[Senate Hearing 106-392]
[From the U.S. Government Publishing Office]
S. Hrg. 106-392
QUALITY MANAGEMENT AT THE FEDERAL LEVEL
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HEARING
before the
OVERSIGHT OF GOVERNMENT MANAGEMENT,
RESTRUCTURING AND THE DISTRICT OF COLUMBIA SUBCOMMITTEE
of the
COMMITTEE ON
GOVERNMENTAL AFFAIRS
UNITED STATES SENATE
ONE HUNDRED SIXTH CONGRESS
FIRST SESSION
__________
OCTOBER 15, 1999
__________
Printed for the use of the Committee on Governmental Affairs
U.S.GOVERNMENT PRINTING OFFICE
61-700 cc WASHINGTON : 2000
_______________________________________________________________________
For sale by the Superintendent of Documents, Congressional Sales Office
U.S. Government Printing Office, Washington, DC 20402
COMMITTEE ON GOVERNMENTAL AFFAIRS
FRED THOMPSON, Tennessee, Chairman
WILLIAM V. ROTH, Jr., Delaware JOSEPH I. LIEBERMAN, Connecticut
TED STEVENS, Alaska CARL LEVIN, Michigan
SUSAN M. COLLINS, Maine DANIEL K. AKAKA, Hawaii
GEORGE V. VOINOVICH, Ohio RICHARD J. DURBIN, Illinois
PETE V. DOMENICI, New Mexico ROBERT G. TORRICELLI, New Jersey
THAD COCHRAN, Mississippi MAX CLELAND, Georgia
ARLEN SPECTER, Pennsylvania JOHN EDWARDS, North Carolina
JUDD GREGG, New Hampshire
Hannah S. Sistare, Staff Director and Counsel
Joyce A. Rechtschaffen, Minority Staff Director and Counsel
Darla D. Cassell, Administrive Clerk
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SUBCOMMITTEE ON OVERSIGHT OF GOVERNMENT MANAGEMENT, RESTRUCTURING, AND
THE DISTRICT OF COLUMBIA
GEORGE V. VOINOVICH, Ohio, Chairman
WILLIAM V. ROTH, Jr., Delaware RICHARD J. DURBIN, Illinois
JUDD GREGG, New Hampshire ROBERT G. TORRICELLI, New Jersey
Kristine I. Simmons, Staff Director
Marianne Clifford Upton, Minority Staff Director and Chief Counsel
Julie L. Vincent, Chief Clerk
C O N T E N T S
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Opening statements:
Page
Senator Voinovich............................................ 1
Senator Akaka................................................ 7
WITNESSES
Friday, October 15, 1999
Charles O. Rossotti, Commissioner, Internal Revenue Service,
Department of the Treasury..................................... 4
Martha N. Johnson, General Services Administration............... 8
Colleen M. Kelley, National President, National Treasury
Employees Union................................................ 23
Bobby L. Harnage, Sr., National President, American Federation of
Government Employees........................................... 25
J. Christopher Mihm, Associate Director, Federal Management and
Workforce Issues, General Government Division, U.S. General
Accounting Office; accompanied by James R. White, Director, Tax
Policy and Administration Issues, General Government Division,
U.S. General Accounting Office; and Bernard Ungar, Director,
Government Business Operations Issues, General Government
Division, U.S. General Accounting Office....................... 33
Alphabetical List of Witnesses
Harnage, Bobby L. Sr.:
Testimony.................................................... 25
Prepared statement........................................... 77
Johnson, Martha N.:
Testimony.................................................... 8
Prepared statement submitted by David J. Barram,
Administrator of General Services.......................... 56
Kelley, Colleen M.:
Testimony.................................................... 23
Prepared statement with an attachment........................ 65
Mihm, J. Christopher:
Testimony.................................................... 33
Prepared statement........................................... 94
Rossotti, Charles O.:
Testimony.................................................... 4
Prepared statement with attachments.......................... 43
APPENDIX
Dr. Jack West, Past President, American Society for Quality,
testimony of ASQC before the National Commission on
Restructuring the IRS, September 10, 1996...................... 109
QUALITY MANAGEMENT AT THE FEDERAL LEVEL
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FRIDAY, OCTOBER 15, 1999
U.S. Senate,
Oversight of Government Management, Restructuring,
and the District of Columbia Subcommittee,
of the Committee on Governmental Affairs,
Washington, DC.
The Subcommittee met, pursuant to notice, at 9:06 a.m., in
room SD-628, Dirksen Senate Office Building, Hon. George V.
Voinovich, Chairman of the Subcommittee, presiding.
Present: Senators Voinovich and Akaka.
OPENING STATEMENT OF SENATOR VOINOVICH
Senator Voinovich. Good morning. It is nice to have Senator
Akaka with us this morning.
Senator Akaka. It is good to be with you this morning.
Senator Voinovich. Unfortunately, we have a vote at 9:15. I
know all of you are very busy people and I have quite a lengthy
statement that I may submit for the record, because I think we
should move forward with the panels.
