[Senate Hearing 107-65]
[From the U.S. Government Publishing Office]
S. Hrg. 107-65
HIGH RISK: HUMAN CAPITAL IN THE FEDERAL GOVERNMENT
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HEARING
before the
OVERSIGHT OF GOVERNMENT MANAGEMENT,
RESTRUCTURING AND THE DISTRICT OF COLUMBIA SUBCOMMITTEE
of the
COMMITTEE ON
GOVERNMENTAL AFFAIRS
UNITED STATES SENATE
ONE HUNDRED SEVENTH CONGRESS
FIRST SESSION
__________
FEBRUARY 1, 2001
__________
Printed for the use of the Committee on Governmental Affairs
U.S. GOVERNMENT PRINTING OFFICE
70-977 WASHINGTON : 2001
_______________________________________________________________________
For sale by the Superintendent of Documents, Congressional Sales Office
U.S. Government Printing Office, Washington, DC 20402
COMMITTEE ON GOVERNMENTAL AFFAIRS
FRED THOMPSON, Tennessee, Chairman
JOSEPH I. LIEBERMAN, Connecticut, Ranking Democrat
TED STEVENS, Alaska CARL LEVIN, Michigan
SUSAN M. COLLINS, Maine DANIEL K. AKAKA, Hawaii
GEORGE V. VOINOVICH, Ohio RICHARD J. DURBIN, Illinois
PETE V. DOMENICI, New Mexico ROBERT G. TORRICELLI, New Jersey
THAD COCHRAN, Mississippi MAX CLELAND, Georgia
JUDD GREGG, New Hampshire THOMAS R. CARPER, Delaware
ROBERT F. BENNETT, Utah JEAN CARNAHAN, Missouri
Hannah S. Sistare, Staff Director and Counsel
Joyce A. Rechtschaffen, Democratic Staff Director and Counsel
Darla D. Cassell, Chief Clerk
------
SUBCOMMITTEE ON OVERSIGHT OF GOVERNMENT MANAGEMENT, RESTRUCTURING, AND
THE DISTRICT OF COLUMBIA
GEORGE V. VOINOVICH, Ohio, Chairman
RICHARD J. DURBIN, Illinois, Ranking Democrat
TED STEVENS, Alaska DANIEL K. AKAKA, Hawaii
SUSAN M. COLLINS, Maine ROBERT G. TORRICELLI, New Jersey
PETE V. DOMENICI, New Mexico THOMAS R. CARPER, Delaware
THAD COCHRAN, Mississippi JEAN CARNAHAN, Missouri
Kristine I. Simmons, Staff Director
Marianne Clifford Upton, Minority Staff Director and Chief Counsel
Julie L. Vincent, Chief Clerk
C O N T E N T S
------
Opening statements:
Page
Senator Voinovich............................................ 1
Senator Durbin............................................... 4
Senator Akaka................................................ 6
WITNESS
Thursday, February 1, 2001
Hon. David M. Walker, Comptroller General of the United States
and Chief Executive Officer, U.S. General Accounting Office,
Washington, DC:
Testimony.................................................... 7
Prepared statement with attachments.......................... 27
HIGH RISK: HUMAN CAPITAL IN THE FEDERAL GOVERNMENT
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THURSDAY, FEBRUARY 1, 2001
U.S. Senate,
Oversight of Government Management, Restructuring,
and the District of Columbia Subcommittee,
of the Committee on Governmental Affairs,
Washington, DC.
The Subcommittee met, pursuant to notice, at 10:30 a.m., in
room SD-342, Dirksen Senate Office Building, Hon. George V.
Voinovich, Chairman of the Subcommittee, presiding.
Present: Senators Voinovich, Durbin, and Akaka.
OPENING STATEMENT OF SENATOR VOINOVICH
Senator Voinovich. The hearing will come to order.
First, I would say that I am expecting some more of my
colleagues. I was able to get out of the prayer breakfast a
little bit sooner than some of them, so I suspect they will be
coming along in the next couple of minutes.
I would like to thank you all for coming today. This is the
first hearing in the 107th Congress of the Subcommittee on
Oversight of Government Management. Today we will examine the
decision of the U.S. General Accounting Office to designate
strategic human capital management across the entire government
as high risk. To help in that examination, our sole witness
today is the Hon. David M. Walker, the Comptroller General of
the United States and the Chief Executive Officer of the U.S.
General Accounting Office.
Comptroller General, we are very happy to have you with us
today, and again I want to express publicly the wonderful
cooperation that I have received from you during the last
couple of years. It is heartening to me to know that your
recently released ``2001 GAO High-Risk Report'' states that,
``After a decade of government downsizing and curtailed
investments in human capital, it is becoming increasingly clear
that today's Federal human capital strategies are not
appropriately constituted to adequately meet current and
emerging needs of government and its citizens in the most
effective, efficient, and economical manner possible. Strategic
human capital management is a pervasive challenge in the
Federal Government.'' I agree.
As anyone who has been following the activities of this
Subcommittee knows, we have been focusing on the unmet needs of
the Federal workforce for some time. During the 106th Congress,
one of the top priorities of the Subcommittee was to raise the
profile of human capital issues, and I am proud of our record
in that regard. From July 1999 through May 2000, the
Subcommittee held six hearings that examined various aspects of
human capital management. We requested four reports from GAO
addressing various aspects of the human capital issue, and I
sponsored and cosponsored important civil service legislation
that has become law.
The culmination of the Subcommittee's review was to release
this past December a report entitled, ``Report to the
President: The Crisis in Human Capital.'' The findings of the
Subcommittee leave little doubt that the Federal Government is
in dire need of a unified strategy to rebuild the civil service
in light of the demographic and performance challenges it
confronts. The report includes recommendations for reforming
human capital management before it reaches critical mass, and I
think that in some departments we have already reached that. I
have shared the report with the new administration.
I must say it is fortuitous that 7 weeks after we issued
this report stating that there is a crisis, GAO designated
human capital as high risk. I hope that the work of the
Governmental Affairs Committee, the General Accounting Office,
and numerous well-respected think tanks such as The Brookings
Institution, the National Academy of Public Administration, and
the Council for Excellence in Government, has settled the
question that we do have a crisis in human capital. The
question now is: How are we going to resolve it?
Mr. Walker, I would like to commend you for sounding the
alarm over the human capital crisis. We have both been ringing
the bell over the human capital crisis for the last 2 years,
and I would like to ring the bell right now. [Rings bell.] Is
anybody listening?
There is an old song entitled, ``If I had a Hammer.'' Some
of the young people here will not remember it. But the fact is
that we have to get people's attention, and I wish more of my
colleagues were here this morning. We have to have a wakeup
call.
Some of you may wonder why I am so interested in this
subject. For 18 years, as a mayor and a governor, I lobbied and
interfaced with the Federal Government. I am the only person in
the history of this country who has been president of the
National League of Cities and chairman of the National
Governors Association. I worked with administrations year in
and year out, and my observations were that new administrations
came in and appointed their secretaries, many of whom were
appointed because of geographic or other reasons; and then,
there were assistant secretaries and deputy secretaries and so
on and so forth. Then, they all got on a plane and went around
the country giving speeches. And the ``A'' team, the people who
were supposed to get the job done, were basically ignored.
One thing that I decided to do and one reason why I came to
the U.S. Senate was to see if we could not do something about
changing the culture of the workforce of the Federal
Government. We are here today--and the chickens have come home
to roost. We have a lot of people who are ready to retire and
will be retiring, and I am hoping that this administration
``gets'' it and understands how important the ``A'' team is.
One rumor that I have heard is that there is some talk
about eliminating existing Executive orders that deals with
labor-management partnerships. I have to tell you something:
Labor-management partnerships are very important if we are
going to do something about the human capital crisis.
