Pay for Performance?

In the private sector, linking employee pay to individual and organizational performance has been a long- accepted practice. This approach has gained gradual acceptance in the public sector over the past two decades, with varying degrees of progress and success. However, the approach has been seen as an increasingly divisive issue in the past few years. What might the next President do?

There has been controversy in the performance-related pay approaches being undertaken over the past 6 years, especially in the Departments of Defense and Homeland Security. Hearings were held last year on legislation proposed to extend similar approaches to the rest of the government, but it never gained any traction.

A recent IBM Center report by pay experts Howard Risher and Charles Fay provide some potential guideposts for moving forward. In their report, “Managing for Better Performance: Enhancing Federal Performance Management Practices,” they say that there are certain prerequisites that need to be in place before an agency can successfully implement a performance management system, especially a performance management system linked to employee pay.

Risher and Fay say that agency leadership has to be seen as valuing performance management and advocating a high performing culture. Based on their experience in the private sector, they observe: “No single practice by itself is powerful enough to create a strong culture, but in combination they promote high performance.”

Some of the practices that contribute, they note, are:

• employee belief that high performance matters and is valued,
• they can trust their managers to rate them fairly based on performance, and
• employees are involved in helping define what constitutes “successful performance.

The governmentwide survey of employees suggests that none of these practices are seen as prevalent across the board. Interestingly, many of these prerequisites were advocated earlier by the National Performance Review in its original 1993 recommendations.Risher and Fay suggest that managerial training would help, so managers more clearly understand what constitutes good performance management and their roles as managers. They also applaud the approach taken by Congress in 2003 when the Senior Executive Service was placed under a performance pay system. They say that if the leaders cannot embrace performance management among themselves, leaders cannot expect line employees to do so. The SES system has not been well-received uniformly by SES members, according to a 2006 survey, but starting with the top 6,000 employees will create more credibility as the system expands more broadly across the workforce.

Risher and Fay also believe the “beta test” pilots of performance management, which were launched across the government voluntarily by a number of agencies last year, can create a foundation for expanding performance management principles more broadly across the government in coming years. These systems are not linked to pay, but do attempt to address the prerequisites Risher and Fay advocate for high performing organizations.

So while the implementation of governmentwide performance-related pay may be problematic, a solid foundation for good performance management — and potentially steps toward performance-related pay — may await the next President.

The President’s Management Councils

Historically, the bane of government inaction has been committees. In novels, ideas are sent to committees as a place to die. Do they deserve this reputation today? Working across agency boundaries – and creating a professional network – is increasingly a road to success. As leadership becomes increasingly shared and problems becoming more complex, leveraging the help of others has grown.

Will the next President build on the experience of his or her predecessors? The success of councils and committees depends on their purpose, their sponsorship, leadership, and membership.

Both law and presidential actions have created a series of high level, cross-agency councils that have been making a difference in the way government operates over the past two decades.

The President’s Management Council, first created by President Bill Clinton and re-constituted by President George W. Bush, is comprised of the chief operating officers of the major departments and agencies. Oftentimes this is the deputy secretary, or in the case of smaller agencies, it is the agency head himself or herself. A study toward the end of the Clinton Administration showed that this Council shared best practices among members and led major initiatives such as governmentwide e-government projects or downsizing efforts.

The Chief Financial Officers Council is one of the oldest, being constituted in the wake of the 1990 Chief Financial Officers Act. It focuses on the improvement of federal financial management systems and its members develop 5-year plans for how they will work together toward financial system improvements and the financial management workforce.

The Chief Information Officers Council was created in 1996 by President Clinton, then it was later prescribed by law. It recommends governmentwide policies and procedures related to information technology and shares best practices among its members. It also pursues joint projects that reach beyond the bounds of any single agency, such as benefits.gov, which provides a one-stop website for government benefits.

The Chief Human Capital Officers Council was created in 2002 as one of a series of personnel reforms in the Homeland Security Act. Its members work together to modernize the human capital systems, share information on best practices, and improve personnel information.

The Chief Acquisition Officers Council was established in 1999. It monitors and improves the federal acquisition system, sponsors joint projects, and engages in sharing best practices among its members.

The President’s Council on Integrity and Efficiency was created in 1992 by executive order and is comprised of the Inspectors General of the major departments and agencies. The Council addresses cross-agency audits, such as those in the wake of Hurricane Katrina, and well as developing the professional skills of the IG workforce.

