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Effort through Strategic Human Capital Management' which was released 
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Report to the Subcommittee on Legislative Branch, Committee on 
Appropriations, U.S. Senate:

October 2003:

Government Printing Office:

Advancing GPO's Transformation Effort through Strategic Human Capital 
Management:

[Hyperlink, http://www.gao.gov/cgi-bin/getrpt?GAO-04-85] GAO-04-85:

GAO Highlights:

Highlights of GAO-04-85, a report to the Subcommittee on Legislative 
Branch, Committee on Appropriations, U.S. Senate

Why GAO Did This Study:

The Government Printing Office (GPO) has undertaken the task of 
transforming itself in response to pressing fiscal and other realities 
in the 21st century. This report focuses on actions GPO’s leaders can 
take to advance its transformation efforts through strategic human 
capital management and is a part of GAO’s response to a congressional 
request that GAO conduct a general management review of GPO that 
focuses on issues related to GPO’s management and transformation. GAO 
plans to address other management topics, including strategic planning 
and financial management, in a series of reports that may assist GPO 
in its ongoing transformation efforts.

What GAO Found:

The Public Printer has demonstrated the leadership commitment that is 
essential to transforming GPO, stating that GPO is going to have to 
reengineer itself to remain relevant and viable for the future. Under 
the Public Printer’s direction, GPO has taken several steps that 
recognize the important role strategic human capital management plays 
in its transformation. For example, GPO created and filled the position 
of Chief Human Capital Officer (CHCO), shifted the focus of existing 
training and expanded opportunities for more staff to attend needed 
training, enhanced recruitment strategies, and initiated a process to 
develop an agency strategic plan and an accompanying strategic 
workforce plan.

To sustain its transformation efforts, GPO’s leadership needs to 
ensure that managers throughout the agency appreciate the importance 
of their role in managing GPO’s workforce and helping transform the 
agency. Furthermore, now that GPO has hired a CHCO, it can begin to 
restructure its human resources office to better support its 
transformation by adopting a more strategic view of human capital 
management and by having human resources officials work 
collaboratively with GPO managers. To further support its 
transformation, GPO should use strategic workforce planning to help 
ensure that its staff has the skills needed to meet emerging needs. A 
workforce plan that includes both an inventory of current GPO 
employees’ knowledge and skills and an identification of the knowledge 
and skills GPO needs in the future will best support GPO’s 
transformation. Finally, a modern, effective, and credible performance 
management system can help GPO facilitate the transformation process 
and serve as the basis for establishing individuals’ roles and 
accountability in the transformation. Performance management can also 
help GPO achieve results, accelerate change, and facilitate two-way 
communication between managers and employees.

GAO makes numerous recommendations to GPO on the steps it should take 
to strengthen its human capital management in support of its 
transformation. These recommendations can guide GPO as it seeks to 
meet the changing and emerging information needs of its customers. The 
focus of GAO’s recommendations is on the following four interrelated 
areas:

* communicating the role of managers in GPO’s transformation,

* strengthening the role of the human resources office,

* developing a strategic workforce plan to ensure GPO has the skills 
and knowledge it needs for the future, and

* using a strategic performance management system to drive change.

By implementing the recommendations in these four areas, GPO can build 
the strong human capital foundation needed to reinforce the 
transformation now under way.

What GAO Recommends:

GAO makes many interrelated recommendations that reflect the important 
role of human capital in GPO’s ongoing transformation. These 
recommendations provide a framework to reinforce GPO’s initial 
transformation efforts and enhance its future efforts.

We provided a draft of this report in September 2003 to the Public 
Printer for review and comment. GPO’s Chief of Staff, Deputy Chief of 
Staff, and Chief Human Capital Officer provided comments orally and by 
e-mail on behalf of GPO generally agreeing with the content, findings, 
and recommendations in the draft report.

www.gao.gov/cgi-bin/getrpt?GAO-04-85.

To view the full product, including the scope and methodology, click 
on the link above. For more information, contact J. Christopher Mihm 
at (202) 512-6806 or mihmj@gao.gov.

[End of section]

Contents:

Letter: 

Results in Brief: 

Background: 

Communicating the Role of Managers and Following Up on Employees' 
Stated Concerns Is Vital to GPO's Transformation: 

Developing a Strategic Human Capital Office: 

Strategic Workforce Planning Can Assist GPO's Transformation: 

Performance Management Can Help GPO Drive Internal Change and Achieve 
External Results: 

Concluding Observations: 

Agency Comments: 

Appendix:

Appendix I: Objective, Scope, and Methodology: 

Table: 

Table 1: Key Agency Actions to Integrate Human Capital Approaches with 
Strategies for Accomplishing Agency Missions: 

Figures: 

Figure 1: The Net Operating Income (Loss) for GPO's Major Operations 
(in 
Thousands of Dollars): 

Figure 2: GPO's Net Operating Income: 

Figure 3: GPO's New Organizational Structure: 

Figure 4: Critical Elements to Include in the Workforce Planning 
Process: 

Figure 5: Examples of Workforce Data That Are Collected and Analyzed by 
Other Federal Agencies: 

Figure 6: Key Practices for Effective Performance Management: 

Figure 7: 2001 Performance Ratings for Current GPO Employees: 

Letter October 20, 2003:

The Honorable Ben Nighthorse Campbell 
Chairman 
The Honorable Richard J. Durbin 
Ranking Minority Member 
Subcommittee on Legislative Branch 
Committee on Appropriations 
United States Senate:

Like other public and private organizations, the Government Printing 
Office (GPO) has undertaken the enormous task of transforming itself in 
response to the pressing fiscal and other realities of the 21ST 
century. This transformation process will eventually lead the 
organization to make some fundamental program and cultural changes. 
During his nomination hearing on October 3, 2002, the Public Printer 
emphasized GPO's need to transform itself by stating that ". . . like 
every other manufacturing business in America, the GPO is going to have 
to reengineer itself if it is to remain relevant and viable for the 
future." On several occasions, the Public Printer has reiterated the 
need for GPO to move from the 19TH century to the 21ST century by 
looking at ". . . the changing and emerging information needs of our 
customers and develop a deeper understanding of our true strengths so 
that we can plan for and build a new business model that will allow us 
to meet the information demands of our customers." To underscore these 
statements, the Public Printer has taken actions to transform GPO by 
creating a new management structure, launching a major reorganization 
of GPO's divisions, and initiating a demonstration project to allow 
federal agencies more flexibility in contracting for printing services. 
The Public Printer has also taken steps to reduce GPO's persistent 
financial losses by closing bookstores[Footnote 1] and reducing 
staffing levels. Finally, the Public Printer has initiated a process to 
develop an agency strategic plan and an accompanying strategic 
workforce plan.

GPO leadership already recognizes that implementing large-scale 
organizational transformations are not simple endeavors. As we have 
noted, it typically takes at least 5 to 7 years until an organization's 
change initiatives are fully implemented, and the related culture is 
transformed in a 
sustainable manner.[Footnote 2] Further, successful transformations 
require the concentrated efforts of both leadership and employees to 
accomplish the organization's new goals.[Footnote 3] To sustain and 
focus the transformation effort, organizations need to concentrate on 
how effectively they use their people, or human capital.

As agreed with your Subcommittee, this report focuses on actions GPO's 
leadership could take to advance its transformation efforts through 
strategic human capital management. To examine GPO's transformation 
efforts, we used our Model of Strategic Human Capital Management 
released in March 2002[Footnote 4] as the analytical framework for 
collecting data and reviewing GPO's human capital management. This 
model is designed to help agency leaders effectively use their human 
capital and determine how well they integrate human capital 
considerations into daily decision making and planning for the program 
results they seek to achieve. We focused our review on the human 
capital issues that are of most immediate concern and significance to 
GPO's transformation initiative, such as the recent hiring of a Chief 
Human Capital Officer (CHCO), the desire to restructure GPO's 
workforce, and the use of a performance management system. We reviewed 
GPO documentation describing its personnel practices and transformation 
initiatives and interviewed numerous GPO managers about GPO's human 
capital practices. For additional information on our scope and 
methodology, see appendix I.

