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299CG entitled 'Making Human Capital Transformation a Reality: Lessons 
Learned from GAO’s Experience' which was released on November 19, 2007.

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United States Government Accountability Office: 

Making Human Capital Transformation a Reality:   

Lessons Learned from GAO’s Experience:   

The Honorable David M. Walker: Comptroller General of the United 

Human Capital Management Federal 2007 (HCMF): Washington, D.C.: 
November 15, 2007:   


The Case for Change:   

The federal government is on a “burning platform,” and the status quo 
way of doing business is unacceptable for a variety of reasons, 

* Past fiscal trends and significant long-range challenges; 
* Selected trends and challenges having no boundaries; 
* Additional resource demands due to Iraq, Afghanistan, incremental 
homeland security needs, and recent natural disasters in the United 
* Numerous government performance/accountability and high risk 
* Outdated federal organizational structures, policies, and practices; 
* Rising public expectations for demonstrable results and enhanced 

Any organization is only as good as the people who compose it.   

GAO's High-Risk List 2007:   

Addressing Challenges in Broad-based Transformations:   

* Strategic Human Capital Management[a]: Year Designated: 2001;
* Managing Federal Real Property[a]: Year Designated: 2001;
* Protecting the Federal Government’s Information Systems and the 
* Nations’ Critical Infrastructures: Year Designated: 1997;
* Implementing and Transforming the Department of Homeland Security: 
Year Designated: 2003;
* Establishing Appropriate and Effective Information-Sharing Mechanisms 
to Improve Homeland Security: Year Designated: 2005;
* DOD Approach to Business Transformation[a]: Year Designated: 2005;
- DOD Business Systems Modernization: Year Designated: 1995;
- DOD Personnel Security Clearance Program; Year Designated: 2005;
- DOD Support Infrastructure Management; Year Designated: 1997;
- DOD Financial Management; Year Designated: 1995;
- DOD Supply Chain Management; Year Designated: 1990;
- DOD Weapon Systems Acquisition; Year Designated: 1990;
* FAA Air Traffic Control Modernization; Year Designated: 1995;
* Financing the Nation’s Transportation System[a] (New); Year 
Designated: 2007; 
* Ensuring the Effective Protection of Technologies Critical to U.S. 
National Security Interests[a] (New): Year Designated: 2007; 
* Transforming Federal Oversight of Food Safety[a] (New): Year 
Designated: 2007;   

Managing Federal Contracting More Effectively:   

* DOD Contract Management: Year Designated: 1992;
* DOE Contract Management: Year Designated: 1990;
* NASA Contract Management: Year Designated: 1990;
* Management of Interagency Contracting: Year Designated: 2005;   

Assessing the Efficiency and Effectiveness of Tax Law 

* Enforcement of Tax Laws[a]: Year Designated: 1990;
* IRS Business Systems Modernization: Year Designated: 1995;   

Modernizing and Safeguarding Insurance and Benefit Programs:   

* Modernizing Federal Disability Programs[a]: Year Designated: 2003;
* Pension Benefit Guaranty Corporation Single-Employer Pension 
Insurance Program: Year Designated: 2003;
* Medicare Program[a]: Year Designated: 1990;
* Medicaid Program[a]: Year Designated: 2003;
* National Flood Insurance Program[a]: Year Designated: 2006.   

[a] Legislation is likely to be necessary, as a supplement to actions 
by the executive branch, in order to effectively address this high-risk 

Source: GAO.   

[End of table]  

Twenty-first Century Challenges Report:   

* Provides background, framework, and questions to assist in 
reexamining the base; 
* Covers entitlements and other mandatory spending, discretionary 
spending, and tax policies and programs; 
* Based on GAO’s work for the Congress  

Source: GAO.  

Twelve Reexamination Areas:   

* Defense; 
* Education and Employment; 
* Financial Regulation and Housing; 
* Health Care; 
* Homeland Security; 
* International Affairs; 
* Natural Resources, Energy and Environment; 
* Retirement and Disability; 
* Science and Technology; 
* Transportation.   

Crosscutting Areas:   

* Improving Governance; 
* Reexamining the Tax System.   

Illustrative Twenty-first Century Questions: Management & Human 
Capital Issues:   

* What are the leadership models that can be used to improve agency 
management and address transformation challenges? For example, should 
we create chief operating officer or chief management officer positions 
with term appointments within selected agencies to elevate, integrate, 
and institutionalize responsibility and authority for business 
management and transformation efforts?   

