oversight

Human Capital: Selected Agency Actions to Integrate Human Capital Approaches to Attain Mission Results

Published by the Government Accountability Office on 2003-04-11.

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

             United States General Accounting Office

GAO          Report to Congressional Subcommittees




April 2003
             HUMAN CAPITAL
             Selected Agency
             Actions to Integrate
             Human Capital
             Approaches to Attain
             Mission Results




GAO-03-446
             a
                                                April 2003


                                                HUMAN CAPITAL

                                                Selected Agency Actions to Integrate
 Highlights of GAO-03-446, a report to          Human Capital Approaches to Attain
 congressional subcommittees
                                                Mission Results



Successful strategic human capital              The executive branch agencies GAO reviewed have taken key actions to
management requires the                         integrate their human capital approaches with their strategies for
integration of human capital                    accomplishing organizational missions and to shift the focus of their human
approaches with strategies for                  capital office from primarily compliance activities to consulting activities.
accomplishing organizational
missions and program goals. Such                      •      Agency leaders included human capital leaders in key agency
integration allows the agency to                             strategic planning and decision making and, as a result, the
ensure that its core processes                               agencies engaged the human capital organization as a strategic
efficiently and effectively support
                                                             partner in achieving desired outcomes relating to the agency’s
mission-related outcomes.
                                                             mission.
Based on the recommendations of
various human capital experts,                        •      Human capital leaders took actions to transform the agencies’
GAO identified six executive                                 human capital organizations by establishing clear human capital
branch agencies that had taken key                           strategic visions, restructuring their organizations, and improving
actions to integrate their human                             the use of technology to free organizational resources. Human
capital approaches with their                                capital leaders also promoted a transition to a larger strategic role
strategic planning and decision                              for human capital professionals with their focus being more on
making. The agencies were the                                consulting rather than compliance activities. The human capital
Federal Emergency Management
                                                             profession is in transition from valuing narrowly focused specialists
Agency, the General Services
Administration, the Internal                                 to requiring generalists, who have all the skills necessary to play an
Revenue Service, the Social                                  active role in helping to determine the overall strategic direction of
Security Administration, the U.S.                            the organization.
Coast Guard, and the U.S.
Geological Survey. These key                          •      Jointly, agency leaders and human capital leaders are having
actions may prove helpful to other                           human capital professionals and agency line managers share the
agencies as they seek to ensure                              accountability for successfully integrating strategic human capital
that their human capital                                     considerations into agency strategic planning and decision making.
approaches are aligned with their
program goals.
                                                Federal Human Capital Workforce: Percentage of Generalists and Specialists




 www.gao.gov/cgi-bin/getrpt?GAO-03-446.

 To view the full report, including the scope
 and methodology, click on the link above.
 For more information, contact J. Christopher
 Mihm at (202) 512-6806 or mihmj@gao.gov.
Contents



Letter                                                                                           1
                         Results in Brief                                                        2
                         Background                                                              4
                         Selected Agencies Took Actions to Integrate Human Capital
                           Approaches with Organizational Missions                               5
                         Conclusions                                                            26
                         Agency Comments                                                        27


Appendix
           Appendix I:   Objective, Scope, and Methodology                                      29


Tables                   Table 1: Key Agency Actions to Integrate Human Capital
                                  Approaches with Strategies for Accomplishing Agency
                                  Missions                                                       3
                         Table 2: GSA Human Capital Council Members                             10
                         Table 3: GSA’s HR Roles and Competencies                               22
                         Table 4: USGS’s HR Competencies                                        23


Figures                  Figure 1: FEMA’s Human Resources Division after
                                   Restructuring                                                14
                         Figure 2: The Federal Human Capital Workforce: Percentage of
                                   Generalists and Specialists                                  19




                         Page i                                            GAO-03-446 Human Capital
Contents




Abbreviations

CHCO                  Chief Human Capital Officer
CHRIS                 comprehensive human resources integrated system
CIO                   Chief Information Officer
CPO                   Chief People Office
FEMA                  Federal Emergency Management Agency
GSA                   General Services Administration
HR                    Human Resources
HRD                   Human Resources Division
HRPC                  Human Resource Policy Council
IRS                   Internal Revenue Service
NAPA                  National Academy of Public Administration
OARS                  online automated recruitment system
OMB                   Office of Management and Budget
OPM                   Office of Personnel Management
PMA                   President's Management Agenda
SSA                   Social Security Administration
USCG                  U.S. Coast Guard
USGS                  U.S. Geological Survey


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Page ii                                                         GAO-03-446 Human Capital
A
United States General Accounting Office
Washington, D.C. 20548



                                    April 11, 2003                                                                                 Leter




                                    The Honorable George V. Voinovich
                                    Chairman
                                    Subcommittee on Oversight of Government Management,
                                      the Federal Workforce, and the District of Columbia
                                    Committee on Governmental Affairs
                                    United States Senate

                                    The Honorable Jo Ann Davis
                                    Chairman
                                    Subcommittee on Civil Service and Agency
                                      Organization
                                    Committee on Government Reform
                                    House of Representatives

                                    Strategic human capital management is a pervasive challenge in the federal
                                    government. In July 1998, we reported on agencies’ efforts to restructure
                                    their personnel operations.1 At that time, resource reductions and
                                    changing missions, coinciding with the replacement of aging human capital
                                    management information systems, were driving efforts in federal agencies
                                    to restructure their human capital offices. We found agencies’ additional
                                    human capital challenges included the need to achieve a more strategic
                                    integration of human capital approaches in the program decision-making
                                    processes.

                                    Fortunately, we are seeing increased attention to strategic human capital
                                    management and a real and growing momentum for change. Recent
                                    legislation creating the Department of Homeland Security includes a
                                    provision to establish a chief human capital officer (CHCO) in major
                                    agencies of the federal government.2 One of the functions of the CHCO is
                                    to align the agency’s human capital policies and programs with
                                    organization mission, strategic goals, and performance outcomes. This
                                    increased visibility of human capital organizations within federal agencies
                                    underscores the increased recognition that strategic human capital
                                    management is a vital enabler of organizational success.


                                    1
                                      U.S. General Accounting Office, Management Reform: Agencies’ Initial Efforts to
                                    Restructure Personnel Operations, GAO/GGD-98-93 (Washington, D.C.: July 13, 1998).
                                    2
                                        Title XIII of Pub. L. 107-296, Nov. 25, 2002, Chief Human Capital Officer’s Act of 2002.




                                    Page 1                                                               GAO-03-446 Human Capital
                   We are addressing this report to you because of your ongoing interest in
                   federal human capital issues and how agencies can effectively manage their
                   human capital to achieve their organizational goals. Our objective for this
                   report was to identify and provide examples of key actions agencies have
                   taken to integrate their human capital approaches with their strategies for
                   accomplishing organizational missions. These actions may prove helpful to
                   other agencies as they seek to ensure that their human capital approaches
                   are aligned with their program goals. We examined selected human capital
                   integration actions within the Federal Emergency Management Agency
                   (FEMA), the General Services Administration (GSA), the Internal Revenue
                   Service (IRS), the Social Security Administration (SSA), the U.S. Coast
                   Guard (USCG), and the U.S. Geological Survey (USGS).3 These executive
                   branch agencies were chosen because various human capital experts
                   identified them as having taken actions to integrate human capital
                   approaches with strategies for accomplishing organizational missions and
                   program goals.

