Report 2007-007-ADV - Report on the Strategic Management of Human Capital: Succession Planning

Published by the Equal Employment Opportunity Commission, Office of Inspector General on 2009-04-24.

Below is a raw (and likely hideous) rendition of the original report. (PDF)

Report on the
Strategic Management of Human Capital:
Succession Planning
OIG Report No. 2007-07-ADV
Since 2002, the Office of Inspector General has issued periodic management advisories on the
agency’s progress in meeting the core requirements of the President’s Management Agenda.
We’ve reported information relating to the Strategic Management of Human Capital as
Management Challenges in semiannual reports to Congress and in annual Performance and
Accountability Reports. Further, OIG met with auditors from the Government Accountability
Office and discussed the results of our periodic updates relating to the Agency’s management of
human capital prior to their issuing their report in June 2008. OIG recognizes that the Agency
has prioritized its budget to address reducing its backlog and managing the workload. However,
it is also of utmost importance that the Agency addresses the Strategic Management of Human
Capital, including workforce planning of which succession planning is a major part. Without
planning today for tomorrow’s workforce, there are no assurances that the Agency will be able to
continue to meet its mission in years to come.

Our objective was to identify progress made by EEOC to address the core requirement of the
President’s Management Agenda (PMA) for strategic management of human capital dealing
specifically with succession planning.

Scope and Methodology
We met with agency managers periodically from March 2008 through January 2009 and
discussed progress and planned actions relating to the agency’s succession planning efforts. We
also researched and reviewed audit reports of other agencies that addressed succession planning.
Our work was performed in accordance with generally accepted government auditing standards.
Those standards require that we plan and perform the audit to obtain sufficient, appropriate
evidence to provide a reasonable basis for our findings and conclusions based on our audit
objectives. We believe that the evidence obtained provides a reasonable basis for our findings
and conclusions based on our audit objectives.

In 2001, the strategic management of human capital on a government wide basis was included in
the Government Accountability Office’s (GAO) list of high risk areas. GAO first added strategic
human capital management as a government wide high-risk area because federal agencies lacked
a strategic approach to human capital management that integrated human capital efforts with
agency mission and program goals. Additionally, President George W. Bush issued what is
known as the President’s Management Agenda (PMA) where Office of Management and Budget
(OMB) established standards for success for each of the five initiatives of the PMA including
human capital.1 The President’s strategic advisor on human capital is the Office of Personnel
Management (OPM). OPM, in collaboration with OMB and the GAO revised the Human Capital
standards for success necessary to meet the requirements of the PMA. OPM also developed the
Human Capital Assessment and Accountability Framework (HCAAF) which supports an
ongoing process of human capital management in every Federal agency’s planning, goal setting,
implementation, and evaluating results in five systems:

       Strategic Alignment
       Leadership and Knowledge Management
       Results-Oriented Performance Culture
       Talent Management
       Accountability

Succession planning falls under the leadership and knowledge management system of the
HCAAF. OPM defines leadership and knowledge management as “a system that ensures
continuity of leadership by identifying and addressing potential gaps in effective leadership and
implements and maintains programs that capture organizational knowledge and promote
learning.” Succession planning involves identifying leadership competencies and establishing
objectives and strategies to ensure that there is a continuous pipeline of available leadership
within the organization. GAO has issued various reports highlighting the need for agencies to
increase their efforts in workforce planning including succession planning to address aging of the
current workforce and to ensure that agencies have the talent with the knowledge, skills, and
competencies in the occupations needed to meet their missions.2

The chart below summarizes several factors by GAO/OPM found in successful succession
planning initiatives and OIG's assessment of EEOC’s current status for each success factor:

       OPM/GAO Factors for Successful Succession Planning
         Success Factor                           Assessment of EEOC’s Status
                              In Congressional testimony relating to the 2009 Agency
                              budget, former Chair Earp agreed with the OIG that there was
                              a need for senior level management to place greater emphasis
Commitment and Active Support on human capital management and the need to make sure that
of Top Leadership             the Agency has the right positions at the right grade with the
                              right skills.