When I was Governor of Ohio, we initiated a quality
management program, and we could not have done it without
cooperation from our unions. We did not call it quality
management; we called it ``quality services through
partnership.'' And it was amazing what happened to that
workforce because of the fact that we started working together,
created teams, and started to solve problems by committing
ourselves to continuous improvement.
So the years of inattention to sound human resource
management within the Federal Government have taken their toll.
As I have said on numerous occasions, and it bears repeating
right now, the average Federal employee is 46 years old. By
2005, 34 percent of Federal employees will be eligible for
regular retirement, and 20 percent more will be eligible for
early retirement. Taken together, that is more than half the
Federal workforce. Now, I do not expect them all to retire at
once, but it is a serious problem.
It is amazing, when I have had people come in, prior to
confirmation, Senator Durbin and I talk to them. Joe Albaugh,
who is going to be the new director of FEMA, came in, and I
asked him if he had looked at his workforce and its
vulnerability in terms of retirement. And he said, ``I did not
even know it was a problem.''
I asked, how many people do you have? He said 2,600. I said
you are running FEMA, and you are going to have storms and
tornadoes and floods, and you are going to have to respond. He
is taking over after James Lee Witt, who I think is probably
the best director that President Clinton had.
So there is a potential for exodus. Now, some people say,
``So what?'' I do hear that. I give speeches, and they say it
is good to see that we are going to get rid of our Federal
employees. I am hearing that too often and right now, from some
people in parts of the administration. Well, you do not have to
worry about it. We are going to get rid of people. They are
going to go out the door.
A nursing shortage could adversely affect the Department of
Veterans Affairs' efforts to improve patient safety in VA
facilities and put veterans at risk. The stories about the VA
and sub-par treatment are notorious.
But do you want to know something? That is not only a
problem at the VA; it is a problem throughout the country. We
need more nurses. And how is the Federal Government going to
compete if it does not have the tools to bring more nurses on
board?
At the Social Security Administration, increasing demand
for services, imminent retirement of a large part of its
workforce, changing consumer expectations, and mixed success in
past technology investments will challenge the agency's ability
to meet its service delivery demands, which include faster and
more accurate benefit claims determinations and increased
emphasis on returning the disabled to work.
At the Department of Energy, headquarters and field staff
lack contract management skills to oversee large projects such
as the cleanup of radioactive and hazardous waste sites.
I met with the commissioners from the Nuclear Regulatory
Commission the other day. Six times more people on their
payroll are over 60 than under 30. They all have Ph.D.'s and
master's degrees, and the Commissioners are worried about
losing experienced personnel. How are they going to do their
work?
So this is something that we really need to be concerned
about. In over 30 years, as an elected public servant, I have
come to learn that the individuals who administer the programs
and services on which the public depends are the government's
greatest resource. However, building a world-class civil
service is not an end in and of itself. The ultimate and most
important goal is to improve Federal Government programs and
the delivery of services to the American people, to work harder
and smarter and do more with less. This can be accomplished
most effectively by making wise investments in the employees
who run the programs and know how to make them work.
It is my hope that the activities of the Subcommittee will
invite an exchange of ideas and begin a process that will
dramatically improve the management of human capital in the
Federal Government.
I look forward to working on a bipartisan basis with my
Subcommittee colleagues, the Bush Administration, other Members
of the Senate and House, as well as the Federal employees
unions--and I want to make it clear that they are very much a
part of this. We cannot get this job done without the
cooperation of our unions, and we have tried to stay in touch
with them. Public policy think tanks are also important, as
well as other interested parties.
I am very pleased with the cooperation that the
Subcommittee has received, and I look forward to continuing to
work with everyone.
The Subcommittee will hold hearings on solutions in the
near future. The human capital crisis creates an opportunity
for Congress and the administration to reshape the Federal
workforce in the 21st Century. It is time for us to roll up our
sleeves and get to work.
I am pleased that the Ranking Minority Member of the
Subcommittee is here with us, Senator Durbin; and Senator
Akaka, welcome. I was explaining that you were on your way back
from the prayer breakfast. We are glad to have both of you here
with us.
I would now like to call on Senator Durbin for an opening
statement.
OPENING STATEMENT OF SENATOR DURBIN
Senator Durbin. Thank you very much, Senator Voinovich, and
thank you for this hearing, which is a continuation of an issue
which we have looked at before, and we should continue to look
at.
I think the Chairman has adequately described the scope of
the problem in terms of the shortfall in Federal civil servants
who will be available in years to come. It is truly a troubling
phenomenon when we consider the major responsibilities which we
entrust to these Federal agencies. We want to make certain that
we have men and women who are capable and dedicated in those
positions.
I am happy that the Comptroller General, David Walker, has
joined us today to give us his observations.
I would just like to say in very general terms that I think
our strong economy is part of the problem in that a lot of job
opportunities, usually paying more, have become available.
Perhaps the slowing down, downturn, however you want to
characterize it, will change that. I hope that that is not the
tradeoff, that if we want a strong Federal workforce, we have
to pray that the private sector is not that appealing. I think
that is a false exchange and one that we should reject. I think
we can have both a strong economy and a strong public
workforce, and that is something we ought to focus on in
creating incentives for people to consider Federal public
service.
A year or two ago, the Democrats met and invited a
gentleman from the Federal Communications Commission to come in
and talk about some of the things they are facing. The
interesting thing was that he was a man in his sixties who had
retired from teaching at a university and was very bright and
really gave us some insight into some of the more technical
aspects of Federal oversight of the telecommunications
industry, which you can imagine is just changing by the day.
But he quickly added that he did not have the workforce to
sustain this kind of surveillance and oversight.
Think about that for a second--where we expect the Federal
Government to be there as the final arbiter and protector for
families and businesses across America in so many different
aspects, and whether we can attract people with the technical
expertise and dedication to do the job. And he said, quite
frankly, we cannot. Under the present circumstances in the area
of information technology and communications, there are just so
many more appealing opportunities outside government, it is so
difficult to bring people in.
There are two additional things that I would like to
comment on. It was not that long ago that the great Rush
Limbaugh and others gloried in the closing down of the Federal
Government, suggesting that the American people would never
notice. That kind of trash talk from radio personalities
diminishing the responsibility and role of Federal agencies and
the people who work there takes its toll on the folks who have
dedicated their lives to doing the right thing for our country
by being part of Federal public service.
The fact is we closed down the government, and people did
notice. A lot of things happened that we did not want to happen
across America, and we learned our lesson after a few weeks.
But think about that steady drumbeat. We put up with enough
as politicians, but if somebody hears every single day how
worthless they are, and it becomes a mantra across America, how
appealing is that job in the long haul?
The other thing is that we have a responsibility when it
comes to these agencies in the way we budget them. If we do not
give them the resources so they can make adequate planning for
their future so they know that the job they are involved in
today is of value and has some long-term benefit, then,
frankly, it is no surprise that many people look for greener
pastures and a more satisfying work experience.
So I thank you for this hearing. I think you are addressing
a very serious problem, and I think it is one that we can make
some suggestions to the new administration and perhaps really
improve the situation.
One last point if I could. A president of a university in
Chicago came to see me a week or two ago, and we were talking
about the shortfall in teachers--I know the Chairman mentioned
the shortfall in nurses, and that is a national problem. The
shortfall in teachers is the same. I said it is just alarming
to me that we have so many teachers who will be retiring so
soon, and he said you have to look at the individual teacher.
He said a lot of these teachers are burned out, have no
interest in this anymore, and do not want to learn what they
have to learn to be effective; it is time for them to retire.