                   To meet our objective, we analyzed agency documents, such as planning
                   and organizational restructuring documents, and previous studies on
                   strategic human capital management. In addition, we conducted
                   semistructured interviews with agency officials, human resource directors,
                   and line managers, who were involved in designing or implementing their
                   agencies’ human capital integration actions, to elicit their experiences and
                   conclusions about the agency actions they believed were most important to
                   the successful integration of their human capital function. After reviewing
                   and analyzing their responses, we developed a framework to classify and
                   report on the types of identified actions. We did not attempt to
                   independently verify the performance results that agencies attributed to
                   their actions. Additionally, our selection process was not designed to
                   provide examples that could be considered representative of all the actions
                   at the agencies reviewed or of the federal government in general. By
                   profiling an agency for a particular action, we do not mean to imply
                   complete success for the action or lack of success for others. Appendix I
                   provides additional information on our scope and methodology.



Results in Brief   The executive branch agencies we reviewed have taken a range of key
                   actions to integrate their human capital approaches with their strategies for

                   3
                     Congress has designated FEMA and USCG part of the new Department of Homeland
                   Security (Pub. L.107-296, Nov. 25, 2002).




                   Page 2                                                    GAO-03-446 Human Capital
                                                      accomplishing organizational missions and goals. Table 1 identifies the
                                                      actions taken and who within the agency initiated them.



Table 1: Key Agency Actions to Integrate Human Capital Approaches with Strategies for Accomplishing Agency Missions

Action initiators            Description of action
Agency leaders               • Agency leaders included human capital leaders in key agency decision making. For example, USCG’s agency
                               leadership has engaged its human capital organization earlier in the strategic planning and decision-making
                               process by appointing its Assistant Commandant for Human Resources as a member of the agency’s senior
                               management team and a full partner in the development of key USCG management decisions.

                             • Agency leaders also established entities, such as human capital councils, accountable for integrating human
                               capital approaches with strategies for achieving programmatic goals. The groups’ members include both program
                               leaders and human capital leaders. For example, GSA created a Human Capital Council to ensure, among other
                               objectives, that the agency’s human capital strategic plan was integrated within GSA’s strategic plan and
                               supported the agency’s program strategies.
Human capital                • Human capital leaders are establishing and communicating clear human capital strategic visions. For example,
leaders                        GSA’s Chief People Officer’s vision is for GSA’s Chief People Office (CPO) to become a partner in GSA’s
                               business success. To do so, she explained that CPO must deliver products and services that enable its
                               customers to focus on their core business. Similarly, IRS’s former Chief Human Resource Officer’s vision is for
                               the human capital professional in IRS to become more proactive in providing human capital strategies and
                               solutions that directly enhance the agency’s performance.

                             • Human capital leaders are restructuring their human capital organizations to improve their alignment with their
                               vision. For example, IRS’s restructured human capital management function includes, as one of three major
                               components, a national headquarters strategic human resources organization.

                             • Human capital leaders are using technological advances to provide opportunities to free organizational resources
                               that can be redeployed for strategic purposes. For example, the USGS partnered with QuickHire, a commercial
                               off-the-shelf software developer, to develop an on-line automated recruitment system (OARS) that allows USGS’s
                               human capital staff to enter job vacancies into a centralized database and develop rating and ranking criteria by
                               selecting and weighting questions from an extensive question library organized by job series. According to
                               USGS, as the agency continues to gain experience and efficiencies using OARS, it hopes to divert an increasing
                               number of human capital staff members to other strategic efforts.

                             • Human capital leaders are promoting a more strategic role for human capital professionals and are investing in
                               the development of new competencies for human capital professionals to support their increased strategic
                               engagement. For example, in response to the changing role and functions of its human capital community, GSA
                               has developed new core competencies needed by its human capital staff. Included in these competencies are
                               the new skills GSA’s Chief People Officer believes the agency’s human capital staff members must develop to
                               become business partners.
Agency leaders and • Jointly, agency leaders and human capital leaders are having human capital professionals and agency line
human capital        managers share the accountability for successfully integrating strategic human capital approaches into the
leaders              planning and decision making of the agency. For example, FEMA’s human capital leaders and program officials
                     have implemented an innovative employee staffing effort. According to FEMA officials, this greatly enhanced the
                     agency’s emergency response capability by providing the human capital staff and the line managers the ability to
                     collaborate in identifying available deployment candidates for assignment as soon as federal disasters are
                     declared.
Source: GAO analysis of agency data.




                                                      Page 3                                                           GAO-03-446 Human Capital
             The Office of Personnel Management (OPM) and five of the six selected
             agencies provided comments on a draft of this report. All generally agreed
             with the information presented and that there is a need for federal agencies
             to ensure that their human capital activities are a strategic consideration in
             accomplishing their missions. Several agencies provided additional
             examples of strategic actions taken by their human capital offices as well
             as technical comments that we have incorporated as appropriate. USCG
             noted that they had no comments on the report.



Background   Similar to the federal government’s acknowledgment over the past decade
             of the need to adopt a more businesslike approach to financial, information
             technology, and performance-based management, the need for strategic
             management of human capital is meeting increased recognition. Since we
             placed strategic human capital management on our high-risk list in 2001,
             the President’s Management Agenda (PMA) subsequently identified
             human capital as one of the five key governmentwide management
             challenges facing the federal government. The agenda specifically sets an
             expectation for agencies to integrate their human capital strategies with
             their organizational missions, visions, core values, goals, and objectives. In
             October 2002, the Office of Management and Budget (OMB) and OPM
             approved revised standards for success in the human capital area of the
             PMA, reflecting language that was developed in collaboration with GAO.
             To assist agencies in responding to the revised PMA standards, OPM
             released the Human Capital Assessment and Accountability Framework.




             Page 4                                                 GAO-03-446 Human Capital
                      Our work and that of others has shown that high-performing organizations
                      link their human capital management systems—from the organizational
                      level down to individual employees—with their strategic planning and
                      mission accomplishment.4 This means the function that has traditionally
                      been called personnel or human resources needs to make a fundamental
                      transformation, from being a strictly support function involved in managing
                      personnel processes and ensuring compliance with rules and regulations to
                      designing and implementing human capital approaches to attain the
                      agency’s strategic goals. In addition, we found that effective human capital
                      professionals must have the appropriate preparation not just to provide
                      effective support services, but also to effectively consult with line
                      managers in tailoring human capital strategies to the unique needs of the
                      agency.5

                      In March 2002, we released our Model of Strategic Human Capital
                      Management to help agency leaders more effectively lead and manage their
                      people and integrate human capital approaches into their strategic
                      planning and decision making.6 The model emphasizes that successful
                      strategic human capital management requires the integration of human
                      capital approaches with strategies for accomplishing organizational
                      missions and program goals. Such integration allows the agency to ensure
                      that its core processes efficiently and effectively support mission-related
                      outcomes.



Selected Agencies     The executive branch agencies we reviewed took a range of actions as part
                      of efforts to integrate human capital approaches with strategies for
Took Actions to       achieving organizational missions. Top agency leaders and human capital
Integrate Human       leaders were the primary initiators of the various actions taken. In
                      addition, the agency leaders and human capital leaders jointly have
Capital Approaches    employed human capital professionals and agency line managers to share
with Organizational   the accountability for successfully integrating human capital approaches
Missions              into the planning and decision making of the agencies.