                                  OHR developed the Executive and Senior Leadership
                                    Development Plan and provided to SES Advisory Council
                                    reviewed plan and provided suggestions for improvement in
                                    October 2008. No actions have been taken since that time.
Direct link between the
                                    The agency’s strategic plan does not have any outcome
organization’s mission, its
                                    measures addressing succession planning.
strategic plan and outcomes
Identification of critical skills
                                    Of the 337 EEOC supervisors requested, 129 or 38%
and competencies that will be
                                    completed OPM’s Federal Competency Assessment Tool;
needed to achieve current and
                                    analysis of results is expected by the end of fiscal year 2009.
future programmatic goals
Development of strategies to
                                    Not completed; To be completed after identifying critical
address gaps in mission critical
                                    skills and competencies
and other key positions
Leadership Training programs
                                    EEOC now has four (4) slots for the Federal Executive
that include formal and informal
                                    Institute and held new supervisors training through its
training for all levels of
                                    Management Development Institute in June 2008 and will
supervisors, managers and
                                    hold New Managers Training in May 2009.
potential leaders
Strategies for addressing specific
human capital challenges such as The Agency held its “Can We Talk?” seminars to address
diversity, leadership, capacity    diversity in the Agency during FY 2008.
and retention
A process for evaluating the
costs and benefits of succession No measures have been developed relating to succession
planning efforts and the return on planning nor has any return on investment analyses been
investment it provides the         conducted.

Findings, Conclusions and Recommendation
Top Senior Management Must Take an Active Role in Succession Planning

The Office of Human Resources (OHR) headed by the Agency's Chief Human Capital Officer
(CHCO)3 has been our primary contact for issues relating to the strategic management of human
capital. Each year, OHR staff is assigned responsibility for developing the agency's succession
management plan. Other than making changes to planned implementation dates for various
strategies identified in the plan, there was little progress suggesting that succession planning is
not a priority within the agency. In a June 2008 Report to the Chairman, Subcommittee on
Commerce, Justice, Science, and Related Agencies, Committee on Appropriations, U.S. Senate,
the GAO stated that EEOC faces the human capital challenge that by 2012, all of it's current
senior executives and senior managers will be retirement eligible and estimates that many may
have already retired by 2012. The FY 2009 Omnibus Appropriations Act reference the June 2008
GAO report and directs EEOC to implement its recommendations and to report back to the
House and Senate Committees on Appropriations within 60 days of the enactment of the Act on
how these recommendations were implemented. Taking this fact into consideration, it is of
utmost importance that top senior level EEOC management takes an active role in the agency's
succession planning efforts to ensure that future leaders with the right skills, knowledge, and
abilities are in place to lead the agency in meeting its mission and challenges of the 21st century.

OHR prepared a draft document titled, “Executive and Senior Leadership Development
Program” (ESLDP) in August 2008. It discusses a proposed succession planning initiative for
EEOC. Specifically, the draft plan includes guidance for a proposed leadership development
plan, selection process, and other components including mentoring, training, developmental
assignments, and evaluations. Also, the draft plan is designed to appeal to staff at the GS 14/15
level interested in participating in the Agency’s Leadership Succession Program. Best practices
in the federal government suggest that effective succession planning and management efforts
identify talent from multiple organizational levels and early in their careers. Core succession
training and development programs should be developed to include entry-level employees, mid-
level management and senior executives to strengthen high potential employees’ skills and to
broaden their experience. The OPM suggests that human capital planning be managed by a
human capital review team or similar collaborative body comprised of the CHCO, and senior
leaders and managers from human resources, information technology, finance, and mission
specific areas. This draft plan was presented to the EEOC Executive Resources Board and
forwarded to the Senior Executive Service Advisory Council 4 members for review and comment
on the program’s viability on October 9, 2008. The Council completed its review of the draft
Executive and Senior Leadership Development Plan on October 22, 2008. The Council’s
comments included concerns about the projected costs of the program and the number of
candidates that would be accepted. The Council believes that there is a sizeable group of GS-15s
Agency-wide who with or without minimal additional training qualify for selection for upcoming
SES vacancies. However, a more immediate need for leadership development training is for
incumbents at the GS-13 and GS-14 grades, and for a targeted approach rather than an agency
wide approach to addressing leadership development. Since that time, no further action has been
taken by OHR to address the Council‘s comments.