But a lot of them who are just great are going to be leaving,
too. So when we talk about retirements, there are some people
who need to relax and look at a different side of life, but
there are also some very valuable people whom we want to keep
in public service, who make a contribution that cannot be
replicated by a new employee.
Thanks, Mr. Chairman.
Senator Voinovich. Thank you, Senator Durbin.
That is interesting, because at the NRC, they have a lot of
people who are working now who could retire, and they stay
because they are dedicated and know that they are making a
contribution; but they could decide to leave, and much
institutional knowledge would be gone. So it is a real problem.
Senator Akaka, please.
OPENING STATEMENT OF SENATOR AKAKA
Senator Akaka. Thank you very much, Mr. Chairman.
I am very pleased to be here with you, Chairman Voinovich,
and my colleague and Ranking Member, Senator Durbin, as we
continue our discussion on the challenges facing the Federal
Government in managing its personnel resources.
Our government operates with machines and with computers,
but the greatest asset of government is our human resources,
and that is what we are talking about today. Placing human
resource management on the GAO high-risk list will focus
attention on ensuring a viable and effective workforce.
Chairman Voinovich is to be commended for his diligence and
commitment to this issue. I know that you are interested in
pursuing legislative solutions, and I look forward to working
with you, Mr. Chairman, and with the Ranking Member in this
endeavor.
As we renew these hearings on government management, we
should remember that we are referring to people, individuals
who have devoted their lives to public service as Federal
employees. I believe that all of us here today agree that the
Federal Government needs dedicated and qualified employees.
The question is how does the Federal Government best manage
and retain current employees, attract new personnel, and
provide competitive compensation to all. Proposals recommended
and actions taken should be done in a fair and equitable
manner.
I will work with the new administration to foster the
relationship between effective workforce management and
organizational success, a point stressed in GAO's January
update.
The leadership demonstrated by this Subcommittee over the
past decade to ensure an efficient and effective Federal
Government is well known. However, strategic plans for
performance measures and annual performance reports will have
little meaning until Federal agencies are given adequate
budgets to utilize programs that will help attract, retain, and
train employees.
Tools and personnel flexibilities allowed under current law
are under utilized because agencies lack the money to carry
them out. The public's perception of the Federal Government
comes from the top. In this time of unprecedented budget
surpluses, I call on the administration and my colleagues in
Congress as well to provide agencies with the funds needed to
carry out the people's business.
Mr. Chairman, I look forward to hearing from Mr. Walker,
and I thank you for holding this hearing today.
Thank you very much.
Senator Voinovich. Thank you very much, Senator Akaka, for
your opening statement. I think that the last portion of it was
very apropos, that there are tools available today in the
Federal Government to keep individuals on board, to provide
training, and to do some other things, but the budgets in the
past have not reflected the amount of money that they need. I
hope that this administration recognizes that fact and
understands that if they are going to have a competitive
workforce, they are going to have to provide the dollars to
make it competitive.
Senator Voinovich. Mr. Walker, we have a custom of swearing
in our witnesses, so if you would stand, please, and raise your
right hand.
Do you swear to tell the truth, the whole truth and nothing
but the truth, so help you, God?
Mr. Walker. I do.
Senator Voinovich. Thank you.
Please proceed.
TESTIMONY OF HON. DAVID M. WALKER,\1\ COMPTROLLER GENERAL OF
THE UNITED STATES AND CHIEF EXECUTIVE OFFICER, U.S. GENERAL
ACCOUNTING OFFICE, WASHINGTON, DC
Mr. Walker. Thank you, Chairman Voinovich, Ranking Member
Durbin, and Senator Akaka.
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\1\ The prepared statement of Mr. Walker appears in the Appendix on
page 27.
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I appreciate your collective continued interest in this
very important topic. Like you, I wish that we had more
participating in this endeavor. It is going to take more than
four of us in order to get the job done in this area--but I
think people might be amazed at how much the four of us,
working collectively together, can get done in this area.
I have a very extensive statement that I have submitted for
the record, and I would like to hit the highlights if I could,
and at the end, I will cover some summary material with these
two boards that we were able to bring today.
Again, thank you for this opportunity to discuss the
urgency of the need to improve the way the Federal Government
manages its most valuable asset--its human capital, or its
people.
As we all know, many Federal employees have made the choice
to choose country over self and to maximize their self-worth
rather than their net worth. I think that we have to recognize
that the Federal Government represents about 20 percent of the
overall economy in the United States, and it has significant
implications on every American's life as well as significant
implications around the world, being the only superpower on
earth with unparalled military, economic, and political
capabilities.
Given that fact, we need to have the best and the brightest
working for the Federal Government, doing the people's
business, looking out for the greater good to the extent that
we are going to maximize the performance and assure the
accountability of the Federal Government for the benefit of all
Americans.
An organization's people, its human capital, are its most
critical asset in managing for results. However, the Federal
Government has all too often acted as if Federal employees were
costs to be cut rather than assets to be valued. After a decade
of government downsizing and curtailed investments in human
capital, it is becoming increasingly clear that today's Federal
human capital strategies are not appropriately constituted to
meet the current and emerging needs of the Federal Government
and the Nation's citizens.
I would like to touch on two key points today. First,
strategic human capital management is a pervasive challenge in
the Federal Government. At many agencies, human capital issues
have contributed to serious programmatic problems and risks,
and in most cases, these risks are increasing rather than
decreasing.
Second, addressing the Federal Government's human capital
challenges is a responsibility that must be shared by a variety
of parties, including agency leaders, OMB, OPM, the Congress,
and a variety of other parties in the not-for-profit as well as
the for-profit sector, which I will touch on at the end.
To help focus on this critically important issue, we
recently added strategic human capital management to the list
of Federal programs and operations we identified as being high
risk. We determined that the Federal Government's current
approach to strategic human capital management met all three of
the criteria that we had adopted for identifying governmentwide
high-risk areas. First, strategic human capital management
challenges are evident at multiple agencies--and in fact I
would say most agencies.
Second, these challenges affect a significant portion of
the government's total budget or other resources. And third,
these challenges constitute a deficiency that should be
monitored and addressed through individual agency actions as
well as through OMB and OPM initiatives, legislative action,
and congressional oversight.
The leadership provided by this Subcommittee and the Senate
Committee on Governmental Affairs has been especially helpful
and important in focusing attention on this area and our
related challenges. Working together on a bipartisan basis, I
think, lays a foundation for eventual human capital reforms,
both administratively and legislatively. And I might note that
I have a copy here of the report of this Subcommittee with me.
I believe it is an outstanding document. I think it is a
foundation for progress, a good building block to move from in
seeing the way forward in this area.
Widespread inattentiveness to strategic human capital
management has created a governmentwide risk, one that is
fundamental to the Federal Government's ability to effectively
serve the American people, both now and in the future.
The landmark Federal management reforms of the 1990's
addressed most but not all of the essential elements of modern
performance management. Unfortunately, they did not address the
most critical element of modern performance management, and
that is the people dimension.
There are three key enablers that are necessary to maximize
any organization's potential, whether it be in the for-profit
sector, the not-for-profit sector, or the government--people,
process, and technology--and people are by far the most
important element.
Mr. Chairman, we believe that Congress will eventually want
to address human capital legislative reforms similar to those
discussed in your report--reforms in such key areas as
improving the Federal hiring system, providing more flexible
pay approaches, enhancing career development and training, and
improving employee accountability.
However, we also believe that Federal agency leaders cannot
afford to wait for these kinds of legislative reforms to
arrive. Their first priority must be to provide the leadership
and to take the steps that they can within current law to
improve their human capital management using authorities that
already exist. In many cases, we believe that a vast majority
of what needs to be done in this area can be done within the
context of current law. In the end, we will need legislative
reforms and comprehensive reforms, and we should work to
achieve a consensus on those necessary reforms. But in the
interim, it is absolutely essential that all of the key players
do everything they can within the context of current law to use
all the flexibilities available under current law, and very
few, if any, agencies are doing that at the present point in
time.