First I will introduce the witnesses that we have here
today. Then I will ask you to stand, administer the oath, and
then we will proceed with the hearing.
In a nutshell, what we are hoping to do with these hearings
is to see if during the next 2 to 3 years we can change the
culture of the A-team, the people that really make a difference
in the Federal Government, the people who are the middle
managers and the rank and file workers who survive
administration after administration, but I think in too many
instances have not had an opportunity to participate. I am
interested in empowering our workforce. I am interested in
providing the money that is necessary for upgrading people's
training. I am looking for ways that we can provide new
incentives for our Federal workers, and overall create the best
environment that we can for our Federal workforce.
When we instituted quality management in State Government,
it took us 8 years, but it is the most important piece of work
that I did as Governor of Ohio in terms of improving the
overall quality of life for the citizens of Ohio, and also the
quality of life for the 58,000 people who worked for the State
of Ohio. I know at the Federal level, it is going to be a much
bigger job, but I think if we stay with it, we can make a
difference.
The prepared opening statement of Senator Voinovich
follows:
PREPARED OPENING STATEMENT OF SENATOR VOINOVICH
The hearing will come to order. Good morning, and thank you all for
coming. Today the Subcommittee on Oversight of Government Management,
Restructuring, and the District of Columbia holds its second hearing on
Total Quality Management. For at least the next 2 years, hearings like
this will be an important part of my efforts to change the culture of
the Federal workforce.
I am interested in improving the work environment and culture of
Federal career civil service employees and middle-managers who, I
believe, do most of the heavy lifting and receive little acclaim for
their hard work. I call these dedicated men and women the ``A-Team.''
I would like to start this hearing by again defining Total Quality
Management and outlining what I believe it can do for the operations of
the Federal Government. Quality management is a system that (1) focuses
on internal and external customers; (2) establishes an environment
which facilitates team building, employee contribution and
responsibility, risk taking, and innovation; (3) analyzes work
processes and systems; and (4) institutionalizes a goal of continuous
improvement. For TQM to be successful, several important elements must
be present, including management-union partnerships, effective employee
training, modern personnel policies, and an established system to
measure program outcomes. This last point is a core characteristic of
the Results Act.
At our last hearing on July 29, we highlighted what quality
management has done on the State level. Representatives from the State
of Ohio and their union partners described to the Subcommittee the
great success that they have enjoyed with their own brand of Total
Quality Management, called Quality Services Through Partnership.
Today's hearing will address what is happening at the Federal level.
The Federal Government is moving in the right direction. The
Results Act requires that all Federal departments and agencies adopt
strategic plans, and that they collect performance information to
measure the effectiveness and efficiency of their programs.
However, I am concerned that the formulation of strategic and
performance goals may be a wasted, paper-pushing exercise if it fails
to include the perspectives of line employees and middle-managers who
really know the programs and know how to make government work better.
The rank and file must be involved in establishing the goals of Federal
agencies. That's why I believe we must have in place at the Federal
level both a strategic framework, which is proved by the Results Act,
and a quality management framework, which will enable the government to
use the Results Act to its full potential. In other words, quality
management is the means by which agencies can achieve their Results Act
goals.
Through my work as Chairman of this Subcommittee, I will do all I
can to help create an environment where our dedicated public servants
can maximize their talents. I believe that if the Federal Government
were to adopt quality management, it would lead to greater employee
satisfaction and empower the ``A-Team'' to really make a difference in
the lives of the American people.
Today, we will move away from the hypothetical and focus
specifically on quality management initiatives already in place at the
General Services Administration (GSA), and the Internal Revenue Service
(IRS). GSA is one of the three central management agencies in the
government that provides a wide array of goods and services to other
Federal agencies, and the IRS is the Nation's tax collector. Both
agencies have undergone or initiated significant reorganizations in
response to congressional oversight and criticism of management and
customer service practices. This is an opportunity for these two
agencies to discuss what they have accomplished, what remains to be
done, and whether their success with quality management can be
replicated in other Federal agencies. I would note that because of my
duties as Chairman of the Subcommittee on Transportation and
Infrastructure, I am more familiar in general with GSA and its program
than the IRS.
I am encouraged from what I have learned about the efforts of GSA
and the IRS. Both agencies seem to have taken customer service to
heart: GSA with their motto of ``thrilling the customer,'' and the IRS
with new strategic goals focusing on ``Service to Each Taxpayer,''
``Service to All Taxpayers,'' and ``Productivity Through a Quality Work
Environment.''
Information technology is also playing a prominent role in agency
reforms. GSA has hundreds of thousands of items for purchase on the
Internet, and has leveraged the purchasing power of the government to
save money. Despite some early setbacks, the IRS is attempting what is
surely one of the most ambitious and important computer modernization
projects in the Federal Government. I realize how challenging the
computer modernization must be, given the shortage of information
technology specialists and the difficulty of recruiting them into
government service. I am eager to learn if the personnel flexibilities
allowed under the Reform Act have assisted the IRS in this area.