Integrating Succession Planning with Strategic Planning and
Budget Process
The Agency needs to begin to think strategically regarding its succession planning efforts. The
Agency’s revised strategic plan for fiscal years 2007-2012, adopted by the Commission in July
2008 includes only one strategic objective: Justice, Opportunity and Inclusive Workplaces.
Included in the Means and Strategies section of the plan is a brief overview of the President’s
Management Agenda addressing the strategic management of human capital. One of the key
steps identified in improving the strategic management of human capital is “Developing and
sustaining leadership, through the agency’s Management Development Institute, and supporting
succession planning.” However, there are no human capital objectives in the strategic plan with
specific performance measures relating to succession planning. Without these, the Agency will
not be able to assess the effectiveness of its succession planning efforts. In order for the
Agency’s succession planning efforts to be meaningful, it is vital that strategic planning efforts
include specific measures to evaluate progress in meeting succession planning goals and that all
human capital related documents, OHR’s draft Strategic Human Capital Plan and the draft
Executive and Senior Leadership Development Plan, are linked to the Agency-wide strategic
plan. Further, the Agency must ensure the development of a well documented workforce plan
that describes the steps that will be taken to identify potential leadership needs and qualified
candidates for future leadership positions.

Additionally, human capital initiatives including succession planning should be integrated into
the agency wide budget process. This is a critical step because identifying necessary resources
ensures that human capital initiatives will be carried out as planned and remains a future priority.
The Chief Human Capital Officer will be held accountable for ensuring that scarce funds that
impact the strategic management of human capital are put to the best use. For example, the
Omnibus Appropriations Act of 2009, H.R. 1105 requires that EEOC provide a cost-benefit
analysis of hiring higher credentialed employees for the in-house call intake function. OIG
reviewed other agencies' budget information and found that succession planning initiatives are
clearly identified and discussed along with funding estimates.

Lastly, once the succession management plan has been finalized it should be communicated to
employees and posted to the Agency's web site. Communication is a vital component of the
succession planning implementation process.

Approach to Succession Planning
There is no one right way for organizations to manage succession planning for their leaders and
other key employees. Succession planning can be approached on an agency- wide basis or at the
program level. From an agency-wide basis, top leadership and senior managers hold periodic
meetings (e.g. quarterly) to discuss succession planning and human capital issues for the entire
organization. For each executive and senior level position, in headquarters and field offices,
potential successors to each incumbent are identified by skill level, training, and past job
experience. This information is taken into consideration by Agency leaders in deciding on future
assignments and filling senior level vacancies. Succession planning at the program level first
involves agency top leadership and senior managers developing succession planning guidance
for program offices. Each office has responsibility for preparing its workforce with the skills,
knowledge, and abilities that the agency will need to meet its mission. This approach was used
by the U.S. Housing and Urban Development (HUD). HUD management developed guidance in
the form of a seven- step approach to succession planning to be used by its various program
offices. Further details of this approach are contained in the HUD Office of Inspector General
Report No. 2007-CH-001 dated 9/29/07 and can be found at

Additionally, there are various tools and training available to assist agency managers on steps to
implement successful succession planning efforts. OIG staff participated in a webcast provided
by the Government Executives Network entitled "Succession Planning in the Government: How
to Create a Comprehensive Succession Planning System" which provided a general overview of
the succession planning process. Additionally, software is available to help organizations to
manage their pipeline of internal future leaders. Various vendors are available and provide
sample versions of their succession planning software for evaluation and use.

OIG concludes that EEOC must finalize succession planning efforts and ensure that they are
implemented. OHR has drafted an Executive and Senior Leadership Development Program
which was reviewed by the SES Advisory Council in October 2008 but there has been no action
since. Specifically, top senior management must make succession planning a priority. Though
key leadership positions have been identified, no pipeline is in place identifying current
employees having the necessary skills, knowledge and abilities to move into leadership positions.
Additionally, steps are needed to link succession planning efforts with the agency's strategic plan
and to integrate succession planning into the budget process. The Agency must take steps now to
ensure that a leadership pipeline exists within the current workforce that is equipped with the
skills, knowledge, and abilities necessary to ensure that future leaders are available to lead the
agency in meeting its mission and strategic goals.

We recommend that EEOC’s Chairman and senior management:

      Take an active role in the Agency's succession planning efforts including:
           o Ensuring that the Office of Human Resources take actions to move the Executive
               and Senior Leadership Development Program forward including finalizing the
               draft document.
           o Ensuring that the Agency develops and implements succession management
               planning that identifies talent from multiple organizational levels early in their
               careers, or with critical skills. Succession training and development programs
               should include entry level employees, mid-level management, and senior
      Integrate succession planning with the Agency's strategic planning and budget processes.
      Ensure that the Agency takes steps to address each of the GAO/OPM Success Factors
       found in successful succession planning initiatives.