Again, our view is that the vast majority of needed
improvements can be achieved if agencies take a more strategic
and performance-based approach to managing their workforces--
for example, by performing effective workforce planning,
developing performance goals and measures to meet these
challenges, and by linking employee performance to results and
to their overall strategic plan.
What is needed is leadership, vision, commitment,
persistence, and accountability. This is a multi-year effort.
Now that strategic human capital management has been added
to the list of high-risk areas, it is logical to ask what is it
going to take to get off the list. The answer is twofold.
First, the key players in the human capital area--agency
leaders, OMB, OPM, the Congress, and human capital
professionals throughout the government--need to play their
part in effectuating meaningful and lasting change. Just as
modern performance management principles have been brought to
the Federal financial management, information technology
management, and strategic planning performance management
areas, they must also be brought to the human capital
management area.
Second, we need to see measurable and sustainable
improvements in the economy, efficiency, and effectiveness with
which the government as a whole and individual agencies manage
their workforces to achieve their missions and goals, and in
ways that are fundamentally linked to their strategic planning
under GPRA, and that also need to be linked to their resource
allocations and their budgetary requests.
Although Federal human capital management is a high-risk
area, Federal employees are not the problem; rather, the
problem is the lack of a consistent strategic approach to
marshalling, managing, and maintaining the human capital needed
to ensure that we are maximizing the government's performance
and assuring its accountability.
The Federal Government's approach to people management
includes a range of outmoded attitudes, policies, and practices
that warrant serious and sustained attention. To view Federal
employees as a cost to be cut rather than an asset to be valued
would be taking a narrow and shortsighted view, one that is
obsolete and must be changed.
In many government entities, the transition to modern
performance management, and along with it, to strategic human
capital management, will require a cultural transformation.
Hierarchical management approaches will need to yield to
partnerial approaches. Process-oriented ways of doing business
will need to yield to results-oriented ones. And silohed or
stovepiped organizations will need to become integrated
organizations if they expect to make the most of the knowledge,
skills, and abilities of their people. And they will need to
look externally and to partner more across government, Federal,
State, and local governments, internationally, as well as the
private sector and not-for-profit sector to get the job done in
these changing times.
Agencies that expect to make the best use of their people
will need to establish a strong performance-oriented culture
including appropriate performance measures and rewards, and to
focus on continuous learning and knowledge management that
supports employees and helps them to maximize their potential
and to achieve their organizational mission.
Many Federal agencies lack organizational cultures that
promote high performance and assure accountability. In fact,
the results of our calendar 2000 survey of Federal managers
indicated that in some key areas, agencies may be losing ground
in their efforts to change their more performance-oriented
culture that focuses on results and outcomes rather than
outputs and processes.
Agency leaders and managers have a number of strategies
available to them to help them steer their cultures to support
agency goals. These include modern performance management
incentive approaches directed at either individual employees,
teams, or both to help empower and motivate staff, reward high
performance, and assure accountability.
Mr. Chairman, I would now like to turn to the two boards,
because I think they help to demonstrate an important point.
Then, I will summarize and would be happy to answer any
questions that you may have.
First, the board on my right is intended to demonstrate
that in order to effectively address the human capital
challenge, it is a shared responsibility. It goes from the
President throughout the Executive Branch; it includes the
Legislative Branch; it includes the private sector, the not-
for-profit sector, as well as the media. Let me hit a few
highlights.
The President sets the tone. The President must recognize
that in order for the Federal Government to maximize its
performance and assure its accountability, it has to have
modern and effective human capital/people strategies; that
people are the ones who get the job done; and that in order to
move to more performance management-based approaches and
results-based approaches, we have got to deal with our people
challenges, both administratively and eventually legislatively
as well.
He needs to promote public service. It is extremely
important to recognize that while a lot of things can be done
in the private sector more efficiently, effectively, and
economically, there are some things that you can never have the
private sector do. The private sector cannot be entrusted with
watching out for the greater good. Public workers have a duty
of loyalty to the greater good, to serve the collective best
interest of all, not the narrow interests of a few. And while
there are certain things that can and should be done by the
private sector, there are certain core governmental functions
that must be done by government employees, that are compensated
reasonably and that we can have, not only for today but for
tomorrow, in order to get the job done.
OMB, for example, needs to provide more leadership from a
strategic perspective, to link strategic human capital
management planning with overall strategic planning, to link
resource allocations with what is needed in order to perform
agency missions, to coordinate at the secretary and deputy
secretary level the important aspects of human capital
management in moving toward a more results-oriented government
that maximizes performance and assures accountability.
The ``M'' in OMB must be capitalized, and the human capital
dimension from a strategic standpoint must be an integral
element of the management area.
OPM must lead with regard to planning and review and update
of existing policies and practices. It is important to review
existing guidance in light of changed conditions. Where can
they be streamlined; where can they be simplified; where can
more flexibility be provided while assuring adequate
protections to prevent abuse? This is critically important.
They should provide more tools rather than rules. They can end
up providing methodologies, best practices, and other types of
things to help others understand what you can do in the context
of current law and what has worked, and share those successes,
if you will.
I am pleased to say that they have been doing more in that
area lately, and I think that that is great, but much more
needs to be done. Departments and agencies, secretaries, deputy
secretaries need to be focused on these issues. Realistically,
it is going to be the deputy secretary who normally would be
the chief operating officer. This is a key element of achieving
mission. They need to be focused on this area and held
accountable in this area.
The Congress needs to consider human capital issues in
conjunction with confirmations of key appointees, in
conjunction with oversight of departments, agencies, and key
programs, as well as whatever legislation might be appropriate
in this area.
The GAO will continue to share our experiences, to help
others help themselves, as we have been with our best practice
guides and our self-assessment guides and sharing the
experiences that we have, because we are trying to become a
model agency. And just because we do it a certain way does not
mean it is the only way to do it, but we do have some
experiences that we are willing to share and have been sharing
with others to help them help themselves.
We will review what others do, and we will make
recommendations as appropriate as to the way forward.
The private sector can partner with government. I am
pleased to say that I met with Pete Smith, of the Private
Sector Council, and they are very interested in trying to do
more in this area, to try to share knowledge and experience
between the private and public sectors, to try to create
relationships, buddy systems, and so on, for senior executives
in the private sector to be able to consult with their
counterparts in the public sector, because the fact of the
matter is it is in everybody's interest, including the private
sector's interest, to have a government that functions in a way
that maximizes performance and assures accountability.
Foundations can partner and can do research in this area.
The academic community obviously can do more to try to help
identify and encourage individuals who are interested in public
service in various ways. And the media must do more in the area
of investigating and reporting on the critical challenges that
we have in this area.
With regard to the context of current law, it is important
to note that while legislation ultimately will be needed, there
is a lot that can and should be done in the context of current
law.
The first thing that agencies should probably do--which is
not on here, but I will mention it--is a self-assessment. They
need to assess where they are and where they stand. Our self-
assessment guide is being used by a number of agencies,
including NASA, Social Security, and a variety of others,
toward that end. They need to engage in workforce planning, to
look at the profile of their agency, what are the projections
as to what it is going to look like 3 years, 5 years, 10 years
from now, and what are the challenges that relate thereto.
They need to engage in succession planning. Just because
people are eligible to retire does not mean they are going to
immediately, but eventually, they will. There is a lot of
skill, a lot of knowledge, a lot of institutional memory that
will go out the door. That, coupled with the fact that many
departments and agencies had hiring freezes for a number of
years in the 1990's, resulted in a double whammy, whereby a
significant percentage of the Federal workforce is going to be
exiting, and yet we have not had that many people coming into
the pipeline to be able to position us for the future.