We must all keep in mind that major reforms are often lengthy and
require a great deal of patience. We should not expect quick results
nor be disappointed when they don't materialize conveniently overnight.
The purpose of today's hearing is to demonstrate that there are Federal
agencies in the midst of dynamic change that have made a long-term
commitment to quality management as a tool to realize the goals they
have set for themselves under the Government Performance and Results
Act. I believe that the success of these efforts builds the case for a
governmentwide quality management initiative.
An equally important objective of this hearing is to stress the
importance of labor-management partnerships. I am encouraged that the
White House is directing Federal agencies to increase union
participation in workplace decisions. The active participation of
employees at all levels is essential for reforms to take hold
successfully in Federal agencies. I believe it will be demonstrated,
especially in the case of the IRS, that employee involvement is one of
the keys to success.
I would now like to introduce today's witnesses. On our first panel
are the Hon. Charles O. Rossotti, Commissioner of the Internal Revenue
Service, and Martha Johnson, Chief of Staff, of the General Services
Administration. I have asked them to discuss the major changes to
organization and operations that their respective agencies have begun
to implement.
Also joining us for our second panel are Colleen M. Kelley,
National President of the National Treasury Employees Union, and Bobby
L. Harnage, National President of the American Federation of Government
Employees. Ms. Kelley and Mr. Harnage were asked to discuss the
participation and role of their union members in the reform efforts
currently underway at IRS and GSA, respectively.
On the third panel is J. Christopher Mihm, Associate Director of
Federal Management and Workforce Issues, General Government Division,
U.S. General Accounting Office. He is accompanied by James R. White,
Director of Tax Policy and Administration Issues, General Government
Division, and Bernard Ungar, Director of Government Business Operations
Issues, General Government Division. Mr. Mihm will first present an
overview of common features that have been identified in successful
government management initiatives. Mr. White and Mr. Ungar will be
available to discuss the extent to which reforms at IRS and GSA have
incorporated there features and the degree of success that they have
experienced. We have also asked all witnesses to address the
feasibility of implementing the types of reforms underway at IRS and
GSA at other Federal agencies. We thank you all for coming and look
forward to your testimony.
Before we adjourn, I would mention that at our next quality
management hearing, the Subcommittee will examine Federal agencies'
employee training programs and budgets. Continuing education has been
an important feature of Ohio's quality management program, and I think
it makes sense for us to examine what the Federal Government is doing
in this area. Thank you.
Senator Voinovich. The witnesses on our first panel are
Charles O. Rossotti, who is the Commissioner of the Internal
Revenue Service, and Martha Johnson, who is the Chief of Staff
of the General Services Administration. I have asked them to
discuss the major changes to organization and operations in
their respective agencies.
Joining us on our second panel are Colleen M. Kelley,
National President of the National Treasury Employees Union,
and Bobby L. Harnage, National President of the American
Federation of Government Employees. Ms. Kelley and Mr. Harnage
were asked to discuss participation and role of their union
members in the reform efforts currently underway at the IRS and
at GSA, respectively.
On the third panel is J. Christopher Mihm, Associate
Director of Federal Management and Workforce Issues, General
Government Division, U.S. General Accounting Office, and he is
accompanied by James R. White, Director of Tax Policy and
Administration Issues, General Government Division, and Bernard
Ungar, Director of Government Business Operation Issues,
General Government Division. Mr. Mihm will first present an
overview of common features that have been identified in
successful government management initiatives, and Mr. White and
Mr. Ungar will be available to discuss the extent to which the
reforms at IRS and GSA have incorporated these features and the
degree of success they have experienced.
We have also asked all witnesses to address the feasibility
of implementing the types of reforms underway at IRS and GSA at
other Federal agencies.
We thank you for coming and if you will stand, I will
administer the oath. Do you swear that the testimony you are
about to give before the Subcommittee is the truth, the whole
truth, and nothing but the truth?
Mr. Rossotti. I do.
Ms. Johnson. I do.
Ms. Kelley. I do.
Mr. Harnage. I do.
Mr. Mihm. I do.
Mr. White. I do.
Mr. Ungar. I do.
Senator Voinovich. Thank you. Let the record show that
everyone answered in the affirmative.
I would like to remind the witnesses that your entire
statement will be entered into the record and if you can keep
your testimony to 5 minutes or thereabouts, I would be
grateful.
Mr. Rossotti, we would like to start with you. I want to
say that I really enjoyed meeting you yesterday. You have a big
challenge there at IRS, and you have been there for just a
short time and there have been some terrific changes. I want to
remind everyone that nothing is perfect, but the reason why GSA
and IRS are here today is because of the fact that they are
innovative, they are making change, and they have had success.
So I want you to know, this is not a hearing to beat up on
anybody. We have enough of those hearings around here.