This report is part of your request that we conduct a general 
management review of GPO that examines GPO's human capital, financial 
management, information management, strategic planning, organizational 
operations, as well as its use of technology in printing and 
information dissemination. The Subcommittee requested that our general 
management review be done in conjunction with another GAO review 
mandated in the Committee on Appropriation's report of legislative 
branch appropriations for fiscal year 2003, which will examine the 
current state of printing and dissemination of federal government 
information. We plan to address this topic and others related to GPO's 
management as part of a series of reports to be issued periodically to 
assist GPO in its ongoing transformation efforts. For example, in the 
coming months, we plan to issue a report on legislative and executive 
branch printing requirements and views of GPO, which will provide GPO 
with important information it needs to develop its strategic plan. In 
addition, we plan to continue working with GPO leaders cooperatively, 
meeting regularly with them about the progress of their transformation 
initiatives, and at their request, continuing to provide them with 
information on our human capital efforts and related initiatives.

Results in Brief:

The Public Printer clearly recognizes strategic human capital 
management as critical to the success of GPO's transformation. To 
strengthen GPO's human capital management, the Public Printer has 
established and recently filled the position of CHCO, shifted the focus 
of training, and enhanced recruitment strategies. GPO can build on 
these important first steps by taking additional actions to further (1) 
enhance communication with senior managers, (2) build a strategic human 
resources office to help drive the transformation, (3) develop 
strategic workforce plans, and (4) implement an individual performance 
management system that aligns organizational goals with day-to-day 
operations and creates a line of sight between individual and 
organizational performance.

* Communication: As part of their efforts to transform the 
organization, GPO's leadership has shown commitment to improving human 
capital management. To sustain this transformation, GPO's leadership 
needs to ensure that managers throughout the organization appreciate 
the importance of their roles in transforming the organization and 
managing GPO's workforce. To this end, we recommend steps that the 
Public Printer and GPO's CHCO should take to strengthen communications 
and hold managers accountable for effectively managing people and 
leading change.

* Strategic human capital office: The appointment of the CHCO was a 
critical first step. GPO can now support its transformation by adopting 
a strategic view of human capital management that centers on the 
contributions GPO's Human Resources Office can make to the long-term 
accomplishment of GPO's mission. We recommend numerous steps GPO 
leadership can take to strengthen the role of human capital and ensure 
that it will be integrated with strategies for accomplishing GPO's 
mission and program goals. For example, by involving the CHCO and other 
human capital leaders in strategic planning, GPO can ensure that its 
human capital approaches are integrated with its program strategies. 
The Public Printer and CHCO will need to develop a new human capital 
organization with a strong collaborative focus and culture. The Human 
Resources Office should work in partnership with managers in all of 
GPO's divisions to integrate human capital approaches with GPO's 
program strategies.

* Strategic workforce planning: GPO should use strategic workforce 
planning to integrate its human capital approaches with its programs 
and ensure that it recruits and develops staff needed to meet emerging 
needs. We recommend several steps to assist GPO leadership in preparing 
for GPO's future. Specifically, to implement effective workforce 
planning, GPO will need to analyze workforce skills gaps based on the 
decisions it is making as part of its ongoing efforts to set a 
strategic direction, develop human capital strategies to fill the gaps, 
build the capability to support workforce planning, and evaluate and 
revise its human capital strategies. GPO collects some data on its 
workforce, including the number of people eligible for retirement and 
the results of employees' performance reviews. However, GPO needs to 
develop a system to collect and analyze data on the knowledge and 
skills of its workforce and develop performance measures for its human 
capital strategies in order to evaluate them.

* Performance management: Effective performance management is one of 
the nine key practices we identified for effective mergers and 
transformations.[Footnote 5] The performance management system can help 
manage and direct the transformation process and serve as the basis for 
setting expectations for individuals' roles in the transformation 
process. GPO is developing a strategic plan and organizational goals 
that, when completed, can serve as the basis for setting individual 
performance expectations and ensuring accountability. However, GPO can 
begin to use the performance management system now to drive its 
transformation and help achieve critical organizational imperatives, 
such as improving its financial condition. We recommend several steps 
through which GPO can develop a performance management system to help 
achieve results, accelerate change, and facilitate two-way 
communication between managers and employees so that discussions about 
individual and organizational performance are integrated and ongoing.

We provided a draft of this report in September 2003 to the Public 
Printer for review and comment. GPO's Chief of Staff, Deputy Chief of 
Staff, and Chief Human Capital Officer provided comments orally and by 
e-mail. The GPO officials generally agreed with the content, findings, 
and recommendations of the draft report. The officials also provided 
minor technical clarifications, and we made those changes where 
appropriate.

Background:

Under the public printing and documents statutes of Title 44, United 
States Code, GPO's mission is to fulfill the needs of the federal 
government for information products and to distribute those products to 
the public.[Footnote 6] GPO was created in 1860 as part of the 
legislative branch primarily to satisfy the printing needs of Congress 
but eventually became the focal point for printing, binding, and 
information dissemination services across the federal government. GPO 
publishes the Congressional Record overnight when Congress is in 
session and produces the Federal Register, the Code of Federal 
Regulations, and other key federal government documents, such as the 
annual U.S. Budget. In addition, approximately 130 federal departments 
and agencies use GPO's in-plant printing facility, electronic 
information systems, or printing-buying operations to produce a variety 
of government information products, such as census and tax forms, U.S. 
passports, and federal regulations and reports. Through its Information 
Dissemination programs (formerly Superintendent of Documents), GPO 
disseminates these government information products via a system of 
1,200 depository libraries located around the country (the Federal 
Depository Library Program), its Web site [Hyperlink, http://
www.gpoaccess.gov], telephone and fax 
ordering, an online ordering site, and a bookstore.

GPO's role as the principal agent for printing and distributing federal 
government information currently faces two major challenges. First, in 
a memorandum dated May 3, 2002, the Office of Management and Budget 
(OMB) recommended that the Federal Acquisition Regulatory Council 
eliminate restrictions mandating the use of GPO as the federal 
government's single source for obtaining printing services and related 
supplies. After this proposed rule change was issued in the Federal 
Register on November 13, 2002,[Footnote 7] GPO and OMB entered a 
compact on June 6, 2003, in which GPO would create a demonstration 
project designed to provide federal agencies flexibility in choosing 
their own printing services. According to GPO, the demonstration 
project would be a print procurement contract, which would function 
similar to the General Services Administration's (GSA) Federal Supply 
Schedule[Footnote 8] and be tested for 1 year, beginning on October 1, 
2003, with the Department of Labor serving as the federal agency 
customer. The demonstration project is expected to result in GPO 
adopting the role of registering and qualifying printers to participate 
in the contract as well as offering customer support and in federal 
agencies being able to select qualified printers, using either lowest 
price or best value techniques.

Second, the demand from federal agencies for ink-on-paper printing has 
declined in recent years because the public has increasingly accessed 
government information through the Internet and obtained GPO's products 
through electronic publishing technologies. This trend has affected all 
of GPO's programs, reducing the production, procurement, and sales of 
printed products. As a result, over the past 5 fiscal years, GPO has 
sustained losses in all of its major operations except for its in-house 
printing. As shown in figure 1, since 1998, in-house printing, which 
includes the Federal Register and Code of Federal Regulations, has 
raised $39,814,000 in income; purchased printing, which includes most 
of the printing done for federal agencies, lost $12,299,000; the sales 
program, which includes sales from the recently closed bookstores, as 
well as online and telephone sales, lost $48,275,000; and agency 
distribution services, which distributes executive branch 
publications, lost $274,000.