We have to revise and reinvigorate recruiting and college
relations efforts. We have to update our training programs and
invest in our people. Let us face it--government needs to be a
knowledge-based and learning organization. We will never be
able to pay people in the government what they could
potentially earn in the private sector, but we can offer them
other things that the private sector cannot. We can offer them
the ability to make a difference in people's lives. We can
offer them challenging work. We can offer them a learning
environment where they are learning on a continuing basis. We
can offer them a better balance between work and family. We can
offer them somewhat enhanced job security. We need to recognize
that. We need to sell what we have to sell, and we also need to
address some of the areas where we are not as competitive or
have taken shortsighted actions in the past years.
We need to obviously strive for diversity, because one of
the great strengths of our country is diversity. It is one
reason why we are really a microcosm of the world. But in the
end, while we need to take affirmative steps to achieve and
maintain diversity, we also need to make decisions based on
skills, knowledge, and performance.
We really need to focus on our outdated performance
appraisal and reward system. Mr. Chairman, one area where I
think there has to be much more focus is the performance
appraisal systems in the Federal Government, which for the most
part are broken--they are fundamentally broken. They do not
provide meaningful information to individuals or to management.
Performance appraisal systems must provide meaningful
information to help everybody, that helps to recognize and
reward top performers and helps to deal with nonperformers. For
the most part, the systems in the government do not get the job
done. They need to be competency-based. They need to focus on
skills, knowledge, and performance. They need to address those
fundamental elements. And if you do not have a modern and
effective performance appraisal system, you do not have much.
Employer-labor relations--we need to have constructive
versus confrontational approaches. There are many ways to get
there, but we have got to have constructive approaches to
engage with each other.
We need to tap the knowledge of our employees. There is
tremendous knowledge on the part of these employees. We need to
have employee suggestion programs; we need to understand what
their preferences are from the standpoint of their assignments.
People generally have a lot of ideas on how to improve economy,
efficiency, and effectiveness; we need to tap their ideas, and
we also need to understand what their preferences are so we can
match them to the agencies' needs when possible. They are
probably going to do their best if we have them in a slot that
is aligned with their skills and knowledge and their interests.
We need to be more competitive in compensation, especially
in certain critical occupations and at the executive level.
We need to take advantage of flextime to help balance work
and family. We also need to consider flexi-place to the extent
that it is appropriate, although I will tell you, Mr. Chairman,
that I do not think that flexi-place is for everybody. Flexi-
place has to be determined based upon what the person's job and
function is and also what their personal attributes and
interests are. Some jobs and functions can facilitate flexi-
place, and some individuals can handle that, and many cannot.
So I think we have to be very careful when we set targets so we
make sure that we are setting those targets based on an
informed basis, recognizing what I think Senator Durbin said,
that there may be some people that it works for and some for
whom it does not. You talked about retirement--there are some
who might be ready to retire, and there might be a mutual
benefit; but there are some who are not, and we still need
them.
In that regard, as one example that I have in my testimony,
we need to look at innovative approaches like how can we allow
people and encourage people to retreat into retirement. Right
now, our systems and our policies in the government are such
that you pretty much have to make an all-or-nothing decision--
you are either going to work full-time, or you are going to
retire. We need to have more part-time employment. We need to
have more job-sharing. We need to look at our pension laws,
just as the private sector is doing, to figure out how we can
allow people to maybe go from full-time work to part-time work
and possibly draw on part of their pension, so they can
maintain their standard of living.
We need to be creative to find out what we can do to manage
succession and manage the migration of people outside the
government.
The bottom line is this, Mr. Chairman. Federal employees
represent an asset that needs to be valued, not a cost that
needs to be cut. I am not saying there are not opportunities
for streamlining in some areas of the government--there are--
but they need to be based on considered analysis. We need to be
careful not to just have arbitrary numbers that we come up with
that we are managing toward, and we need to make sure we do the
kind of due diligence and the kind of planning to make sure
that the right decisions and actions are being taken.
This is a high-risk area, and the risk is increasing. The
good news is that, I think, it is now on the radar screen, and
I believe that by working collectively, with all of these
players doing their part, we can make a lot of progress quickly
in trying to help manage this. But it is going to take years to
effectively deal with the challenge that has built up over a
decade or more.
This area is the missing link in results-oriented
government, in maximizing performance and assuring
accountability, both administratively and legislatively. In the
end, we will need legislative reforms, but we have got to do
what we can in the context of current law, and we need to move
toward consensus on what those reforms ought to be. They should
provide more management flexibility, but adequate protections
to prevent employee abuse.
Mr. Chairman, I really do appreciate your interest and
efforts, those of Senator Durbin and Senator Akaka. I know that
you are all sincere about this, I know that you are dedicated,
and I look forward to working with you in the future to try to
help manage this risk and address this challenge.
Thank you.
Senator Voinovich. Thank you, Mr. Walker.
Senator Durbin will preside for about 5 minutes.
Senator Durbin [presiding]. Thank you, Mr. Chairman.
Mr. Walker, I want to ask you about your methodology in
coming to your conclusions. Did you discuss some of these
concerns with the actual employees themselves, and did you have
any surveys or focus groups of people who were already in
Federal public service, those who have left and those who are
contemplating retirement?
Mr. Walker. Senator Durbin, we have done a lot of work in
this area, and we are doing more and more as time goes on. We
have done work at individual agencies; we have also done work
in the past where we have looked at things like, for example,
succession planning, what are some of the challenges the
government has with regard to retirement trends and eligibility
for retirement. We have also done some work on surveying
segments of the employee population. We have surveyed, for
example, Federal executives, SES members, in a variety of
areas. We have also surveyed some cases of military personnel
with regard to why are they leaving the service. So we have
done a lot of work in this area. We have not surveyed every
agency.
Senator Durbin. I understand. That is a big undertaking,
and I would not expect that. But it would seem to me that that
would be a great starting place. I go back to the conversation
I had with the president of the university about teachers. I
asked what brings a person to teaching. He said, by and large,
a great teacher. They had an experience at some point in their
lives, and they said this great teacher changed my life, and I
would like to change someone else's.
I am wondering what the motivation is for Federal public
service or if there is one. It may be elusive. Maybe it is not
that simple. I went on to ask him how important is money to a
person who takes up teaching. He said that initially it is
almost unimportant; they are really focused on doing something
with their lives that has meaning to them. But, he said, I will
tell you something we found out--after 3 years, we lose 30
percent of these new teachers. Guess why? They get married.
They start thinking of the world a little differently, about
what it takes to sustain and raise a family.
I am wondering if we have done anything along these lines
to sort out the motivation to move toward Federal service, what
really brings a person to it, what are the sources--and I
imagine each agency might come at this a little differently.
Where do you find people with an interest in the issues of the
Department of Agriculture? Do they just come at random and
learn them, or do they come from specific areas where we might
be mining for resources in the future? And what does it take to
convert a person from a casual employee to a committed and
career employee? What are the things they look for? Could it be
that after a few years, when they are thinking about families,
child care all of a sudden becomes a major concern and that if
we decided to focus resources on child care as part of public
employment, part of Federal employment, a lot of people would
make that commitment beyond the first few years and say this is
worth staying for another 4 or 5 years, because I have a
resource here at my disposal that I might not have if I branch
out and try to find a new job?
Mr. Walker. Let me respond. First, I think we need to do
more survey work governmentwide, and obviously, I think that is
something that OPM can do, and they have done some of that in
the past. I think that individual departments and agencies need
to do work in this area, too, because every government
department and agency and every program is not the same; the
type of people you have, the skills and knowledge, and the
recruting sources will be different.