* How should the federal government update its compensation systems to 
be more market-based and performance-oriented? For example, should poor 
performers be guaranteed pay increases? How can these systems ensure 
pay comparability and provide reasonable annual pay adjustments while 
also competing for critical occupations or in higher cost locations?   

* How can the executive branch and the Congress have a more strategic, 
crosscutting focus on policy and budget decisions to address goals that 
cut across conventional agency and program boundaries? Can the 
governmentwide performance plan required by GPRA be implemented to 
provide the necessary crosscutting focus?  


Webster's Definition:   

An act, process, or instance of change in structure appearance, or 

A conversion, revolution, makeover, alteration, or renovation.   

Source: GAO.   

Transformation is about creating the future rather than perfecting the 

Effective human capital strategy is key to any successful 
transformation effort.   

The Objective of Transformation:   

To create a more positive future by maximizing value and mitigating 
risk within current and expected resource levels.   

Transformation: A New Model for Government Organizations:   

Government organizations will need to:   

* Become less hierarchical, process-oriented, stovepiped, and inwardly 

* Become more partnership-based, results-oriented, integrated, and 
externally focused.   

* Achieve a better balance between results, customer, and employee 

* Work better with other governmental organizations, non-governmental 
organizations, and the private sector, both domestically and 
internationally, to achieve results.   

* Focus on maximizing value, managing risk and enhancing 
responsiveness within current and expected resource levels.   

Key Transformation Elements:   

* Planning; 
* People; 
* Process; 
* Partnerships; 
* Technology; 
* Environment.   

The most important of the six is people — an agency’s human capital.   

Figure: Photographs of nine people.   

[See PDF for image]   

Keys to Making Change Happen:   

* A strategic, integrated and outcomes-based plan; 
* Commitment and sustained leadership; 
* Demonstrated need for change (i.e., burning platform); 
* Start at the top and with the new people (transformation takes 7+ 
* Process matters (e.g., employee involvement)—Don’t fight a two-front 
* 15-percent rule; 
* Identifiable and measurable progress over time; 
* Communication, communication, communication; 
* Figure out what’s right versus what’s popular; 
* Patience, persistence, perseverance to pain before you prevail.   

Other Keys to Making Change Happen:   

Several other actions needed:   

* Core values; 
* Organizational alignment; 
* Recruiting, development, and succession planning strategies; 
* Modernizing and integrating institutional, unit and individualized 
performance measurement and reward systems; 
* Employee empowerment and effective communications  

Specific Transformation Activities for GAO:   

* Clarified mission and vision; 
* Defined core values: accountability, integrity & reliability; 
* Engaged in strategic planning; 
* Realigned the organization; 
* Defined success; 
* Employed multi-tasking and matrix management; 
* Strengthened procurement, contracting, and acquisition; 
* Focused on human capital; 
* Emphasized information technology, knowledge management, and 
financial management; 
* Developed client service & external agency protocols; 
* Enhanced products and services; 
* Engaged in constructive engagement with agencies; 
* Partnered with other accountability and “good 

GAO’s Strategic Plan:   

Serving The Congress And The Nation:   

GAO's Strategic Plan Framework Mission:   

GAO exists to support the Congress in meeting its constitutional 
responsibilities and to help improve the performance and ensure the 
accountability of the federal government for the benefit of the 
American people.   


* Changing Security Threats;
* Sustainability Concerns;
* Economic Growth & Competitiveness;
* Global Interdependency;
* Societal Change;
* Quality of Life;
* Science & Technology.   

Goals and Objectives:   

Provide Timely, Quality Service to the Congress and the Federal 
Government to Address Current and Emerging Challenges to the Well-being 
and Financial Security of the American People related to:
* Health care needs;
* Lifelong learning;
* Work benefits and protection;
* Financial security;
* Effective system of justice;
* Viable communities;
* Natural resources use and environmental protection;
* Physical infrastructure.   

Respond to Changing Security Threats and the Challenges of Global 
Interdependence involving:
* Homeland security;
* Military capabilities and readiness;
* Advancement of U.S. interests;
* Global market forces.   