                      4
                        See, for example, Thomas R. Connolly, et al. “Transforming Human Resources,”
                      Management Review, June 1997.
                      5
                        U.S. General Accounting Office, Human Capital: A Self-Assessment Checklist for Agency
                      Leaders, GAO/OCG-00-14G (Washington, D.C.: September 2000).
                      6
                       U.S. General Accounting Office, A Model of Strategic Human Capital Management, GAO-
                      02-373SP (Washington, D.C.: Mar. 15, 2002).




                      Page 5                                                        GAO-03-446 Human Capital
Agency Leaders Recognize   Top leadership in the agencies expected agency human capital leaders to
Key Role of Strategic      significantly contribute to strategic planning and decision making,
                           evidenced by their establishing human capital roles in positions that are
Human Capital Engagement   significant in the organizational hierarchy. This acknowledges both the
                           commitment of the agency head to strategically managing the agency’s
                           people and the expected role that human capital leaders should contribute
                           to organizational success. In addition, agency heads created entities, such
                           as human capital councils, to regularly review their agencies’ human
                           capital strategies and to ensure a data-driven, performance-oriented
                           approach to human capital management. These groups of senior agency
                           officials, including both program leaders and human capital leaders,
                           provide oversight and are accountable for the integration and alignment of
                           the agencies’ human capital approaches.



Agency Leaders Ensure      Although the so-called “seat-at-the-table” is significant, human capital
Human Capital              leaders are ultimately valued not by place, but by the value they add to the
                           agencies’ strategic human capital approaches in attaining organizational
Representation in Agency   goals. According to a 1999 OPM report on strategic human capital
Strategic Planning and     management,7 there has often been contention between human capital
Decision Making            leaders and agency leaders because of human capital’s role as “gatekeeper,”
                           that is, enforcing the law, rules, and regulations. Now, with the
                           responsibility of the human capital function evolving, agency leaders are
                           positioning human capital leaders in roles where they have the opportunity
                           to more directly affect agency decisions and achievement of goals.




                           7
                             U.S. Office of Personnel Management, Office of Merit Systems Oversight and Effectiveness,
                           Strategic Human Resources Management: Aligning with the Mission (Washington, D.C.:
                           September 1999).




                           Page 6                                                          GAO-03-446 Human Capital
USCG officials told us that USCG’s Assistant Commandant for Human
Resources (HR) is a member of the agency’s senior management team and
is a full partner in the development of key USCG management decisions.
They stated that because of the Assistant Commandant’s organizational
status, USCG’s HR unit has participated earlier in strategic planning and
decision making, thus facilitating a smoother transition and execution of
ideas. The officials cited USCG’s use of scenario-based planning as an
example of early involvement by USCG’s HR unit in agency strategic
planning and decision making. Scenario-based planning is a technique
used by USCG for managing uncertainty and risk when planning into the
future. The agency develops a few plausible future scenarios and then
plans how it would best respond to each scenario and what resources it
would need to respond. For example, one scenario may describe
conditions that imply a greater need to interdict drugs in harbors than
another scenario, which may describe a world where the higher priority is
to intercept possible terrorist threats from the seas as far offshore as
legally possible. Differing competency requirements and operating
concepts (e.g., time spent at sea) require different human capital
approaches in each of these scenarios. With USCG’s migration to the
Department of Homeland Security and its added security responsibilities,
the agency’s plans for balancing resources among its many missions will
become increasingly important.8

In the summer of 1998, senior USCG human capital staff members were
part of a core group of USCG planners who developed scenarios and
constructed the operational and support strategies to succeed in those
scenarios. The group eventually created five very different worlds that
might exist in the year 2020, along with the "history" of events that led to
each of those, based on the combined factors of U.S. economic vitality, the
global demand for maritime services, the role of the federal government,
and threats to U.S. society. The purpose of the five worlds was to create
the boundaries of the possible future, and allow leaders and planners to
create a strategy for USCG that would work well in each independent
scenario. The core group then analyzed the elements common to all five
strategies and crafted a core strategy. The human capital strategies that
emerged became part of USCG’s official strategy, and simultaneously drove
the human resource organization’s business planning and resource
investments for the 2001-2005 time frame.


8
  U.S. General Accounting Office, Coast Guard: Strategy Needed for Setting and
Monitoring Levels of Effort for All Missions, GAO-03-155 (Washington, D.C.: Nov. 12, 2002).




Page 7                                                          GAO-03-446 Human Capital
USCG attributes a number of its improved processes to the early
involvement of its human capital unit with the agency’s decision-making
management team. Specific examples cited by USCG include (1) a
significant restructuring of military occupations and career paths to reflect
emerging requirements for new competencies, (2) a revision of assignment
and reassignment practices to make better use of the investments in
training and development, and (3) a restructuring of civilian personnel
management functions to better support line managers in meeting their
operational requirements.

USGS’s HR Office has also played a prominent role in agency strategic
planning and decision making. In 1997, USGS’s HR Office led a group of
senior USGS managers in developing the first strategic HR plan for USGS
as the agency strategically planned how it would remain at the forefront of
earth and biological science and technology. USGS’s strategic HR plan
formed the basis for the four people goals (skills, rewards, flexibility, and
leadership) included in the agency’s current strategic plan. HR staff
members were active in the development of the people goals and in the
creation of the current and next-generation measures by which the agency
is assessing progress under these goals. They were also involved in
planning and implementing the strategic human capital initiatives by which
USGS hopes to achieve its goals.

USGS’s strategic human resources plan describes how USGS will align its
people and processes with the business strategies it has adopted to achieve
its mission and also recognizes that organizational goals are seldom, if ever,
realized without the effective use and support of people. One USGS
business strategy is to increase the agency’s flexibility to get work done by
using all options other than permanent staff members. The strategic
human resources plan states that to enhance USGS’s flexibility to acquire
skills to meet short-term needs and provide an influx of new ideas, the HR
Office will, for example, expand the use of short-term student and faculty
appointments from academia and development agreements from the
private sector.

SSA’s Deputy Commissioner for Human Resources reports directly to the
Commissioner and is an equal partner with the agency’s other deputies.
SSA’s human capital officials report that their engagement in the strategic
planning activities of the agency has provided a much greater opportunity
to contribute to effective outcomes. For example, the human capital
organization worked in partnership with SSA’s Office of Finance,
Assessment and Management regarding the competitive sourcing initiative



Page 8                                                 GAO-03-446 Human Capital
                             of the President’s Management Agenda to ensure there was no undue
                             negative impact on the agency’s human capital and workloads. In addition,
                             SSA’s human capital organization has worked closely with SSA’s Office of
                             Systems in the construction and implementation of the Office of Systems’
                             major reorganization. The human capital organization believes its efforts
                             have ensured the appropriate mix of employees at the proper levels, and
                             will result in an efficient systems organization.



Agency Leaders Established   Agency leaders established entities, such as human capital councils,
Entities to Integrate        accountable for integrating human capital approaches with program
                             strategies to attain successful program results. Composed of senior agency
Strategic Human Capital
                             officials, including both program leaders and human capital leaders, these
Approaches                   groups meet regularly to review the progress of the agency’s integration
                             efforts and to make certain that the human capital strategies are visible,
                             viable, and remain relevant. Additionally, the groups help the agencies
                             monitor whether differences in human capital approaches throughout their
                             agencies are well considered, effectively contribute to outcomes, and are
                             equitable in their implementation.