While there are many other councils and committees that also involve citizens – about 1,000 are reported under the Federal Advisory Committee Act – these six are important opportunities to influence how the government is managed. The President appoints virtually all their members. As a consequence, the next President may want to ensure that they operate effectively as an extension of his or her government reform or improvement efforts.

Revisiting the Political Appointment Process

Presidents recognize that when they win the election, they can select a cadre of about 6,000 people to help him or her “run the government.” The appointment process, however, is overly complex. What most presidents don’t realize is that when they take office, it will take at least a year if not more – at least one quarter of the President’s term office — to put those people in place. It then takes that team about another year to get up to speed.

Is there a better way?

The effort to fix the process needs to take place before a president takes office. And generally that’s not of interest to anyone running for office, and not of interest to any president finishing his term. Fixing it would be painful since it requires political capital to work with the Senate to streamline its procedures.

There have been nonpartisan efforts, especially before 2000, to update and streamline the process. The Brookings Institution sponsored a major project to reform the presidential appointment process and the RAND Corporation led a similar project targeted specifically at appointments in the Defense Department. Some progress was made fixing the process in the Executive Branch. According to the Brookings project director, Paul Light, little was accomplished in improving the Senate’s processes, which vary by each committee.

Interestingly, one solution seems to be to reduce the number of political appointees. Paul Light has been an advocate of this, and it seems to be supported by some academic research. Princeton University professor David Lewis found that career appointees seem to be better program managers.

But that may be only a partial solution. Another factor is understanding what kinds of people belong in the 6,000 jobs. Beyond the “Plum Book,” published every four years, there are few indications as to what each of these jobs require in terms of skills and capabilities. In the past, the Council for Excellence in Government has produced a “Prune Book” for the 45 or so most challenging jobs, but that doesn’t solve the labyrinth appointment process.

The interesting thing, though, is that even absent answers to these questions – or even who the nominees will be – there are already websites recommending people brush up their resumes. So the pressure to act quickly will be strong.

So even absent a flood of resumes, the next President will face at least three staffing issues immediately: Can the political nomination process be fixed? How many political appointees should there be? And, to improve the chances of getting the right talent in the right jobs, is there a set of detailed job descriptions for each of the 6,000 positions?

Addressing Management Challenges

Comptroller General David Walker has been participating in a “Fiscal Wakeup Tour” of the early presidential primary states to encourage voters to ask the candidates about their plans to address looming fiscal challenges facing our country. He’s been profiled on “60 Minutes” for his bold stands on fiscal accountability for the future.

Less prominent, but also significant, Mr. Walker’s organization, the Government Accountability Office, has been publishing reports on the need to address a number of management challenges facing the government, as well.

The two most pointed pieces GAO has written on the government’s management challenges are a bit dated, yet still current. Generally, GAO updates its management advice to Congress at the beginning of each new session of Congress via its “High-Risk List” but it added a new list of oversight questions this past January, called “21st Century Challenges: Reexamining the Base of the Federal Government.” This report offers scores of oversight questions, grouped into a dozen areas, such as defense, retirement, and transportation. One of the areas is “Governance Capacity.” The bottom line in this segment of the report is GAO’s conclusion that the government “must fundamentally reexamine not only its business processes, but also its outmoded organizational structures, management approaches, and in some cases, outdated missions.”

In the 20th century, academics note that there were nearly a dozen committees or commissions that attempted to address virtually the same challenge. There have been numerous presidential and congressional efforts to create new commissions to do the same. Some have offered lessons from past commission efforts, in hopes of improving their success. However, the key seems to be the commitment of the President to wanting to make a difference.

GAO raises a number of other serious domestic issues that need to be addressed – reforming the tax system, fixing the healthcare system, fixing the entitlement system, etc. Does fixing the government rank up there for the next President? Should it?

What’s the “State of the USA?”

 Presidents annually visit the Congress and present a State of the Union address. But these speeches tend to be a list of policy initiatives. What about a report on the state of the nation – you know, how have we done? This may not be seen as “presidential” because it is backward-looking. But sharing information with Americans about the position and progress of our country is an important component of informed civic involvement.

The Government Accountability Office has put this idea on its reexamination agenda as a top priority for federal lawmakers. It says, “By insuring that the best facts are made more accessible and usable by the many different members of our society, we increase the probability of well-framed problems, good decisions and effective solutions.” So far, however, no congressional action has been taken.

