The Human Factor

uman resources management is like the water system in your house: You don't notice it until it backs up or shuts down. Perhaps that's why human resources offices are becoming more visible in a growing number of federal agencies. HR officials are justifiably proud of the way they have coped with the past five years of downsizing and massive reorganization. But managers and executives outside the personnel field still criticize HR operations for failing to speed up hiring, promotions and discipline.

There is no doubt that differing expectations largely account for the divergent views. HR offices suffered painful staffing cuts under the mandates of the National Performance Review, yet successfully introduced buyouts, distance learning, automated personnel processes and labor-management partnerships to keep the civil service operating despite the loss of more than 300,000 jobs since 1993. But line managers experiencing their own cutbacks see little relief from traditional obstacles in hiring, promoting and disciplining. In addition, they must cope with an increase in administrative work migrating from shrunken HR offices.

Both groups' perceptions are right. Amidst the turbulence of reinvention and downsizing, human resources management offices are making a positive contribution to overall effectiveness in a growing number of agencies. Managers for the most part now view HR people as team members who try to help them get their jobs done. But many managers do not yet see significant added value from the HR function because understaffed--and sometimes overwhelmed--HR staffs are often unable to implement the very innovations and economies that would make them fully functioning and appreciated partners in management.

Though progress in HR management has often been painfully slow, there is evidence of positive change and streamlining among the agencies examined by the Government Performance Project. Among the more eye-catching innovations:

• Formation of the Patent and Trademark Office employee university by a consortium of four colleges and universities;
• The Social Security Administration's elimination of several organizational layers;
• The Veterans Health Administration's Internet-based program to retrain nurses to become badly needed nurse practitioners;
• A broad array of software packages to guide and assist supervisors and managers in performing HR tasks; and
• The shift to simplified performance evaluation systems and the decoupling of monetary awards from appraisals.

The innovations have been forced, in many cases, by staff reductions averaging more than 20 percent in HR offices across government since 1992. Some offices have lost as much as 41 percent of their staff, according to a July General Accounting Office report (GGD-98-93). Those cutbacks have left some non-HR supervisors feeling swamped by administrative chores formerly performed by personnel offices. Indeed, the growing trend toward "shadow" human resources staffs in program organizations calls into question the net value of the HR office cuts.

Measuring HR Management

There is much disagreement about what constitutes progress and value in human resources management. One person's decentralization of authority is another's abdication of responsibility for merit principles. An increase in adverse conduct or performance actions may herald an overdue tightening of discipline or the collapse of morale and motivation.

But a consensus is developing on what makes an effective HR operation. At a conference of managers and HR specialists last year, Kay Frances Dolan, Treasury Department deputy assistant secretary for human resources, said that a good HR staff understands the organization's business, offers alternatives and customized solutions and demonstrates its usefulness by making life easier for managers and employees. Speaking for line managers at the same conference, Al Ressler, the Defense Logistics Agency's corporate administration chief, applauded the objective of relieving managers of process burdens and urged HR practitioners to become change agents.

Others emphasize human resources managers' roles in creating "learning organizations" in which the workforce is constantly adding skills and knowledge to meet new challenges. Customer satisfaction and frequent, high-quality communications are also characteristics of the new human resources model. But it is a model that lends itself more to "I'll know it if I see it" judgments than to the hard performance measures so much in demand today.

Nevertheless, analysts and practitioners are crafting measures of HR office contributions to the management of organizations. A September 1997 National Academy of Public Administration report, "Measuring Results: Successful Human Resources Management," suggests using customer-oriented surveys and balanced scorecards to align HR measures with organizational performance measures under the 1993 Government Performance and Results Act. The Transportation Department human resources office has constructed a scorecard of five measured
elements with organizational goals that allows for internal benchmarking. Other agencies are bound to follow suit as Congress intensifies its GPRA oversight activities.

Opting Out

Human resources officials, along with their observers and overseers, are sharply divided as to how much autonomy individual organizations should have in managing their people. Individual agencies, and pieces of agencies, are dropping out of some or most statutory and regulatory personnel constraints with congressional approval. The Federal Aviation Administration and IRS are only the most recent examples.

The Education Department's student loan office has won legislative exemption from most personnel and other administrative constraints as government's first official performance-based organization (PBO). In PBOs, executives are given broad exemptions from procurement and personnel rules in exchange for tough performance standards. They are expected to run their operations more like private companies.

Clearly, some issues have lent themselves and will continue to lend themselves to broad solutions. Changing demographics and economic realities in the early 1980s led Congress to create the Federal Employees Retirement System featuring a 401(k)-equivalent thrift plan and Social Security benefits for those hired after 1983. The size of the federal workforce makes possible a better deal in health benefits, as it presumably will in long-term care insurance, which the Clinton administration has proposed to provide and Congress appears likely to approve.

