The Performance Revolution Government Needs

In a recent column, Terry Gerton, President of the National Academy of Public Administration, noted that government will not be able to solve many problems until the civil service system is reformed. NAPA’s new white paper, “No Time to Wait:  Building a Public Service for the 21st Century,” spells out the need clearly.

I have made the same argument many times in this publication, although my background is very different from that of Gerton’s or the report’s authors. I have never worked in government. The qualification that’s relevant here is the realization that people who look forward to going to work in the morning are lucky.  I’ve known too many government employees who are frustrated and angry about their experience at work.

But several comments added at the end of the column raise an important issue.  Bmj1’s comment is one of several on point: “You've stated this over and over, as have many others, but what is the driving need for reform? What is the problem and what are we trying to fix? . . . I've yet to see an actual problem defined and a solution proposed . . . To quote a line: ‘Let's work the problem people. Let's not make things worse by guessing.’”

I know the quote. It’s from the movie Apollo 13.  When I teach undergrads I ask students to write a paper on the movie.  It’s one of the best depictions of a high performance organization. The film ignores a key issue -- the people portrayed are government employees.

In answer to bmj1’s questions, the Government Accountability Office has had human capital management on its high risk since 2001. Their assessments provide solid justification for reform. They also cite the problem of skill gaps in 15 areas. The need for talented cybersecurity specialists is critical, for example.

One of the problems that could be addressed immediately is the inevitable aging and retirement of federal workers. The emerging field of HR analytics could shed light on voluntary resignation trends, especially among recent hires. Agencies will also need to plan and reorganize following the force reductions. (If anything, the time required to rewrite all the job descriptions and reclassify the jobs should prompt support for scrapping the classification system.) Staying ahead of talent loss will require reform.

Agencies should also evaluate the number and quality of applicants. Agencies may not be hiring today but the skill gaps, especially in the STEM occupations, are a barrier to improved results. When the brand of government is unattractive to top talent, it should be a reason for reform. Further, I doubt if anyone disagrees with the need to reform the hiring process. Qualified candidates cannot be expected to wait weeks and months for a job offer.

Pay of course is highly contentious. The General Schedule program model is a century old, staggeringly bureaucratic and unresponsive to agency staffing needs. It impedes the reorganization of government. What’s more, few employees believe they are fairly paid. The annual “pay gap analysis” has no credibility. Federal personnel management is based on practices replaced long ago in other sectors. Repeated studies, starting with the Volcker Commission in 1989, have argued the GS system needs to be replaced. Reform is long overdue.

There is a related and completely understandable concern that federal benefits will be reduced. That seems to be inevitable. Again, defining the relevant labor market is a key issue. The critics are correct -- federal benefits are better than those provided by the average employer. It’s been reported that around half of American households have no retirement accounts, so federal retirement benefits are an easy political target. But agencies are not competing for talent with the average employer (which has less than 20 employees). It’s far more relevant to compare federal benefits with the practices of Beltway contractors.

One area that has had little attention but is the heart of meaningful reform is the day to day management of performance. I doubt if anyone believes the badly inflated year-end performance ratings are credible. This is perhaps the most complex of all the human capital problems. It’s not a human resource problem -- it’s a management problem. The idea a couple of years ago that HR meeting with the unions could solve it was not the solution. It will require leadership and time to develop the skills needed by managers. It’s the key to transitioning successfully to pay for performance. It’s necessary for dealing with poor performers.

Surprisingly perhaps neither Gerton’s column or the NAPA report argues for specific reform changes.  The current human capital problems are discussed, starting with database breaches at the Office of Personnel Management and the Internal Revenue Service.  Gerton’s background in the military and working with veterans issues at the Labor Department makes her sensitive to the staffing problems in VA medical centers. The civil service system is a factor in a long list of problems.

The report makes a strong argument for needed flexibility and for increased manager accountability. I doubt if any taxpayer would disagree. It also argued for the creation of a “federated” human capital system that would give agencies more control and flexibility. As the report states, “government’s work and missions are just too varied” for a uniform system. My experience managing pay and performance in a large corporate conglomerate convinces me that is essential.

To begin reform, I suggest starting with the state of Tennessee’s strategy. As discussed in my recent column, “Agencies Could Learn a Lot From Tennessee's Shift to Pay for Performance,” the state asked people at all levels, from the governor’s office to front-line employees, for ideas on how to improve government operations. A common thread was the state’s antiquated workforce management practices.  As evidence of how reform has impacted the state, the governor was re-elected in 2014 with one of the largest margins in state history.

John Kamensky’s recent column, “10 Factors for Successfully Implementing Large Initiatives,” outlines a strategy that would be useful here. He discussed a comparatively simple project -- taking a website of financial data live -- but the approach represents a framework for managing reform.

Human capital and workforce management practices are undergoing a revolution in other sectors.  The impetus for those initiatives is the desire for improved performance. Companies have recognized the value and the untapped capabilities in their workforce. Government needs a similar revolution.