GAO and the National Academies of Science began exploring how to move this idea forward several years ago and GAO issued a report examining the issue. Just recently a new non-profit was formed, with the support of foundation grants, to make it a reality – The State of the USA, Inc.

The non-profit’s purpose is to “provide nonpartisan, non-ideological and accurate information . . . to help Americans assess our nation’s position and progress in addressing important problems.” For example: Are certain places or groups doing better than others? Is our nation making progress on a range of goals and aspirations? How does the U.S. compare to other countries around the world? The idea is to provide citizens with “reliable, objective and accessible information about their neighborhoods, their states and their nation.” They premise their effort on the belief that “The democratic system in the U.S. is predicated on civic involvement” and providing useful information “will facilitate more meaningful participation in these processes.”

The goal is to create an easily-accessible website with existing data – social, economic, and environmental — from federal, state, local, private sector, non-profit sector, and international data sources.

Creating a national indicator system isn’t a new idea. Similar efforts were attempted by the federal government as far back as the 1960s. Scores of city and regional efforts exist in the U.S., such as Boston. Several exist at the state level, such as Virginia. And a number of other countries, such as Australia, have had similar systems in place for some time.

There are still many open questions – who chooses what data gets displayed? How will someone know how accurate it is? What about comparability of the data? Etc. But leaders of similar efforts say that just getting started will help answer some of these questions.

This effort may not be on the radar screen of the presidential candidates at this point, but it may well be something that the next president and his or her team will clearly need to keep in mind!

Presidential Performance Agreements

Come November 2008, the winning team for one of the presidential candidates will be asking the question, “We won! Now what??” Of course, the answer is, “We have to deliver on the President’s promises!” But exactly who actually delivers? The President’s appointees, of course.

But how do appointees find out what the President wants? This is a perennial problem. Former Reagan Treasury Secretary Donald Regan wrote in his memoirs that after he was sworn in as secretary, he waited for a call from the White House telling him what the President wanted to do. He served four years as secretary without ever having a one-on-one meeting with President Reagan. And he was only one of more than 3,000 presidential appointees! So how do they find out? Regan was advised to read the newspapers to see what the White House might be saying about Treasury. But there must be a better way.

In the early Clinton Administration, the National Performance Review recommended voluntary Presidential Performance Agreements with the heads of major departments and agencies. Of the 24 major departments and agencies, about 10 agreed to this arrangement. Examples include: Robert Reich, Secretary of Labor; Bruce Babbitt, Secretary of the Interior; Federico Pena, Secretary of Transportation; and Roger Johnson, Administrator of the General Services Administration.

The process lasted for several years before falling into disuse. White House policy council staff and the Office of Management and Budget hated the process because it allowed the secretaries to come to a direct agreement with the President. While they had input, they couldn’t easily put their imprint on it or change it later. Also, congressional committees disliked it because they did not have input. Secretaries, though, did like it because it gave them greater leverage with White House and OMB staffs and greater clarity as to what was expected. They could then turn to their staffs and say that they needed to help the Secretary meet his or her commitments to the President. The official reason for the demise was the implementation of the annual performance plans under the new Government Performance and Results Act. This created organizational, rather than personal, commitments. Some felt this was more stable.

In the early George W. Bush Administration, some of the cabinet members crafted performance agreements with their political underlings. For example, Secretary for Health and Human Services Tommy Thompson drafted “performance contracts” with his assistant secretaries and senior leaders. This did not last beyond most of the early appointees, in part because many appointees believe they were appointed by, and were accountable to, the President and not the Secretary.

In a recent Council for Excellence in Government seminar, former ambassador Prudence Bushnell commented that the President traditionally sends a personal letter to each ambassador that spells out the authorities and responsibilities of each ambassador before he or she is posted. It makes clear the ambassador has authority over all the different federal agencies that might be assigned within that country. She said this tradition continues and could serve as a model for other agencies as well.

So there is a track record of Presidents conveying clear expectations to appointees. Should the next President build on this or take some other approach?

From Web 2.0 to Government 2.0?

I’ve spent the past few days at a symposium in Berkley, California and came away with a question: “Will the next President take advantage of the new tools of technology commonly called ‘Web 2.0?’”

The definition of Web 2.0 is still evolving, but its elements are increasingly moving from toys to tools – text messaging, Second Life, YouTube, Facebook, Wikipedia. Don Tapscott, in his book “Wikinomics” talks about how these new technologies are changing corporate business models. But how about government?