But on other human resources issues, the jury still is out on the most effective approach. For example, officials in almost every agency say federal pay limitations make recruitment and retention more difficult. But many HR offices have given up on the long-promised but elusive governmentwide pay comparability with the private sector and are working instead for individual agency flexibility. The broad personnel authorities granted FAA and IRS in the past three years were based in large part on their difficulties in hiring and keeping computer specialists to work on critical data and control systems.

The Clinton administration remains wary of significant pay increases. Clinton never has granted an annual increase equal to that called for by the President's pay agent under the 1990 pay reform law. An omnibus House civil service initiative in 1998 avoided major pay issues, as well. But the House civil service subcommittee expects to return to those issues in 1999.

Downsizing Drudgery

Another governmentwide human resources problem, downsizing, presents a dual challenge. On the one hand, human resources offices must try to find a humane way to downsize and retrain employees, and help them find new jobs. On the other hand, human resources offices, too, have fewer people to grapple with these new responsibilities.

Beginning in 1993, externally directed staff cuts of unparalleled size necessitated and complicated workforce planning. The governmentwide personnel reduction goal of 272,900 and its subsequent agency-by-agency distribution emerged from a political process rather than a strategic plan. That meant anticipatory turbulence and actual staff cutting began before programs, activities or workloads were reduced.

Most agencies struggled successfully to avoid large layoffs and the disruptive effects of reduction-in-force (RIF) regulations and procedures. Agencies strove to avoid chain-reaction displacements and the disproportionate impact of RIFs on junior and minority employees. With the private-sector downsizing of the 1980s in mind, Congress and the President authorized buyouts of up to $25,000 to facilitate voluntary separations. Early retirement also was offered more readily.

Agencies worked harder to ameliorate the pain of downsizing than to make sure enough of the right people remained after it was over. The majority of agencies showed "little or no regard for the long-term impact on the ability to carry out the mission considering such factors as core responsibilities and skills balance," according to an August report by the Office of Personnel Management. OPM surveyed employees and managers in 1997 and found that less than a quarter of each group considered their agencies' retraining efforts effective and only 23 percent of managers believed the right people currently were in the right jobs.

Downsizing-induced workforce planning may have been a blessing in disguise. The Social Security Administration adroitly cut several thousand jobs, reduced management layers and doubled its supervisory ratio. SSA human resources planners must now deal with new demographic realities. Eighty percent of SSA's senior executives, 70 percent of supervisors and nearly 60 percent of nonsupervisory employees will be eligible for retirement over the next five years, while the agency's workload will surge starting in 2010 as baby-boomer retirements begin.

The problems spawned by downsizing are illustrated by a Merit Systems Protection Board survey of 9,700 managers and employees in 1996. Nearly half the respondents believed their units lacked enough employees to get their job done and considered institutional memory to have been eroded. Forty percent felt organizational productivity had been impaired. Almost three-quarters of supervisors said their responsibilities had increased, but only 21 percent were aware of any new flexibility in taking personnel actions.

Hiring Headaches

The traditionally slow and cumbersome federal hiring process threatens to break down altogether under the added weight of a tight labor market and the dearth of employees with highly prized information technology skills. As they downsize, agencies also must keep hiring for those operations that are continuing and even expanding. Vigorous retraining and outplacement programs in such agencies as the Defense Department, the Patent and Trademark Office and the Veterans Health Administration aim to match downsized employees with job openings in their organizations and elsewhere.

But the technical expertise required in many occupations dictates active outside recruitment. Government salary levels are noncompetitive for such specialized jobs as electronics engineers, computer specialists and health practitioners. Personnel staffers at PTO, VHA, FAA and IRS are responding with electronic recruiting and hiring processes, financial incentives authorized by the 1990 pay reform law, and proposals for new incentives such as educational loan repayment programs.

VHA's health care staff development and retention office in New Orleans maintains centralized pools of highly qualified clinical applicants to supplement VHA facilities' staffing efforts. The office has an interactive health care recruitment World Wide Web site that offers information on vacancies by occupation and VHA facility. The site enables prospective employees to ask questions and transmit resumes electronically.

FAA's Internet distribution of vacancy announcements has reduced from three weeks to one day the time to prepare an announcement. In the first two years of operation, more than 6,000 announcements were issued online, resulting in more than 8 million Internet inquiries.

These days, few agencies can afford the luxury of individualized job analysis and evaluation. Agencies are giving managers standardized job descriptions that need just minor tinkering for use in hiring or promotions. Many agencies have installed software systems that create position descriptions, evaluation statements, staffing documents and performance plans.

The pressure to streamline hiring can sometimes go too far, in the view of John Palguta, director of policy and evaluation at MSPB. "Fast processes often cost in the long run," Palguta cautions, noting, for example, that when supervisors settle for an internal placement so they can avoid taking the time to recruit outside their agencies, they often regret it. "There should be a balance between efficiency and quality," Palguta adds, observing that streamlined and automated examining can produce candidates for selection in 24 hours. He concedes that many human resources organizations and managers are not up on the latest examining processes.

