2003, Congress
provided DOD with significant flexibility to design a modern
human resources management system. On November 1, 2005, DOD and
the Office of Personnel Management (OPM) jointly released the
final regulations on DOD's new human resources management system,
known as the National Security Personnel System (NSPS). Several
months ago, with the release of the proposed regulations, GAO
observed that some parts of the human resources management system
raised questions for DOD, OPM, and Congress to consider in the
areas of pay and performance management, adverse actions and
appeals, and labor management relations. GAO also identified
multiple implementation challenges for DOD once the final
regulations for the new system were issued. This testimony
provides GAO's overall observations on selected provisions of the
final regulations.
-------------------------Indexing Terms-------------------------
REPORTNUM: GAO-06-227T
ACCNO: A41618
TITLE: Human Capital: Observations on Final Regulations for
DOD's National Security Personnel System
DATE: 11/17/2005
SUBJECT: Employee relations
Federal employees
Federal regulations
Human capital
Human capital management
National security personnel system
Pay for performance
Performance management
Performance measures
Policy evaluation
Strategic planning
DOD National Security Personnel System
******************************************************************
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GAO-06-227T
United States Government Accountability Office
GAO Testimony
Before the Committee on Homeland Security and Governmental Affairs, U.S.
Senate
For Release on Delivery Expected at 10:00 a.m. EST Thursday, November 17,
2005
HUMAN CAPITAL
Observations on Final Regulations for DOD's National Security Personnel System
Statement of David M. Walker Comptroller General of the United States
GAO-06-227T
November 17, 2005
HUMAN CAPITAL
Observations on Final Regulations for DOD's National Security Personnel System
What GAO Found
GAO believes that DOD's final NSPS regulations contain many of the basic
principles that are consistent with proven approaches to strategic human
capital management. For instance, the final regulations provide for (1) a
flexible, contemporary, market-based and performance-oriented compensation
system-such as pay bands and pay for performance; (2) giving greater
priority to employee performance in its retention decisions in connection
with workforce rightsizing and reductions-in-force; and (3) involvement of
employee representatives throughout the implementation process, such as
having opportunities to participate in developing the implementing
issuances. However, future actions will determine whether such labor
relations efforts will be meaningful and credible.
Despite these positive aspects of the regulations, GAO has several areas
of concern. First, DOD has considerable work ahead to define the important
details for implementing its system-such as how employee performance
expectations will be aligned with the department's overall mission and
goals and other measures of performance, and how DOD would promote
consistency and provide general oversight of the performance management
system to ensure it is administered in a fair, credible, transparent
manner. These and other critically important details must be defined in
conjunction with applicable stakeholders. Second, the regulations merely
allow, rather than require, the use of core competencies that can help to
provide consistency and clearly communicate to employees what is expected
of them. Third, although the regulations do provide for continuing
collaboration with employee representatives, they do not identify a
process for the continuing involvement of individual employees in the
implementation of NSPS.
Going forward, GAO believes that (1) DOD would benefit from developing a
comprehensive communications strategy, (2) DOD must ensure that it has the
necessary institutional infrastructure in place to make effective use of
its new authorities, (3) a chief management officer or similar position is
essential to effectively provide sustained and committed leadership to the
department's overall business transformation effort, including NSPS, and
(4) DOD should develop procedures and methods to initiate implementation
efforts relating to NSPS.
While GAO strongly supports human capital reform in the federal
government, how it is done, when it is done, and the basis on which it is
done can make all the difference in whether such efforts are successful.
DOD's regulations are especially critical and need to be implemented
properly because of their potential implications for related
governmentwide reform. In this regard, in our view, classification,
compensation, critical hiring, and workforce restructuring reforms should
be pursued on a governmentwide basis before and separate from any
broad-based labormanagement or due process reforms.
United States Government Accountability Office
Madame Chairman Collins, Senator Lieberman, and Members of the Committee:
I appreciate the opportunity to be here today to provide our observations
on the Department of Defense's (DOD) final National Security Personnel
System (NSPS) regulations, which the Secretary of Defense and the Director
of the Office of Personnel Management (OPM) published earlier this month.1
NSPS will not only affect the roughly 700,000 DOD civilian employees, but
it could have far-reaching implications for civil service reform across
the federal government.
As I have previously testified, we support moving forward with appropriate
human capital reform, but how it is done, when it is done, and the basis
on which it is done can make all the difference in whether such efforts
are successful. Human capital reforms to date recognize that the
"one-size-fits-all" approach is not appropriate to all agencies' demands,
challenges, and missions. However, we have reported that a reasonable
degree of consistency across the government is desirable and that broader
reforms should be guided by a common framework consisting of principles,
criteria, and processes.2 The final NSPS regulations, if implemented
properly, could go a long way in the area of helping to shape such a
framework and serve, along with GAO's, the Department of Homeland
Security's, and other reform efforts, as a potential model for
governmentwide reform in the area of human capital management.
My statement today makes three overall points. First, DOD has considerable
work ahead to define the details of the implementation of its system, and
understanding these details is critical to the overall success of the
system. We find that the final regulations contain many of the basic
principles that are consistent with proven approaches to strategic human
1 Department of Defense Human Resources Management and Labor Relations
System, 70 Fed. Reg. 66116 (Nov. 1, 2005).
2 GAO and the National Commission on the Public Service Implementation
Initiative, Highlights of a Forum: Human Capital: Principles, Criteria,
and Processes for Governmentwide Federal Human Capital Reform, GAO-05-69SP
(Washington, D.C.: Dec. 1, 2004)
Summary
capital management, including several approaches used by GAO.3 DOD has
plans to issue a number of issuances that will contain detailed policies
and procedures for the new system. These issuances will be of critical
importance and their content will include important details that can serve
to either enhance or reduce the likelihood of a successful implementation.
These critically important details must be defined in conjunction with
applicable key stakeholders and certain steps should be taken before any
new authorities are implemented.
Specifically, DOD and other federal agencies must ensure they have the
institutional infrastructure in place to make effective use of their new
authorities. This institutional infrastructure includes, at a minimum, a
human capital planning process that integrates the agency's human capital
policies, strategies, and programs with its program goals, mission, and
desired outcomes; the capabilities to effectively develop and implement a
new human capital system; and importantly, the existence of a modern,
effective, and credible performance management system that includes
adequate safeguards to ensure a fair, effective, non-discriminatory, and
credible implementation of the new system.
Second, DOD has stated that it is committed to continuing to involve
employees, including employee representatives, throughout the
implementation process, another critical ingredient for success. For
instance, under the final regulations, employee representatives are to
have opportunities to participate in developing the implementing
issuances, as outlined under the "continuing collaboration" provisions.
However, future actions will determine whether such employee and labor
relations efforts will be meaningful and credible. In this regard, despite
extensive efforts by many, DOD's attempts to date to involve labor unions
have not been without controversy. Ten federal labor unions have filed
suit alleging that DOD failed to abide by the statutory requirements to
include employee representatives in the development of the labor relations
system, and that the new adverse actions process and labor relations
system are unlawful.4
3 GAO, Human Capital: Preliminary Observations on Proposed Regulations for
DOD's National Security Personnel Systems, GAO-05-559T (Washington, D.C.:
Apr. 14, 2005); GAO, Human Capital: Preliminary Observations on Proposed
Department of Defense National Security Personnel System Regulations,
GAO-05-517T (Washington, D.C.: Apr. 12, 2005); GAO, Preliminary
Observations on Proposed DOD National Security Personnel System
Regulations, GAO-05-432T (Washington, D.C.: Mar. 15, 2005).
4 See American Federation of Government Employees, AFL-CIO et al v.
Rumsfeld et al, No. 1:05cv02183 (D.D.C. filed Nov. 7, 2005).
We believe that sustained and committed leadership can provide the
continuing, focused attention needed to successfully complete this
multiyear conversion to the new human resources management system, and an
ongoing two-way communication strategy can help ensure the quality of that
involvement.
Third, and finally, recent actions, as evidenced by these DOD final
regulations, may have significant, precedent-setting implications for the
rest of the government. They represent both progress and opportunities,
but also raise legitimate concerns. We are fast approaching the point
where "standard governmentwide" human capital policies and processes are
neither standard nor governmentwide. Human capital reform should avoid
further fragmentation within the civil service, ensure reasonable
consistency within the overall civilian workforce, and help maintain a
reasonably level playing field among federal agencies when competing for
talent. Further, human capital reform should maintain key merit principles
and appropriate safeguards against discrimination and other prohibited
personnel practices. While we strongly support human capital reform in the
federal government, how it is done, when it is done, and the basis on
which it is done can make all the difference in whether such efforts are
successful. In our view, classification, compensation, critical hiring,
and workforce restructuring reforms should be pursued on a governmentwide
basis before and separate from any broad-based labor- management or due
process reforms.
This morning I would like to (1) provide some observations on selected
provisions, (2) discuss the multiple challenges that DOD faces as it moves
toward implementation of its new human resources management system, and
then (3) suggest a governmentwide framework that can serve as a starting
point to advance human capital reform. Lastly, I will suggest next steps
for human capital reform.
DOD's final NSPS regulations establish a new human resources management
system within the department that is intended to ensure its ability to
attract, retain, and reward a workforce that is able to meet its critical
mission. Further, the human resources management system is to provide DOD
with greater flexibility in the way employees are to be paid, developed,
evaluated, afforded due process, and represented by employee
representatives while reflecting the principles of merit and fairness
embodied in the statutory merit systems principles.