Figure 1: The Net Operating Income (Loss) for GPO's Major Operations 
(in Thousands of Dollars):

[See PDF for image]

[End of figure]

As shown in figure 2, GPO's losses for its major operations during the 
5-year period were $21 million, with the greatest net loss at 
approximately $17 million from operations in fiscal year 2002.

Figure 2: GPO's Net Operating Income:

[See PDF for image]

Note: Net operating income before eliminations.

[End of figure]

The decline in the demand for GPO's ink-on-paper products and the shift 
toward using its electronically disseminated products has led to a 
decline in GPO's workforce. Over the past 6 years, GPO's total number 
of full-time equivalent (FTE) employees has declined by 13 percent, 
from 3,430 FTEs in 1998 to 2,978 FTEs in 2003. The workforce will 
experience additional decreases through GPO's retirement separation 
incentive program, which was announced on April 29, 2003. The program, 
based on authority provided in the Legislative Branch Appropriations 
Act, 1999, as amended, seeks to generate payroll savings by reducing 
GPO's existing staffing levels by approximately 300 employees.[Footnote 
9]

GPO's current workforce represents a diverse set of skills, ranging 
from electricians to printing machinists to information technology 
specialists. About 47 percent of GPO's employees are in blue-collar 
occupations, such as platemakers and electricians, which are 
represented by 16 different unions. As of August 2003, almost half of 
GPO's workforce was eligible for retirement, while about 5 percent of 
the workforce was under the age of 30. As we have reported 
before,[Footnote 10] it is important to consider the number and type of 
employees an agency will lose to retirement because retirees often 
represent an agency's most experienced and knowledgeable staff.

In January 2003, the Public Printer initiated a process to develop a 
strategic plan and an accompanying strategic workforce plan. The 
process includes a year of data gathering to assess GPO's current 
status; a year to develop and write the plan, which will include input 
from employees, Congress, customers, and other stakeholders; and 3 to 5 
years to fully implement the plan. Currently, GPO is in the data-
gathering phase of its strategic planning process.

Communicating the Role of Managers and Following Up on Employees' 
Stated Concerns Is Vital to GPO's Transformation:

Creating an effective, ongoing communication strategy is essential when 
defining and implementing any transformation effort. More specifically, 
for GPO it is important to communicate the role that managers should 
play in managing people and implementing human capital initiatives in 
the agency's transformation. A comprehensive communication strategy 
that reaches out to employees, unions, Congress, customers, and 
stakeholders and seeks to engage them in the transformation process 
could help GPO's leaders convey an understanding of the purpose of 
planned changes and build trust, cultivating a strong relationship with 
management and gaining employee ownership for the transformation. 
Additionally, communication should facilitate a two-way honest exchange 
between managers and employees and allow for constructive feedback from 
employees.

This communication is central to forming the effective partnerships 
that are crucial to the success of any organization. Because an 
organization's people are the drivers of any transformation, it is 
vital to solicit their input and monitor their attitudes. Obtaining 
employees' attitudes through pulse surveys, focus groups, or 
confidential hotlines can serve as a quick check of how employees are 
feeling about the large-scale changes that are occurring and the new 
organization as a whole. Most important, employees should see that top 
leadership not only listens to their concerns, but also takes action 
and makes appropriate adjustments to the transformation effort based on 
them.

Status of GPO's Communication and Follow-up Efforts:

GPO's leaders have demonstrated that they are committed to a strategic 
human capital approach and understand that implementing a large-scale 
management initiative, such as GPO's transformation, requires the 
concentrated efforts of both leadership and employees. GPO leadership 
has communicated to employees the need for a transformed GPO through 
several channels, including holding town hall meetings with question 
and answer sessions for all employees. In addition, GPO has established 
an Employee Communications Office to disseminate information to the 
employees regarding GPO's ongoing changes through a recently created 
intranet site, newsletters, and mailings to employees' homes. Overall, 
managers say that communication has improved dramatically since the 
arrival of GPO's new leadership team.

To indicate his commitment to GPO's human capital, the Public Printer 
has:

* shifted the focus of existing training and expanded opportunities for 
more staff to attend needed training;

* instituted a new time-off awards program, the first such program 
instituted at GPO in a decade;

* implemented a new executive development program, demonstrating GPO's 
investment in its future leaders; and:

* initiated an employee climate survey to get GPO employees' views on 
issues requiring management attention.

Although GPO leadership demonstrated commitment to communication and 
human capital, we found that GPO's managers did not consistently 
understand the roles they should play in the transformation. For 
example, some managers expressed the need to have additional details 
about the direction of their units within the context of GPO's 
transformation and were unclear about what training requests they 
should accept. A key factor in the success of any strategic human 
capital initiative is the sustained attention of senior leaders and 
managers at all levels of the agency to valuing and investing in their 
employees. As GPO's leadership communicates with employees regarding 
its transformation efforts, it also needs to inform managers about 
their roles in managing people and in monitoring and refining human 
capital initiatives. Establishing a performance expectation that holds 
managers accountable for the effective management of people can help 
clarify the roles of managers and further demonstrate leadership's 
commitment to human capital management.

Follow-up action on GPO's employee climate survey, conducted in 
February 2003, has been slow. Planned focus groups with employees to 
discuss the findings and develop actions that could be taken to address 
some of the issues raised by the survey results were delayed until the 
new CHCO was hired to ensure that the follow-up and the implementation 
of any recommendations resulting from the survey received the 
appropriate level of attention. Moreover, while GPO's employee climate 
survey identified several issues for immediate attention, such as 
communications, performance management, and training, managers we 
interviewed, both within the Human Resources Office and in other areas 
of GPO, said they did not believe that it was their responsibility to 
address issues identified in the employee survey. To address these 
issues, all GPO managers should have performance expectations making 
them responsible and accountable for taking actions to change GPO's 
work environment. While monitoring employee attitudes provides good 
information, it is most important that employees see that top 
leadership not only listens to their concerns but also takes action on 
them.

Recommended Next Steps:

GPO's leaders have communicated a clear message about the need to 
transform GPO. To build on their progress by strengthening two-way 
communications and employee involvement, the Public Printer should take 
the following actions:

* Communicate with managers about their roles in strengthening GPO's 
human capital management in support of mission needs. GPO leadership 
should continue to hold town hall meetings and use the Employee 
Communication Office to reach out to employees and engage them in a 
two-way exchange so that they understand how they may be able to help 
with the transformation.

* Ensure that managers are held accountable, through GPO's performance 
management system and other mechanisms, for effectively managing people 
and leading change.

In addition, the CHCO should follow up on the completed employee 
climate survey by holding focus groups that work to develop recommended 
solutions to issues raised in the survey results, including adjustments 
to GPO's transformation and human capital approaches.

Developing a Strategic Human Capital Office:

Our work and that of others has shown that over the past decade, high-
performing organizations have increasingly adopted a strategic view of 
human capital management in helping to achieve organizational missions 
and program goals.[Footnote 11] This new strategic view centers on the 
contributions that human capital management can make to the long-term 
accomplishment of the agency's mission. As such, the function 
traditionally called personnel or human resources needs to be 
fundamentally transformed, from being a strictly support function 
involved in managing personnel processes and ensuring compliance with 
rules and regulations to designing and implementing human capital 
approaches that are aimed at supporting the agency's strategic goals. 
Human capital professionals must have the appropriate preparation not 
just to provide effective support services, but also to consult 
effectively with line managers in tailoring human capital strategies to 
the unique needs of the agency.