Skills Search

Budget limitations, a prosperous economy, relentlessly advancing technology and the disinclination to conduct RIFs are straining agencies' ability to attract and keep employees with needed skills. To support a strategic shift from predominantly inpatient to outpatient care, VHA began in 1997 a program to train registered nurses to become nurse practitioners. In a program created in connection with St. Louis University, nurses can hold full-time jobs while acquiring the prescribed education and training over three to four years. Another notable VHA initiative, the Student Career Experience Program, allows undergraduate and graduate students to gain valuable work experience, education and training in high-demand career fields. SCEP students can be appointed noncompetitively to VHA jobs upon graduation.

One of the lessons learned during private-sector downsizing was that employees need more skills and technology training to handle larger workloads and changes in goals and methods. Many corporations spend 3 percent to 5 percent of payroll annually on training and development programs. Judging by the GPP sample, that lesson has escaped most federal agencies. Of the agencies surveyed, only PTO, which spends nearly 6 percent of its annual budget on training, showed that level of commitment.

One of its showpieces is PTO University, a consortium of four colleges and universities near its Northern Virginia offices, which has served more than 1,000 employees and now offers undergraduate degrees and graduate certificates in a variety of subjects. The university works in tandem with PTO's Performance Learning Center, which is geared to more specific job-related training.

OPM's downsizing survey revealed that only four of 15 agencies visited indicated that training is a high priority. SSA described itself as "squeezed between conflicting goals: the desire for more and better training and development for the benefit of employees and the agency vs. the demand that costs for training and development be kept as low as possible."

Just Rewards

Age-old dissatisfaction with performance ratings is building to a crescendo as supervisors find themselves with more subordinates. In addition, the traditional five-level rating and bonus system applied by a single supervisor doesn't fit organizations increasingly made up of teams. In 1996, OPM granted broad latitude for agencies to design their own performance systems.

Several agencies opted for the ultimate simplicity of pass/fail systems in place of the traditional five levels, ranging from outstanding to unsatisfactory. But last year, the House civil service subcommittee, citing complaints from "demoralized employees" deprived of recognition, attempted to ban two-level systems.

Some agencies have adapted the private-sector practice of 360-degree, or multi-rater, performance assessments and report both cost savings and higher satisfaction among employees and supervisors. Advocates of such systems say involving subordinates and peers in ratings produces better evaluations for employees who work in teams and reduces pressure on supervisors who have many more subordinates than in the past.

No personnel problem has more staying power than the perception that government can't deal with poor performers. In a March 1998 study, "The Changing Federal Workplace: Employee Perspectives," MSPB found 62 percent of supervisors failed to take action against problem employees for fear that upper-level managers would not support them. The 1996 MSPB Merit Principles Survey cited time-consuming procedures, poor chances of success and fear of litigation as reasons for tolerating or seeking responses other than formal penalties for unsatisfactory performance or conduct.

But the relentless demand for more productivity from fewer hands is motivating many agencies to deal more promptly with performance and conduct problems. The topic is featured at conferences, seminars and "how-to" courses and in HR literature. OPM, in an example of what it does best in the face of a common need, has produced and circulated "Addressing and Resolving Poor Performance," a CD-ROM and guide for supervisors. With the help of case studies, checklists, references and answers to frequently occurring questions, supervisors are walked through the procedures for detecting problems, discussing them with employees, affording improvement opportunities and, if necessary, taking corrective action.

Union Blues

The Clinton administration mandated labor-management partnerships in 1993. Partnerships are flourishing in some agencies and have run into the hard reality of clashing interests in others. NTEU President Robert Tobias says across government, the state of partnerships ranges from "the barely breathing to robust." He believes their success coincides with management acceptance and the practice of negotiating on the basis of identified common interests.

Tobias hailed a recent experience his union had with the Customs Service, in which the agency enlisted the union's help in solving major lapses in drug interdiction. The two sides organized and empowered labor-management port councils to come up with remedies, resulting in constructive plans for heightened surveillance and staff deployment.

In 1996, the IRS determined that a RIF would be necessary to reach congressionally set staffing levels, NTEU took its opposition to Capitol Hill and won a legislative restriction on IRS layoffs. Tobias notes that the 1998 law giving IRS extraordinary hiring, pay and separation authorities specifies that the new flexibilities can be exercised only by written agreement with the union.

American Federation of Government Employees President Bobby Harnage shares Tobias' disappointment with the unwillingness of many agency managers to enter into genuine partnerships. But he, too, points to several labor-management relationships that have contributed to agency efficiency and effectiveness, including those at SSA, where time-consuming unfair labor practice complaints are down significantly.

Human resources people have become more effective partners in managing agencies. Their ability to maintain and possibly enhance this role depends to some extent on the fortunes of their respective agencies and future acts of administrations and Congress. Authorization to adopt long-standing industry practices such as pay-banding, which remain experimental in government, could help. But ultimately, their destiny also depends on their ability to think strategically, identify, cultivate or acquire needed competencies, and relentlessly pursue further efficiencies--all while making sure day-to-day personnel actions keep moving.

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