Observations on DOD's Final Human Capital Regulations
As with any major change management initiative, the final regulations have
raised a number of concerns among employees, employee representatives, and
other stakeholders because they do not contain many of the important
details of how the system will be implemented. We have reported that
individuals inevitably worry during any change management initiative
because of uncertainty over new policies and procedures.5 A key practice
to help address this worry is to involve employees and their
representatives to obtain their ideas and gain their ownership for the
initiative throughout the development process and related implementation
effort.
We continue to believe that many of the basic principles underlying DOD's
final regulations are generally consistent with proven approaches to
strategic human capital management. Today, I will provide our observations
on the following elements of DOD's human resources management system as
outlined in the final regulations-pay and performance management, staffing
and employment, workforce shaping, adverse actions and appeals, and labor
management relations.
Pay and Performance Management
Earlier this year, we testified that DOD's proposed NSPS regulations
reflected a growing understanding that the federal government needs to
fundamentally rethink its current approach to pay and better link pay to
individual and organizational performance.6 To this end, DOD's final
regulations take another valuable step toward a modern performance
management system that provides for elements of a more market-based and
performance-oriented pay system. For instance, the final regulations
provide for the creation of pay bands for most of DOD's civilian workforce
that would replace the 15-grade General Schedule (GS) system now in place
for most civil service employees. Specifically, DOD, after coordination
with OPM, may define occupational career groups and levels of work within
each career group that are tailored to the department's missions and
components. The final regulations also give DOD considerable discretion,
after coordination with OPM, to set and annually adjust the minimum and
maximum rates of pay for each of those career
5 GAO, Results-Oriented Cultures: Implementing Steps to Assist Mergers and
Organizational Transformations, GAO-03-669 (Washington, D.C.: July 2,
2003) and Highlights of a GAO Forum: Lessons Learned for a Department of
Homeland Security and Other Federal Agencies, GAO-03-293SP (Washington,
D.C.: Nov. 14, 2002).
6 GAO-05-559T, GAO-05-517T, and GAO-05-432T.
Aligning Individual Performance to Organizational Goals
groups or bands, based on national and local labor market factors and
other conditions such as availability of funds. In addition, the
regulations provide that DOD may, after coordination with OPM, set and
annually adjust local market supplements for different career groups or
for different bands within the same career group. We strongly support the
need to expand pay reform in the federal government and believe that
implementing more market-based and performance-oriented pay systems is
both doable and desirable. The federal government's current pay system is
heavily weighted toward rewarding length of service rather than individual
performance and contributions, including requiring across-theboard annual
pay increases, even to poor performers. It also compensates employees
living in various localities without adequately considering the local
labor market rates applicable to the diverse types of occupations in the
area.
Regarding performance management issues, we identified several issues in
earlier testimonies that DOD will need to continue to address as it moves
forward with the implementation of the system. These include aligning
individual performance to organizational goals, using competencies to
provide a fuller assessment of employee performance, making meaningful
distinctions in employee performance, and continuing to incorporate
adequate safeguards to ensure fairness and guard against abuse.
Consistent with leading practices, the DOD final regulations stipulate
that the performance management system will, among other things, align
individual performance expectations with the department's overall mission
and strategic goals, organizational program and policy objectives, annual
performance plans, and other measures of performance. DOD'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.
To this end, an explicit alignment of daily activities with broader
results is one of the defining features of effective performance
management systems in high-performing organizations. In our previous
testimony on DOD proposed NSPS regulations,7 we testified that the
regulations did not detail how DOD was to achieve such an alignment. The
final regulations were not modified to provide such details. These details
do matter and are critical issues that will need to be
7 GAO-05-517T.
Using Competencies to Provide a Fuller Assessment of Performance
Making Meaningful Distinctions in Employee Performance
addressed as DOD's efforts in implementing a new personnel system move
forward.8
In the final regulations, performance expectations may take several
different forms. These include, among others, goals or objectives that set
general or specific performance targets at the individual, team, or
organizational level; a particular work assignment, including
characteristics such as quality, quantity, accuracy, or timeliness; core
competencies that an employee is expected to demonstrate on the job; or
the contributions that an employee is expected to make. In a previous
testimony, we reported that DOD needed to define, in more detail than was
provided in the proposed regulations, how performance expectations will be
set. In addition, public comments to the proposed regulations expressed
concerns about the variety of forms that performance expectations could
take. In response to public comments to its proposed regulations and
feedback obtained during the meet and confer process with employee
representatives, DOD modified the proposed regulations, so that the final
regulations state that the basic performance expectations should be
provided to employees in writing.
As DOD develops its implementing issuances, the experiences of leading
organizations suggest that DOD should reconsider its position of merely
allowing, rather than requiring, the use of core competencies as a central
feature of its performance management system.9 Based on our review of
others' efforts and our own experience at GAO, core competencies can help
reinforce employee behaviors and actions that support the department's
mission, goals, and values and can provide a consistent message to
employees about how they are expected to achieve results.10 By including
competencies such as change management, achieving results, teamwork and
collaboration, cultural sensitivity, and information sharing, DOD could
create a shared responsibility for organizational success and help ensure
accountability for the transformation process.
High-performing organizations make meaningful distinctions between
acceptable and outstanding performance of individuals and appropriately
8 GAO-05-517T.
9 GAO, Results-Oriented Cultures: Creating a Clear Linkage between
Individual Performance and Organizational Success, GAO-03-488 (Washington,
D.C.: Mar. 14, 2003).
10 GAO, Human Capital: Implementing Pay for Performance at Selected
Personnel Demonstration Projects, GAO-04-83 (Washington, D.C.: Jan. 23,
2004).
reward those who perform at the highest level.11 These organizations seek
to create pay, incentive, and reward systems that clearly link employee
knowledge, skills, and contributions to organizational results. As in the
proposed regulations, DOD's final regulations stated that DOD supervisors
and managers are to be held accountable for making meaningful distinctions
among employees based on performance and contribution, fostering and
rewarding excellent performance, and addressing poor performance.
Consistent with the proposed regulations, the final regulations provide
for a multilevel rating system for evaluating employee performance.
However, the final regulations do not specify exactly how many rating
levels will be used. We urge DOD to consider using at least four summary
rating levels to allow for greater performance-rating and pay
differentiation. This approach is in the spirit of the new governmentwide
performance-based pay system for the Senior Executive Service (SES), which
requires at least four rating levels to provide a clear and direct link
between SES performance and pay as well as to make meaningful distinctions
based on relative performance. Cascading this approach to other levels of
employees can help DOD recognize and reward employee contributions and
achieve the highest levels of individual performance.12
As DOD develops its implementing issuances, it needs to continue building
safeguards into its performance management system to ensure fairness and
guard against abuse. A concern that employees often express about any pay
for performance system is supervisors' ability and willingness to assess
performance fairly. Using safeguards, such as having an independent body
to conduct reasonableness reviews of performance management decisions, can
help allay these concerns and build a fair, credible, and transparent
system. In our previous testimonies,13 we noted that although DOD's
proposed regulations provided for some safeguards, additional safeguards
should be developed. However, the final regulations do not offer details
on how DOD would, among other things, (1) promote consistency and provide
general oversight of the performance management system to ensure it is
administered in a fair, credible, and
Providing Adequate Safeguards to Ensure Fairness and Guard Against Abuse
11 GAO-03-488.
12 GAO, Human Capital: Observations on Final DHS Human Capital Regulation,
GAO-05-391T (Washington, D.C.: Mar. 2, 2005).
13 GAO-05-559T, GAO-05-517T, and GAO-05-432T.
transparent manner; and (2) incorporate predecisional internal safeguards
to achieve consistency and equity, and ensure nondiscrimination and
nonpoliticization of the performance management process. As DOD moves
forward, it will need to commit itself to define, in more detail than is
currently provided, how it plans to review such matters as the
establishment and implementation of the performance appraisal system- and,
subsequently, performance rating decisions, pay determinations, and
promotion actions-before these actions are finalized, to ensure they are
merit based.
Staffing and Employment
The authorizing legislation allows DOD to implement additional hiring
flexibilities that would allow it to (1) determine that there is a severe
shortage of candidates or a critical hiring need and (2) use direct-hire
procedures for these positions. Under current law, OPM, rather than the
agency, determines whether there is a severe shortage of candidates or a
critical hiring need. Direct-hire authority allows an agency to appoint
candidates to positions without adherence to certain competitive examining
requirements (such as veterans' preference or numerically rating
candidates based on experience, training, and education) when there is a
severe shortage of qualified candidates or a critical hiring need.
In our previous testimonies, we noted that while we strongly endorse
providing agencies with additional tools and flexibilities to attract and
retain needed talent, additional analysis may be needed to ensure that any
new hiring authorities are consistent with a focus on merit principles,
the protection of employee rights, and results. Hiring flexibilities alone
will not enable federal agencies to acquire the personnel necessary to
accomplish their missions. Agencies must first conduct gap analyses of the
critical skills and competencies needed in their workforces now and in the
future, or they may not be able to effectively design strategies to hire,
develop, and retain the best possible workforces.
Workforce Shaping Similar to the proposed regulations, the final NSPS
regulations allow DOD to reduce, realign, and reorganize the department's
workforce through revised reduction-in-force (RIF) procedures. For
example, employees would be placed on a retention list in the following
order: tenure group (i.e., a career employee, including an employee
serving an initial probationary period and an employee serving on a term
appointment), veterans' preference eligibility (disabled veterans will be
given additional priority), level of performance, and length of service.