Mr. Rossotti.
TESTIMONY OF CHARLES O. ROSSOTTI,\1\ COMMISSIONER, INTERNAL
REVENUE SERVICE, DEPARTMENT OF THE TREASURY
Mr. Rossotti. Thank you very much, Mr. Chairman and Senator
Akaka. We appreciate the opportunity to be here. We have with
us today three people that are actively participating in
different ways in our effort. David Allen and Glen Jacobsen are
both front-line revenue agents that are participating in our
teams that are working on the changes, and Mr. Boswell has
recently joined us to head our agency shared services
organization.
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\1\ The prepared statement of Mr. Rossotti with attachments appears
in the Appendix on page 43.
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When we look back a little over a year ago to the passage
of the Restructuring Reform Act, we can see it really set a
fundamentally new direction for the agency. The way I would
summarize this new direction was that we were being asked to
measure our success in terms of its effect on people as well as
on the taxes that we collect, both being important in the
future. To accomplish this goal, we are undertaking some very
pervasive changes that are going to affect all 100,000 of our
employees and managers, as well as our 125 million individual
taxpayers and 6 million businesses that we serve.
I think even before the passage of the act, there was a
general consensus developing on the nature of the change that
was required by the IRS, and the RRA pretty well locked it in
and gave it clear direction. But even after the passage of the
act, there were still many decisions and issues that needed to
be decided. Of course, we also know that even with the passage
of a law, in the end, our inside and outside stakeholders all
have to support and engage in these decisions for the program
to be successful.
If you look at this whole process, we refer to it as
modernization because we hope that it is bringing us forward to
where we want to go in the future. While I think we have had
some success so far, most of the work, as we noted yesterday,
still remains ahead.
But just to outline what we have been doing, the first
aspect is to deal with what I call the softer issues, and they
are summarized in the top half of the chart over there. They
involved rewriting our mission statement, reformulating our
goals and objectives and our guiding principles, which are on
the top there, and I think if you just look at the mission
statement, it really was developed with a lot of participation
of our workforce, and in just 27 words, it says, ``Provide
America's taxpayers top quality service by helping them
understand and meet their tax responsibilities and by applying
the tax law with integrity and fairness to all.''
Then we have translated that into three specific goals that
every employee and manager can, we think, make a contribution
to. The first one is to provide top-quality service to each
taxpayer we deal with in any transaction that we have with
them. The second one being to provide service collectively to
all taxpayers by ensuring that compliance with the laws is done
so that the few taxpayers who may not want to pay their taxes
are not allowed to put a burden on the others. And the third
one, very importantly, is to provide a top-quality work
environment for our employees so we can enable them to provide
service to our customers. That is basically what this whole
thing is about.
Now, in order to make those goals a reality, one of the
other things that we have been doing is making it clear that
the way we measure performance in the agency and the way we set
people's job objectives, that all three of these goals have to
be achieved at the same time. In other words, we cannot any
longer say that we are successful if we collect the taxes but
we do not provide the right kind of service to taxpayers. Nor
is the reverse true. We cannot provide wonderful service but
not collect the taxes. We have to do all of those and we have
to provide our employees what they need to do that job.
I think that is also the principle that is mandated by
GPRA, the Government Performance and Results Act, which says
you should measure performance in a framework that is tied to
what your mission is. So that is what we are trying to do with
the first part of this.
Now, as important as it is to lay those goals out and to
communicate and to measure performance, we also know that we
would not succeed unless we tackled some of the tougher
structural issues that really get in the way of delivering. So
that is why we are on the bottom there tackling a lot of
changes in five major areas that are listed on the bottom of
that chart. They basically boil down to revamping the way that
we do business.
We have a lot of good examples to work from, both in the
IRS and in the private sector, so what we are trying to do is
to take advantage of best practices that we have learned about
in good organizations everywhere, and we think that if we can
take advantage of these best practices, we will succeed in
meeting our strategic goals. Some of these, though, do require
major changes and investments in organization, training, and
technology.
We have tried to set priorities. We have 161 short-term
initiatives that we are doing to try to deliver on these goals
in the short term. In the long term, then, we are working on
some of these major changes, such as reorganizing the agency
and to customer-focused operating divisions supported by,
behind the scenes, the four major divisions who will work with
the outside taxpayers, and then we will have two shared
services organizations that deliver such things as information
systems and facilities services and other personnel services
that are required in order for us to operate effectively.
I do want to mention one important point that I think this
Subcommittee, and the broader Governmental Affairs Committee,
helped a great deal on, which was during the restructuring,
giving us the authority to provide certain flexibility with
respect to personnel. One of the areas was to enable us to
bring in some executive cadre from the outside that had
experience with some of these best practices that we were
trying to implement. We have been using that authority. We have
so far recruited seven executives. Mr. Boswell is here with me
today, who has come in after 31 years in the oil industry. He
is one of the most recent of our hires in this category.