The impact of Web 2.0 is starting to bleed into political campaigns – just look at the YouTube videos about the presidential candidates— and into the civic engagement elements of elected officials, such as California Assemblyman Tom McClintock’s blog that is influencing that state’s budget debate. . . . But what about the “real” government?

The Berkley symposium was a gathering of a handful of state officials from around the country who came together to ponder the implications of Web 2.0 for state government. Their deliberations might have some predictive powers for the federal government. It certainly triggered some thinking on my part!

Some high points from the presentations and discussion:

Web 2.0 is a reflection of the Millennial Generation, born between 1980 and 2000. They think differently; after all they’ve not known a world without cell phones, laptops, or wireless connectivity. They have different expectations and values, and they are just starting to enter the workforce. They assume a world that will be Web 2.0. For them, the question is: will government adapt to it by design or by default?

Web 2.0 is characterized by low entry barriers for communities, communication, and engagement. It is based on shared content, shared tools, and unbounded dialogue, generally not framed or controlled by an owner. It has a self-regulating nature that is uncomfortable to older generations – and to government. It tends to be in a “perpetual beta” state.

Web 2.0 isn’t a project or just a set of tools. It is a capability, another way to get work done. It is a philosophical shift that demands that government be willing to give up and/or share control over information. As a results, it can be a double-edged sword that allows self-organizing systems outside government control.

So how does government fit in this world? Can it change incrementally, or will it go through a disruptive change with new business models? Right now, it is an uneasy fit. Several state government Chief Information Officers at the symposium noted that many state agencies block employees from visiting sites such as YouTube, E-Bay, Second Life, and blogs – under the rationale that they are preserving bandwidth, or preventing employees from engaging in inappropriate activities. This is may have the effect of isolating government employees from the tools that citizens and businesses use to communicate and engage each other.

However, some agencies at the federal are stepping forward, especially those with younger employees such as the Defense Department and the Intelligence Community. There, they are often using Web 2.0 tools internally, to do their work in very different ways. The Intelligence Community has Intellipedia. The Army has created on-line collaborative games for recruiting, such as America’s Army. Most recently, the State Department has created Diplopedia. These are all designed to serve internal agency needs. What are some of the other (citizen-facing) opportunities for government, to make government smaller, more personal? Symposium participants came up with a short list of things that government could do to participate in the Web 2.0 world:

Be a platform and enabler, that it should supply the content citizens or business could use to create ” mash ups” and market places, such as provide housing, school scores, and public safety data to real estate brokers.

Be an honest broker of information and communities, maybe even create a safe space for some on-line communities or serve as a convener. For example, provide recycled building materials from tear-downs via CraigsList.

Create a space for conversation (e.g., Amazon allows its users to comment on products they buy, and the quality of the services they receive) to improve citizen access and allow comments via blogs or wikis on government policy issues, such as the development of new regulations.

Encourage “co-production” of services with citizens, such as enlisting citizen volunteers to help their fellow citizens to solve problems or answer questions about government services that they’ve experienced themselves – especially problems that reach across agency boundaries.

The symposium organizers plan to develop a white paper for government leaders in the next few months. The examples developed at the symposium are still formative. Do you have ideas or examples of how Web 2.0 could be used in federal agencies or programs that the next President should follow through on?

Can Governors Inspire Presidents?

States are supposed to be the “laboratories of democracy.” But can they inspire new ways of doing things in Washington? Some states have piloted new ways of managing that would certainly shake things up in Washington if they were done here. Examples?

· Washington State Governor Christine Gregoire has created an office that focuses on whether agencies get results. Her office on “Government Management Accountability and Performance” tracks key initiatives and, like Baltimore’s CitiStat, holds department heads to account for progress on a regular basis.

· Former Iowa Governor Tom Vilsek used a “Purchasing Results” approach. He defined a set of results he thought the state should achieve and asked agencies to “bid” on whether they would deliver on those results. Agencies could team together on a bid, or go for it on their own.

· Virginia’s Governor Tim Kaine has a “Council on Virginia’s Future” that tracks societal indicators in different areas on how well the state is doing – in education, health care, transportation, etc. He then uses the results of that system to identify specific strategies that he includes in his budget proposals to the legislature.