Let me tell you, for example, what we have done at GAO. We
make extensive use of surveys. For example, about a year ago,
we did an agency-wide survey of every GAO employee, and we
asked them a range of questions--why are you working here, what
do you like, what are you concerned about--a whole range of
issues. We do surveys of all new hires. We do surveys of
retirees. We do surveys of other segments of the population and
ask questions like why did you come here; how long do you plan
to stay here; what will be the critical factors that will be
determinant of whether or not you are going to stay and how
long you are going to stay; why did you leave?
Senator Durbin. What are the critical factors that you hear
coming back to you?
Mr. Walker. What I hear from GAO, as an example, the reason
why people come to work for GAO is: One, the work--we have very
challenging work; second, to be able to make a difference; the
third reason is the people; the fourth reason is being able to
achieve a better balance between work and family. Those are the
reasons why people come to GAO.
If you talk about compensation, we can be reasonably
competitive at the entry level, depending upon what type of
graduate we are talking about. If we are talking about, for
example, a master's in public administration, which a lot of
our people have, we can be competitive. For an accounting
degree, we can be competitive. But for certain other degrees--
law degree, a Ph.D. in economics, a master's in information
technology--we have a problem.
So what we try to do is to sell what we have to sell; we
try to understand, once people are on board, what will help to
keep them on board, and we try to gear our programs and
policies toward those areas where we think we are going to get
the biggest return on investment.
One example at GAO is that we found if we can keep people
for 3 years, they are likely to stay a lot more years. So we
are going to try to gear our tuition reimbursement efforts and
a lot of other things toward trying to keep people for at least
3 years.
Senator Durbin. And we are going to help you with that,
because we know the authority is there. We went into this, and
something that I have focused on is student loan forgiveness--
what the Federal Government can do to say to someone we may not
offer you the greatest salary, but guess what--we are going to
help you pay back your student loan. So they come in and say
this makes sense--I would take the money from another job and
put it back into that student loan anyway, so I can understand
how I can calculate this out to my benefit, ultimately.
But of course, we have to provide the money to the
agencies, we have to appropriate the money for this to happen.
It is a great concept, but if they do not have the money for it
to happen, they will not attract these great people.
Mr. Walker. Let me touch on that, Senator, because you are
exactly right. For example, there are two issues. First, do you
have the authority to do it--and up until recently, agencies
did not have the authority. Congress gave the authority, and
OPM issued regulations--and they are going to have to reissue
them because they were not as up-to-date as they needed to be
as to scope and as to flexibility, and they are in the process
of doing that--but then, you have to have the money.
What I have found in that regard--because I do recruiting
myself at some major universities to try to promote public
service and interest people in working for the government in
general and GAO in particular--is that a lot of the students
face a double whammy. What do I mean by that? Not only do they
not make as much money in government, but they have all this
debt. And even if they want to work in government--if that is
where their heart is, in public policy schools--they may not be
able to because of the double whammy of not making as much
money and being burdened with all this debt and having to pay
it off.
So I think the use of tuition reimbursement is a very
valuable tool, but you are right that you have to have the
resources.
Senator Durbin. How do we find that out? I am wondering if
we have to look at the budget request from the administration,
which we will receive very shortly, I wonder how many of them
will even include this as a line item. Agencies which you have
already identified as having critical needs in terms of
retaining and attracting new people--I am just curious as to
how many of them are considering this as a viable option to
include it in their budget requests, and I will make a point of
looking for that, being on the Appropriations Committee. I
think that if we hear from them that they have a shortfall,
whether it is the FCC or some other agency, and they think that
if they have student loan forgiveness, they can start to bring
in some very talented people, that makes sense, and I think we
want to pursue that if we can.
Mr. Walker. Well, I have to be careful how far I go,
because I know that once you submit your budget, it is the
property of the Congress. I will tell you that it is a line
item in our budget.
Senator Durbin. Good. May I ask you another question about
health insurance for Federal employees. Some numbers that the
staff here have put together suggest that the Federal
employees' health plan, which frankly, I think in many respects
may be one of the best in the world, certainly in the United
States, that gives so many options to individuals, those of us
covered by it, in terms of picking the right coverage for our
families--I am also told that in terms of the contribution from
employees that the Federal employees are making a substantially
larger contribution for their health insurance than people in
the private sector. Have you looked into that?
Mr. Walker. I do not recall if we looked into it lately,
Senator. I will check and get back to you. I will tell you
this, that I think one of the things we have to be careful of
is that in addition to looking at individual elements like
that, for example, health benefits--and I think it is important
to look at that--one of the things that we also have to do when
we look into those areas is to look at the overall package,
because there are going to be some areas where we do better,
and there are going to be some areas where we do not do as
well. The key from a portfolio standpoint is how do we do in
the aggregate.
Senator Durbin. Exactly. Let me ask your folks to please
take a look at the Year 2000 Survey of Public and Private
Employer Health Benefits by the Kaiser Family Foundation. This
is what they found--and again, the benefit package is critical
here--but assuming for a second that they are comparable,
listen to the difference. The average monthly employee share
for health care is $28 for single coverage in the private
sector. According to OPM, the average monthly Federal employee
share of cost for health insurance is $131--a phenomenal
difference. The figures for family coverage are just as
dramatic. The average employee in the private sector pays $138
a month; the average Federal employee pays $300 a month.
So I would appreciate it if you would take a look at that,
because when we talk about compensation and benefits, if we can
raise the salary, it is one thing, but if the cost of the
benefits goes up dramatically and takes away that increase,
then the person will say I do not have the purchasing power
even though my salary looks a little better.
I hope you can take a look at that as one of those aspects.
Thank you very much, Mr. Walker.
Mr. Walker. Thank you, Senator.
Senator Durbin. Senator Akaka, please.
Senator Akaka. Thank you very much, Senator Durbin.
I listened carefully to your testimony, Mr. Walker, and I
looked with great interest at the charts that you have
provided. I am glad to hear what you think about human capital
and what it means to our government.
You pointed out that we--and when I say ``we,'' I mean the
government--do not address the people dimension enough, which
you feel is very important in managing the workforce. You
pointed out that there were four issues--leadership, vision,
commitment, and persistence.
And you note, a Federal agency's first priority must be to
provide leadership and take administrative steps using
authorities already available under existing law. Agencies have
the authority to recruit employees through the use of
commercial recruiting firms and employment services. Agencies
may provide recruiting or relocation bonuses to help, offer
student loan repayment, and give retention allowances to
employees.
However, we keep coming back to whether or not the level of
agency appropriations is adequate. How do agencies weigh
workforce needs with their annual budgetary requests, and to
what extent should OMB work with agencies to develop strategic
human resource goals?
Mr. Walker. First, I think that not enough attention has
historically been paid to look at this from a strategic
perspective, and OMB really has not been a player at all in the
area of human capital. I think that they need to be a player,
but obviously, OPM is going to be involved on a day-to-day
basis and in a much more extensive manner.
OMB needs to be involved from the standpoint of how do you
end up coordinating at the secretary and deputy secretary
level; how do you link this to overall strategic planning; how
do you link this to resource allocation?
Senator Akaka, I think that, first, there will be
additional money needed to deal with some of these issues.
There is no question about that. At the same time, I also
believe that we should not merely assume over the longer term
that we need to keep everything we have and add on top of it.
One thing that people must do that most have not done is take a
hard look at what is their mission, what are they trying to
accomplish, how many people do they need to get that done, what
kind of skills and knowledge do they need to have in order to
do that.
So we need to look at not just the issue of whether you
need to be investing more in training, whether you need to have
more money for tuition reimbursement, but we also need to be
taking steps over a period of time to realign and restructure
the workforce, because in the end, in some circumstances, the
answer may be that you do not have as many people, but they are
higher-skilled, compensated better, and compensated more for
performance.