In a change from the proposed regulations, employees serving in an initial
probationary period
have a lower retention standing than career employees (i.e., permanent
will be listed first, followed by employees serving an initial
probationary period, and then followed by employees on temporary
appointments). In another change, the final regulations reflect the use of
more than one year's performance ratings in placing employees on the
retention list. Under current regulations, length of service is considered
ahead of level of performance. I have previously testified, prior to the
enactment of NSPS, in support of revised RIF procedures that would require
much greater consideration of an employee's performance.14
DOD's approach to reducing, realigning, and reorganizing should be
oriented toward strategically shaping the makeup of its workforce if it is
to ensure the orderly transfer of institutional knowledge and achieve
mission results. DOD's final regulations include some changes that would
allow DOD to rightsize the workforce more carefully through greater
precision in defining competitive areas, and by reducing the disruption
associated with RIF orders as their affect ripples through an
organization. Under the current regulations, the minimum RIF competitive
area is broadly defined as an organization under separate administration
in a local commuting area. Under the final NSPS regulations, DOD would be
able to establish a minimum RIF competitive area on a more targeted basis,
using one or more of the following factors: geographical location, line of
business, product line, organizational unit, and funding line. The final
regulations also provide DOD with the flexibility to develop additional
competitive groupings on the basis of career group, occupational series or
specialty, and pay band. Under the current GS system, DOD can establish
competitive groups based only on employees (1) in the excepted and
competitive service, (2) under different excepted service appointment
authorities, (3) with different work schedules,15 (4) in the same pay
schedule, or (5) in trainee status. The new reforms could help DOD
approach rightsizing more carefully; however, as I have stated, agencies
first need to identify the critical skills and competencies needed in
their workforce if they are to effectively implement their new human
capital flexibilities.
14GAO, Defense Transformation: DOD's Proposed Civilian Personnel System
and Governmentwide Human Capital Reform, GAO-03-741T (Washington, D.C.:
May 1, 2003); and GAO, Human Capital: Building on DOD's Reform Effort to
Foster Governmentwide Improvements, GAO-03-851T (Washington, D.C.: June 4,
2003).
15 For example, employees who work full time, part time, seasonally, or
intermittently.
Adverse Actions and Appeals
Similar to DOD's proposed regulations, the final regulations are intended
to streamline the employee adverse action process. While the final
regulations contain some features meant to ensure that employees receive
due process, such as advance written notice of a proposed adverse action,
they do not require DOD managers to provide employees with performance
improvement periods, as is required under existing law for other federal
employees. It is too early to tell what affect, if any, these final
regulations will have on DOD's operations and employees or on other
entities involved in the adverse action process, such as the Merit Systems
Protection Board (MSPB). Close monitoring of any unintended consequences,
such as on the MSPB and its ability to manage adverse action cases from
DOD and other federal agencies, is warranted.16
Similar to the proposed regulations, DOD's final regulations also modify
the current federal system by providing the Secretary of Defense with the
sole, exclusive, and unreviewable authority to identify specific offenses
for which removal is mandatory. In our previous testimonies, we noted that
DOD's proposed regulations only indicated that its employees would be made
aware of the mandatory removal offenses. We also noted that the process
for determining and communicating which types of offenses require
mandatory removal should be explicit and transparent, and involve relevant
congressional stakeholders, employees, and employee representatives.
Moreover, we suggested that DOD exercise caution when identifying specific
removable offenses and the associated punishment, and noted that careful
drafting of each removable offense is critical to ensure that the
provision does not have unintended consequences. In a change from the
proposed regulations, DOD's final regulations explicitly provide for
publishing a list of the mandatory removal offenses in the Federal
Register.
Similar to its proposed regulations, DOD's final regulations generally
preserve the employee's basic right to appeal mandatory removal offenses
and other adverse action decisions to an independent body-the MSPB- but
retain the provision to permit an internal DOD review of the initial
decisions issued by MSPB adjudicating officials. Under this internal
review, DOD can modify or reverse an initial decision or remand the matter
back to the adjudicating official for further consideration. Unlike
16 Ten federal labor unions have filed suit alleging that, among other
things, DOD's adverse actions and appeals process is unlawful. See
American Federation of Government Employees, AFL-CIO et al v. Rumsfeld et
al, No. 1:05cv02183 (D.D.C. filed Nov. 7, 2005).
other criteria for review of initial decisions, DOD can modify or reverse
an initial MSPB adjudicating official's decision where the department
determines that the decision has a direct and substantial adverse effect
on the department's national security mission.17 In our previous
testimonies on the proposed regulations, we expressed some concern about
the department's internal review process and pointed out that the proposed
regulations do not offer additional details on the department's internal
review process, such as how the review will be conducted and who will
conduct it. We noted that an internal agency review process this important
should be addressed in the regulations rather than in an implementing
directive to ensure adequate transparency and employee confidence in the
process. However, the final regulations were not modified to include such
details.
Similar to DOD's proposed regulations, the final regulations shorten the
notification period before an adverse action can become effective, provide
an accelerated MSPB adjudication process, and continue to give the MSPB
administrative judges (AJs) and arbitrators less latitude to modify
DODimposed penalties than under current practice. Under the current
system, MSPB reviews penalties during the course of a disciplinary action
against an employee to ensure that the agency considered relevant
prescribed factors and exercised management discretion within tolerable
limits of reasonableness. MSPB may mitigate or modify a penalty if the
agency did not consider prescribed factors. In a change from the proposed
regulations, which precluded the MSPB from modifying a penalty imposed on
an employee by DOD for an adverse action unless such a penalty was so
disproportionate to the basis of the action as to be "wholly without
justification," under the final regulations the MSPB AJs and arbitrators
will be able to mitigate a penalty only if it is "totally unwarranted in
light of the pertinent circumstances" while the full MSPB Board may
mitigate penalties in accordance with the standard prescribed in the NSPS
authorizing legislation.18 As stated by DOD in the supplementary
information to the final regulations, the "totally unwarranted in light of
all
17 Any final DOD decision under this review process may be further
appealed to the full MSPB. Further, the Secretary of Defense or an
employee adversely affected by a final order of decision of the full MSPB
may seek judicial review.
18 The full MSPB Board may order such corrective actions, including the
mitigation of penalties, as the board considers appropriate where the
Board determines a decision was: arbitrary, capricious, an abuse of
discretion, or otherwise not in accordance with the law; obtained without
procedures required by law, rule, or regulation having been followed; or
unsupported by substantial evidence. 5 U.S.C. S: 9902(h)(5).
pertinent circumstances" standard is similar to that recognized by the
federal courts and is intended to limit mitigation of penalties by
providing deference to an agency's penalty determination.
The final regulations continue to encourage the use of alternative dispute
resolution (ADR) and provide that this approach be subject to collective
bargaining to the extent permitted by the final labor relations
regulations. To resolve disputes in a more efficient, timely, and less
adversarial manner, federal agencies have been expanding their human
capital programs to include ADR approaches, including the use of ombudsmen
as an informal alternative to addressing conflicts. As we have reported,
ADR helps lessen the time and the cost burdens associated with the federal
redress system and has the advantage of employing techniques that focus on
understanding the disputants' underlying interests rather than techniques
that focus on the validity of their positions. For these and other
reasons, we believe that it is important to continue to promote ADR
throughout the process.
Labor-Management Relations
The final regulations recognize the right of employees to organize and
bargain collectively. Similar to the proposed regulations, the final
regulations would reduce the scope of collecting bargaining by removing
the requirement for DOD management to bargain on matters considered to be
management rights-such as the policies and procedures for deploying
personnel, assigning work, and introducing new technologies. However, in a
departure from the proposed regulations, the final regulations provide
that the Secretary of Defense may authorize bargaining on these management
rights if the Secretary in his or her sole, exclusive, and unreviewable
discretion determines that bargaining would be necessary to advance the
department's mission or promote organizational effectiveness.19
Our previous work on individual agencies' human capital systems has not
directly addressed the scope of specific issues that should or should not
be subject to collective bargaining and negotiations. At a forum we
cohosted exploring the concept of a governmentwide framework for human
capital reform, which I will discuss later, participants generally agreed
that
19 Ten federal labor unions have filed suit alleging that, among other
things, DOD's labor relations system is unlawful. See American Federation
of Government Employees, AFL-CIO et al v. Rumsfeld et al, No. 1:05cv02183
(D.D.C. filed Nov. 7, 2005).
DOD Faces Many Challenges to Successful Implementation
the ability to organize, bargain collectively, and participate in labor
organizations is an important principle to be retained in any framework
for reform.
DOD's final regulations create its own internal labor relations board-the
National Security Labor Relations Board-to deal with most departmentwide
labor relations policies and disputes rather than submit them to the
Federal Labor Relations Authority. DOD's proposed regulations did not
provide for any employee representative input into the appointment of
board members. However, DOD's final regulations require that for the
appointment of two of the three board members, the Secretary of Defense
must consider candidates submitted by employee representatives. However,
the Secretary retains the authority to both appoint and remove any member.
With the issuance of the final regulations, DOD faces multiple challenges
to the successful implementation of its new human resources management
system. We highlighted multiple implementation challenges at prior
hearings and in our July 2005 report on DOD's efforts to design the new
system.20 For information about these challenges identified in our prior
work, as well as related human capital issues that could potentially
affect the implementation of NSPS, see the "Highlights" pages from
previous GAO products on DOD civilian personnel issues in appendix I.
We continue to believe that addressing these challenges is critical to the
success of DOD's new human resources management system. These challenges
include establishing an overall communications strategy, ensuring
sustained and committed leadership, providing adequate resources for the
implementation of the new system, involving employees in implementing the
system, and evaluating the new system after it has been implemented.