The other one, and I will finish up quickly, but I just
want to mention one other major area, which is technology. We
are embarking on one of the biggest technology modernization
programs that I have ever encountered, and I have spent 28
years in the business, and that is because, unfortunately, the
old technology that the IRS currently depends on is probably
the biggest barrier that our employees have to being able to
deliver quality service. So we are faced with almost a complete
renewal and reengineering of our technology base, which we,
with the help of Congress who very constructively has given us
the resources, and now we are embarking with the help of the
private sector to do that.
The last point I will mention is a little bit about the
process that we are using. Some of those factors are summarized
on that chart, which I will not run through, the one on the
left. But the key point here and the reason I brought Mr. Allen
and Mr. Jacobsen with me today as just two of the
representatives that are working with us, is that we are not
doing this in a way that has a few people locked in a back room
at the top making decisions and then telling everyone else what
to do. We have over 500 front-line people working from all
parts of the IRS with us in a set of design teams and they are
very carefully going through an analysis of what we need to do
and have already come up with very effective recommendations on
how we need to move forward, and we are going to continue to
use that process as we implement this change. It does not
eliminate the anxiety and the risk, but I think it does help us
to make sure we get the best information to make decisions and
also to get the best buy-in.
So that is a short summary of a big program that we have at
the IRS. Mr. Chairman, we appreciate the comments you made at
the beginning and would be happy to answer any questions that
you or Senator Akaka have.
Senator Voinovich. Thank you.
Senator Akaka, I apologize to you. I did not give you an
opportunity to make an opening statement, and if you would like
to do that now, I would appreciate it.
OPENING STATEMENT OF SENATOR AKAKA
Senator Akaka. Thank you very much, Mr. Chairman. I want to
compliment you and commend you for holding this hearing on this
subject and for your desire to work with employees of unions
and Federal agencies in this regard.
These are exciting times, as I mentioned to some of you
that I said hello to, that it is going to be a busy morning. As
Ranking Member of the Subcommittee on Federal Services, I am
pleased that there are fresh views on how to improve Federal
management and performance. In working toward improving
management and performance, however, it is important that line
employees, middle management, and the unions be actively
involved.
So I want to join the Chairman in welcoming you to this
hearing, all of you who are of the three panels as well as the
GAO and union presidents who are here this morning.
I want to compliment the IRS for doing what you are doing
now, following your goals, and know that this involvement has
helped the IRS in achieving marked improvement. I would also
like to know that as GSA moves in new directions, I hope that
it will work with its employees, middle management, and their
unions. This involvement and consultation should also extend to
GSA's JWOD partners.
Mr. Chairman, I thank you very much for this moment to
express myself, and again, I want to compliment and commend you
for this hearing.
[The prepared opening statement of Senator Akaka follows:]
PREPARED OPENING STATEMENT OF SENATOR AKAKA
Thank you, Mr. Chairman for allowing me to sit with the
Subcommittee this morning. I commend your keen interest in quality
management and your desire to work with Federal agencies in
implementing these practices. We are all aware of our Subcommittee's
proud history in enacting legislation to increase performance and
accountability within the Federal Government. Most recently, we have
focused on managing for results--the driving force behind the
Government Performance and Results Act, which requires Federal agencies
to develop strategic plans, performance measures, annual performance
plans, and performance reporting.
As Federal agencies work toward improving management and
performance, it is important that employees be actively involved in
these initiatives. Moreover, it should be obvious that without employee
involvement, improvement efforts instituted solely by management will
not have a lasting effect and stand little chance of becoming a part of
an agency's culture. As the Ranking Member of the Subcommittee on
Federal Services, I do not want this fact overlooked as agencies
implement ``best practice'' initiatives.
I look forward to hearing from IRS Commissioner Rossotti, whose
agency has one of the highest levels of interaction with the public.
The IRS was long considered the lightening rod for all that was wrong
with the Federal Government. However, under the Commissioner's
leadership, there has been sustained improvement and accountability to
the public, coupled with a strong drive to involve line employees and
middle managers in achieving those goals.
I am pleased that the General Services Administration is also with
us today. Although this hearing is to explore how quality management
practices can be integrated into the Federal Government, the GSA,
through its announcement that it was closing eight Federal Supply
Service warehouses, found itself at the focal point of dissent.
Although the decision to close the warehouses was just reversed, I hope
that as GSA moves in new directions, it coordinate and consult with its
employees, middle management, and their unions on this issue. This
involvement and consultation must also extend to GSA's Javits-Wagner-
O'Day (JWOD) partners, who immediately felt the unexpected consequences
of the proposed warehouse closings. I am pleased that GSA is now
forging a better relationship with its JWOD partners and their
affiliates.
I know that Bobby Harnage, president of the American Federation of
Government Employees, AFL-CIO, whose union filed the initial grievance
against the GSA closings, will most likely address this matter in his
testimony. I also look forward to hearing from Colleen Kelly, president
of National Treasury Employees Union, whose union has worked so well
with the IRS to implement the wide-ranging changes that resulted in the
agency's turnaround.
