Chapter 9: Human Capital

1

• Chapter 9 Human Capital

2
Human Capital in Government

• Human capital the development of a strategy to
  recruit and retain the workers the government
  needs and to ensure that they produce strong and
  effective government programs.
• GAO noted in 2001 that lack of government
  attention to human capital was a major problem.

3
Challenges to Building Human Capital

• Lack of leaders committed to building human
  capital
• Lack of strategic human capital planning
• Weakness in acquiring, developing, and retaining
  talent
• Emphasis on rules and forms instead of results

4
Attempts to Build Human Capital

• Federal Office of Personnel Management (OPM),
  Office of Management and Budget (OMB), and the
  Government Accountability Office (GAO) have
  attempted reform.
• President George W. Bush made human capital
  central to his management agenda.
• OPM under President Clinton discarded the Federal
  Personnel Manual and a six-feet-long standard
  résumé form.

5
New Attempts to Alter the Personnel System

• Late 1990s new attempts to make the personnel
  system more flexible and to link employee
  performance with agency mission
• Broadbanding collapses typically large number of
  job categories in most government personnel
  systems into a far smaller number
• Giving flexibility to individual departments
• Experiments with merit pay

6
Advantages of Broadbanding

• Flexibility in assigning workers to tasks
• Increased career development
• Ease of linking employee pay to performance

7
Disadvantages of Broadbanding

• Downgrading positions without downgrading the
  work
• Permitting managerial discretion, which could
  lead to abuse
• More tasks and more stress for workers
• Failure to reward increased productivity

8
Flexibilities for Individual Departments

• Congress has allowed some agencies exemptions
  from portions of the civil service law.
• Flexibility has been granted to the FAA and to
  the IRS.
• In 2002 the Department of Homeland Security was
  awarded some flexibility after President Bush
  championed flexibility and freedom.
• Largest and broadest-scale waiver of civil
  service policy yet granted

9
Experiments with Merit Pay

• Texas in 1985 abolished the merit council, and
  agencies were given flexibility in hiring and
  firing procedures for their employees.
• Georgia governor Zell Miller in 1996 abolished
  the states merit system and had employees serve
  at will.
• At-will employment employees have no civil
  service protection and could be fired without
  benefit of standard civil service procedures.
• 2008 GPP survey of state government found Georgia
  at the cutting edge of management capacity.

10
Experiments with Merit Pay (continued)

• Florida in 2001 made changes to its civil service
  system.
• All three states have seen success, no widespread
  abuse, and no political interference in the
  hiring process.

11
Leadership Necessary for Reforms

• High performance in public agencies depends on
  leadership by top officials.
• The government has struggled with how best to
  recruit and reward its top leaders.

12
Political Leadership

• There are 3,000 political positions in the
  executive branch 1,500 of these are at highest
  levels.
• The United States has a far larger number of
  political officials at the top of the bureaucracy
  than do other Western democracies. Why?

13
Political Leadership (continued)

• Because European countries have more
  administrative freedom.
• Or because some U.S. presidents bash bureaucracy
  and want instead to select their own employees.
• Paul Lights recent study the United States has
  more layers of leaders and more leaders at each
  layer.

14
Recruitment of Political Leaders

• Filling these positions is big task for a new
  president.
• Paul Light it now takes as long, on average, to
  get an appointee into office as it does to have a
  child.
• Many political appointees have suffered from lack
  of experience in the federal executive branch and
  with no history of extensive management
  experience.

15
Turnover of Political Leaders

• Turnover refers to political appointees serving
  only briefly in their posts
• Average service of presidential appointee two
  years
• Rapid-fire turnover of political appointees
  creates many problems

16
Problems with Turnover

• Many presidential appointees leave shortly after
  adapting to the Washington environment.
• Rapid turnover undermines teamwork.
• Staff has weak incentive to obey revolving
  superiors.
• Staffing the administration never really ends.
• Large exodus occurs during presidents last year
  in office.

17
Volcker Commission on Political Appointees

• Volcker Commission included fifteen former top
  political appointees in 1989
• Recommendation reduce number of presidential
  appointees from 3,000 to 2,000
• Recommendation too many appointees serving brief
  periods of time may undermine the presidents
  ability to govern

18
Career Leadership

• Civil Service Reform Act of 1978 created the
  Senior Executive Service (SES) to provide career
  leadership.
• SES absorbed most of the previously GS-16 to
  GS-18 career and noncareer positions.
• SES consists of about 7,700 employees, mostly
  career officials but including 575 presidential
  appointees.
• SES includes the well-educated with average of
  long-term service in government.

19
Characteristics of the SES

• Each agency establishes qualification standards
  for SES positions.
• Each agency is required to establish
  performance-appraisal systems.
• Problems with SES include rapid turnover of
  political appointees, too much specialization,
  proliferation of new systems, compression of
  performance ratings and pay, and the never-ending
  lack of attention to the human capital problem.

20
Lack of Leadership at the Top

• Governments big problem is a lack of leadership
  at the top of the bureaucracy.
• Salaries are inadequate for top federal
  officials.
• Yet citizens express dismay at the salaries paid
  to public officials.