                             IRS, for example, created an entity to ensure a coordinated approach to
                             agencywide human capital issues, policies, and strategies. The agency’s
                             Human Resource Policy Council (HRPC), which meets monthly for
                             approximately half a day, addresses cross-unit human capital issues that
                             cannot be resolved at lower levels. It is composed of the Chief Human
                             Resource Officer and representatives from each of IRS’s major
                             organizations. HRPC is charged with (1) identifying and addressing
                             crosscutting human capital issues and emerging human capital priorities,
                             (2) ensuring that cross-divisional links are in place and operating
                             effectively, (3) making final decisions on all cross-unit human capital
                             issues, (4) providing strategic human capital advice and recommendations
                             to the Commissioner and his senior staff, and (5) addressing the issue of
                             uniformity versus flexibility across divisions for human capital policy.
                             HRPC decided, for example, to eliminate agencywide restrictions regarding
                             fast-track promotion of IRS managers.

                             GSA has a similar group, its Human Capital Council. The council, created
                             in 2002, meets quarterly and, as shown in table 2, consists of human capital
                             leaders, senior executives and officials for the major service and staff
                             offices, and representatives of regional administrators and deputy regional
                             administrators.




                             Page 9                                               GAO-03-446 Human Capital
                          Table 2: GSA Human Capital Council Members

                          Agency leaders                              Human capital leaders
                          Chief Financial Officer                     Chief People Officer
                          Chief Information Officer                   Deputy Chief People Officer
                          Deputy Commissioner, Federal Supply         Director of Human Resources
                          Service
                          Deputy Commissioner, Public Buildings       Director of Executive Resources
                          Service
                          Deputy Commissioner, Federal Technology     Director of Information Technology (CPO)
                          Service
                          Deputy Associate Administrator, Office of
                          Governmentwide Policy
                          Regional Administrator, Region 5
                          Deputy Regional Administrator, National
                          Capital Region
                          Deputy Regional Administrator, Region 3
                          Source: GSA (data), GAO (presentation).


                          The council ensures that, among other objectives, the agency's human
                          capital strategic plan is consistent with GSA's strategic plan. As an
                          advocate for human capital initiatives, council members are to ensure that
                          activities in the agency reflect the human capital strategic plan. Another
                          objective of the group is to assist CPO in setting human capital program
                          priorities by assuring that program goals are key determinants of the
                          human capital approach. To support future program priorities, the
                          council, for example, determined what the GSA leadership competencies
                          would be and established the policy and requirements for the GSA-wide
                          Advanced Leadership Development Program.



Human Capital Leaders     High-performing organizations treat strategic human capital management
Have Taken Actions to     as fundamental to effective overall management. Human capital leaders in
                          such organizations develop human capital organizations that can fulfill
Transform Human Capital   enlarged roles, such as business partner, human capital expert, leader, and
Organizations             change agent, to meet current and future programmatic needs.9 For


                          9
                            U.S. Office of Personnel Management, An Occupation in Transition: A Comprehensive
                          Study of the Federal Human Resources Community, Part 3, The HR Workforce: Meeting
                          the Challenge of Change, MSE-99-7 (Washington, D.C.: January 2000).




                          Page 10                                                       GAO-03-446 Human Capital
                               example, agency human capital leaders took actions to enlarge the vision
                               of their organizations from being providers of largely transaction-based
                               services to ones whose visions included integrating human capital
                               approaches in agency plans and strategies to successfully accomplish their
                               goals. To align the human capital resources with the organizations’ new
                               visions, human capital leaders often found it necessary to restructure the
                               organizations. Additionally, improving and expanding upon the efficiency
                               of human capital systems and technology offers the opportunity to
                               reallocate additional resources for strategic purposes. Human capital
                               leaders also worked to ensure that the human capital professionals within
                               their agencies were prepared, expected, and empowered to provide a range
                               of consultative and technical services to their internal customers.

Establishing a Human Capital   A human capital strategic vision is crucial in providing a common direction
Strategic Vision               across the organization. Agency human capital leaders we interviewed
                               envisioned their human capital offices becoming more strategically
                               involved with the achievement of agency goals. These leaders
                               communicated their visions to employees and took steps to institute the
                               organizational changes needed to achieve their visions.

                               IRS’s former Chief Human Resource Officer believes that IRS’s human
                               capital professionals must be champions of change and be totally
                               committed to thinking and acting strategically with respect to the agency’s
                               broader mission, its people, and the importance of linking the two together.
                               According to IRS, to make change on the scale needed to enact the vision
                               requires the involvement of management, employees, and the employee
                               unions in virtually every aspect of the transformation. To obtain employee
                               buy-in, IRS’s human capital organization formed work groups to empower
                               its human capital employees to participate in the redesign effort.

                               IRS’s human capital leaders believe the principal contribution of its new
                               human capital organization vision and framework is that it provides a
                               direct focus on developing new and more flexible ways of managing the
                               workforce. For example, IRS has introduced streamlined critical pay
                               authority, developed a category rating process, and instituted a managerial
                               pay banding system. IRS’s officials stated that these actions were
                               undertaken to attract world-class senior leadership and technical talent,
                               simplify and accelerate external and internal hiring, and support
                               organizational delayering in addition to creating a culture of performance
                               and individual accountability. In general, they said the innovations provide
                               top management with a strong and direct connection between human
                               capital strategies and systems and mission results.



                               Page 11                                              GAO-03-446 Human Capital
                                  GSA’s Chief People Officer has a vision for GSA’s CPO to become a partner
                                  in GSA’s business success. To do so, she said that CPO must (1) deliver
                                  products and services that enable its customers to focus on their core
                                  business and (2) develop its workforce to be a valued business partner.
                                  GSA’s Chief People Officer said that before the human capital organization
                                  can play a bigger role as a business partner it must ensure that its
                                  transaction-based tasks are accurately and efficiently processed and that
                                  day-to-day problems, concerns, and needs of individual employees that are
                                  related to human resources are addressed.

                                  To achieve her vision, the Chief People Officer wants to focus more time
                                  and resources on CPO becoming a business partner by ensuring that its
                                  transaction-based tasks and advisory activities are completed more
                                  efficiently. She has placed a high priority on automation and information
                                  technology as means to reduce costs and make time available for the
                                  business partner role. She has established a Chief Information Officer
                                  (CIO) position within GSA’s CPO to support GSA’s human capital functions
                                  that are increasingly being driven by technology.

                                  The Chief People Officer has shared her vision with agency leadership
                                  during presentations before GSA’s administrators. In addition, she has
                                  expressed her vision to program leaders during Human Capital Council
                                  meetings and has included information on her vision in electronic
                                  newsletters sent to CPO staff members. The Chief People Officer also
                                  issues periodic written updates on human capital issues that contain
                                  information on her vision and related goals.

Restructuring the Human Capital   Restructuring the human capital organization is an important step that is
Organization                      often necessary for the transformation of the human capital function.
                                  Ideally, this restructuring should help align the organization with its revised
                                  vision and should position the human capital function to move from a
                                  reactive, process-oriented, and compliance focus to the platform needed to
                                  become a proactive, results-oriented, consulting-oriented strategic partner.
                                  When we reported on agencies’ initial efforts to restructure their personnel
                                  operations in 1998, we noted that the four departments reviewed generally
                                  approached the restructuring of their personnel offices with the intent of
                                  achieving staff reductions.10 Some human capital leaders are now focusing
                                  less on finding additional internal efficiencies and more on replacing stove-
                                  piped structures that include separate units for functions such as staffing

                                  10
                                       GAO/GGD-98-93.




                                  Page 12                                                GAO-03-446 Human Capital
and classification, with more flexible structures that support new human
capital roles.