Management’s Response
We received comments from the Office of Human Resources (OHR) and the Office of the Chief
Financial Officer. These comments are included in their entirety as an attachment. Management
generally concurred with OIG’s conclusion that EEOC must finalize succession planning efforts
and ensure that they are implemented.

Rather than responding directly to our recommendations, OHR summarizes its meetings held
with senior leaders in the past and notes that they are designing a succession planning approach
which will assess, identify, and develop management talent at the GS 13/14 levels. Additionally,
OHR staff is completing an Agency Human Capital Strategic Plan and expects to have
significant input into revisions of the Agency’s strategic plan.

The Office of the Chief Financial Officer agrees with the report and noted that when
implemented the results of succession planning would have a direct impact on the reduction of
the agency’s workload activity.

OIG Conclusion on Management’s Response
We believe that the Chair of the Agency should be involved in the succession planning process
and provide oversight and direction to the Office of Human Resources to ensure that succession
planning is a priority and that succession planning efforts are finalized and implemented.

                                                                                   Attachment 1

                      Comments to Office of Inspector General
                              Draft Report on the
           Strategic Management of Human Capital: Succession Planning
                          OIG Report No. 2007-07-ADV

The Office of Human Resources concurs with the conclusion from the OIG draft report that
“…EEOC must finalize succession planning efforts and ensure that they are implemented.” We
are dedicated to addressing the challenges of preparing the Agency and its leaders for the
expected losses from anticipated retirements and other separations. However, we also believe
that we have made significant progress in this important initiative and have set in motion efforts
to complete this milestone. The Office of Human Resources provides the following comments on
the OIG findings, conclusions and recommendations as noted below:

Top Senior Management Must Take an Active Role in Succession Planning Efforts:

Presentations and recommendations on succession planning and executive development have
been made on several occasions to senior Agency leaders comprising the EEOC’s Executive
Resources Board (ERB). The ERB is currently being reconstituted but previously included top
level management representation in the form of the Chief Operating Officer, Director of Field
Programs, Director of the Office of Federal Operations, Deputy General Counsel, and the Chief
Human Capital Officer.

Development of a succession planning approach has been an evolutionary process which has
included the following steps and interaction with senior leaders and Agency management staff:

      Development and presentation to the ERB of a Succession Leadership Management Plan-
       -Framework (September 2007) which identified the business need and importance for
       such planning.
   Design of a leadership development program similar to the “Steps for Success” program
    used at the Department of Housing and Urban Development. This approach included a
    process for leadership assessment, preparation of an individual development plan and
    self-identification for an Agency leadership pool at all levels. This draft program was
    presented to ERB but was considered too costly and labor intensive with OHR staff
    directed to redesign the approach.
   Competition for EEOC’s four slots in OPM/FEI’s “Leadership for a Democratic Society”
    program. In 2007, the previous Chair directed that this training opportunity be publicized
    and open to competition among all Agency GS-15s and SESers. Eleven GS-15s were
    nominated and thus far six of these individuals have attended or are scheduled to attend
    the training. This has added to the pool of senior managers who have completed this
    training which addresses OPM’s five executive core qualifications for executive
   Design of an Executive and Senior Leadership Development Program and presentation to
    the ERB. As noted in the draft report, a copy of this proposed program was also
    circulated to the SES Advisory Council for comment. This program provides for the
    assessment, identification and development of management talent at the GS-14 and 15
    levels. The ERB also directed that focus should be placed on developing GS-13/14 level
    leaders--OHR staff is currently designing this approach.
   Delivery of leadership and management training under the umbrella of the Management
    Development Institute (MDI). Developing current and future leaders has been a high
    priority for the Agency since the MDI was first instituted in FY 2003. However, the
    frequency of course delivery has fluctuated from year to year depending on the
    availability of the Agency’s limited training funds. One of the underlying principles of all
    Agency management training is that supervisors and managers are responsible for the
    development of their staff including preparation of those who will follow in their
    footsteps. Courses which have been delivered since the MDI’s inception include the

    Fundamentals of Management (acting supervisors)—this course is being redesigned and
    will be titled “Emerging Leaders” and will include acting supervisors and non-
    supervisory employees aspiring to leadership positions.