Establishing an Overall Another significant challenge for DOD is to ensure
an effective and
Communications Strategy ongoing two-way communications strategy, given
DOD's size, geographically and culturally diverse audiences, and the
different command structures across DOD organizations. While we have
reported
20 GAO, Human Capital: DOD's National Security Personnel System Faces
Implementation Challenges, GAO-05-730 (Washington, D.C.: July 14, 2005).
that developing a comprehensive communications strategy is a key practice
of a change management initiative,21 we reported in July 2005 that DOD
lacks such a strategy.22 We recommended that the Secretary of Defense take
steps to ensure that its communications strategy effectively addresses
employee concerns and their information needs, and facilitates two-way
communication between employees, employee representatives, and management.
In prior testimonies, we also suggested that this communications strategy
must involve a number of key players, including the Secretary of Defense.
Providing Adequate Resources for Implementing the New System
DOD also is challenged to provide adequate resources to implement its new
personnel system, especially in times of increased fiscal constraints. OPM
reports that the increased costs of implementing alternative personnel
systems should be acknowledged and budgeted for up front. 23 Based on the
data provided by selected OPM personnel demonstration projects, we found
that direct costs associated with salaries and training were among the
major cost drivers of implementing pay for performance systems. Certain
costs, such as those for initial training on the new system, are one-time
in nature and should not be built into the base of DOD's budget. Other
costs, such as employees' salaries, are recurring and thus should be built
into the base of DOD's budget for future years. DOD estimates that the
overall cost associated with implementing the new human resources
management system-including developing and delivering training, modifying
automated personnel information systems, and starting up and sustaining
the National Security Labor Relations Board-will be approximately $158
million through fiscal year 2008. Since experience has shown that
additional resources are necessary to ensure sufficient planning,
implementation, training, and evaluation for human capital reform, funding
for NSPS will warrant close scrutiny by Congress as DOD's implements the
new system.
We plan to evaluate the costs associated with the design and
implementation of NSPS and look forward to sharing our findings with
Congress upon completion of our review.
21 GAO-03-669.
22 GAO-05-730.
23 OPM, Demonstration Projects and Alternative Personnel Systems: HR
Flexibilities and Lessons Learned (Washington, D.C.: September 2001).
Ensuring Sustained and Committed Leadership
One challenge DOD faces is the need to elevate, integrate, and
institutionalize leadership responsibility for large-scale organizational
change initiatives, such as its new human resources management system, to
ensure success. A chief management officer or similar position could
effectively provide the sustained and committed leadership essential to
successfully completing these multiyear business transformation
initiatives. Especially for an endeavor as critical as DOD's new human
resources management system, such a position could serve to
o elevate attention to overcome an organization's natural resistance to
change, marshal the resources needed to implement change, and build and
maintain organizationwide commitment to new ways of doing business;
o integrate this new system with various management responsibilities so
that they are no longer "stove-piped" and fit into other organizational
transformation efforts in a comprehensive, ongoing, and integrated manner;
and
o institutionalize accountability for the system to sustain the
implementation of this critical human capital initiative.24
Involving Employees and Other Stakeholders in Implementing the System
DOD faces a significant challenge in involving its employees, employee
representatives, and other stakeholders in implementing NSPS. Similar to
the proposed regulations, DOD's final regulations, while providing for
continuing collaboration with employee representatives, do not identify a
process for the continuing involvement of employees in implementation of
NSPS. According to DOD, almost two-thirds of its 700,000 civilian
employees are represented by 41 different labor unions, including over
1,500 separate bargaining units. Consistent with DOD's proposed
regulations, its final NSPS regulations about the collaboration process,
among other things, would permit the Secretary of Defense to determine (1)
the number of employee representatives allowed to engage in the
collaboration process, and (2) the extent to which employee
representatives are given an opportunity to discuss their views with and
submit written comments to DOD officials. In addition, DOD's final
regulations indicate that nothing in the continuing collaboration process
24 On September 9, 2002, we convened a roundtable of government leaders
and management experts to discuss the chief operating officer concept. For
more information, see GAO, Highlights of a GAO Roundtable: The Chief
Operating Officer Concept: A Potential Strategy to Address Federal
Governance Challenges, GAO-03-192SP (Washington, D.C.: Oct. 4, 2002), and
The Chief Operating Officer Concept and Its Potential Use as a Strategy to
Improve Management at the Department of Homeland Security, GAO-04-876R
(Washington, D.C.: June 28, 2004).
will affect the right of the Secretary of Defense to determine the content
of implementing guidance and to make this guidance effective at any time.
DOD's final regulations will give designated employee representatives an
opportunity to be briefed and to comment on the design and results of the
new system's implementation.25
The active involvement of all stakeholders will be critical to the success
of NSPS. Substantive and ongoing involvement by employees and their
representatives both directly and indirectly is crucial to the success of
new initiatives, including implementing a modified classification and pay
for performance system. This involvement must be early, active,
meaningful, and continuing if employees are to gain a sense of
understanding and ownership of the changes that are being made. The 30-day
public comment period on the proposed regulations ended March 16, 2005.
During this time period, according to DOD, it received more than 58,000
comments. The public comment period was followed by a period during which
DOD and OPM officials met and conferred with employee representatives to
resolve differences on any portions of the proposed regulations where
agreement had not been reached. Earlier this year, during testimony, we
stated that the meet and confer process had to be meaningful and was
critically important because there were many details of the proposed
regulations that had not been defined. According to DOD, a significant
issue raised in the public comments and during the meet and confer process
concerned the lack of specificity in the proposed regulations. However, as
we noted earlier in this statement, DOD still has considerable work to
define the details for implementing its system. These details do matter,
and how they are defined can have a direct bearing on whether or not the
ultimate new human resources management system is both reasoned and
reasonable.
Evaluating DOD's New Human Resources Management System
Evaluating the effect of NSPS will be an ongoing challenge for DOD. This
element is especially important because DOD's final regulations would give
managers more authority and responsibility for managing the new human
resources management system than they have under the existing system.
High-performing organizations continually review and revise their human
capital management systems based on data-driven lessons learned
25 Ten federal labor unions have filed suit alleging that, among other
things, 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. See American Federation of Government
Employees, AFL-CIO et al v. Rumsfeld et al, No. 1:05cv02183 (D.D.C. filed
Nov. 7, 2005).
and changing needs in the work environment. Collecting and analyzing data
on the costs, benefits, and effects of NSPS will be the fundamental
building block for measuring the effectiveness of NSPS in support of the
mission and goals of the department.
DOD's final regulations indicate that DOD will evaluate the regulations
and their implementation. In our July 2005 report on DOD's efforts to
design NSPS, we recommended that DOD develop procedures for evaluating
NSPS that contain results-oriented performance measures and reporting
requirements.26 We also recommended that these evaluation procedures could
be broadly modeled on the evaluation requirements of the OPM demonstration
projects. Under the demonstration project authority, agencies must
evaluate and periodically report on results, implementation of the
demonstration project, cost and benefits, effects on veterans and other
equal employment opportunity groups, adherence to merit system principles,
and the extent to which the lessons from the project can be applied
governmentwide. A set of balanced measures addressing a range of results
and customer, employee, and external partner issues may also prove
beneficial. An evaluation such as this would: facilitate congressional
oversight; allow for any midcourse corrections; assist DOD in benchmarking
its progress with other efforts; and provide for documenting best
practices and sharing lessons learned with employees, stakeholders, other
federal agencies, and the public. In commenting on our recommendation, the
department stated that it has begun developing an evaluation plan and will
ensure that the plan contains results-oriented performance measures and
reporting mechanisms. If the department follows through with this effort,
we believe that it will be responsive to our recommendation.
The federal government is quickly approaching the point where "standard
governmentwide" human capital policies and processes are neither standard
nor governmentwide, raising the issue of whether a governmentwide
framework for human capital reform should be established. The human
capital environment in the federal government is changing, illustrated by
the fact that DOD's new human capital authority joins that given to
several other federal departments and agencies-such as the Department of
Homeland Security (DHS), GAO, the National Aeronautics and Space
Administration, and the Federal Aviation
Framework for Governmentwide Human Capital Reform
26 GAO-05-730.
Administration-to help them strategically manage their human resources
management system to achieve results.
To help advance the discussion concerning how governmentwide human capital
reform should proceed, we and the National Commission on the Public
Service Implementation Initiative co-hosted a forum on whether there
should be a governmentwide framework for human capital reform and, if so,
what this framework should include.27 While there was widespread
recognition among the forum participants that a one-size-fitsall approach
to human capital management is not appropriate for the challenges and
demands faced by government, there was equally broad agreement that there
should be a governmentwide framework to guide human capital reform.
Further, a governmentwide framework should balance the need for
consistency across the federal government with the desire for flexibility
so that individual agencies can tailor human capital systems to best meet
their needs. Striking this balance would not be easy to achieve, but is
important for maintaining a governmentwide system that is responsive
enough to adapt to agencies' diverse missions, cultures, and workforces.
While there were divergent views among the forum participants, there was
general agreement on a set of principles, criteria, and processes that
could serve as a starting point for further discussion in developing a
governmentwide framework in advancing human capital reform, as shown in
figure 1. We believe that these principles, criteria, and processes
provide an effective framework for Congress and other decision makers to
use as they consider governmentwide civil service reform proposals.
