Human Capital:

Key Principles From Nine Private Sector Organizations

GGD-00-28: Published: Jan 31, 2000. Publicly Released: Jan 31, 2000.

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Pursuant to a congressional request, GAO identified the private sector's key principles for strategically and effectively managing their human capital to provide federal agencies with information and examples to help them improve their human capital management.

GAO noted that: (1) each of the 9 private sector organizations that GAO reviewed implemented human capital strategies and practices that were designed to directly support the achievement of their specific missions, strategic goals, and core values; (2) GAO identified 10 underlying and interrelated principles of human capital management that are common to the 9 organizations and viewed as the foundation for their ongoing success and viability: (a) treat human capital as being fundamental to strategic business management by integrating human capital considerations with the organization's mission, strategic goals, core values, and operational policies and practices; (b) integrate human capital functional staff into management teams and expand the strategic role of the staff beyond providing traditional personnel administration services; (c) supplement internal human capital staff's knowledge and skills with outside expertise from consultants, professional associations, and other organizations, as needed; (d) hire, develop, and sustain leaders according to leadership characteristics identified as essential to achieving specific missions and goals; (e) communicate a shared vision that all employees, working as one team, can strive to accomplish by promoting a common understanding of the mission, strategic goals, and core values toward which all employees are directed to work as a team to achieve; (f) hire, develop, and retain employees according to competencies--knowledge, skills, abilities, and behaviors--needed to achieve high performance of mission and goals; (g) provide incentives, including pay and other meaningful incentives, to link performance to results and hold employees accountable for contributing to the achievement of mission and goals; (h) support and reward teams to achieve high performance by fostering a culture in which individuals interact and support and learn from each other as a means of contributing to the high performance of their peers, units, and the organization as a whole; (i) integrate employee input into the design and implementation of human capital policies and practices to develop responsive policies and practices; and (j) measure the effectiveness of human capital policies and practices by evaluating and making fact-based decisions on whether human capital policies and practices support high performance mission and goals; and (3) federal agencies need only to adopt and adapt to these principles, if necessary, to give human capital higher priority as they implement performance-based management to achieve success and higher performance.

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