I would like to touch briefly on the successes achieved by the
Administration's National Partnership for Reinventing Government,
formerly the National Performance Review. This initiative, begun in
1993, established customer service standards and identified programs
that could be reinvented, terminated, or privatized. Most recently, NPR
is working on performance partnerships with Federal and State and local
governments, and I applaud this ongoing effort to make the Federal
Government more responsive to those it serves and to those it employs.
These are exciting times for the Federal Government, and I am
pleased that there are fresh views on how to improve management and
performance within the Federal Government. However, there is much work
to be done, as we will be told by representatives from the Government
Accounting Office, who are also here with us today.
I again compliment the Senator from Ohio on his interest and
willingness to hold hearings on this subject and for his desire to work
with employees, their unions, and Federal agencies in this regard.
Thank you Mr. Chairman; I look forward to this morning's hearing.
Senator Voinovich. Thank you. As I mentioned in my remarks,
we are going to spend a lot of time on this and, hopefully, get
something done.
Our next witness is Ms. Johnson. We are anxious to hear
from you.
TESTIMONY OF MARTHA N. JOHNSON,\1\ GENERAL SERVICES
ADMINISTRATION
Ms. Johnson. Thank you. We are very glad you are holding
this hearing on the issues of quality management. Dave Barram
submitted a statement in writing and I ask that it be submitted
for the record.
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\1\ The prepared statement of David J. Barram submitted by Ms.
Johnson appears in the Appendix on page 56.
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I cut my teeth professionally in manufacturing at Cummins
Engine Company just as it began to embrace TQM, total quality
management. I agree with Barram when he says that one of the
great lessons of that time is that quality is actually free.
Any costs you pay are more than offset by increased
productivity and customer satisfaction. You cannot have quality
without good management, and you cannot have good management
without high quality. There is no point in trying.
We are proud of the GSA management story. We are at a
different place than just a few years ago. The President and
Vice President charged us to work better and cost less, and we
have done just that.
There were many levers and gears shifting and turning to
make this happen. We are much smaller. We are clearer about our
mission. We are structured in significant ways so that the
market can measure and discipline us. We use technology.
Good management is not a one-shot, one-pill, one-remedy
answer. Instead, it is a systems answer in which the leadership
juggles change on a number of fronts.
Early in our tenure at GSA, we worked on our vision for the
future. We did not go offsite for a week-long conference to
wordsmith a statement. Instead, we tested ideas. We tried ideas
in speeches and conversation. When we heard these ideas back,
we knew we had something. If this sounds a little informal or
iterative, perhaps it is, but it connects us to an idea shared
by Stanford Professors Collins and Porras in their book,
``Built to Last.'' In it, they talk about something called
BHAGs, big hairy audacious goals. Our visions are like that.
For example, we challenge ourselves to thrill the customer,
not satisfy, not meet the needs, thrill. This is a BHAG,
according to the professors, and everyone at GSA seems to sense
what that means. We did not need position papers to engage and
convince all of GSA. It happened first by phrase, then more
discussion, then a sense of direction. That is vision at its
best.
One of our top priorities and my specific job has been
challenging our leadership team. They must be champions of our
vision. We are delighted that GSA executives have changed jobs,
the cheapest training possible, model flexibility themselves,
broadened themselves through experience, tough projects,
creative learning, and technology. Seeing the senior leadership
changing jobs raises the bar for the entire organization.
I have already mentioned technology twice. It cannot be
mentioned too often. In 1996, we made it possible for every GSA
employee to have access to the Internet. While not a big deal
now, it was then. It means we have, today, a full 3 years of
living and working in the future under our belt, and that makes
a difference. We have an online university system, a chat line,
a daily electronic newspaper, and a vast array of research
capabilities. All these things bind a community together and
build people's skills, and skills are what it is all about.
In a knowledge society, every person has to be skilled. One
way we approach this challenge is by turning an old idea on its
head. The old idea is job security. Our new idea is
employability. Our economy is robust and fluid. People need the
security of knowing that they are desirable and competitive.
Our job is to meet their curiosity and drive for skills with
mechanisms to build their skill set. The Internet has helped
hugely.
Mr. Barram and I agreed that if we were forced to choose
one goal for GSA, it would be that all GSA employees are
regularly approached with job offers because they are such
highly competitive workers, but they choose to stay and work at
GSA. Good management must have a good people-centric attitude
configured so that it builds the viability of the whole
enterprise.
The Federal Government operates within regulations and
policies about ethical and efficient procurement, about smart
use of large government assets, and about sensible purchases
from the large-volume agreements we negotiate for telephone
service, airline tickets, etc. These frame GSA's work and
remain our steady business guideposts, but our attitude is new.
We wake up each day determined to serve our customers. With
commitment, technology, and skill, we can thrill the customer
and thrive ourself.