27 GAO-05-69SP.
Figure 1: Principles, Criteria, and Processes for a Governmentwide Human
Capital Reform Framework
Principles that the government should retain in a framework for reform
because of their inherent, enduring qualities:
o Merit principles that balance organizational mission, goals, and
performance objectives with individual rights and responsibilities
o Ability to organize, bargain collectively, and participate through
labor organizations
o Guaranteed due process that is fair, fast, and final
Criteria that agencies should have in place as they plan for and manage
their new human capital authorities:
o Demonstrated business case or readiness for use of targeted authorities
o An integrated approach to results-oriented strategic planning and human
capital planning and management
o Adequate resources for planning, implementation, training, and
evaluation
o A modern, effective, credible, and integrated performance management
system that includes adequate safeguards to ensure equity and prevent
discrimination
Processes that agencies should follow as they implement new human capital
authorities:
o Prescribing regulations in consultation or jointly with the Office of
Personnel Management
o Establishing appeals processes in consultation with the Merit Systems
Protection Board
o Involving employees and stakeholders in the design and implementation
of new human capital systems
o Phasing in implementation of new human capital systems
o Committing to transparency, reporting, and evaluation
o Establishing a communications strategy
o Ensuring adequate training
Next Steps for Human Capital Reform
Source: GAO.
Moving forward with human capital reform, in the short term, Congress
should consider selected and targeted actions to continue accelerating the
momentum to make strategic human capital management the centerpiece of the
government's overall transformation effort. One option may be to provide
agencies one-time, targeted investments that are not built into agencies'
bases for future year budget requests. For example, Congress established
the Human Capital Performance Fund to reward agencies' highest performing
and most valuable employees. However, the Administration's draft proposed
"Working for America Act" proposes to repeal the Human Capital Performance
Fund. According to OPM, the provision was never implemented, due to lack
of sufficient funding. We believe that a central fund has merit and can
help agencies build the infrastructure needed to implement a more
market-based and
performance-oriented pay system. To be eligible, agencies would submit
plans for approval by OPM that incorporate features such as a link between
pay for performance and the agency's strategic plan, employee involvement,
ongoing performance feedback, and effective safeguards to ensure fair
management of the system. In the first year of implementation, up to 10
percent of the amount appropriated for the fund would be available to
train employees who are involved in making meaningful distinctions in
performance. These features are similar to those cited in the draft
proposal as the basis for OPM's certification for agencies to implement
their new pay and performance management systems.
In addition, as agencies develop their pay for performance systems, they
will need to consider the appropriate mix between pay awarded as base pay
increases versus one-time cash bonuses, while still maintaining fiscally
sustainable compensation systems that reward performance. A key question
to consider is how the government can make an increasing percentage of
federal compensation dependent on achieving individual and organizational
results by, for example, providing more compensation as one-time cash
bonuses rather than as permanent salary increases. However, agencies' use
of cash bonuses or other monetary incentives has an effect on employees'
retirement calculations since they are not included in calculating
retirement benefits. Congress should consider potential legislative
changes to allow cash bonuses that would otherwise be included as base pay
increases to be calculated toward retirement and thrift savings benefits
by specifically factoring bonuses into the employee's base pay for
purposes of making contributions to the thrift savings plan and
calculating the employee's "high-three" for retirement benefits.
Concluding Observations
Consistent with our observations earlier this year, DOD's final NSPS
regulations take another valuable step toward a modern performance
management system that provides for a more market-based and
performance-oriented pay system. DOD's final NSPS regulations are intended
to align individual performance and pay with the department's critical
mission requirements; provide meaningful distinctions in performance; and
give greater priority to employee performance in connection with workforce
rightsizing and reductions-in-force. However, how it is done, when it is
done, and the basis on which it is done will be critical to the overall
success of the new system. That is why it is important to recognize that
it is critically important that DOD define the details for implementing
its system and that DOD does it in conjunction with applicable key
stakeholders. It is equally important for DOD to ensure
that is has the necessary infrastructure in place to implement the system.
DOD's regulations are especially critical and need to be implemented
properly because of their potential implications for related
governmentwide reform. However, compensation, pay, compensation, critical
hiring, and workforce restructuring reforms should be the first step in
any governmentwide reforms.
Contact and Acknowledgments
(350776)
For further information, please contact Derek B. Stewart, Director,
Defense Capabilities and Management, at (202) 512-5559 or
[email protected]. For further information on governmentwide human capital
issues, please contact J. Christopher Mihm, Managing Director, Strategic
Issues, at (202) 512-6806 or [email protected]. Contact points for our Offices
of Congressional Relations and Public Affairs may be found on the last
page of this report. Individuals making key contributions to this
statement include Sandra F. Bell, Renee S. Brown, William J. Doherty,
George M. Duncan, Barbara L. Joyce, Julia C. Matta, Susan W. Tieh, and
John S. Townes.
[IMG]
July 2005
HUMAN CAPITAL
DOD's National Security Personnel System Faces Implementation Challenges
What GAO Found
DOD's current process to design its new personnel management system
consists of four stages: (1) development of design options, (2) assessment
of design options, (3) issuance of proposed regulations, and (4) a
statutory public comment period, a meet and confer period with employee
representatives, and a congressional notification period. DOD's initial
design process was unrealistic and inappropriate. However, after a
strategic reassessment, DOD adjusted its approach to reflect a more
cautious and deliberative process that involved more stakeholders.
DOD's NSPS design process generally reflects four of six selected key
practices for successful organizational transformations. First, DOD and
OPM have developed a process to design the new personnel system that is
supported by top leadership in both organizations. Second, from the
outset, a set of guiding principles and key performance parameters have
guided the NSPS design process. Third, DOD has a dedicated team in place
to design and implement NSPS and manage the transformation process.
Fourth, DOD has established a timeline, albeit ambitious, and
implementation goals. The design process, however, is lacking in two other
practices. First, DOD developed and implemented a written communication
strategy document, but the strategy is not comprehensive. It does not
identify all key internal stakeholders and their concerns, and does not
tailor key messages to specific stakeholder groups. Failure to adequately
consider a wide variety of people and cultural issues can lead to
unsuccessful transformations. Second, while the process has involved
employees through town hall meetings and other mechanisms, it has not
included employee representatives on the working groups that drafted the
design options. It should be noted that 10 federal labor unions 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. A successful transformation
must provide for meaningful involvement by employees and their
representatives to gain their input into and understanding of the changes
that will occur.
DOD will face multiple implementation challenges. For example, in addition
to the challenges of continuing to involve employees and other
stakeholders and providing adequate resources to implement the system, DOD
faces the challenges of ensuring an effective, ongoing two-way
communication strategy and evaluating the new system. In recent testimony,
GAO stated that DOD's communication strategy must include the active and
visible involvement of a number of key players, including the Secretary of
Defense, for successful implementation of the system. Moreover, DOD must
ensure sustained and committed leadership after the system is fully
implemented and the NSPS Senior Executive and the Program Executive Office
transition out of existence. To provide sustained leadership attention to
a range of business transformation initiatives, like NSPS, GAO recently
recommended the creation of a chief management official at DOD.
United States Government Accountability Office April 14, 2005
[IMG]
HUMAN CAPITAL
Preliminary Observations on Proposed Regulations for DOD's National
Security Personnel System
What GAO Found
Many of the principles underlying the proposed NSPS regulations are
generally consistent with proven approaches to strategic human capital
management. For instance, the proposed regulations provide for (1)
elements of a flexible and contemporary human resources management
system-such as pay bands and pay for performance; (2) DOD to rightsize its
workforce when implementing reduction-in-force orders by giving greater
priority to employee performance in its retention decisions; and (3)
continuing collaboration with employee representatives. The 30-day public
comment period on the proposed regulations ended March 16, 2005. DOD and
OPM have notified the Congress that they are preparing to begin the meet
and confer process with employee representatives who provided comments on
the proposed regulations. The meet and confer process is critically
important because there are many details of the proposed regulations that
have not been defined, especially in the areas of pay and performance
management, adverse actions and appeals, and labormanagement relations.
(It should be noted that 10 federal labor unions 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.)
GAO has several areas of concern: the proposed regulations do not (1)
define the details of the implementation of the system, including such
issues as adequate safeguards to help ensure fairness and guard against
abuse; (2) require, as GAO believes they should, the use of core
competencies to communicate to employees what is expected of them on the
job; and (3) identify a process for the continuing involvement of
employees in the planning, development, and implementation of NSPS.
Also, GAO believes that DOD (1) would benefit if it develops a
comprehensive communications strategy that provides for ongoing,
meaningful two-way communication that creates shared expectations among
employees, employee representatives, and stakeholders and (2) should
complete a plan for implementing NSPS to include an information technology
plan and a training plan. Until such a plan is completed, the full extent
of the resources needed to implement NSPS may not be well understood.
United States Government Accountability Office
What GAO Recommends
[IMG]
April 12, 2005
HUMAN CAPITAL
Preliminary Observations on Proposed Department of Defense National
Security Personnel System Regulations
What GAO Found
Many of the principles underlying the proposed NSPS regulations are
generally consistent with proven approaches to strategic human capital
management. For instance, the proposed regulations provide for (1)
elements of a flexible and contemporary human resources management
system-such as pay bands and pay for performance; (2) DOD to rightsize its
workforce when implementing reduction-in-force orders by giving greater
priority to employee performance in its retention decisions; and (3)
continuing collaboration with employee representatives. The 30-day public
comment period on the proposed regulations ended March 16, 2005. DOD and
OPM have notified the Congress that they are preparing to begin the meet
and confer process with employee representatives who provided comments on
the proposed regulations. The meet and confer process is critically
important because there are many details of the proposed regulations that
have not been defined. (It should be noted that 10 federal labor unions
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.)
