EOM PRESIDENTIAL TRANSITION MATERIALS

“Strategic Management of Human Capital”by Doris Hausser

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Executive Summary

The success of the next President’s agenda will rest on the talent of those who implement it – top to bottom. With oncoming retirements and a fierce competition for scarce skills, the government will be pressured to improve the strategic management of its human capital. Sometimes this will require changes in policy and practice to accommodate 21st century work and labor markets. Further, as federal human capital includes more than civil service employees, questions about the range and extent of contracting out require serious debate and resolution so that contracting and human resources leaders can work closely to achieve optimum staffing in-house and by contract, using procurement and human resources policies that are better harmonized.

Policy changes for the civil service itself should be approached with an understanding of its current context. Many operational policies for hiring, promoting, paying, reassigning, disciplining, and removing civil service employees are rooted in obsolete premises suitable to a mid-20th century federal workforce. However, merit system principles and public service values like providing employment preferences to our nation’s veterans remain a strong foundation for the civil service. This has been validated over the past 25 years as alternative personnel systems have flourished without abandoning those principles and values.

The author explores four issues about the civil service and recommends specific actions:

Leadership in the Civil Service. Failures in leadership – from both political and career appointees – continue to plague the government. Some consider the substantial increase in political appointees to be detrimental to effective management. Current human capital systems for qualifying and paying career managers should shift their emphasis away from technical occupational expertise and toward more general leadership competence.

Balancing Centralization and Decentralization. Increasingly, agency-specific alternative personnel systems have been authorized by Congress or by using the Office of Personnel Management’s (OPM’s) authority to permit waiver of existing law and regulation. As pressure builds to let more agencies upgrade their human capital systems, greater authority is needed to establish permanent alternatives and to adapt them to changing missions and circumstances.

Employment Policy and Practice. With retirements looming, recruitment and retention of needed talent is a priority. A review and update of employment law, rule and regulation is needed to leave behind obsolete premises and address fundamental questions about the nature of today’s competitive service.

Performance and Pay. Effective employee performance management continues to be a major challenge in agencies. OPM’s efforts to hold agencies accountable for improving their employee performance management systems are proving beneficial and should continue. The reward system must be better aligned to support an emphasis on achieving results. The current systems for determining work and pay levels no longer match the way work is actually structured and performed. The pay system’s insensitivity to occupational pay differences and individual performance differences is a serious drawback at a time when the government must compete for the best talent available.

Related Resources

EOM Panel Minutes:
Topic presented at EOM Panel on April 21, 2006

Associated Presentation Materials:
None

Other Related NAPA Materials:
See related work by the Standing Panel on Public Service

About the Author

Doris Hausser retired in 2007 after 30 years of federal career service, most recently as Senior Policy Advisor to the Director of the U.S. Office of Personnel Management (OPM). She served on the personal staff of three successive OPM Directors in two Presidential administrations and played a key advisory and execution role in the planning, coordination, development, and implementation of OPM policy and program matters across the full range of human resources management systems within the federal government. She supported a variety of legislative and administrative initiatives to establish alternative personnel systems. She also served as OPM’s first Chief Human Capital Officer. She was awarded the rank of Distinguished Executive and was elected a Fellow of the National Academy of Public Administration, where she is a member of several NAPA Standing Panels and has served on NAPA Study Panels as well. Her B.A. degree is from Albion College and her M.A. and Ph.D. degrees in organizational psychology are from the University of Michigan. She is also a Certified Compensation Professional (CCP).

She can be reached at: dorishausser@comcast.net or 703-901-4456.