Mr. Chairman, the GSA of 1999 is built on a solid platform
that will let us move smartly into the next century. We have
achieved a lot, but we have a lot still to accomplish. Barram
and I are more confident today than ever that we have been able
to help with the management and leadership culture of this
important organization and it is capable of continued high
performance. Thank you.
Senator Akaka [presiding]. I thank both of you for your
testimony this morning. I am so glad to hear that you are extra
sensitive to the people who work in your agencies. It is
obvious that when people do not leave their job, even though
they have other offers, that tells you something about what the
job and the environment offers them.
Mr. Rossotti, again, I want to compliment you for what you
are doing. It is a great turnaround and it answers many of the
complaints that we, in Congress, have received in years past.
A front page headline in last Sunday's New York Times
indicates, ``IRS is allowing more delinquents to avoid tax
bills.'' Can you explain this situation and offer us some
insights as to what you are doing about this?
Mr. Rossotti. Yes. Well, I think it is important to
recognize, if you look at the chart, we have three goals, not
just one goal, and that basically means what Congress is saying
to us, as we understand it, is we need to continue to collect
the taxes, as has been the case, but we also need to observe
taxpayer rights and treat taxpayers properly. So that is a more
complex thing to do than just to do one or the other.
With respect to the issue that is raised in the New York
Times article, it really deals with a particular part of the
tax administration process, which is collection of certain
types of tax debts, particularly the older, more hard-core, we
call them, kinds of tax debts. As I think was well known at the
time that the Restructuring Reform Act was passed, the act did
add additional taxpayer rights and additional procedures that
need to be followed before the IRS can take enforcement action,
such as seizing someone's home or seizing their bank account or
their property. So there was a delay factor imposed, when the
act passed because there is an elongated process in order to
take those kinds of actions.
The second thing that happened was that, of course,
additional resources were required just to implement these
procedures, because they are somewhat time consuming.
And the third point, of course, and I have to be honest
about this, is that the whole process of learning how to do
this in this new environment, our front-line employees learning
how to do this, and of the management providing the necessary
support and training, has been a very challenging, very
difficult one, and I have said that many times. We have not yet
arrived at the point even now, after over a year, where I think
we have fully been able to work out all the ways, the practical
ways, to do this. So that has caused some confusion, some
anxiety. There were some provisions in this bill that certainly
caused anxiety among our front-line workforce.
Therefore, the net result of this is there was a decline in
the number of enforcement-type cases that we were able to do in
collections. Now, that is something that we are working very
hard to turn around and to stabilize.
I do want to point out, because it is important to put this
in perspective, that this represents a very tiny percentage of
the total revenue that is actually collected in terms of our
total tax collections, because our total tax collections, and
even our tax collections from our own enforcement collection
activities have leveled off. But this particular part of the
problem is very important in the long run because, of course,
as I said, our goal is to make the law apply equally and fairly
to every taxpayer. So we cannot allow, even though it is a
small percentage, we cannot allow a certain set of taxpayers
who may be unwilling to pay to be allowed to burden the
remaining taxpayers.
Senator there is one last point that I do want to make, and
I actually made this on TV the other night when I was asked
about this, is that I really hope that no taxpayer reads any of
this and makes a mistake in thinking that any of the things
that they have read about or learned about or anything that has
happened in the IRS means that they do not still have to pay
the tax debts that are due, because even though it may take us
a little longer to get to some of these debts, they are still
debts, they are still on the books, and taxpayers are going to
be required to pay them. So I do not want anyone to be confused
about that point.
Senator Akaka. I do realize, and all of us do, the tough
job you have. I like the word you used, challenges. There is so
much under that word that you have to meet to keep your
employees up with whatever changes that Congress makes. It is
tough enough already.
Mr. Rossotti. Yes, sir.
Senator Akaka. But I am glad you are using all the
resources you can, including technology, to try to meet the
needs of the taxpayers. I like your three goals, each taxpayer
and all taxpayers, and also with the quality working
environment. I think those are great goals.
GAO praises their top-level leadership commitment to
change, which you demonstrate as you lead IRS in implementing
comprehensive reforms. However, GAO expresses concern that the
IRS, ``missed its opportunity'' to demonstrate how important
management reform initiatives are on the way to tackle
longstanding management weaknesses. What is your reaction to
that finding?
Mr. Rossotti. I have to say, I am not sure I know which
report that refers to. I am sorry.
Senator Akaka. It was an expression of GAO that the IRS,
and as I said, I was just quoting the three words, ``missed its
opportunity'' to demonstrate how important management reform
initiatives are that are underway to tackle longstanding
management weaknesses.
Mr. Rossotti. The only reason I am hesitating is there are
a lot of GAO reports. I am not sure where that one--when it was
or where it comes from. So I have a little bit of difficulty
responding, but I will say that what we are attempting to do
throughout the whole way that we are running the agency is to
demonstrate in sort of clear, unmistakable terms that we are
committed to change. We are attempting to take advantage of the
window of opportunity, as I call it, that we have in front of
us that was created by the directives of the act and the other
things that went before it.