GAO has three primary areas of concern: the proposed regulations do not
(1) define the details of the implementation of the system, including such
issues as adequate safeguards to help ensure fairness and guard against
abuse; (2) require, as GAO believes they should, the use of core
competencies to communicate to employees what is expected of them on the
job; and (3) identify a process for the continuing involvement of
employees in the planning, development, and implementation of NSPS.
Going forward, GAO believes that (1) the development of the position of
Deputy Secretary of Defense for Management, who would act as DOD's Chief
Management Officer, is essential to elevate, integrate, and
institutionalize responsibility for the success of DOD's overall business
transformation efforts, including its new human resources management
system; (2) DOD would benefit if it develops a comprehensive
communications strategy that provides for ongoing, meaningful two-way
communication that creates shared expectations among employees, employee
representatives, and stakeholders; and (3) DOD must ensure that it has the
institutional infrastructure in place, including a modern performance
management system and an independent, efficient, effective, and credible
external appeals process, to make effective use of its new authorities
before they are operationalized.
GAO strongly supports the concept of modernizing federal human capital
policies, including providing reasonable flexibility. The federal
government needs a framework to guide human capital reform. Such a
framework would consist of a set of values, principles, processes, and
safeguards that would provide consistency across the federal government
but be adaptable to agencies' diverse missions, cultures, and workforces.
United States Government Accountability Office
[IMG]
March 15, 2005
HUMAN CAPITAL
Preliminary Observations on Proposed DOD National Security Personnel
System Regulations
What GAO Found
Given DOD's massive size and its geographically and culturally diverse
workforce, NSPS represents a huge undertaking for DOD. DOD's initial
process to design NSPS was problematic; however, after a strategic
reassessment, DOD adjusted its approach to reflect a more cautious,
deliberate process that involved more stakeholders, including OPM.
Many of the principles underlying the proposed NSPS regulations are
generally consistent with proven approaches to strategic human capital
management. For instance, the proposed regulations provide for (1)
elements of a flexible and contemporary human resources management
system-such as pay bands and pay for performance; (2) DOD to rightsize its
workforce when implementing reduction-in-force orders by giving greater
priority to employee performance in its retention decisions; and (3)
continuing collaboration with employee representatives. (It should be
noted that 10 federal labor unions 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.)
GAO has three primary areas of concern: the proposed regulations do not
(1) define the details of the implementation of the system, including such
issues as adequate safeguards to help ensure fairness and guard against
abuse; (2) require, as GAO believes they should, the use of core
competencies to communicate to employees what is expected of them on the
job; and (3) identify a process for the continuing involvement of
employees in the planning, development, and implementation of NSPS.
Going forward, GAO believes that (1) the development of the position of
Deputy Secretary of Defense for Management, who would act as DOD's Chief
Management Officer, is essential to elevate, integrate, and
institutionalize responsibility for the success of DOD's overall business
transformation efforts, including its new human resources management
system; (2) DOD would benefit if it develops a comprehensive
communications strategy that provides for ongoing, meaningful two-way
communication that creates shared expectations among employees, employee
representatives, and stakeholders; and (3) DOD must ensure that it has the
institutional infrastructure in place to make effective use of its new
authorities before they are operationalized.
GAO strongly supports the concept of modernizing federal human capital
policies, including providing reasonable flexibility. There is general
recognition that the federal government needs a framework to guide human
capital reform. Such a framework would consist of a set of values,
principles, processes, and safeguards that would provide consistency
across the federal government but be adaptable to agencies' diverse
missions, cultures, and workforces.
United States Government Accountability Office
Highlights of GAO-04-753, a report to the Ranking Minority Member,
Subcommittee on Readiness, Committee on Armed Services, House of
Representatives
During its downsizing in the early 1990s, the Department of Defense (DOD)
did not focus on strategically reshaping its civilian workforce. GAO was
asked to address DOD's efforts to strategically plan for its future
civilian workforce at the Office of the Secretary of Defense (OSD), the
military services' headquarters, andthe Defense Logistics Agency (DLA).
Specifically, GAO determined: (1) the extent to which civilian strategic
workforce plans have been developed and implemented to address future
civilian workforce requirements, and(2)the major challenges affecting the
development and implementation of these plans.
GAO recommends that DOD and the components include certain key elements in
their civilian strategic workforce plans to guide their human capital
efforts. DOD concurred with one of our recommendations, and partially
concurred with two othersbecause it believes that the department has
undertaken analyses of critical skills gaps and are using strategies and
personnel flexibilities to fill identified skills gaps. We cannot verify
DOD's statement because DOD was unable to provide the gap analyses. In
addition, we found that the strategies being used by the department have
not been derived from analyses of gaps between the current and future
critical skills and competencies needed by the workforce.
www.gao.gov/cgi-bin/getrpt?-GAO-04-753.
To view the full product, including the scope and methodology, click on
the link above. For more information, contact Derek Stewart at (202)
512-5559 or [email protected].
June 2004
DOD CIVILIAN PERSONNEL
Comprehensive Strategic Workforce Plans Needed
OSD, the service headquarters, and DLA have recently taken steps to
develop and implement civilian strategic workforce plans to address future
civilian workforceneeds,but these plans generally lack some key elements
essential to successful workforce planning. As a result, OSD, the military
services' headquarters, and DLA-herein referred to as DOD and the
components-do not have comprehensive strategic workforce plans to guide
their human capital efforts. None of the plans included analyses of the
gaps betweencritical skills andcompetencies (a set ofbehaviors that are
critical to work accomplishment) currently needed by the workforce and
those that will be needed in the future. Without including gap analyses,
DOD and the components may not be able to effectively design strategies to
hire, develop, and retain the best possible workforce. Furthermore, none
of the plans contained results-oriented performance measures that could
provide the data necessary to assess the outcomes ofcivilian human capital
initiatives.
The major challenge that DOD and most of the components face in their
efforts to develop and implement strategic workforce plans is their need
for information on current competencies and those that will likely be
needed in the future. This problem results from DOD's and the components'
not having developed tools to collect and/or store, and manage data on
workforce competencies. Without thisinformation, it not clear whether they
are designing and funding workforce strategies that will effectively shape
their civilian workforces with the appropriate competencies needed to
accomplish future DOD missions. Senior department and component officials
allacknowledged this shortfall and told us that they are taking steps to
address this challenge. Though these are steps in the right direction, the
lack of information on current competencies and future needs is a
continuing problem that several organizations, including GAO, have
previously identified.
Strategic Workforce Planning Process
Source: GAO.
Highlights of GAO-03-851T, testimony before the Committee on Governmental
Affairs, United States Senate
People are at the heart of an organization's ability to perform its
mission. Yet a key challenge for the Department of Defense (DOD), as for
many federal agencies, is to strategically manage its human capital. DOD's
proposed National Security Personnel System would provide for wide-ranging
changes in DOD's civilian personnel pay and performance management and
other human capital areas. Given the massive size of DOD, the proposal has
important precedentEURsetting implications for federal human capital
management.
This testimony provides GAO's observations on DOD human capital reform
proposals and the need for governmentwide reform.
www.gao.gov/cgi-bin/getrpt?GAO-03-851T.
To view the full testimony, click on the link above. For more information,
contact Derek Stewart at (202) 512-5559 or [email protected].
June 4, 2003
HUMAN CAPITAL
Building on DOD's Reform Effort to Foster Governmentwide Improvements
GAO strongly supports the need for government transformation and the
concept of modernizing federal human capital policies both within DOD and
for the federal government at large. The federal personnel system is
clearly broken in critical respects-designed for a time and workforce of
an earlier era and not able to meet the needs and challenges of today's
rapidly changing and knowledge-based environment. The human capital
authorities being considered for DOD have far-reaching implications for
the way DOD is managed as well as significant precedent-setting
implications for the rest of the federal government. GAO is pleased that
as the Congress has reviewed DOD's legislative proposal it has added a
number of important safeguards, including many along the lines GAO has
been suggesting, that will help DOD maximize its chances of success in
addressing its human capital challenges and minimize the risk of failure.
More generally, GAO believes that agency-specific human capital reforms
should be enacted to the extent that the problems being addressed and the
solutions offered are specific to a particular agency (e.g., military
personnel reforms for DOD). Several of the proposed DOD reforms meet this
test. In GAO's view, the relevant sections of the House's version of the
National Defense Authorization Act for Fiscal Year 2004 and the proposal
that is being considered as part of this hearing contain a number of
important improvements over the initial DOD legislative proposal.
Moving forward, GAO believes it would be preferable to employ a
governmentwide approach to address human capital issues and the need for
certain flexibilities that have broad-based application and serious
potential implications for the civil service system, in general, and the
Office of Personnel Management, in particular. GAO believes that several
of the reforms that DOD is proposing fall into this category (e.g., broad
banding, pay for performance, re-employment and pension offset waivers).
In these situations, GAO believes it would be both prudent and preferable
for the Congress to provide such authorities governmentwide and ensure
that appropriate performance management systems and safeguards are in
place before the new authorities are implemented by the respective agency.
Importantly, employing this approach is not intended to delay action on
DOD's or any other individual agency's efforts, but rather to accelerate
needed human capital reform throughout the federal government in a manner
that ensures reasonable consistency on key principles within the overall
civilian workforce. This approach also would help to maintain a level
playing field among federal agencies in competing for talent and would
help avoid further fragmentation within the civil service.
May 1, 2003
Highlights of GAO-03-741T, testimony before the Committee on Armed
Services, House of Representatives
DOD is in the midst of a major transformation effort including a number of
initiatives to transform its forces and improve its business operations.