The right organizational structure can help human capital organizations
strategically align with agency objectives and improve the delivery of
human capital products and services. Although some federal agencies are
restructuring their human capital organizations along similar lines, the
right organizational structure depends on the unique characteristics of the
agency. In a 1999 report, OPM maintained that because organizations are
starting from different positions, they would need to structure their human
capital functions based on mission, not on a “one size fits all” solution.11 In
a similar vein, in July 2000 a coalition of individuals representing a wide
cross section of organizations with an interest in the federal human capital
community anticipated that a variety of human capital organizational
structures would form across the federal government.12 The coalition
predicted that factors such as customer needs and agency budgets would
design and drive the structure of a particular agency’s human capital
organization. The report noted, however, that the group did expect to see
movement away from traditional structures toward more flexible
arrangements.

In a 2001 National Academy of Public Administration (NAPA) report, one of
the key findings was that human capital organizations were restructuring,
and the report noted that the emerging organizational model appears to
consist of three elements: a center of expertise, a shared service center,
and a strategic consultant component.13 The center of expertise provides
expert technical advice and assistance to managers and employees while
the shared service center processes traditional personnel transactions.
The strategic consultant component serves as a strategic partner, change
agent, and consultant to agency managers. The elements in the new
structure attempt to balance the need for consolidation while still allowing
human capital professionals to have a direct connection with their
customers.

11
  U.S. Office of Personnel Management, An Occupation in Transition: A Comprehensive
Study of the Federal Human Resources Community, Part 2, Looking to the Future:
Human Resources Competencies, MSE-99-6 (Washington, D.C.: September 1999).
12
  A Coalition on the Future of the Federal Human Resource Management Profession, A Call
to Action (Washington, D.C.: September 2000).
13
  National Academy of Public Administration, Changes in the Human Resources Function
Since 1996: Implications for Federal HR Competencies (Washington, D.C.: March 2001).




Page 13                                                      GAO-03-446 Human Capital
FEMA’s Human Resources Division (HRD) has recently restructured in a
manner similar to this emerging organizational model. As shown in figure
1, FEMA’s new HRD structure contains three branches: an advisory
services branch, a reconfigured operations branch, and a human capital
investment branch.



Figure 1: FEMA’s Human Resources Division after Restructuring

                                                                    Human capital
   Advisory services branch                Operations branch
                                                                  investment branch



              Functions                       Functions               Functions



              Management                         Systems            Strategic planning
             advisory services                 management          and policy oversight


               Employee and                     Staffing and        Workforce planning
               labor relations                  classification       and development


                                              Personnel and          Performance and
             Benefit counseling
                                             payroll processing    recognition programs


               Human capital                Disaster deployment       Family friendly
              program delivery                systems support       programs/initiatives


Source: FEMA (data), GAO (presentation).



The advisory services branch provides on-site management advisory
service and support to FEMA directorates, regional offices, divisions, and
branches. The operations branch handles all staffing and selection,
classification systems, employee self-service operations, and records
processing. The human capital investment branch is designed to take the
lead in FEMA’s strategic human capital planning and policy oversight.

FEMA officials told us that the agency restructured its human capital
organization to meet the emerging requirements of its strategic planning
initiatives and to address its inability to respond effectively to growing
operational demands. Since the restructuring, HRD has initiated over 30
projects targeting human capital improvements that are aligned to the
agency’s strategic plan and the President’s Management Agenda. For



Page 14                                                           GAO-03-446 Human Capital
                                example, the improvement initiatives included determining uniform
                                compensation bands based on staff competencies and a series of initiatives
                                focused on improving human capital services throughout the agency.
                                Additionally, in connection with its migration to the Department of
                                Homeland Security on March 1, 2003, FEMA identified a set of 17
                                “matrix/virtual” teams of HRD and agency leaders to address key
                                transitional issues.

                                IRS also restructured its human capital management function with the
                                same three elements found in the emerging organizational model. The IRS
                                structure includes (1) an embedded human resources organization in each
                                business/functional unit, (2) an agencywide shared services organization,
                                and (3) a national headquarters strategic human resources organization
                                called Strategic Human Resources. Under this arrangement, each
                                operating division has its own human capital office “embedded” within its
                                division. These embedded human capital offices report to the operating
                                division leader and are tasked with formulating, implementing, and
                                customizing human capital policies, procedures, and strategies to fit the
                                business unit’s unique needs. IRS’s agencywide shared services performs
                                an operational mission involving the delivery of common products and
                                services to organizations, managers, and employees across the agency.
                                Strategic Human Resources develops strategic human capital management
                                policies, programs, and strategies in collaboration with a council that
                                includes human capital directors from the major business units.

Technology Used to Facilitate   Improved efficiencies and economies of transaction-based services provide
Change                          the opportunity for agencies to reallocate resources and enable their
                                human capital organizations to meet expanded roles as business partners
                                and change agents. However, as we found in our 1998 report on agencies’
                                efforts to restructure personnel operations, agencies need to carefully plan
                                and manage the implementation of new technology to fully achieve the
                                desired benefits.14

                                USGS has developed OARS, which allows its human capital staff to enter
                                job vacancies into a centralized database and develop rating and ranking
                                criteria by selecting and weighting questions from an extensive question
                                library organized by job series. Applicants register and apply for vacancies
                                on-line. The system immediately rates, ranks, and scores applicants based
                                on their answers to weighted questions, taking into account all of the

                                14
                                     GAO/GGD-98-93.




                                Page 15                                              GAO-03-446 Human Capital
regulations that govern the federal hiring process. The list of the best-
qualified candidates is provided to the hiring manager within several days.
USGS’s officials said that OARS has given applicants a quick and easy way
to apply for jobs, increased the number of applicants per vacancy between
40 and 500 percent, dramatically reduced the time it takes to fill vacancies,
and allowed human capital professionals to refocus their efforts from
processing to consulting. USGS hopes to be able to divert an increasing
number of its staff members to other strategic efforts as it continues to gain
experience and efficiencies using OARS.

As mentioned above, GSA has established a CIO for the personnel function
located within its Chief People Office. The position was created several
years ago when GSA began developing an information technology
management system for federal personnel operations. Because GSA’s
comprehensive human resources integrated system (CHRIS) required
major systems modification and was intended to serve other federal
agencies, a senior-level technology position was needed to facilitate the
effort. According to CPO’s CIO, his role is to evaluate, develop, and install
systems that support GSA’s human capital technology needs. He believes
that technology is vital to achieving GSA’s Chief People Officer’s goals. He
explained that improved technology and automation efforts mean less staff
time is needed for traditional human capital functions, thus allowing the
CPO staff members to play bigger roles as business partners. However,
because most of GSA’s system is fairly new or still under development,
CPO’s CIO has not reduced resources and identified staff savings. In an
earlier report, we noted instances where agencies eliminated personnel
staff before new technology for automating personnel transactions was in
place. This resulted in delays in implementing new personnel and payroll
systems.15 According to CPO’s CIO, resources reallocation will be
accomplished as efficiencies are demonstrated. CHRIS is expected to
ultimately provide self-service to employees and managers, performance
management capability, integrated training solutions, and succession
planning. As technology becomes more important to the entire human
capital process and productivity drives future GSA staffing, the Chief
People Officer believes that by having the CIO in-house, she has needed
input into the technology decision making and the capital allocation
process for the agency.




