Public employers are confronted by four interrelated workforce problems. Budgets are under severe stress. There is pressure to raise performance levels. The workforces are aging and losing talent though heavy retirements. And labor markets are tight: Qualified employees in a growing number of job families are scarce, and that is driving up pay levels.
Less immediately pressing but endemic to government's reality is the prevalence of civil-service laws enacted long ago; a history of stable organizations that have experienced comparatively little change; disconnected pay and performance systems; human-resources policies and systems that are not responsive to labor-market trends or organizational problems; and resistance to change from unions, employee associations and some elected officials. In many jurisdictions elected leaders as well as appointees have little, if any, meaningful experience addressing workforce problems.
In the traditional government work environment, the HR or personnel office has had a limited role, focused narrowly on administering and enforcing civil-service rules and programs. HR specialists often side with employees and frustrate managers. They are often seen as an impediment to change.
The HR operation could be so much more than it is. Particularly in government, it should be central to the mission of improving organizational performance. To date, initiatives to improve performance have largely ignored the workforce itself and relied on technology and metrics. The results have been disappointing. A 2010 report by the National Performance Management Advisory Commission concluded that "simply superimposing a performance management process onto a traditionally managed organization ... is not likely to make any difference" in day-to-day management. The message was that government had ignored the reality of organizations and the role social psychology plays in the work experience.
The missing element in these initiatives at all levels of government is the failure to recognize that employees are integral to high performance. Virtually everything accomplished in government is attributable to employees at some level. After decades of disappointing investments in technology, it's time to develop a strategy to engage employees and tap their capabilities more fully. The potential for improved performance is significant, and the logical home for the expertise that's missing is the HR function.
There's no question that new thinking in the organization and management of work can trigger significantly higher performance. The largest gains combine leading-edge HR policies and systems with effective "people management" -- the organization of work and the day-to-day effectiveness of managers and supervisors. The HR function is responsible for preparing employees for their role as supervisors, and managers have more impact on an organization's performance than any other factor.
Perhaps the strongest sign of this new thinking at work is the increasing prevalence of chief human resources officers in both public- and private-sector organizations. As leadership adviser Mike Myatt put it recently in Forbes, there's a strong case to be made for the CHRO as "the real game changer." CEOs, Myatt wrote, "have grown to understand that regardless of the business they are in, they are always in the people business."
If compensation is a measure of perceived importance, in many larger companies today the CHRO is paid only slightly less than the chief financial officer and more than other senior executives including the CIO. That amounts to a growing recognition that the kind of change needed to improve workforce performance needs someone to be the catalyst, and the obvious choice is the CHRO.
CHRO or no CHRO, however, there will be plenty of change to manage. HR's administrative work will continue to be automated, outsourced or shifted to shared-service arrangements. Budget crises have prompted calls to consolidate HR as a central office -- or eliminate it completely. But workforce issues should not be ignored.
Every organization has HR horror stories. It may be difficult to convince elected officials that HR can play an important role in improving government. But it can, and it should. Here are some steps that will set the stage to create an HR office ready to work with managers to improve performance:
• Take a listening tour. Arrange to meet with groups of employees to discuss what's working and what's not, and to identify changes that promise to improve the work experience. Invite a senior leader to participate so everyone understands the importance of change. In Tennessee, the lieutenant governor joined with the CHRO.
• Review civil-service laws and regulations to identify those that inhibit people management. Where state or local governments have done away with civil-service laws or significantly amended them, it opened the door to a better work experience. Colorado changed its state constitution to make reform possible.
• Regularly review HR practices for their impact on performance. A key is maintaining a work environment where managers and employees can perform at their best. Executives and managers should be asked if HR policies and systems contribute to their effectiveness.
• Adopt goal-based management. Gallup recently released a research-based report that advocates relying on individual goals or expected results and involving employees in the planning for how to achieve them. Every employee should be able to state what she or he expects to accomplish.
Initiatives to improve performance cannot succeed in a static work environment. That's confirmed by the disappointing returns from IT investments. The prospects are far better when employers invest in developing employee capabilities and empower them to tackle problems. Leaders should be able to look to the HR community for guidance to get everyone on the same page.