In April 2003, we reported on key actions that selected agencies had 
taken to integrate their human capital approaches with their strategies 
for accomplishing organizational missions and to shift the focus of 
their Human Resources Office from performing primarily compliance 
activities to performing consulting activities.[Footnote 12] These 
actions can be particularly instructive to GPO as it strengthens the 
role of human capital in support of its transformation. Table 1 
identifies the actions taken and who within each agency initiated them.

Table 1: Key Agency Actions to Integrate Human Capital Approaches with 
Strategies for Accomplishing Agency Missions:

Action initiators: Agency leaders; Description of action: * Agency 
leaders included human capital leaders in key agency decision-making. 
For example, United States Coast Guard's (USCG) agency leadership has 
engaged its human capital organization earlier in the strategic 
planning and decision-making process by appointing its Assistant 
Commandant for Human Resources as a member of the agency's senior 
management team and a full partner in the development of key USCG 
management decisions; * Agency leaders also established entities, 
such as human capital councils, accountable for integrating human 
capital approaches with strategies for achieving programmatic goals. 
The groups' members include both program leaders and human capital 
leaders. For example, the GSA created a Human Capital Council to 
ensure, among other objectives, that the agency's human capital 
strategic plan was integrated within GSA's strategic plan and 
supported the agency's program strategies..

Action initiators: Human capital; leaders; Description of action: * 
Human capital leaders are establishing and communicating clear human 
capital strategic visions. For example, GSA's Chief People Officer's 
vision is for GSA's Chief People Office (CPO) to become a partner in 
GSA's business success. To do so, she explained that CPO must deliver 
products and services that enable its customers to focus on their core 
business. Similarly, Internal Revenue Service's (IRS) former Chief 
Human Resource Officer's vision is for the human capital professionals 
in IRS to become more proactive in providing human capital strategies 
and solutions that directly enhance the agency's performance; * 
Human capital leaders are restructuring their human capital 
organizations to improve their alignment with their vision. For 
example, IRS's restructured human capital management function 
includes, as one of three major components, a national headquarters 
strategic human resources organization; * Human capital leaders are 
using technological advances to provide opportunities to free 
organizational resources that can be redeployed for strategic purposes. 
For example, the United States Geological Survey (USGS) partnered with 
QuickHire, a commercial off-the-shelf software developer, to develop an 
on-line automated recruitment system (OARS) that allows USGS's human 
capital staff to enter job vacancies into a centralized database and 
develop rating and ranking criteria by selecting and weighting 
questions from an extensive question library organized by job series. 
According to USGS, as the agency continues to gain experience and 
efficiencies using OARS, it hopes to divert an increasing number of 
human capital staff members to other strategic efforts; * Human 
capital leaders are promoting a more strategic role for human capital 
professionals and are investing in the development of new competencies 
for human capital professionals to support their increased strategic 
engagement. For example, in response to the changing role and functions 
of its human capital community, GSA has developed new core competencies 
needed by its human capital staff. Included in these competencies are 
the new skills GSA's Chief People Officer believes the agency's human 
capital staff members must develop to become business partners..

Action initiators: Agency leaders and human capitalleaders; Description 
of action: * Jointly, agency leaders and human capital leaders are 
having human capital professionals and agency line managers share the 
accountability for successfully integrating strategic human capital 
approaches into the planning and decision making of the agency. For 
example, Federal Emergency Management Agency's (FEMA) human capital 
leaders and program officials have implemented an innovative employee 
staffing effort. According to FEMA officials, this greatly enhanced the 
agency's emergency response capability by providing the human capital 
staff and the line managers the ability to collaborate in identifying 
available deployment candidates for assignment as soon as federal 
disasters are declared..

Source: GAO.

[End of table]

Status of GPO's Efforts to Create a Strategic Human Capital Function:

GPO's new leaders recognize that its Human Resources Office has been 
characterized by the following weaknesses:

* Lacking a strategic focus. Managers in both the Human Resources 
Office and GPO's program divisions acknowledged the need to improve 
collaboration in support of agency goals and the transformation and 
indicated that efforts should be more proactive. One official in the 
Human Resources Office indicated the need for the new CHCO to 
dramatically improve communication with GPO program managers so that 
the Human Resources Office can better understand and anticipate their 
needs.

* Viewing human capital as costs to be cut rather than as assets needed 
to achieve results. Managers told us that the Human Resources Office 
had been used to reduce and control salary costs by restricting 
promotions, denying managers requests to increase the grade levels of 
positions so that they would reflect increased responsibilities, and 
downgrading vacant positions. Managers said that these actions 
contributed to good employees leaving GPO for positions in other 
federal agencies where they had more opportunities for advancement.

* Focusing more on processing transactions rather than strategically 
managing human capital to help achieve results. Program managers viewed 
the Human Resources Office's assistance in such efforts as filling 
recruitment needs and providing requested employee data as positive but 
very limited and falling far short of their expectations for 
assistance.

* Being an obstacle to rather than supporting manager's needs. For 
example, we were told that the Human Resources Office has not provided 
adequate assistance or guidance to managers in writing position 
descriptions needed to fill critical vacancies or get positions 
reclassified. A few managers told us that, as a result, they found the 
hiring process took longer than necessary and caused significant 
frustration and rework, taking attention away from other higher 
priorities.

GPO's Human Resources Office faces substantial challenges resulting 
from the many changes accompanying GPO's transformation. For example, 
the Information Dissemination Division, formerly the Superintendent of 
Documents Division, is undergoing a major reorganization to better 
position it to address GPO's increasing emphasis on electronic 
information dissemination. This divisional reorganization has created 
four major sections within the division, which will require the Human 
Resources Office to perform additional work reclassifying positions, 
developing position descriptions, and recruiting people for new 
positions. GPO managers expressed concerns about the Human Resources 
Office's ability to respond to the increased demands for support due to 
other divisional reorganizations and transformation-related 
initiatives on the horizon. In addition, some managers questioned 
whether the Human Resources Office had sufficient staff with the 
competencies needed to effectively serve as advisors to and partners 
with senior leaders and managers.

As an important first step in changing the role of the Human Resources 
Office at GPO, the Public Printer created a new organizational 
structure that establishes the position of CHCO, equivalent to the 
heads of the other administrative and operating divisions. (See fig. 
3.) This structure is consistent with executive branch agencies, many 
of which have now established CHCO positions. The creation of the Human 
Resources Office establishes accountability for the cross-functional 
area of human capital management within GPO and may help GPO use 
resources driven by the Public Printer's strategic vision more 
efficiently.

Figure 3: GPO's New Organizational Structure:

[See PDF for image]

[End of figure]

:

GPO's new CHCO has the opportunity to transform GPO's Human Resources 
Office into one that integrates GPO's human capital approaches with 
strategies for achieving programmatic results. The new CHCO realizes 
that this transformation is critical to the success of GPO's strategic 
human capital efforts and told us that his vision for the Human 
Resources Office includes human capital professionals working 
strategically with GPO's line managers to integrate the human capital 
function throughout the agency.

As the CHCO begins his efforts, he can build on the Human Resources 
Office's ongoing efforts to streamline operations and employ technology 
to meet customer needs and free organizational resources that can be 
redeployed for strategic purposes. GPO's Human Resources Office is 
streamlining and moving its payroll functions from within GPO to the 
National Finance Center, which handles payroll functions for many 
federal agencies. The Human Resources Office has also developed an 
automated system that alerts managers when employees under their 
supervision are due in-grade promotions and is working to convert 
employee performance ratings into an online/automated format. GPO 
managers have viewed these efforts positively and have indicated that 
there may be other opportunities to further automate and streamline 
human capital processes.