15
     GAO/GGD-98-93.




Page 16                                                GAO-03-446 Human Capital
                                 As the President’s human capital management advisor, OPM has recently
                                 been given the responsibility of leading five e-Government initiatives that
                                 are designed to use technology to improve the strategic management of the
                                 federal workforce. OPM is the managing partner for the Recruitment One-
                                 Stop, e-Clearance, Enterprise Human Resources Integration, e-Training,
                                 and e-Payroll initiatives. The e-Payroll initiative, for example, is designed
                                 to simplify and integrate payroll systems across the federal government.
                                 OPM and OMB announced on January 15, 2003, the selection of two payroll
                                 partnerships to consolidate federal payroll systems and save the federal
                                 government an estimated $1.2 billion over the next decade. The Enterprise
                                 Human Resources Integration and e-Clearance initiatives are focused on
                                 electronically integrating personnel records across the government and
                                 reducing the delays involved in security clearance processing. The full
                                 implementation of these two initiatives is scheduled for the end of fiscal
                                 year 2006.16 OPM envisions that the use of technology will help streamline
                                 and improve procedures for moving federal employees through the
                                 employment life cycle by removing redundancies, reducing response times,
                                 eliminating paperwork, and improving coordination among federal
                                 agencies.

Changing Roles and               The actions that human capital leaders, and federal agencies in general, are
Competencies for Human Capital   taking to improve their integration of human capital approaches with their
Professionals                    missions are reflected, in part, by a definite shift in the roles of human
                                 capital professionals throughout the federal government. The occupation
                                 is in transition from valuing narrowly focused specialists to requiring
                                 generalists, who have all the skills necessary to play an active role in
                                 helping to determine the overall strategic direction of the organization. As
                                 agencies further integrate strategic human capital approaches into their
                                 strategic planning and decision making, investment in the development of
                                 new competencies for human capital professionals is receiving more
                                 attention.




                                 16
                                   U.S. General Accounting Office, Electronic Government: Selection and Implementation
                                 of the Office of Management and Budget’s 24 Initiatives, GAO-03-229 (Washington, D.C.:
                                 Nov. 22, 2002).




                                 Page 17                                                      GAO-03-446 Human Capital
OPM published a study in 1999 establishing a statistical profile of the
human capital profession within the federal government.17 The report
described the federal human capital community as a cadre of experts
separated into seven distinct occupational series. One series represented
the human capital generalist, who typically has a breadth of knowledge
about personnel issues. The other six categories consisted of specialists,
such as classifiers and staffing specialists, who possess in-depth
knowledge in specific human capital areas.18 The report noted that from
1969 through 1998 there had been a small but noticeable shift occurring in
the human capital profession away from specialist positions to generalist
positions. In 1998, generalists made up a slight majority of human capital
professionals at 53 percent, while specialists positions had declined to 47
percent.

Consistent with the changing roles and expectations for human capital
professionals, this noticeable shift toward human capital generalists has
accelerated since 1998. As of June 2002, generalists made up 73 percent of
human capital professionals, while specialists had declined to 27 percent.
Figure 2 shows the dramatic change in the percentage of human capital
generalists since 1996.




17
  U.S. Office of Personnel Management, An Occupation in Transition: A Comprehensive
Study of the Federal Human Resources Community, Part 1, Federal Human Resources
Employment Trends, MSE-99-5 (Washington, D.C.: September 1999).
18
  We use the term “human capital specialist” throughout the report to denote a human
capital professional who focuses on a specific area. It does not refer to an occupation title.




Page 18                                                           GAO-03-446 Human Capital
Figure 2: The Federal Human Capital Workforce: Percentage of Generalists and
Specialists
100 Percentage

 90

 80

 70

 60

 50

 40

 30

 20

 10

     0

          1996        1997          1998   1999   2000   2001      2002
         Years

                 Generalists
                 Specialists

Source: OPM Central Personnel Data File.



A combination of factors appears to have contributed to this shift.
According to OPM, it was necessitated, to a large degree, by the significant
downsizing in federal office staffing levels during the 1990s, which
precluded continuing a specialized approach.19 In addition, OPM
concluded that human capital management as an occupation had been
undergoing a significant redefinition. For example, automation began to
greatly affect how human capital products and services were delivered.
Many agencies began using the Internet or their own intranets to educate
managers and employees about human capital programs and options. OPM
also noted in a 1999 report that many agencies were beginning to outsource
some of their human capital services.20 With more efficient ways to deliver
products and services, human capital professionals could focus on their

19
 Human Resource Management Council, Transmittal MSG-083b, Appendix H—Historical
Record and Explanatory Material (Washington, D.C.: 2000).
20
  U.S. Office of Personnel Management, An Occupation in Transition: A Comprehensive
Study of the Federal Human Resources Community, Part 2.




Page 19                                                         GAO-03-446 Human Capital
emerging roles as advisors and consultants, which require more generalist
practitioners able to work across multiple human capital functions.

The advantage to the agencies of this shift was that existing staff members
could be deployed more flexibly and new staff members could be recruited
for broader human capital competencies that had less to do with
specialized procedures than with general human capital knowledge,
concepts, and principles. In fact, OPM concluded in 2000, based on a body
of research and evidence, that the human capital occupation was truly
becoming generalized in nature both inside and outside the federal
government.21 Although OPM did not find that human capital roles had
shifted in every agency, it determined that agencies needed their human
capital staff members to leave behind their roles of technical specialists
focused on regulatory compliance and to take on more consultative roles.
This entailed working with managers, employees, and their representatives
to ensure that human capital programs and practices were properly aligned
to help the organization meet its strategic objectives, while adhering to
merit system principles and other legal obligations.

To reflect these changes in the federal human capital community, in
December 2000, OPM issued a new consolidated classification standard for
the Administrative Work in the Human Resources Management Group.
OPM expects the agencies to apply the new job family position
classification standard within a reasonable amount of time of its release, as
determined by the agency. According to an OPM official, agencies are
making progress in applying the new standard.

The pressures on human capital professionals to assume new roles present
a significant learning and development challenge for human capital staff
members. For human capital professionals to begin acting in their new
capacities, human capital leaders must ensure that they develop the
competencies and gain the experience to effectively take on the expected
roles. Consistent with the changes reflected by OPM’s new classification
standards, several of the agencies we reviewed have developed human
capital competency models designed to develop staff members who can
contribute at the strategic and business partner levels as well as design and
manage delivery systems, which achieve value-added services at lower
costs.



21
     Human Resource Management Council.




Page 20                                               GAO-03-446 Human Capital
GSA recognized the vision of its Chief People Officer and the changing role
of its human resources organization and assembled a team of experienced
human resources staff members to develop new core competences needed
by the CPO staff. This group developed GSA’s new human capital core
competencies needed to support its CPO business model and identified five
roles that GSA believes its human capital community must play
successfully to achieve the Chief People Officer’s vision and to meet the
expectations of the GSA customers. The five roles are consultant, leader,
technologist, transactional expert, and expert. Specific competencies
support each role. In addition, GSA uses its competency model as a
recruiting tool for human resources professionals. The model lists
desirable attributes for job candidates as well as a few suggested interview
questions for determining whether applicants possess these attributes.
Table 3 lists GSA’s HR roles and the primary competencies GSA states are
essential for success in each of the roles.