DOD's legislative initiative would provide for major changes in civilian
and military human capital management, make major adjustments in the DOD
acquisition process, affect DOD's organization structure, and change DOD's
reporting requirements to Congress, among other things.
DOD's proposed National Security Personnel System (NSPS) would provide for
wide-ranging changes in DOD's civilian personnel pay and performance
management, collective bargaining, rightsizing, and a variety of other
human capital areas. The NSPS would enable DOD to develop and implement a
consistent DOD-wide civilian personnel system.
This testimony provides GAO's preliminary observations on aspects of DOD's
legislative proposal to make changes to its civilian personnel system and
discusses the implications of such changes for governmentwide human
capital reform. This testimony summarizes many of the issues discussed in
detail before the Subcommittee on Civil Service and Agency Organization,
Committee on Government Reform, House of Representatives on April 29,
2003.
www.gao.gov/cgi-bin/getrpt?GAO-03-741T.
To view the full testimony, click on the link above. For more information,
contact Derek Stewart at (202) 512-5559 or [email protected].
DEFENSE TRANSFORMATION
DOD's Proposed Civilian Personnel System and Governmentwide Human Capital
Reform
Many of the basic principles underlying DOD's civilian human capital
proposal have merit and deserve serious consideration. The federal
personnel system is clearly broken in critical respects-designed for a
time and workforce of an earlier era and not able to meet the needs and
challenges of our current rapidly changing and knowledge-based
environment. DOD's proposal recognizes that, as GAO has stated and the
experiences of leading public sector organizations here and abroad have
found, strategic human capital management must be the centerpiece of any
serious government transformation effort.
More generally, from a conceptual standpoint, GAO strongly supports the
need to expand broad banding and pay for performance-based systems in the
federal government. However, moving too quickly or prematurely at DOD or
elsewhere, can significantly raise the risk of doing it wrong. This could
also serve to severely set back the legitimate need to move to a more
performance-and results-based system for the federal government as a
whole. Thus, while it is imperative that we take steps to better link
employee pay and other personnel decisions to performance across the
federal government, how it is done, when it is done, and the basis on
which it is done, can make all the difference in whether or not we are
successful. One key need is to modernize performance management systems in
executive agencies so that they are capable of supporting more
performance-based pay and other personnel decisions. Unfortunately, based
on GAO's past work, most existing federal performance appraisal systems,
including a vast majority of DOD's systems, are not currently designed to
support a meaningful performance-based pay system.
The critical questions to consider are: should DOD and/or other agencies
be granted broad-based exemptions from existing law, and if so, on what
basis? Do DOD and other agencies have the institutional infrastructure in
place to make effective use of any new authorities? This institutional
infrastructure includes, at a minimum, a human capital planning process
that integrates the agency's human capital policies, strategies, and
programs with its program goals and mission, and desired outcomes; the
capabilities to effectively develop and implement a new human capital
system; and, importantly, a set of adequate safeguards, including
reasonable transparency and appropriate accountability mechanisms to
ensure the fair, effective, and credible implementation of a new system.
In GAO's view, as an alternative to DOD's proposed approach, Congress
should consider providing governmentwide broad banding and pay for
performance authorities that DOD and other federal agencies can use
provided they can demonstrate that they have a performance management
system in place that meets certain statutory standards, that can be
certified to by a qualified and independent party, such as OPM, within
prescribed timeframes. Congress should also consider establishing a
governmentwide fund whereby agencies, based on a sound business case,
could apply for funding to modernize their performance management systems
and ensure that those systems have adequate safeguards to prevent abuse.
This approach would serve as a positive step to promote high-performing
organizations throughout the federal government while avoiding further
human capital policy fragmentation.
April 29, 2003
Highlights of GAO-03-717T, testimony before the Subcommittee on Civil
Service and Agency Organization, Committee on Government Reform, House of
Representatives
DOD is in the midst of a major transformation effort including a number of
initiatives to transform its forces and improve its business operations.
DOD's legislative initiative would provide for major changes in the
civilian and military human capital management, make major adjustments in
the DOD acquisition process, affect DOD's organization structure, and
change DOD's reporting requirements to Congress, among other things.
DOD's proposed National Security Personnel System (NSPS) would provide for
wide-ranging changes in DOD's civilian personnel pay and performance
management, collective bargaining, rightsizing, and a variety of other
human capital areas. The NSPS would enable DOD to develop and implement a
consistent DOD-wide civilian personnel system.
This testimony provides GAO's preliminary observations on aspects of DOD's
legislative proposal to make changes to its civilian personnel system and
poses critical questions that need to be considered.
www.gao.gov/cgi-bin/getrpt?GAO-03-717T.
To view the full report, including the scope and methodology, click on the
link above. For more information, contact Derek Stewart at (202) 512-5559
or [email protected].
DEFENSE TRANSFORMATION
Preliminary Observations on DOD's Proposed Civilian Personnel Reforms
Many of the basic principles underlying DOD's civilian human capital
proposals have merit and deserve serious consideration. The federal
personnel system is clearly broken in critical respects-designed for a
time and workforce of an earlier era and not able to meet the needs and
challenges of our current rapidly changing and knowledge-based
environment. DOD's proposal recognizes that, as GAO has stated and the
experiences of leading public sector organizations here and abroad have
found strategic human capital management must be the centerpiece of any
serious government transformation effort.
More generally, from a conceptual standpoint, GAO strongly supports the
need to expand broad banding and pay for performance-based systems in the
federal government. However, moving too quickly or prematurely at DOD or
elsewhere, can significantly raise the risk of doing it wrong. This could
also serve to severely set back the legitimate need to move to a more
performance and results-based system for the federal government as a
whole. Thus, while it is imperative that we take steps to better link
employee pay and other personnel decisions to performance across the
federal government, how it is done, when it is done, and the basis on
which it is done, can make all the difference in whether or not we are
successful. In our view, one key need is to modernize performance
management systems in executive agencies so that they are capable of
supporting more performance-based pay and other personnel decisions.
Unfortunately, based on GAO's past work, most existing federal performance
appraisal systems, including a vast majority of DOD's systems, are not
currently designed to support a meaningful performance-based pay system.
The critical questions to consider are: should DOD and/or other agencies
be granted broad-based exemptions from existing law, and if so, on what
basis; and whether they have the institutional infrastructure in place to
make effective use of the new authorities. This institutional
infrastructure includes, at a minimum, a human capital planning process
that integrates the agency's human capital policies, strategies, and
programs with its program goals and mission, and desired outcomes; the
capabilities to effectively develop and implement a new human capital
system; and, importantly, a set of adequate safeguards, including
reasonable transparency and appropriate accountability mechanisms to
ensure the fair, effective, and credible implementation of a new system.
In our view, Congress should consider providing governmentwide broad
banding and pay for performance authorities that DOD and other federal
agencies can use provided they can demonstrate that they have a
performance management system in place that meets certain statutory
standards, which can be certified to by a qualified and independent party,
such as OPM, within prescribed timeframes. Congress should also consider
establishing a governmentwide fund whereby agencies, based on a sound
business case, could apply for funding to modernize their performance
management systems and ensure that those systems have adequate safeguards
to prevent abuse. This approach would serve as a positive step to promote
high-performing organizations throughout the federal government while
avoiding fragmentation within the executive branch in the critical human
capital area.
May 2003
Highlights of GAO-03-493T, a testimony before the Subcommittee on
Oversight of Government Management, the Federal Workforce and the District
of Columbia, Senate Committee on Governmental Affairs
People are at the heart of an organization's ability to perform its
mission. Yet, a key challenge for the Department of Defense (DOD), as for
many federal agencies, is to strategically manage its human capital. With
about 700,000 civilian employees on its payroll, DOD is the second largest
federal employer of civilians in the nation. Although downsized 38 percent
between fiscal years 1989 and 2002, this workforce has taken on greater
roles as a result of DOD's restructuring and transformation. DOD's
proposed National Security Personnel System (NSPS) would provide for
wide-ranging changes in DOD's civilian personnel pay and performance
management, collective bargaining, rightsizing, and other human capital
areas. The NSPS would enable DOD to develop and implement a consistent
DOD-wide civilian personnel system. Given the massive size of DOD, the
proposal has important precedent-setting implications for federal human
capital management and OPM.
This testimony provides GAO's preliminary observations on aspects of DOD's
proposal to make changes to its civilian personnel system and discusses
the implications of such changes for governmentwide human capital reform.
Past reports have contained GAO's views on what remains to be done to
bring about lasting solutions for DOD to strategically manage its human
capital. DOD has not always concurred with our recommendations.
www.gao.gov/cgi-bin/getrpt?GAO-03-493T.
To view the full testimony, including the scope
and methodology, click on the link above.
For more information, contact
Derek B.Stewart at (202) 512-5140 or
[email protected].
HUMAN CAPITAL
DOD'S CIVILIAN PERSONNEL STRATEGIC MANAGEMENT AND THE PROPOSED NATIONAL
SECURITY PERSONNEL SYSTEM
DOD's lack of attention to force shaping during its downsizing in the
early 1990s has resulted in a workforce that is not balanced by age or
experience and that puts at risk the orderly transfer of institutional
knowledge. Human capital challenges are severe in certain areas. For
example, DOD has downsized its acquisition workforce by almost half. More
than 50 percent of the workforce will be eligible to retire by 2005. In
addition, DOD faces major succession planning challenges at various levels
within the department. Also, since 1987, the industrial workforce, such as
depot maintenance, has been reduced by about 56 percent, with many of the
remaining employees nearing retirement, calling into question the
longer-term viability of the workforce. DOD is one of the agencies that
has begun to address human capital challenges through strategic human
capital planning. For example, in April 2002, DOD published a department
wide strategic plan for civilians. Although a positive step toward
fostering a more strategic approach toward human capital management, the
plan is not fully aligned with the overall mission of the department or
results oriented. In addition, it was not integrated with the military and
contractor personnel planning.