So I think that, yes, we will need more money, but we need
to engage in that fundamental reassessment and workforce
strategic planning, which will take a number of years in order
to get to where we need to be.
Senator Akaka. I am glad to hear that as you look at
mission statements, core values, goals and strategies, these
intentions should be integrated with their human capital
strategies so that goals may be met, as you point out here.
My question, then, is has GAO done an assessment of short-,
mid-, and long-term future needs for government employees in
specific fields, such as contract specialists, secretaries, and
even park rangers?
Mr. Walker. We have done some work in that area, but we
have not yet done a lot of work in that area. We did enough to
satisfy ourselves as to the scope and magnitude of the
challenge to make it a high-risk area governmentwide. We have
done some work, for example, at the Forest Service, we have
done work at the acquisition workforce at DOD, we have done
some work at NASA, and we are familiar with some of the things
going on at SSA.
But frankly, I think this is an example of where OPM needs
to be actively involved. We are in the Legislative Branch, and
the Executive Branch needs to be taking the lead in dealing
with these issues. We are happy to be helpful, and we are happy
to do the work that Congress asks us to do, but it is important
that we not be the ones who are doing work that should
otherwise be done by OMB or OPM.
Senator Akaka. As we try to meet the challenges and define
the problems, do you believe that there is a lack of
recognition on the part of Federal agencies that workforce
problems are serious enough to warrant adding it to the high-
risk list, and if so, why?
Mr. Walker. I can tell you that I have not had one agency
disagree with our decision to put this on the high-risk list.
Obviously, I have only had interactions with a few. I have had
a number of them agree that it is time that we focus more time
and attention on this.
There are some people who express concern, agencies that
may have direct responsibilities, that say, look, we are doing
more in this area now--and I think that has to be acknowledged.
For example, OPM is doing more in this area, and they have done
some things to help in the last year or so. But this is such a
serious and pervasive problem that we felt compelled to
designate it high risk, primarily because it met our criteria
and because of the pervasiveness and the serious nature of it.
The problem, Senator Akaka, from my perspective--let us
take what happened in the nineties. In some cases, people
celebrated--and whether they should have or not is a different
question--the fact that the Federal workforce declined
significantly in the nineties. But the question is at what
price? In many cases, what ended up happening was that those
reductions-in-force were not well-thought-out; they were not
part of an overall workforce realignment or workforce planning
strategy. In addition to that, in many cases, people quit
hiring. People eliminated performance rewards. They cut back on
training. They cut back on enabling technology. You might be
able to do that for a year; you cannot do it for multiple
years, because what happens is that you mortgage the future,
and you undercut your capacity to perform in the future.
So that is what has happened, and it is going to take us a
number of years to get to where we need to be--and hopefully,
making this high risk will attract light; with light comes
heat, and with heat comes action. That is what we need.
Senator Akaka. Thank you for your responses.
Mr. Chairman, I have other questions, but I thank you.
Senator Voinovich. Thank you, Senator Akaka.
Mr. Walker, have you had a chance to look at any of the
transition documents that the Clinton Administration turned
over to the Bush Administration?
Mr. Walker. I have not. I obviously have read what has been
in the press, and I did have an extensive meeting with OMB
Director Daniels, who was very interested in the work that we
had done in this area and, at least at that preliminary
meeting. He felt that OMB needed to be doing a lot more in the
management area and felt that this was a serious issue that
needed to be addressed. So I was encouraged by that, but it is
early in the ball game.
Senator Voinovich. It would seem to me that when the baton
was handed over to the new administration, one thing that you
would want to do--it is the kind of thing that we prepared in
our transition documents in Ohio--is acknowledge that we have
some problems here, to give the new administration a heads-up.
I would be interested to know--and maybe the Subcommittee could
find out--whether some of those things were in those transition
documents.
Mr. Walker. For the record, Mr. Chairman, I do not know if
they are, but we wanted to make sure that we did what we could
within our span of control to make sure it was on the radar
screen. And we did two things there: One, obviously, we put it
on the high-risk list, which is justified for the reasons that
I articulated, I believe; but second, on our website, which is
www.gao.gov, we have a separate section which is dedicated to
Congressional and Presidential transition issues and summarizes
electronically for every major department and agency and a
number of functions governmentwide the work that we have done
and what we see as the major challenges. That, frankly, is an
extremely vuluable tool not just for the new administration but
for the Congress as well that I would encourage your staff to
become familiar with.
Senator Voinovich. We should try to see if we can get our
hands on some of those transition documents to see how they
have been put together. I know that OPM made a real effort in
the last year and a half to move into this area, and they may
have communicated that to the agencies and asked them to do it.
Mr. Walker. I spoke with Janice Lachance on numerous
occasions, and I would like to acknowledge for the record that
I think OPM has done a lot more in the last year or year and a
half in this area. There is no question about that. But there
is so much more that needs to be done--and frankly, they cannot
do it all. As this board demonstrates, they have an important
role to play, but they are a piece of the overall pie.
Leadership starts at the top and involves both the Executive
Branch and the Legislative Branch as well as various other
parties.
Senator Voinovich. I noticed you said that the deputy
secretary is the chief administrative officer, and that is a
key position in Federal agencies.
Mr. Walker. It is. From a practical standpoint, I think the
secretary is going to be focused on policy issues, the
secretary is going to be focused on external affairs. Somebody
at a very high level has to be focused on getting things done,
and not only getting the job done today, but preparing for
tomorrow. If it is not the deputy secretary, it needs to be
somebody right at that level, because they have to have access
to the secretary. They have to have the secretary's support. It
is not something that you can expect to get done in middle
management; it starts at the top.
Senator Voinovich. I will present your work to the chairmen
of the authorizing committees before which the nominees from
the departments will be coming, with questions on those
agencies' high risk areas. Senator Durbin, I am sharing that
information with the ranking members also, because I think that
part of the problem here is that we are not tough enough on
management issues in some of these confirmation hearings. You
cannot do too much about the secretaries--you honor the
President's choice--and I know they are going to have
difficulty getting people, but it seems to me that we have an
obligation to make sure that the people they are bringing into
those top jobs know something about management, the problems
that exist, and have some experience in dealing with them. I
have observed in the 2 years that I have been in the Senate
that so many of the things that we are talking about should
actually be done in the agencies themselves. We should not even
be bothered with these things; they should be doing them as
part of their everyday work.
So I think that we can try to make sure that the appointees
in this administration are aware of the problems.
You have talked to Mr. Daniels, and I have talked to Mr.
Daniels, and I have heard very little about the human capital
crisis. We have heard about tax reductions and on-budget
surpluses and so on, and that is usually the main thing that
OMB concentrates on.
I would like to ask you how would you organize this thing
from the top on down to make sure that human capital is
addressed?
Mr. Walker. I think the key player at OMB, taking OMB as an
example, is probably the Deputy Director for Management.
Clearly, for the Director, Mitch Daniels, it has to be on his
radar screen, he has to be aware of it and focused on it,
because one thing that has to happen here is that there has to
be a better linkage between resource decisions on the budget
side and strategic planning, including the human capital
aspect, which is on the management side.
So the DDM is going to be critically important. The DDM is
not going to be able to do it alone, because the DDM has
responsibility for financial management, information
technology, the regulatory process, so they are going to have
to have some other resources--not necessarily a lot, but high-
quality resources there.
I think that if you end up leveraging those resources
through interagency councils--the past administration had
something called the President's Management Council, which was
really the deputies, the chief operating officers, who focused
on key issues--that is a good idea; having one in the human
capital area, making sure that we have people who are strategic
players in those jobs would be a good thing to do.