Page 21                                              GAO-03-446 Human Capital
Table 3: GSA’s HR Roles and Competencies

Roles                       Primary competencies essential for success
HR consultant               --Knows the mission, culture, and business of customers
                            --Has applied knowledge of customer service
                            --Communicates effectively
                            --Is innovative and willing to take risks
                            --Builds partnerships/relationships
                            --Has knowledge of HR program, laws, and practices and how they
                            contribute to workforce/organizational effectiveness
                            --Understands and applies the change process
HR leader                   --Knows the mission, culture, and business of customers
                            --Understands organizational and human behavior
                            --Communicates effectively
                            --Acts professionally and builds trust
                            --Builds partnerships/relationships
                            --Influences others to take action
                            --Understands and applies change process
                            --Has knowledge of HR programs, laws, and practices and how they
                            contribute to workforce/organizational effectiveness
HR technologist             --Understands HR operations and the impact of the systems they
                            develop
                            --Has broad knowledge of trends/technology in automation field, with
                            special emphasis on application in HR
                            --Communicates effectively (writing, speaking, and listening,
                            especially with nontechnical customers)
                            --Influences others to take action
                            --Uses technology to improve efficiency and service
                            --Understands and applies change process
                            --Has in-depth knowledge of variety of current automated software,
                            tools, systems, and techniques
HR transactional            --Knows the mission, culture, and business of customers
expert                      --Communicates effectively
                            --Is able to work in teams
                            --Has knowledge of relevant HR laws and practices
                            --Is able to use technology to improve efficiency and service
                            --Has applied knowledge of customer service
HR expert                   --Knows the mission, culture, and business of customers
                            --Has applied knowledge of customer service
                            --Communicates effectively
                            --Builds partnerships and relationships
                            --Has mastered relevant HR laws and practices
                            --Analyzes programs/process and measures results
Source: GSA (data), GAO (presentation).


USGS’s HR Competency Model also identifies and describes a set of human
capital competencies that are essential to effective performance in the
roles and responsibilities of the agency’s human capital office as outlined in
its business model. USGS’s competency model identifies core or universal



Page 22                                                                 GAO-03-446 Human Capital
competencies that USGS human capital staff members need and specific
competencies that human capital managers, strategic consultants,
operating specialists and generalists, and assistants need. For each
competency, the model describes how that competency is applied.
According to USGS, the competency model is currently being used as a tool
for self-directed human capital development, and portions of the model
have been incorporated in the new automated skills assessment system. In
the future, USGS plans to use the model as a basis for recruiting and
interviewing candidates, making decisions about developmental
assignments, and developing the competencies of every human capital staff
member to think and relate strategically to the science mission of USGS.
Table 4 lists USGS’s competency categories.



Table 4: USGS’s HR Competencies

Competency categories Competencies
Communications          Facilitation, listening, presentation (formal), oral
                        communications, reading, and written communications
Personal credibility    Assertiveness, creative thinking, ethics, flexibility, learning,
                        self-awareness, self-management, stress management, and
                        time management
Interpersonal skills    Conflict management, diplomacy, diversity,
                        negotiating/influencing, networking, partnering, and
                        teamwork
Leadership              Change management, coaching, decisiveness,
                        integrity/honesty, leadership, political savvy,
                        self-esteem, and team building
Organizational skills   External awareness, organizational awareness,
                        organizational development, performance measurement and
                        improvement, planning and evaluating, strategic planning,
                        systems thinking,
                        and vision
Management              Analytical thinking/reasoning, financial management, human
                        resources management,
                        information analysis, problem solving,
                        process management, project management,
                        and technology management
Customer orientation    Advertising, customer focus, distribution,
                        market analysis, message development, message packaging,
                        and product knowledge
Technical               Attention to detail; HR automation,
                        HR laws, regulations, and policies; information management
                        research methods and techniques;
                        and technology application
Source: USGS data.




Page 23                                                        GAO-03-446 Human Capital
Joint Actions Result in          As the role of the human capital organization evolves to include serving the
Shared Accountability            individual employee and helping to achieve the organization’s strategic
                                 objectives, the accountability for human capital management is
                                 increasingly being shared by top management, line managers, and human
                                 capital professionals. Successful organizations, according to our Model of
                                 Strategic Human Capital Management, include human capital
                                 professionals acting together with agency leaders and line managers in
                                 developing strategic and program plans to accomplish agency goals.
                                 Through this joint action, agency and human capital leaders and their staffs
                                 share accountability for successfully integrating strategic human capital
                                 approaches into the planning and decision making of the agency.

Assuming Shared Accountability   Agency and human capital leaders, human capital professionals, and line
for Achieving Program Goals      managers share responsibility for achieving agency programmatic and
                                 human capital goals, and they ultimately share accountability for effective,
                                 legally compliant human capital management. According to OPM, agencies
                                 have delegated more key human capital authorities to line managers.22 In a
                                 recent report, we highlighted the importance of delegating authority and
                                 holding line managers accountable for the effective use of human capital
                                 flexibilities, important tools that assist agencies in managing their
                                 workforces.23 Agencies are also following a more collaborative approach
                                 between managers and human capital professionals for those human
                                 capital authorities retained by the human capital staff members.
                                 Additionally, more agency and human capital leaders are linking human
                                 capital policies and practices to organizational outcomes and expecting
                                 more collaboration between line managers and human capital
                                 professionals.

                                 IRS, for example, has dispersed human capital professionals throughout
                                 the agency’s divisions to help apply strategic thinking to each operating
                                 division’s unique interest. Human capital staff members are responsible
                                 for advising operating division managers on how to best apply human
                                 capital strategy to improve results. The human capital professional may
                                 have responsibility, for example, for assisting managers in anticipating


                                 22
                                   U.S. Office of Personnel Management, Office of Merit Systems Oversight and
                                 Effectiveness, HRM Accountability System Development Guide (Washington, D.C.:
                                 December 1998).
                                 23
                                    U.S. General Accounting Office, Human Capital: Effective Use of Flexibilities Can Assist
                                 Agencies in Managing Their Workforces, GAO-03-2 (Washington, D.C.: Dec. 6, 2002).




                                 Page 24                                                         GAO-03-446 Human Capital
                            changes in the labor market and recommending strategies for sustaining a
                            well-qualified and productive workforce. The operating division managers
                            are responsible for rating the performance of the human capital
                            professionals working with them. According to IRS officials, some of the
                            benefits of the shared accountability of human capital professionals
                            working with operating division managers have included customized
                            support for recruitment plans and hiring products and a facilitated merit
                            promotion process.

                            FEMA line managers and human capital staff members have developed a
                            system where the human capital staff works with line managers to quickly
                            identify available employees for deployment as soon as disasters are
                            declared. FEMA employs approximately 2,600 full-time employees and as
                            many as 4,000 temporary and reserve employees who are deployed during
                            federal disasters. In response to this need, the human capital office has
                            implemented the Automated Disaster Deployment System. This automated
                            system allows the staff to track employee credentialing (including
                            knowledge and experience levels and performance ratings), availability,
                            past and present assignment locations, dates of employment, and other
                            vital employee data. According to FEMA officials, the system enables
                            human capital staff and line managers to share accountability for
                            identifying employee training and promotion needs, matching employee
                            expertise with specific disaster site victim needs, and creating a selection
                            routine that rotates available employees, thereby avoiding employee
                            burnout. The process has reduced the time necessary to complete the
                            staffing review and selection from days to hours. Additionally, centralized
                            deployment provides a dedicated staff that acts upon all deployment
                            requests within 3 hours.