Help Transform the Federal Government's Role and How It Does Business 
to Meet Twenty-first Century Challenges by assessing:
* Roles in achieving federal objectives;
* Government transformation;
* Key management challenges and program risks;
* Fiscal position and financing of the government.   

Maximize the Value of GAO by Being a Model Federal Agency and a World- 
Class Professional Services Organization in the areas of:
* Client and customer satisfaction;
* Strategic leadership;
* Institutional knowledge and experience;
* Process improvement
* Employer of choice.   

Core Values:   

* Accountability;
* Integrity;
* Reliability.   

Source: GAO.   

Selected Performance Measures:   

Key Dimensions: 
* Results; 
* Clients/customers; 
* People; 
* Partnerships.   


* Absolute; 
* Trend; 
* Compared to Peers.   

Importance of Measurements:   

* Add transparency; 
* Focus on results; 
* Assure Congress, clients, and taxpayers; 
* Promote continuous improvement. 
* What gets measured gets done!   

GAO’s Balanced Scorecard:   

* Results;
* People; 
* Internal Operations; 
* Clients.   

Results Measures (dollars in billions):   

Measures: Financial benefits; 
1998: $19.7;
2007: $45.9.  

Measures: Return on investment; 
1998: $58; 
2007: $94.   

Measures: Nonfinancial benefits; 
1998: $537
2007: $1,354.   

Measures: Recommendations implemented; 
1998: 69%; 
2007: 82%.  

Measures: Number of Personnel; 
1998: 3,245; 
2007: 3,152.  

People Measures:   

Measure: Staff Development; 
2007: 76%.  

Measure: Staff utilization; 
2007: 73%.   

Measure: Leadership; 
2007: 79%.   

Measure: Organizational climate; 
2007: 74%.   

Measure: New hire rate; 
2007: 96%.   

Measure: Retention rate (excluding retirements); 
2007: 94.   

How GAO Has Addressed Its Human Capital Challenges:   

* Human capital strategic plan; 
* HQ realignment & field office restructuring; & Self-assessment 
* Human capital profile; 
* Workforce & succession planning; 
* Employee feedback survey & suggestion program; 
* Employee Advisory Council; 
* Enhanced employee communications & participation; 
* Skills & knowledge inventory; 
* Employee preference survey; 
* Frequent flyer miles; 
* Student loan repayment; 
* Recruitment & college relations; 
* Phased retirement initiative; 
* Training/development; 
* Recognition & rewards; 
* Business casual dress & business cards; 
* Enabling technologies; 
* Mentor/buddy programs; 
* Commuting subsidy; 
* Competency-based employee appraisal system; 
* Human Capital Officer; 
* Office of Opportunity & Inclusiveness; 
* Flextime and telework; 
* Total compensation communications; 
* Broad-banding; 
* Market-based pay studies; 
* Band II restructuring.   

Legislation Addressing GAO’s Human Capital Challenges:   

* Broad-banding authority; 
* Expedited hiring authority (e.g., internship program); 
* Special pay rates; 
* Senior level for technical staff; 
* Targeted early out and buyout authority (3 years); 
* Revised RIF rules; 
* Targeted early out and buyout authority (permanent); 
* Annual pay adjustment rates controlled by GAO; 
* Pay retention provisions; 
* Relocation benefits; 
* Increased annual leave for upper level employees; 
* Executive exchange program; 
* Re-designation of “General Accounting Office” to “Government 
Accountability Office.”   

GAO Elements of Reform:   

Modern, Effective, Credible, and Validated Performance Management 

* Focuses on core competencies; 
* Helps to communicate employee performance expectations; 
* Creates a “line of sight” linking institutional team/unit and 
individual performance; 
* Makes meaningful distinctions in employee performance. 
* Provides for competency-based results automatically and relative peer 
group standing on request.   

Modern Classification and Compensation System:   

* Uses pay bands; 
* Is market-based; 
* Is performance-oriented.   

Safeguards, transparency, and accountability built in:   

* Provisions for employee participation; 
* Pre-and post-implementation consultation and communications strategy 
* Internal pre-decisional revenues and reasonable post-decisional 
* Avenues for adverse action appeals, both internally and externally.   

Source: GAO.   

The Importance of Workforce Planning:   

Planning helps organizations:   

* Accomplish mission efficiently and effectively; 
* Be more client focused and employee oriented; 
* Link resources to strategic direction; 
* Identify and address skill gaps, surpluses, and succession 

GAO’s Workforce Planning Process:   

* Establish strategic priorities; 
* Analyze current staffing data; 
* Establish resources planning parameters.   