Recommended Next Steps:

GPO's hiring of a CHCO, concurrent with its efforts to begin developing 
an overall agency strategic plan and a complementary strategic 
workforce plan, creates the opportunity for GPO leadership and human 
capital leaders to work together to strengthen the role of human 
capital and ensure that it will be integrated with strategies for 
accomplishing GPO's mission and program goals. To effectively support 
GPO's overall transformation efforts, the CHCO will need to develop a 
new human capital organization with a strong collaborative focus and 
culture. This may involve a number of steps, such as establishing a 
strategic vision for the Human Resources Office and ensuring that human 
capital professionals have the competencies needed to collaborate with 
GPO's managers. The final result should be a Human Resources Office 
that helps integrate human capital approaches with GPO's program 
strategies throughout the organization by working in partnership with 
managers of all divisions.

To enhance the role of strategic human capital in support of GPO's 
transformation efforts, the Public Printer should take the following 
actions:

* Include human capital leaders in agency strategic planning and 
decision making. Involving these leaders as full partners would 
acknowledge both the commitment of the Public Printer to strategically 
managing GPO's people and create the expectation that human capital 
professionals will contribute to organizational success.

* Establish an entity, such as a human capital council, that is 
accountable for integrating human capital approaches with strategies 
for achieving programmatic goals. The group's members should include 
both program managers and human capital professionals. As GPO develops 
and implements its strategic plan and human capital plan, the group can 
help ensure that the plans are integrated.

* Communicate clearly that the CHCO should create a Human Resources 
Office that is not solely focused on routine processing and compliance 
issues but is also focused on strategic human capital planning and 
management.

To further the integration of human capital with GPO's strategies for 
transformation and mission accomplishment, the CHCO should take the 
following actions:

* Establish a human capital strategic vision, and a mission for the 
Human Resources Office, and define goals and expectations for human 
capital professionals as well as the Human Resources Office that can be 
used to hold human capital professionals accountable.

* Strengthen communication between human capital officials and program 
managers to enhance the understanding of how they can work together to 
achieve organizational goals. As a key part of strengthening 
communication, the CHCO should routinely solicit the feedback of GPO 
managers to identify how the Human Resources Office can best meet 
managers' needs and help them uphold federal merit principles.

* Consider how to organize the Human Resources Office to align it with 
the strategic vision and best achieve integration of GPO's human 
capital approaches and mission strategies. One potential approach used 
successfully in other federal agencies is to integrate human capital 
professionals throughout the agency's operational divisions. Each of 
these human capital professionals reports to a particular operating 
division leader and is tasked with implementing and customizing human 
capital policies, procedures, and strategies to fit the division's 
unique needs.

* Ensure that human capital professionals have the skills needed to 
implement the Human Resources Office's mission, thereby helping to 
achieve the goals of the Human Resources Office and the agency as a 
whole. This will include providing necessary training for current human 
capital professionals and hiring new human capital professionals with 
the appropriate skills to help implement the Human Resources Office's 
mission.

* Further explore how technological advances can provide opportunities 
to better serve managers and free organizational resources that can be 
redeployed for strategic purposes.

Together, the Public Printer and the CHCO should clearly define and 
communicate to the human capital professionals, as well as throughout 
GPO, that the role of the Human Resources Office is to partner with the 
other units within GPO to achieve the agency's mission. The town hall 
meetings initiated by the Public Printer are one forum in which this 
type of communication can happen. It should be made clear that agency 
and human capital leaders, human capital professionals, and line 
managers share responsibility for advancing agency programmatic and 
human capital goals.

Strategic Workforce Planning Can Assist GPO's Transformation:

A key factor in successfully transforming GPO and sustaining high 
performance is the effective integration and alignment of GPO's human 
capital approaches with its strategies for achieving mission and 
programmatic goals and results. GPO should use strategic workforce 
planning to integrate and align its human capital approaches with its 
mission strategies. Strategic workforce planning focuses on developing 
long-term strategies for acquiring, developing, and retaining an 
organization's workforce to meet future needs. It is an essential 
element of GPO's management infrastructure, which is needed to ensure 
that its human capital program addresses workforce issues in a manner 
that is clearly linked to achieving the agency's mission and goals.

The goal of strategic workforce planning is to ensure that the right 
people with the right skills are in the right place at the right time. 
Agency approaches to workforce planning can vary with their particular 
needs and missions. Nevertheless, looking across existing successful 
public and private organizations, certain critical elements recur as 
part of a successful workforce plan and workforce planning process. 
Although fluid, this process starts with an organization setting a 
strategic direction that includes program goals and strategies to 
achieve those goals. The process consists of five critical elements 
that frame successful workforce planning efforts. Figure 4 uses a 
simple model to show these critical elements and their relationships to 
the agency's overall strategic direction and goals.

Figure 4: Critical Elements to Include in the Workforce Planning 
Process:

[See PDF for image]

[End of figure]

These five elements may be helpful to GPO in developing its plan:

* involve top management, employees, and other stakeholders in 
developing, communicating, implementing, and evaluating the strategic 
workforce plan;

* determine workforce gaps by identifying the critical skills and 
competencies that will be needed to achieve the future programmatic 
results, inventorying the skills and competencies of the existing 
workforce, and analyzing the gaps;

* develop strategies to address gaps in number, deployment, and the 
alignment of human capital approaches that enable and sustain the 
contributions of all critical skills and competencies;

* build the capability needed to address administrative, educational, 
and other requirements important to support workforce strategies; and:

* monitor and evaluate the agency's progress toward its human capital 
goals and the contribution that human capital results have made toward 
achieving programmatic goals.

Additionally, collecting and analyzing data is a fundamental building 
block for measuring the effectiveness of human capital approaches in 
support of the mission and goals of an agency. Having complete and 
reliable data is particularly important to doing a workforce gap 
analysis. Early development of the data provides a baseline by which an 
agency can identify current workforce problems, and regular updating of 
the data enables agencies to plan for improvements, manage changes in 
the programs and workforce, and track the effects of changes on 
achieving program goals. As shown in figure 5, agencies can collect and 
analyze a variety of information to support their workforce planning 
efforts.

Figure 5: Examples of Workforce Data That Are Collected and Analyzed by 
Other Federal Agencies:

[See PDF for image]

[End of figure]

Status of GPO's Workforce Planning Efforts:

GPO leaders have shown that they understand the benefits of involving 
managers and employees in developing human capital initiatives and have 
the opportunity to continue this practice to support GPO's workforce 
planning efforts. GPO has included both managers and employees in newly 
created task forces that are examining the training needed for the new 
Information Dissemination Division, exploring the creation of a 
gainsharing program, and making decisions to implement the time off 
awards program. GPO managers and labor leaders told us that they view 
participation in these efforts favorably and want more specific 
information about the role that they could play in GPO's 
transformation. GPO leadership can build on its experiences in using 
management and employee task forces and on the interest and support 
shown by these managers and employees by involving them in workforce 
planning. Involving GPO employees in strategic workforce planning can 
build support and foster a clear understanding of how managers and 
employees can contribute to the overall transformation of GPO by doing 
their part to help develop and implement human capital approaches.

GPO leaders acknowledge the importance of strategic workforce planning, 
including workforce gap analysis, to help GPO transform itself. They 
understand that they need to identify, in greater detail, the new 
skills and competencies that GPO will need and develop an inventory of 
the skills and competencies of its existing workforce to analyze 
workforce gaps. GPO leadership has told us that, currently, it is 
difficult for leaders to identify all of the specific skills and 
competencies GPO will need because they are still working to better 
define GPO's future mission and strategies as part of its recently 
initiated strategic planning effort. Although uncertainty about GPO's 
future may complicate the identification of future workforce needs, GPO 
may find it useful to begin producing an inventory of its employees' 
skills and competencies and work with its senior managers to identify 
some obvious gaps and establish a more systematic process for analyzing 
workforce gaps as it develops its strategic plan.