Increasing Role for Line    Line managers have always played a key role in human capital
Managers in Human Capital   management. They interact with, teach, evaluate, reward, develop, and
Management                  promote employees from the day they join an organization. According to
                            OPM, many agencies are now pursuing the strategy of delegating key
                            human capital authorities to managers thereby making the delegated
                            authorities within the agency shared responsibilities of the manager and
                            the human capital staff.24 SSA officials, for example, described how
                            responsibility for recruiting new employees is now shared between human
                            capital professionals and line managers. SSA involves agency line


                            24
                              U.S. Office of Personnel Management, Office of Merit Systems Oversight and
                            Effectiveness, HRM Accountability System Development Guide.




                            Page 25                                                       GAO-03-446 Human Capital
              managers in the preliminary recruiting determinations and has human
              capital professionals take over in the final, technical stages.

              Some agencies have developed tools and services to help line managers
              assume more human capital authority. Within our selected agencies, SSA,
              for example, has a link on its Office of Personnel Web site that contains,
              “Information for Managers.” The Web site presents a myriad of
              information, from addressing poor performance to life resources
              counseling. GSA’s CPO has issued a supervisory desk guide to provide
              supervisors with basic information on human capital topics. The desk
              reference guide provides an overview of personnel and administrative
              practices and procedures that supervisors should know. According to the
              guide, it is not meant to make supervisors into personnel experts or
              provide the answers to all personnel-related or administrative questions.
              The guide is meant to give supervisors basic information on topics such as
              internal and external recruitment, pay flexibilities, and worker’s
              compensation that will enable them to handle most situations and to
              provide references and contacts for more information.



Conclusions   As agencies integrate their human capital strategies with their
              organizational missions, visions, core values, goals, and objectives, they are
              increasingly recognizing how human capital activities contribute to
              achieving missions and goals. Congress has recognized this through recent
              legislation creating a chief human capital officer position in major
              agencies. Effective human capital integration efforts require the
              cooperation of management and employees throughout the organization.
              All members of an organization must understand the rationale for making
              organizational and cultural changes because everyone has a stake in
              helping to implement the initiatives as part of the agency’s efforts to meet
              current and future challenges.

              In this report, we have identified actions agencies have taken to improve
              their integration of strategic human capital approaches with their strategies
              for accomplishing organizational missions and goals. Agency leaders
              included human capital leaders in key agency strategic planning and
              decision making. Human capital leaders transformed the agencies’ human
              capital organizations to better enable them to add value to the strategic
              activities of the agencies. Working together, agency leaders and human
              capital leaders have employed human capital professionals and agency line
              managers to share accountability for successfully integrating strategic
              human capital considerations into agency planning and decision making.



              Page 26                                                GAO-03-446 Human Capital
                  As agencies take action to enhance their ability to meet organizational
                  goals by linking their human capital activities with their strategic planning
                  and decision making, agencies can consider the initiatives we identified.
                  However, each federal agency will have to consider the applicability of
                  specific actions to be taken within the context of its own mission, needs,
                  and culture.



Agency Comments   We provided a draft of this report to the Director of OPM and to cognizant
                  officials from the individual agencies we visited. OPM and five of the six
                  agencies provided comments on the draft report. All generally agreed with
                  the information presented.

                  Two of the agencies and OPM provided written technical comments to
                  clarify specific points regarding the information presented. Where
                  appropriate, we have made changes to reflect those technical comments.
                  In other cases, agencies provided additional examples of actions they had
                  taken to integrate human capital approaches to attain mission results.
                  OPM noted that the results of the agency initiatives have not been
                  evaluated, which is an important next step for agencies to take, but was not
                  within the scope of this report. USCG noted that they had no comments on
                  the report.


                  We will send copies of this report to appropriate congressional committees,
                  the federal agencies and offices discussed in this report, and the Directors
                  of OPM and OMB. We will also make copies available to others upon
                  request. In addition, the report will be available at no charge on the GAO
                  Web site at http://www.gao.gov.

                  If you have any questions about this report, please contact me or William
                  Doherty on (202) 512-6806 or on mihmj@gao.gov and dohertyw@gao.gov.
                  The major contributors to this report were Clifton G. Douglas, Jr. and




                  Page 27                                               GAO-03-446 Human Capital
Judith Kordahl. Mark Braza, Matthew Tropiano, and Laura Turman also
made key contributions.




J. Christopher Mihm
Director, Strategic Issues




Page 28                                          GAO-03-446 Human Capital
Appendix I

Objective, Scope, and Methodology                                                                       AA
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              Our objective in this self-initiated review was to identify examples of key
              actions that agencies have taken to integrate their human capital
              approaches with agency strategies for achieving mission objectives.

              To address our objective, we identified and focused on six federal agencies
              that were integrating their human capital approaches. We analyzed agency
              documents, such as planning and organizational restructuring documents,
              and previous studies on strategic human capital management. In addition,
              we conducted semistructured interviews with agency officials, human
              resources directors, and line managers from our selected agencies that
              were involved in designing or implementing their agencies’ human capital
              integration actions. We elicited their experiences and conclusions about
              the agency actions they believed were most important to the successful
              integration of their human capital functions. After reviewing and analyzing
              their responses, we developed a framework to classify and report on the
              types of actions identified. We did not attempt to independently verify the
              performance results that agencies attributed to their actions.

              To select the agencies we reviewed, we first held discussions with human
              capital experts from American University, the Center for Policy
              Implementation, George Washington University, and the National Academy
              of Public Administration. We asked these experts to identify federal
              agencies that they believed had taken actions to improve the integration of
              their strategic human capital management functions. We also reviewed our
              High-Risk Series, the Federal Managers’ Survey, and other documents for
              examples of federal agency integration efforts not identified by the human
              capital experts.1 In addition, we considered the size, mission, and type of
              workforce of the pool of identified agencies to get a variation of federal
              agency experiences. We selected six agencies—the Federal Emergency
              Management Agency, the General Services Administration, the Internal
              Revenue Service, the Social Security Administration, the U.S. Coast Guard,
              and the U.S. Geological Survey—to identify examples of human capital
              integration actions. Our selection process was not designed to provide
              examples that could be considered representative of all the actions at the
              agencies reviewed or of the federal government in general. By profiling an




              1
               See, for example, U.S. General Accounting Office, High-Risk Series: An Update, GAO-01-
              263 (Washington, D.C.: January 2001), and National Academy of Public Administration,
              Changes in Human Resources Competencies Since 1996: Implications for Federal HR
              Professionals (Washington, D.C.: March 2001).




              Page 29                                                       GAO-03-446 Human Capital
           Appendix I
           Objective, Scope, and Methodology




           agency for a particular action, we do not mean to imply complete success
           for the action or lack of success for others.

           We conducted our work from February 2002 through January 2003 in
           accordance with generally accepted government auditing standards.




(450099)   Page 30                                            GAO-03-446 Human Capital
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