* Identify workforce needs and address succession planning issues; 
* Formulate workforce decisions; 
* Develop workforce plans.   

* Finalize workforce plans; 
* Communicate; 
* Implement workforce plans; 
* Incorporate workforce results into planning cycle.   

* Monitor workforce results throughout year; 
* Conduct post-implementation assessment; 
* Continuously improve the process.   

GAO’s Recruiting Approach:   

* Recruiting is an important component of our strategic human capital 
* Recruiting efforts are led by a Senior Executive and involve a number 
of other senior management and staff; 
* Our recruiting strategy involves:
- Outreach at 50 campuses; 
- A robust internship program; 
- Targeted efforts to hire specialists and other hard-to-fill 

GAO’s Professional Development Program:   

Components of 2-year program include: 
* On-the-job and classroom training; 
* Regular feedback and coaching; 
* Exposure to different projects; 
* Individual development plan; 
* Potential salary increases every 6 months.   

GAO’s Training and Development Programs:   

Emphasize continuous learning: 
* Instructor-led and Web-based training; 
* Courses tied to competencies; 
* Adjunct faculty program trains and develops current employees to 
* Specialized courses available to accountants.   

Emphasize peer-to-peer mentoring: 
* New program helps employees attain professional goals.   

GAO’s Pay and Performance Management: 
* Banded positions; 
* Competency-based appraisal system; 
* Market based rates; 
* Performance-based compensation.   

GAO’s Band II Restructuring Effort: Lessons To Be Shared:   

* Study the relative roles and responsibilities of the employees 
affected before determining the number of bands;   

* Conduct an independent market-based compensation study instead of 
relying on GS-pay ranges;   

* Design and implement a modern, effective, and credible performance 
management system that makes meaningful distinctions in performance.   

GAO’s Human Capital Achievements: 
* High intern conversion rate; 
* 94 percent retention rate; 
* High ratings on Employee Feedback Survey; 
* Earned an IPMA 2007 Leading Edge Award; 
* Ranked #2 in the 2007 Best Places to Work in the Federal Government 
* Named a 2007 “Great Place to Work” by Washingtonian Magazine.   

The 2007 Union Election at GAO:   

* On September 19, 2007, a significant majority of bargaining unit 
employees voted to have the International Federation of Professional 
and Technical Engineers (IFPTE) serve as their exclusive representative 
in dealing with GAO management on the terms and conditions of 

* GAO’s bargaining unit consists of approximately 1800 staff (all 
permanent and probationary Band I, Band IIA, and Band IIB employees, 
with the exception of specified confidential personnel).   

* The union is currently in the process of formulating its governing 

Factors Contributing to Union Formation at GAO:   

* GAO has made more significant human capital changes than possibly 
any other agency within a relatively short period of time; 
* The Comptroller General probably has more discretionary human capital 
authority than any other federal agency head.   

Steps Toward Constructive Labor Management Relations:   

* Build effective relationships with the union; 
* Be responsive to the union’s reasonable requests for documents or 
information when a particularized need is shown; 
* Inform the union in advance of formal discussions involving 
management and staff; 
* Keep the union informed of proposed changes to bargaining unit 
employees’ conditions of employment; 
* Ensure managers are aware of their responsibilities in a union 
environment and that they have received training in labor management 
* Respect the role of the union and ensure that union representatives 
are treated with dignity at all times; 
* Develop a set of principles that management will use as part of the 
bargaining process.   

Key Leadership Attributes Needed for These Challenging and Changing 

* Courage; 
* Integrity; 
* Creativity; 
* Partnership; 
* Stewardship.   

[End of presentation]   

On the Web:   

Web site: [hyperlink,].   


Chuck Young, Managing Director, Public Affairs: 
(202) 512-4800: 
U.S. Government Accountability Office: 
441 G Street NW, Room 7149: 
Washington, D.C. 20548:   


This is a work of the U.S. government and is not subject to copyright 
protection in the United States. The published product may be 
reproduced and distributed in its entirety without further permission 
from GAO. However, because this work may contain copyrighted images or 
other material, permission from the copyright holder may be necessary 
if you wish to reproduce this material separately.