More specifically, although GPO leadership has not systematically 
determined the specific skills it will need to effectively carry out 
its shifting role, it has indicated that GPO's emphasis will 
increasingly shift from printed information dissemination to more 
electronic dissemination, and in some areas GPO has begun to identify 
some potential skills gaps. For example, the Superintendent of 
Documents said that the skills needed to complete GPO's document 
cataloging function are changing rapidly as the number of electronic 
documents increases. Cataloging now requires Internet searching skills 
and greater sophistication to locate documents that are available on 
agency Web sites. While GPO currently lacks a fact-based systematic 
approach to define the critical skills and competencies required to 
meet its strategic program goals, it can use available information 
about skills gaps as a starting point for its workforce planning 
activities.

To help meet its skills gaps, GPO has begun by strengthening its 
ability to recruit and develop staff. GPO formed a strategic 
partnership with leading universities in the areas of printing and 
graphic communications and initiated a recruiting drive to attract 
graduates in other disciplines, such as business administration and 
electrical, mechanical, and chemical engineering. Also, GPO hired 
experts who possess skills and competencies for addressing immediate 
needs, such as developing new sales and marketing strategies, to serve 
in temporary positions. To develop its existing workforce, GPO has 
shifted the focus of existing training and expanded opportunities for 
more staff to attend needed training.

Recent actions by GPO's leaders demonstrate an understanding of the 
need to consider workforce skills and knowledge when making business 
decisions and implementing human capital approaches. For example, GPO 
made the business decision that it needed to decrease its staff by 
about 300 people to reduce its costs. To achieve this reduction, GPO 
initiated a retirement separation incentive program, which included an 
approach to ensure that GPO retained employees with critical knowledge 
and skills. This approach involved GPO's executive committee screening 
employees to separate early retirement applicants into two groups, 
priority 1 and priority 2. Priority 1 applicants held positions that 
would not be filled because the positions were no longer necessary. 
Priority 2 applicants held positions that would be filled by other GPO 
employees, who would leave positions that would not be filled. Thus, 
GPO took a step toward stemming its operating losses while ensuring the 
retention of needed knowledge and skills.

Workforce planning includes building the capability to support 
workforce strategies by addressing administrative, educational, and 
other requirements. For example, it is important for GPO to educate 
managers on the use of available human capital flexibilities, such as 
the time-off awards program recently introduced at GPO. Educating 
managers and employees on the availability and use of such 
flexibilities is one way for GPO to integrate human capital approaches 
throughout the organization. Managers and supervisors can be more 
effective in using time off awards and other authorities if they are 
properly trained on when they can be used and how to ensure 
consistency, fairness, and transparency for their use.

GPO collects some data on its workforce, including the number of people 
eligible for retirement and the results of employees' performance 
reviews. However, GPO lacks information necessary to evaluate the 
effectiveness of its workforce strategies. Attention to the development 
and collection of workforce data could help ensure that GPO's human 
capital approaches are supporting its strategies for achieving results 
and transforming the organization.

GPO's managers can use human capital data like those shown in figure 5 
to help them identify human capital challenges, develop strategies to 
address them, and create measures to assess the strategies' success. 
For example, exit interviews can help GPO develop effective workforce 
strategies to address the reasons why top performing staff leave. 
Although overall attrition may not be a problem for GPO given its 
current downsizing efforts, it is important for GPO to retain top 
performers who have the skills it needs in the future. Some managers 
told us that high-performing staff have left GPO for comparable 
positions at other federal agencies because GPO's promotion 
possibilities were limited, often resulting from difficulties in 
reclassifying these positions. However, GPO has not conducted 
interviews with its departing employees to confirm their reasons for 
leaving. Without comprehensive data on why people leave GPO, it cannot 
determine what types of actions it should take, if any, to retain top 
performers.

Recommended Next Steps:

To ensure that human capital strategies are integrated throughout the 
agency, GPO should develop a strategic workforce plan that can guide 
its transformation and support mission accomplishment. The Public 
Printer and the CHCO should take the following actions:

* Involve staff in all phases of workforce planning to help improve the 
quality of the plan and build support needed to successfully implement 
it. Specifically, GPO should (1) ensure that top management sets the 
overall direction and goals of workforce planning, (2) involve 
employees and other stakeholders in developing, implementing, and 
evaluating future workforce strategies, and (3) establish a 
communication strategy to create shared expectations, promote 
transparency, and report progress.

* Complete a workforce gap analysis to identify critical skills and 
competency gaps that could affect GPO's ability to achieve its mission 
and transform the organization. The workforce gap analysis should 
include (1) an analysis of the current workforce to develop an 
inventory of employees' skills and competencies and (2) a systematic 
identification of the new skills and competencies that GPO will need in 
the future so that it can pinpoint any gaps that could affect its 
mission accomplishment and transformation.

* Develop strategies to address any identified workforce gaps and move 
from the current to the future workforce needed to achieve GPO's 
mission and transformation. These strategies, consistent with recent 
efforts at GPO, should include the programs, policies, and practices 
that will enable an agency to recruit, develop, and retain critical 
staff.

* Build the capability to support workforce strategies by addressing 
administrative, educational, and other requirements. To this end, 
managers and employees need training to understand how to use available 
human capital authorities and flexibilities effectively so that they 
are implemented equitably and their strategic purpose is fulfilled.

* Evaluate the results of current human capital strategies and make any 
needed revisions to ensure that the strategies work as intended and 
support the transformation. This will provide a baseline by which to 
evaluate these strategies to ensure alignment with its mission and 
transformation efforts.

* Develop performance measures for GPO's human capital strategies. Such 
measures are a first step in holding managers accountable for their 
management of human capital and provide valuable data for future 
workforce planning efforts. GPO could benchmark its human capital data 
against the data of high-performing organizations.

* Periodically survey managers and employees regarding human capital 
strategies to ensure that they are being implemented fairly, observing 
federal merit principles, and being used appropriately.

Performance Management Can Help GPO Drive Internal Change and Achieve 
External Results:

In July 2003, we reported that an organization's performance management 
system can be a vital tool for aligning the organization with desired 
results and creating a "line of sight" showing how team, unit, and 
individual performance can contribute to overall organizational 
results. The performance management system can help manage and direct 
the transformation process. The system serves as the basis for setting 
expectations for individuals' roles in the transformation 
process.[Footnote 13] Effective performance management systems are not 
merely used for once-or twice-yearly individual expectation setting and 
rating processes, but are tools to help the organization manage day to 
day. These systems are used to achieve results, accelerate change, and 
facilitate two-way communication throughout the year so that 
discussions about individual and organizational performance are 
integrated and ongoing.

In March 2003, we reported on key practices for federal agencies to 
consider when developing modern, effective, and credible performance 
management systems.[Footnote 14] While it is important that 
organizations develop performance management systems that reflect their 
specific structures, priorities, and cultures, these systems also 
reinforce individual accountability for results, and therefore, can 
strengthen overall agency performance. Figure 6 lists nine key 
practices for effective performance management that GPO may find 
instructive as it develops a more robust performance management system.

Figure 6: Key Practices for Effective Performance Management:

[See PDF for image]

[End of figure]

Analysis of GPO's Performance Management Efforts:

GPO has begun to make progress on two of the key practices for 
effective performance management. GPO has taken a first step toward 
aligning individual performance expectations with organizational goals 
by beginning to develop an agency strategic plan and complementary 
workforce plan. GPO is also beginning to explore the use of 
competencies to provide a fuller assessment of performance. The other 
seven key practices present opportunities for GPO to strengthen its 
performance management system. For example, GPO presently does not make 
meaningful distinctions in performance or link pay to individual and 
organizational performance. As GPO explores actions to strengthen its 
performance management, it has the opportunity to involve employees and 
stakeholders so that they gain ownership of the performance management 
system.