    New Manager Training (new managers with less than 2 years supervisory experience)--
    OHR will be delivering a second New Manager Training class in FY 2009 in addition to
    the session scheduled in May 2009 in order to address the high demand for this program.

    Growing Leaders for the 21st Century and Beyond (experienced supervisors)—this was
    the first course given under the MDI beginning in FY 2003 and was intended to be given
    to all agency supervisors. It was delivered 11 times to over 250 supervisors and has now
    been incorporated into the New Manager Training program.

    Fundamentals of Performance Management (experienced supervisors)—this course is
    aimed at helping EEOC supervisors become more effective in the area of managing staff
    performance and emphasizes the importance of focusing on results and accomplishments
    rather than activities. Approximately 100 managers have completed this training.
Integrating Succession Planning with Strategic Planning and Budget Process:

      OHR staff are currently completing preparation of an Agency Human Capital Strategic
       Plan and have been in frequent contact with staff at the Office of Personnel
      Management to assure that the Plan meets their guidelines and requirements. Under the
       Leadership and Knowledge Management section of the Plan, objectives will include
       among others: implementation of a leadership succession planning process based on
       workforce analysis, identification of potential sources of talent, assessment of leadership
       competencies and identification of gaps, recruitment or development strategies needed to
       ensure availability of well qualified staff to full leadership positions at all levels, and as a
       key outcome, a return on investment analysis to determine the effectiveness of the
       Agency’s efforts in succession planning.
      OHR expects to have significant input into revisions of the Agency’s Strategic Plan as
       staff complete development of an EEOC Workforce Plan while considering objectives in
       the current Strategic Plan.
      EEOC was recently contacted by OPM staff regarding study of its management training
       program based on results of OPM’s administered Federal Competency Assessment
       Tool—Management. EEOC supervisors participated in this survey when it was first
       offered in FY 2007 and again in FY 2008. We hope to partner with OPM to try to
       determine the effect that training programs delivered through our MDI may have on the
       effectiveness of leaders attending these classes.

We look forward to a continuing dialog with the Office of Inspector General as we develop,
implement, evaluate and refine our approach to succession planning at the EEOC. We believe
that through creativity and communication, we will be able to position the Agency for the future
through the identification and development of talented leaders.

                                                                                        Attachment 2

                                              Washington, D.C. 20507

                Office of Inspector General

                                                    April 24, 2009

TO:            Aletha L. Brown
               Inspector General

FROM:          Jeffrey Smith
               Chief Financial Officer

SUBJECT:       Draft Report on the Strategic Management of Human Capital:
               Succession Planning (OIG Report No. 2007-07-ADV)

Thank you for sharing your draft report. We agree that succession planning is a key element to
EEOC's success in retaining staff to fill vacant management positions thereby providing
continuity of EEOC operations. As you may be aware, the agency plans to revamp its strategic
plan in coordination with OMB and issue a final document by October 1, 2009. This would be a
good time to revisit the inclusion of a specific measure for succession planning which Human
Resources could champion and seek inclusion by the strategic plan team. However, if a measure
that specifically states "succession planning" is not approved, we believe that human capital
objectives can be better depicted in the strategic plan. When implemented the results of
succession planning would have a direct impact on the reduction of our agency's workload
activity and we could show that interrelationship in the Budget Justification.

Thank you for the opportunity to comment. Should you or your staff have questions, please feel
free to contact Germaine Roseboro on extension 4238.

cc: Deidre Flippen, Director, Office of Research, Information and Planning

 The Obama Administration has not formally announced its management policy but it has been
anticipated that the Administration will maintain key aspects of the Bush Administration’s
President’s Management Agenda. A goal of the PMA called for reshaping organizations and
developing talent and leadership to meet standards of excellence.
  See GAO reports: GAO-04-127T- HUMAN CAPITAL Succession Planning and Management
is Critical Driver of Organizational Transformation, October 1, 2003 GAO-08-762T HUMAN
CAPITAL Transforming Federal Recruiting and Hiring Efforts
  The Chief Human Capital Officer’s position has been vacant since June 2008. In January 2009,
the Agency created a Deputy Director Position in the Office of Human Resources that serves as
the Acting CHCO in the absence of the CHCO in conflict with EEOC Orders 110.002
 The SES Advisory Council is composed of the Director, Office of Field Programs (OFP); the
Deputy General Counsel; Associate Legal Counsel, and District Directors from St. Louis, Los
Angeles, and Memphis.