· Maryland’s Governor Martin O’Malley has created a “StateStat” that replicates his successful CitiStat in Baltimore. Beginning in June, he’s started with a pilot covering several agencies, then plans to extend it state governmentwide. Already, a Washington-based think tank is starting to tout it as a possible model for the federal government.

Are there other examples of cutting-edge innovations at the state level that future presidents might want to consider bringing to Washington?

Designing New Ways to Engage Citizens

Should the next President actively seek greater citizen involvement in government? AmericaSpeaks, a nonprofit that champions citizen engagement, recently released a report, Designing 21^{st Century Governance Mechanisms}. This report is based on an international conference held last year on ways to increase citizen involvement in governance. It offers five new ways for increasing citizen involvement at the federal level:

1. Allow citizen-initiated legislation, which would involve convening a citizen’s assembly one every two years to identify one issue that Congress must place on its agenda and be accountable to voters.

2. Create an independent, quasi-governmental body that would support legislative and executive branch agencies in their citizen participation efforts, like the former Office of Technology Assessment.

3. Develop measures that assess how well agencies engage in citizen participation activities and tie results to awards to agencies and staff.

4. Develop criteria to assess how well public officials foster effective citizen engagement, that would be used by non-profits and citizen groups.

5. Engage citizens in identifying and monitoring progress toward key national priorities.

While idealistic in approach, some of these themes are appearing in some of the statements by candidates. For example, Hillary Clinton has advocated restoring the Office of Technology Assessment, and Barak Obama has recommended empowering citizens to “crack down on government waste.”

From my perspective, the report’s mechanisms may not be “the answer.” For example, state-level citizen-initiated ballot initiatives have been problematic in some states, sometimes being co-opted by special interest groups. Extending something like that to the national level may face the same challenges, but on the other hand it could certainly have the potential to kick-start a national dialogue on issues such as entitlement reform or health care reform. The effectiveness of some of the other proposed ideas would heavily depend on how they were implemented – for example, who develops measures and criteria, and would they be perceived as truly non-partisan in definition and application?

Which of these ideas bother or excite you?

Blogging in Government

Will the next Administration join the Blogging Revolution? A couple weeks ago the IBM Center released a report on blogging in government, and sponsored an event where we invited both corporate and government bloggers to share their experiences. The audience – largely government communication experts – was wowed by the possibilities. The event was recorded, so you can watch it on our website.

The report, by Dr. David Wyld of Southeastern Louisiana University, seems to be the first compilation of the state of the art. It has over 400 links to government blogs. He purposely left out political campaign blogs; he wanted to showcase those being used in the administration of government. Most were posted by elected officials – governors, mayors, legislators. But he also found blogs by appointed officials – police chiefs, fire chiefs, etc. More infrequent were blogs by federal agencies. In fact, www.USA.gov – the governmentwide web portal – lists less than a dozen active federal blogs that reach out to the public.

One federal blog that Dr. Wyld showcased in his report (and who was a speaker at our event) was by the commanding general of the U.S. Strategic Command. General James Cartwright uses an internal, classified blog, and other on-line social networking tools, to move information and ideas more quickly across his command. He says the traditional hierarchy doesn’t work well when decisions need to be made more rapidly than in the past.

The corporate bloggers at the event – John Wolf from Marriott Corporation and David Berger from IBM – described how their companies went about creating their blogs, and how they are used for either internal or external audiences. While there are few external federal agency blogs, there maybe more internal blogs – but no one seems to know. The speakers talked not only about why they blog and the value, but also about how to do it. There are different styles, but the most compelling is a first-person narrative. An example is one on government reform by Steve Kelman, who is one of the authors of the Center’s initial Presidential Transition reports.

While the Blog event was a success, and people seem to be downloading copies of the report like crazy, I never really understood the power of blogging as a way of getting the word out until I started looking at how the word was getting out about the Blog report. We only saw a couple press articles about the report. However, I didn’t understand the extent to which it would be picked up by the blogosphere and passed along virally. A week after the event, I went onto the Google Blog search engine and found more than a dozen links to the report by different bloggers, all encouraging their readers to read it. We’re now curious – will this become our most downloaded report because of a viral campaign?

While the federal government seems to be a slow adopter of blogging, that doesn’t seem to be the case in states and localities. In fact, a symposium is being held toward the end of July on how states and localities can leverage blogging and other Web 2.0 technologies. Maybe they will be the ones to create a roadmap for the federal government. I’ll let you know what I learn.

In the meanwhile – do you know of any federal agency-run blogs – internal or external?