An explicit alignment of daily activities with broader results is one 
of the defining features of effective performance management systems in 
high-performing organizations. These organizations use their 
performance management systems to improve performance by helping 
individuals see the connection between their daily activities and 
organizational goals and encouraging individuals to focus on their 
roles and responsibilities to help achieve these goals. Such 
organizations continuously review and revise their performance 
management systems to support their strategic and performance goals, as 
well as their core values and transformational objectives.

Currently, GPO requires that supervisors set annual performance 
expectations for all staff that are linked to employees' position 
descriptions rather than unit goals. Once GPO's strategic plan and 
organizational goals are established, GPO can use them as the basis for 
setting individual performance expectations and ensuring related 
accountability. However, GPO can begin to use the performance 
management system now to drive its transformation and hold individuals 
accountable for helping to achieve critical organizational priorities, 
such as improving GPO's financial condition and customer service. For 
example, we were told that employees in GPO's Information Dissemination 
Division lack basic sales techniques, like matching customer needs with 
available products. GPO could create a performance expectation for its 
sales staff related to their knowledge of GPO products. The performance 
expectation could help GPO improve its financial condition and customer 
service as staff become more familiar with the types of products GPO 
offers and matching these products to customers' needs.

Further, GPO could help staff achieve organizational goals by requiring 
that managers take follow-up actions to address performance gaps. For 
example, GPO could routinely collect and analyze information from its 
customers to determine their views on the quality and timeliness of the 
products and services GPO provides as well as their current and future 
needs. Through the performance management system, managers in GPO's in-
house printing operation could be required to use this information to 
follow up on recurring issues and plan for its customers' future needs.

High-performing organizations use competencies to examine how the 
performance of individual employees contributes to the organization's 
results. Competencies, which define the skills and supporting behaviors 
that individuals are expected to exhibit to carry out their work 
effectively, can provide a fuller picture of an individual's 
performance. Because GPO is developing its agency strategic plan and 
related workforce plan, identifying core competencies for employees 
will necessarily lag. However, some GPO managers have started to 
identify critical competencies for employees in their units. For 
example, one manager in the Human Resources Office plans to revise the 
performance expectations for her staff to include a focus on customer 
service in order to improve the collaboration between her staff and 
managers throughout GPO. More generally, GPO is identifying 
competencies for senior managers to be included in their performance 
contracts.

Effective performance management requires the organization's 
leadership to make meaningful distinctions between acceptable and 
outstanding performance of individuals and to appropriately reward 
those who perform at the highest level. In doing so, performance 
management systems in high-performing organizations typically seek to 
achieve three key objectives: (1) they strive to provide candid and 
constructive feedback to help individuals maximize their contribution 
and potential in understanding and realizing the goals and objectives 
of the organization, (2) they seek to provide management with the 
objective and fact-based information it needs to reward top performers, 
and (3) they provide the necessary information and documentation to 
deal with poor performers.

GPO's performance management system does not make meaningful 
distinctions among employees' performance in the performance appraisal 
process. Managers told us that attention given to preparing individual 
performance ratings had decreased over the past decade due to the lack 
of performance awards. In addition, they said that since the ratings 
were not used as the basis for employee recognition, there was little 
incentive for mangers to make distinctions among their employees' 
performance when rating their staff. As a result, managers said that 
they rated large numbers of their staff as outstanding to boost morale 
and to avoid employee complaints. Figure 7 shows that over 94 percent 
of the employees who were rated in 2001 received an overall rating of 
outstanding or excellent.

Figure 7: 2001 Performance Ratings for Current GPO Employees:

[See PDF for image]

Note: Data are 2001 ratings of on-board employees as of August 7, 2003. 
Data for 2002 are not yet available.

[A] This number is less than GPO's current number of staff, or 2,928, 
because it does not include employees hired since 2001 and those not 
rated because they were not covered by performance standards for a 
minimum of 90 days.

[End of figure]

The lack of identified distinctions among employee's performance 
compromises GPO's ability to select among employees for development and 
advancement opportunities. In the absence of objective and fact-based 
performance information, managers rely on their personal knowledge of 
employee performance and employees' reputations. Having objective and 
fact-based information and related documentation on which to justify 
personnel decisions is fundamental to ensuring that managers can 
effectively fulfill their responsibilities to uphold federal merit 
system principles. Further, without this information, managers lack the 
basic tools to motivate and reward staff for their performance.

Seniority rather than performance is the basis for most pay decisions 
by GPO managers, and financial awards are not used to reward GPO's top 
performers. However, GPO's leadership recognizes the need to strengthen 
incentives for individual and organizational performance and has taken 
some actions to stimulate higher performance. On February 10, 2003, GPO 
instituted a time-off awards program to recognize outstanding effort by 
rewarding productivity, dedication, creativity, and superior 
accomplishment. Before the time-off awards program was introduced, GPO 
had been without any mechanism to recognize and reward outstanding 
performance since 1992 when funding for its incentive awards and 
recognition system was removed due to financial constraints and equity 
concerns. While the time-off awards program represents an improvement 
in GPO's rewarding of employees for good performance, several managers 
told us that GPO needs to do more to reward performance through 
financial mechanisms. Consistent with this view, GPO leadership 
recently formed a task force to determine the feasibility of developing 
a gainsharing program modeled after the program at the Bureau of 
Engraving and Printing, which rewards employees for meeting 
organizational goals. Under the program, all employees share in the 
gains from proven savings according to predetermined standards and 
payout formulas.

High-performing organizations have found that actively involving 
employees and stakeholders, such as unions or other employee 
associations, when developing results-oriented performance management 
systems helps improve employees' confidence and belief in the fairness 
of the system and increases their understanding and ownership of 
organizational goals and objectives. Effective performance management 
systems depend on individuals', their supervisors', and management's 
common understanding, support, and use of these systems to reinforce 
the connection between performance management and organizational 
results. These organizations recognize that they must conduct frequent 
training for staff members at all levels of the organization to 
maximize the effectiveness of the performance management 
systems.[Footnote 15] Overall, employees and supervisors share the 
responsibility for individual performance management. Both are actively 
involved in identifying how they can contribute to organizational 
results and are held accountable for their contributions.

GPO leadership has demonstrated that it understands the importance of 
working with employees at all levels of the organization to implement 
human capital changes. As GPO moves forward to make additional needed 
changes to its performance management system, it is vital that leaders 
work to further strengthen the involvement of employees and 
stakeholders such as GPO's unions and employee associations. GPO cannot 
successfully improve its performance management system without the 
support and commitment of its many unions, which have substantial 
influence over GPO's human capital policies because of their right to 
bargain for wages. Given that union leaders and GPO's leadership agree 
that GPO's performance management system is ineffective, common ground 
exists from which GPO, GPO's employees, and the employees' elected 
representatives can begin a dialogue about how best to change the 
system. The constructive relationship that currently exists between 
GPO's union leaders and GPO management can facilitate this dialogue.

Recommended Next Steps:

Public sector organizations both in the United States and abroad have 
used their performance management systems to create a clear linkage--
"line of sight"--between individual performance and organizational 
success and, thus, transform their cultures to be more results-
oriented, customer-focused, and collaborative. GPO can obtain similar 
benefits by adopting the practices of leading organizations' 
performance management systems. Specifically, the Public Printer, in 
conjunction with the CHCO should take the following actions:

* Align the individual performance expectations with organizational 
goals, which helps individuals identify the connection between their 
daily activities and organizational goals.

* Connect performance expectations to crosscutting organizational 
goals, which would foster the necessary collaboration, interaction, and 
teamwork across organizational boundaries to achieve these results.

* Provide and routinely use performance information to track 
organizational priorities, which would help GPO identify performance 
gaps and pinpoint improvement opportunities.

* Require individuals to take follow-up actions on identified 
performance gaps to address organizational priorities, which 
underscores the importance of holding individuals accountable for 
making progress on their priorities.

* Use competencies, which define the skills and supporting behaviors 
that individuals are expected to exhibit, to provide a fuller 
assessment of performance.