We strongly support the concept of modernizing federal human capital
policies within DOD and the federal government at large. Providing
reasonable flexibility to management in this critical area is appropriate
provided adequate safeguards are in place to prevent abuse. We believe
that Congress should consider both governmentwide and selected agency,
including DOD, changes to address the pressing human capital issues
confronting the federal government. In this regard, many of the basic
principles underlying DOD's civilian human capital proposals have merit
and deserve serious consideration. At the same time, many are not unique
to DOD and deserve broader consideration.
Agency-specific human capital reforms should be enacted to the extent that
the problems being addressed and the solutions offered are specific to a
particular agency (e.g., military personnel reforms for DOD). Several of
the proposed DOD reforms meet this test. At the same time, we believe that
Congress should consider incorporating additional safeguards in connection
with several of DOD's proposed reforms. In our view, it would be
preferable to employ a government-wide approach to address certain
flexibilities that have broad-based application and serious potential
implications for the civil service system, in general, and the Office of
Personnel Management (OPM), in particular. We believe that several of the
reforms that DOD is proposing fall into this category (e.g.,
broad-banding, pay for performance, re-employment and pension offset
waivers). In these situations, it may be prudent and preferable for the
Congress to provide such authorities on a governmentwide basis and in a
manner that assures that appropriate performance management systems and
safeguards are in place before the new authorities are implemented by the
respective agency.
However, in all cases whether from a governmentwide authority or agency
specific legislation, in our view, such additional authorities should be
implemented (or operationalized) only when an agency has the institutional
infrastructure in place to make effective use of the new authorities.
Based on our experience, while the DOD leadership has the intent and the
ability to implement the needed infrastructure, it is not consistently in
place within the vast majority of DOD at the present time.
Highlights of GAO-03-475, a report to the Ranking Minority Member,
Subcommittee on Readiness, House Committee on Armed Services
The Department of Defense's (DOD) civilian employees play key roles in
such areas as defense policy, intelligence, finance, acquisitions, and
weapon systems maintenance. Although downsized 38 percent between fiscal
years 1989 and 2002, this workforce has taken on greater roles as a result
of DOD's restructuring and transformation. Responding to congressional
concerns about the quality and quantity of, and the strategic planning for
the civilian workforce, GAO determined the following for DOD, the military
services, and selected defense agencies: (1) the extent of top-level
leadership involvement in civilian strategic planning; (2) whether
elements in civilian strategic plans are aligned to the overall mission,
focused on results, and based on current and future civilian workforce
data; and (3) whether civilian and military personnel strategic plans or
sourcing initiatives were integrated.
GAO recommends DOD improve the departmentwide plan to be mission aligned
and resultsoriented; provide guidance to align component- and
department-level human capital strategic plans; develop data on future
civilian workforce needs; and set milestones for integrating military and
civilian workforce plans, taking contractors into consideration. DOD
comments were too late to include in this report but are included in
GAO-03-690R.
www.gao.gov/cgi-bin/getrpt?GAO-03-475.
To view the full report, including the scope and methodology, click on the
link above. For more information, contact Derek B. Stewart at (202)
512-5559 or [email protected].
March 2003
DOD PERSONNEL
DOD Actions Needed to Strengthen Civilian Human Capital Strategic Planning
and Integration with Military Personnel and Sourcing Decisions
Generally, civilian personnel issues appear to be an emerging priority
among top leaders in DOD and the defense components. Although DOD began
downsizing its civilian workforce more than a decade ago, it did not take
action to strategically address challenges affecting the civilian
workforce until it issued its civilian human capital strategic plan in
April 2002. Top-level leaders in the Air Force, the Marine Corps, the
Defense Contract Management Agency, and the Defense Finance Accounting
Service have initiated planning efforts and are working in partnership
with their civilian human capital professionals to develop and implement
civilian strategic plans; such leadership, however, was increasing in the
Army and not as evident in the Navy. Also, DOD has not provided guidance
on how to integrate the components' plans with the department-level plan.
High-level leadership is critical to directing reforms and obtaining
resources for successful implementation.
The human capital strategic plans GAO reviewed for the most part lacked
key elements found in fully developed plans. Most of the civilian human
capital goals, objectives, and initiatives were not explicitly aligned
with the overarching missions of the organizations. Consequently, DOD and
the components cannot be sure that strategic goals are properly focused on
mission achievement. Also, none of the plans contained results-oriented
performance measures to assess the impact of their civilian human capital
initiatives (i.e., programs, policies, and processes). Thus, DOD and the
components cannot gauge the extent to which their human capital
initiatives contribute to achieving their organizations' mission. Finally,
the plans did not contain data on the skills and competencies needed to
successfully accomplish future missions; therefore, DOD and the components
risk not being able to put the right people, in the right place, and at
the right time, which can result in diminished accomplishment of the
overall defense mission.
Moreover, the civilian strategic plans did not address how the civilian
workforce will be integrated with their military counterparts or sourcing
initiatives. DOD's three human capital strategic plans-- two military and
one civilian--were prepared separately and were not integrated to form a
seamless and comprehensive strategy and did not address how DOD plans to
link its human capital initiatives with its sourcing plans, such as
efforts to outsource non-core responsibilities. The components' civilian
plans acknowledge a need to integrate planning for civilian and military
personnel-taking into consideration contractors-but have not yet done so.
Without an integrated strategy, DOD may not effectively and efficiently
allocate its scarce resources for optimal readiness.
Highlights of GAO-03-472, a report to the Subcommittee on Readiness,
Committee on Armed Services, House of Representatives
Between 1987 and 2002, the Department ofDefense (DOD) downsizedthe
civilian workforce in 27 key industrial facilities by about 56 percent.
Many ofthe remaining 72,000 workers are nearing retirement. In recent
years GAO has identified shortcomings in DOD's strategic planning and was
asked todetermine (1)whether DOD has implemented our prior recommendation
to develop and implement a depot maintenance strategic plan, (2) the
extent to which the services have developed and implemented comprehensive
strategic workforce plans, and (3) what challenges adversely affect DOD's
workforce planning.
GAO recommends that the DOD complete revisions to core policy, promulgate
a schedule for completing core computations, and complete depot strategic
planning; develop a plan for arsenals and ammunition plants;develop
strategic workforce plans; and coordinate the implementation of
initiatives to address various workforce challenges. DOD concurred with 7
of our9 recommendations; nonconcurring with two because it believes the
proposed National Security Personnel System, which was submitted to
Congress as a part of the DOD transformationlegislation, will take care of
these problems. We believe it is premature to assume this system will (1)
be approved by Congress as proposed and (2) resolve these issues.
April 2003
DOD CIVILIAN PERSONNEL
Improved Strategic Planning Needed to Help Ensure Viability of DOD's
Civilian Industrial Workforce
DOD has not implemented our October 2001 recommendation to develop and
implement a DOD depot strategic plan that would delineate workloads to be
accomplished in each of the services' depots. The DOD depot system has
been a key part of the department's plan to support military systems in
the past, but the increased use of the private sector to perform this work
has decreased the role of these activities. While title 10 of the U.S.
code requires DOD to retain core capability and also requires that at
least 50 percent of depot maintenance funds be spent for public-sector
performance, questions remain about the future role of DOD depots. Absent
a DOD depot strategic plan, the services have in varying degrees, laid out
a framework for strategic depot planning, but this planning is not
comprehensive. Questions also remain about the future of arsenals and
ammunition plants. GAO reviewed workforce planning efforts for 22
maintenance depots, 3 arsenals, and 2 ammunition plants, which employed
about 72,000 civilian workers in fiscal year 2002.
The services have not developed and implemented strategic workforce plans
to position the civilian workforce in DOD industrial activities to meet
future requirements. While workforce planning is done for each of the
industrial activities, generally it is short-term rather than strategic.
Further, workforce planning is lacking in other areas that OPM guidance
and high-performing organizations identify as key to successful workforce
planning. Service workforce planning efforts (1) usually do not assess the
competencies; (2) do not develop comprehensive retention plans; and (3)
sometimes do not develop performance measures and evaluate workforce
plans.
Several challenges adversely affect DOD's workforce planning for the
viability of its civilian depot workforce. First, given the aging depot
workforce and the retirement eligibility of over 40 percent of the
workforce over the next 5 to 7 years, the services may have difficulty
maintaining the depots' viability. Second, the services are having
difficulty implementing multiskilling-an industry and government best
practice for improving the flexibility and productivity of the
workforce-even though this technique could help depot planners do more
with fewer employees. Finally, increased training funding and innovation
in the training program will be essential for revitalizing the aging depot
workforce.
Staffing Levels, Age, and Retirement Eligibility of Civilian Personnel in
Industrial Facilities FY 2002 civilian Percent eligible Percent eligible
Service staffing levels Average age to retire by 2007 to retire by 2009
Navy 35,563 46 28 39
Army 14,234 49 41 52
www.gao.gov/cgi-bin/getrpt?GAO-03-472. Marine Corps 1,323 48 45 60
To view the full report, including the scope Air Force 21,152 47 35 44
and methodology, click on the link above. Total 72,272 47 33 43
For more information, contact Derek Stewart Source: DOD (data),
at (202) 512-5559 or [email protected]. GAO (presentation).
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