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Chapter 9: Human Capital

Chapter 9: Human Capital. 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.

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Chapter 9: Human Capital

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  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 state’s 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 Light’s 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 president’s 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 president’s 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 • Government’s 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.

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