* Link employee pay and awards to individual and organizational 
performance, which establishes incentives for high performance.

* Make meaningful distinctions in performance, which provides a basis 
for constructive feedback, rewarding top performers, and dealing with 
poor performers.

* Involve employees and stakeholders in the development of the 
performance management system which helps increase their ownership of 
the organizational goals and objectives.

* Maintain continuity during leadership transitions by focusing on a 
broad set of programmatic priorities.

Concluding Observations:

Realizing the importance of effective human capital management, the new 
Public Printer has taken several important steps to establish the 
foundation needed to successfully transform GPO. However, there are 
additional opportunities for GPO to strengthen human capital management 
to support its progress into the 21ST century.

We found that, although GPO's leadership recognizes the importance of 
human capital management in GPO's transformation, it must ensure that 
managers appreciate the importance of their roles in order to make the 
entire workforce accountable for results. To achieve this 
transformation, GPO will need to strengthen the role of human capital 
management and ensure that it will be integrated with strategies for 
accomplishing GPO's mission and program goals. In addition, to ensure 
that GPO's workforce has the correct mix of skills and competencies for 
the future, GPO leadership will need to establish a strategic workforce 
planning process. Finally, to make GPO's units and workforce 
accountable for results, GPO will need to strengthen its current 
performance management systems. GPO's future success will depend 
largely on how well it is able to build and strengthen its capacity to 
effectively manage human capital in support of results.

Agency Comments:

We provided a draft of this report in September 2003 to the Public 
Printer for his review and comment. GPO's Chief of Staff, Deputy Chief 
of Staff, and Chief Human Capital Officer provided comments orally and 
by e-mail on behalf of GPO generally agreeing with the content, 
findings, and recommendations of the draft report. They also provided 
minor technical clarifications, and we made those changes where 
appropriate.

The officials stated that GPO is committed to implementing the 
recommendations that we made to strengthen its human capital management 
and that the recommendations were fully consistent with the direction 
in which GPO is already moving. The officials stated that they look 
forward to continuing to work cooperatively with us throughout GPO's 
transformation effort and that our ongoing work on legislative and 
executive branch printing requirements will be an important input into 
GPO's ongoing strategic planning efforts.

:

Unless you announce its contents earlier, we plan no further 
distribution of this report until 7 days after its issuance date. At 
that time, we will send copies to the Public Printer, GPO, as well as 
the Joint Committee on Printing, and the House Appropriations 
Legislative Subcommittee, Senate Committee on Rules and Administration, 
and House Committee on Administration. We will also make copies 
available to others upon request. In addition, the report will be 
available at no charge on GAO's Web site at [Hyperlink, http://
www.gao.gov] h [Hyperlink, http://www.gao.gov] ttp://www.gao.gov.

If you have any questions about this report, please contact me or 
Steven Lozano on (202) 512-6806 or on [Hyperlink, mihmj@gao.gov] 
mihmj@gao.gov and [Hyperlink, lozanos@gao.gov] l [Hyperlink, 
lozanos@gao.gov] ozanos@gao.gov. Major contributors to this report were 
William Reinsberg, Benjamin Crawford, Masha Pastuhov-Pastein, and 
Carole Cimitile.

Signed by:

J. Christopher Mihm 

Director, Strategic Issues:

:

[End of section]

Appendixes: 

Appendix I: Objective, Scope, and Methodology:

The objective of our review was to describe the Government Printing 
Office's (GPO) actions and plans for strategically managing its 
workforce and recommend next steps for GPO as it transforms. To 
identify strategic human capital practices and recommend next steps, we 
reviewed our models, guides, reports, and other products on strategic 
planning and performance measurement, strategic human capital 
management, transformation efforts, and other related areas. We used 
our Model of Strategic Human Capital Management to guide our initial 
analysis. From that analysis, we identified a set of human capital 
issues that could benefit GPO if addressed in the short term. These 
issues include the role of GPO's Human Resources Office and the Chief 
Human Capital Officer (CHCO), the desire to restructure GPO's workforce 
as part of its transformation, and the use of performance management 
systems. In order to address these immediate issues, we narrowed our 
review to focus on five of the eight critical success factors in our 
model:

* leadership's commitment to human capital management,

* the role of the human capital function,

* integration and alignment,

* data-driven human capital decisions, and:

* unit and organizational performance linked to organizational goals.

To assess GPO's actions and plans related to these critical success 
factors, we reviewed statements by the Public Printer; individual 
performance standards, position descriptions, and vacancy 
announcements; GPO policies and procedures; results from GPO's employee 
climate survey taken in March 2003; studies of GPO human capital issues 
conducted by the Office of Personnel Management and Booz-Allen and 
Hamilton; organizational charts; information from GPO's intranet; and 
other relevant documentation.

To obtain additional information and perspectives on GPO's human 
capital issues, we interviewed key senior GPO officials, including the 
Deputy Public Printer; Chief of Staff; Deputy Chief of Staff; 
Superintendent of Documents; Managing Director of Plant Operations; 
Managing Director of 
Customer Services; the CHCO; former Personnel Director;[Footnote 16] 
Acting Personnel Director; Director, Office of Employee and Labor 
Relations; General Counsel; and Comptroller. We also interviewed GPO 
officials at the next level of management responsible for human 
capital, information dissemination, and customer service and union 
leaders. In addition, we visited GPO headquarters in Washington, D.C., 
and a distribution center in Laurel, Maryland, to talk with frontline 
managers about their responsibilities and the responsibilities of their 
employees.

We developed the recommended next steps by referring to our models, 
guides, reports, and other products on strategic human capital 
management and identifying additional practices that were associated 
with and would further complement or support current GPO efforts. We 
performed our work from March through September 2003 in accordance with 
generally accepted government auditing standards.

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FOOTNOTES

[1] GPO closed all of its bookstores except for its Washington, D.C. 
bookstore.

[2] U.S. General Accounting Office, Highlights of a GAO Forum: Mergers 
and Transformation: Lessons Learned for a Department of Homeland 
Security and Other Federal Agencies, GAO-03-293SP (Washington, D.C.: 
Nov. 14, 2002). 

[3] U.S. General Accounting Office, Results-Oriented Cultures: 
Implementation Steps to Assist Mergers and Organizational 
Transformations, GAO-03-669 (Washington, D.C.: July 2, 2003).

[4] U.S. General Accounting Office, A Model of Strategic Human Capital 
Management, GAO-02-373SP (Washington, D.C.: Mar. 15, 2002).

[5] GAO-03-669.

[6] These are chapters 1, 3, 5, 7, 9, 11, 13, 15, 17, 19, 39, and 41 of 
Title 44, U.S.C..

[7] 67 Fed. Reg. 68,914-68,918 (2002).

[8] Under the Federal Supply Schedule Program, GSA enters into 
contracts with commercial firms to provide supplies and services at 
stated prices for given periods. Orders are placed directly with the 
schedule contractor and deliveries are made directly to the customer.

[9] 44 U.S.C. 305 note.

[10] U.S. General Accounting Office, Federal Employee Retirements: 
Expected Increase Over the Next 5 Years Illustrates Need for Workforce 
Planning, GAO-01-509 (Washington, D.C.: Apr. 27, 2001).

[11] GAO-03-446.

[12] GAO-03-446.

[13] GAO-03-669.

[14] U.S. General Accounting Office, Results-Oriented Cultures: 
Creating a Clear Linkage between Individual Performance and 
Organizational Success, GAO-03-488 (Washington, D.C.: Mar. 14, 2003).

[15] U.S. General Accounting Office, Human Capital: Practices That 
Empowered and Involved Employees, GAO-01-1070 (Washington, D.C.: Sept. 
14, 2001).

[16] GPO's Personnel Director retired on July 3, 2003.

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