My personal view is that OMB needs to be working with the
various departments and agencies, and primarily it is going to
be the deputy secretaries and below who are focused on it. OMB
is going to be driving the effort to maximize performance and
assure accountability within the context of what the government
currently is, and I do not think they have been a very active
player in this area in the past. Hopefully, that will change.
Senator Voinovich. If you were in Mitch Daniels' shoes
right now, and you were aware of the fact that you had a human
capital crisis, and you were going to do something short-term
to try to jump-start the situation, what would you do?
Mr. Walker. I think one of the first things that I would
do, in addition to getting some additional resources and having
some focus on it in OMB, is to piggyback on the current budget
process they already have. Every year, you have to do a budget.
Every year, agencies are presenting information to OMB about
what their challenges are, what they are going to accomplish,
and what resources they need in order to be able to accomplish
their objectives. You could probably do more by piggybacking on
that process to identify what some of the issues are and how
they plan to address some of those issues while you are trying
to staff up and figure out what your longer-term strategy is.
At least that gets the issue on the radar screen.
Senator Voinovich. Well, I understand the budget that they
are dealing with is the one that was submitted to them by the
Clinton Administration, and now they are going over that budget
themselves. So your suggestion might be as part of the review
of that budget to ask the new secretaries and their teams to
evaluate the human capital situation in their agencies, to look
at the tools that they have available to them, as Senator
Durbin said, that they have not been utilizing because the
budget has not been there, and to then try to fold that into
their budget request to Congress.
Mr. Walker. I think the other thing that could happen is
that OPM could engage in a much more fundamental review of
their existing guidance and where there are opportunities to
streamline and simplify, and to provide more flexibility for
management clarity while incorporating adequate protections for
employees. In addition, OPM can do more in the area of
educating people as to what they can do within the context of
current law and pointing to success stories where people have
been able to accomplish a lot within the context of current
law. They have started to do some things in that area; I think
more would be good.
Senator Voinovich. That is what worries me, that they will
try to use these flexibilities, we will not pass a sufficiant
budget, they will not have the resources to use the tools that
they have, and we have lost a year.
You have OPM, you have the Office of Management and Budget.
Do you think that this thing can work the way it is organized?
I have found in my experience that if you have good people, and
they work together in clusters, most of the time, you can get
things done. But do you think the organizational structure that
we have is an impediment to dealing with this problem?
In other words, we have had years and years and years of
neglect, and so often in an organization, sometimes the reason
why that happens is because it is laid out the wrong way, and
if you had had it organized in a different way, perhaps it
would not have taken place. Would you comment on the current
organization and whether you think it is adequate, or do you
think it would be better if we came up with a different
organization that might give this issue the priority that it
has not been getting?
Mr. Walker. I do not think that the current approach has
worked, and that is one reason why we have this designated as
high risk.
As I said, I do not think that OMB has done enough in the
``M'' area, in general, and the human capital area, in
particular. I do not think, quite frankly, that the departments
and agencies have really been adequately focused on this, the
top leadership, especially the political leadership, in part
because they have a shorter horizon, and because they have a
number of other things that they are trying to accomplish
within the period of time that they are going to be there.
I think one of the things that we need to do is not only
recognize that there is a problem, but we have to put a
structure and a mechanism in place that recognizes that it is
going to take a number of years to deal with this, so
therefore, it is getting the attention and support of the top
political leadership, but it is also making sure that we have
some structure that will still be able to survive the
transition when there are changes in secretaries, deputy
secretaries, Presidents, or whatever, because this is a
multiyear effort.
Senator Voinovich. Well, one thing that has happened in my
State is that we adopted total quality management--we call it
quality service through partnership--involving the unions, and
the success that we had with it is almost a guarantee that it
will continue, because people realize how this thing works and
how good it makes them feel. But it took training for 8 to 9
years to really do it right. In some of these areas, it is
going to take a long time for it to become part of the
tradition and fabric of the government.
Mr. Walker. Ultimately, you have to make it a priority, you
have to designate responsibility, and you have to incorporate
appropriate accountability mechanisms. And it is not one single
player, as this demonstrates. A lot of players have to be
involved in this area in order for us to get to where we need
to be.
I totally agree--you have to involve not only employees but
employee organizations, and failure to do that is a
prescription for failure.
Senator Voinovich. As I mentioned to you, one of the things
that I am concerned about is that there is talk--and I do not
know if Senator Durbin knows this--about eliminating an
Executive order regarding labor-management partnerships, which
I think are fundamental to any opportunity to move forward in
some of the areas that we are talking about, because if labor
and management are not working on it together, it will not
happen; I know that from my past experience.
I think the other thing that would probably help would be
if the President himself talked about employees being assets to
be valued and not costs to be cut. As Senator Durbin said, I
think there is an attitude on the part of some people that
people who work in government are not as good as people who
work in the private sector. You are only as good as your team.
I think it is really important that it starts from the top,
that the leader says this is an important issue and gets the
message out to government employees that they are important,
and recognizes that some of the incentives have not been there
and that the government has done a lousy job of providing
training money so they can upgrade their skills and that
government can be an exciting place to work.
I just returned from a 2-day seminar on public health in
Florida, and I was speaking with some of the people from the
John F. Kennedy School of Government at Harvard University.
They asked me to come and talk there, because the impression
that many of their students have is that the Federal Government
is not a very exciting place to work anymore. I think it was
Paul Light who did a study that showed that we have had a great
diminishment of people who are interested in coming to work for
the Federal Government.
So this has to be, I think, a cause celebre if we are going
to have a government that works. I keep talking to my private
sector friends and indicating to them that if all of these
regulatory agencies do not have the competent people they need
to get the job done, it will negatively impact on our economy.
Some people do not seem to understand how important that is.
Mr. Walker. I think that you are exactly right, Senator,
and that is why I say that the private sector has a stake in
this, too. Here is the way I look at it. The people that we are
talking about end up being directly responsible for doing
whatever the Federal Government does with $1.9 trillion. As a
taxpayer and a citizen, I sure hope that we have bright,
competent, and dedicated public servants doing that work, not
only for the impact that it has on our domestic economy, but
for the impact that it has on the world.
At the JFK School, for example, and many other public
policy schools, one thing they are finding is that over half of
their graduates are not going into government, and a higher
number are going into consulting firms. Well, you can make a
difference by working on government projects with consulting
firms, but it is fundamentally different. It is the fundamental
difference between being an advisor and being on the front
line.
But we have to be able to help reinstill interest in public
service. We have to recognize the importance of it, and we have
to appreciate the value that is provided by people who do a
good job in this area, because we have enough barriers and
obstacles already to deal with.
Senator Voinovich. Right. But it is interesting that some
of the very things we are talking about, many other private
organizations in this country are experiencing, not as severely
as we are, but they have their problems attracting people, too,
and that means that our job is that much more difficult because
we are so far behind in some of these areas where we need to be
competitive.
Mr. Walker. Many private sector organizations, quite
frankly, have not treated their people as an asset, either, but
they are recognizing, because they are in a competitive
business and a market-based economy, that they have to. We are
currently in a knowledge-based economy, and what is the source
of all knowledge--people. The sooner we realize that, the
better off we will be.
Senator Voinovich. Senator Durbin, do you have any other
questions?
Senator Durbin. No, Mr. Chairman.
Senator Voinovich. Mr. Walker, we thank you very much for
coming today, and we look forward to working with you, and
hopefully, 2 years from now, we can look back and say we made a
dent in this. Thank you.
Mr. Walker. Thank you very much.
Senator Voinovich. The Subcommittee is adjourned.
[Whereupon, at 11:52 a.m., the Subcommittee was adjourned.]
A P P E N D I X
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