But, I guess I would be the first to acknowledge that there
are many pitfalls along the way, and in some areas, we have not
been able to provide, for example, the training that our
employees needed in some of these collection areas as fast as
we would like to. So we try to address that by being very
straightforward and honest about acknowledging where we have
those problems and then acting to improve them in the future.
I would be glad to get a copy of that afterwards and
respond more specifically to that particular case if you would
like, Senator.
Senator Akaka. Thank you, Mr. Rossotti.
I was just informed that I have 2 minutes before they close
the vote on the floor, so I am going to call a recess, but
before I do that, I just want to mention that in July, GSA
announced that eight warehouses were closing, and since that
time, the decision has been reversed. Part of the problem was
that more than 1,000 blind and disabled vendors would have lost
their jobs in the closing. I am grateful that GSA decided to
reverse closing those warehouses, although I think we
anticipate that there might be some of that in the future. I
want to thank you for that. Do you have a comment?
Ms. Johnson. We, just a few days ago, entered into a very
exciting and innovative process with our union in which we
agreed that we would, and you will have to bear with me here,
our phrase is turn back the clock, so that we are going to
reenter pre-decisional discussions with our union about the
stock program. The administrator and the commissioner of the
Federal Supply Service, along with our unions, will engage in a
process of discussion and pre-decisional partnership and at the
end of the month, the administrator and the commissioner will
make a decision about the future of the stock program. But we
are at this point in a turn-back-the-clock mode and our current
stock program is an ongoing concern and we continue to be
moving products through all our warehouses.
Senator Akaka. Thank you very much, Ms. Johnson.
At this time, I would like to call a recess until the
Chairman returns. Thank you.
[Recess.]
Senator Voinovich [presiding]. I apologize to the witnesses
for having to rush out, but you learn that that is part of the
game here in the Senate.
What I am interested in learning from both panelists is,
how much were your people involved in formatting the mission
statement, goals, guiding principles, and so on? I would be
interested in hearing, if they were involved, the method you
used in order to involve them.
Mr. Rossotti. What we did with the mission statement, which
was a key item and we got that done--it was called for,
actually, in the act, interestingly, that we should reformulate
our mission statement. That was in July 1998. During that
period, we had already been working on it. We had a number of
different inputs and solicitations from both external--we have
a lot of external stakeholders, practitioner groups and other
people, as well as internally, to come up with various
formulations. Then we had a small group that actually
formulated several alternatives, several possibilities, because
you cannot wordsmith a mission statement totally in committee.
So we actually formulated a number of different possibilities.
Then we had--very quickly, we did this. We had one person
in the national office that was in charge of soliciting input
on these different alternatives. We did a lot of it through E-
mail and we put it on the Internet and Intranet, and internally
alone, we got over 1,000 different comments from employees,
mostly employees internally, and then a lot of different
comments externally.
Senator Voinovich. This was in response to a mission
statement that had been drafted by a group?
Mr. Rossotti. Yes. It was actually not just one. We had
several different formulations. We had several different
possibilities with different words that we had--we had taken
inputs that had been recommended. There had been previous work
done by--the Vice President had a task force before I even got
there, the National Performance Review had done some work, and
external groups had done some things, so we took all of that
and we used that to formulate a short list of possibilities.
Then what we did is we published these possibilities on the
Internet for externally and on our Intranet internally and
circulated them throughout the organization and asked for
comments. We had one or two people that basically took all
these comments and tried to put them in kind of a rational way
so we could look at them, and we had over 1,000 comments from
our employees internally, as I recall--this was over a year
ago--and quite a few externally.
We tended to group them into what they said so that we
could get them into a rational sort of smaller, manageable
proportions, and eventually, we came out with this formulation
and I think it has been well accepted. It deals with the twin
aspects of our mission, which are then translated into the
goals.
The IRS, as with many organizations, has to satisfy more
than one stakeholder. We have to deal effectively with each
taxpayer. If we have a transaction with a taxpayer, we have to
provide good service. If that taxpayer owes money, we have to
inform them of their rights and make sure they observe all
their rights. But in the end, collectively, we have to protect
all the taxpayers by making sure that the law is applied fairly
and that we collect the debts that are due. Otherwise, people
would be burdening the honest taxpayer by not paying their
debts.
So those are the twin kind of key goals that we have as far
as taxpayers, and then internally, we have the need to provide
the right kind of a working environment for our employees.
Senator Voinovich. I think what a lot of people forget
about is that we talk about taking care of our external
customers, and it is just as important to take care of our
internal customers, the people that deliver the services, in
terms of their involvement, their training----
Mr. Rossotti. Exactly.
Senator Voinovich [continuing]. And how much incentive we
are providing them.
Mr. Rossotti. Exactly.
Senator Voinovich. How about the goals and the rest of it?
Mr. Rossotti. Well, the goals translate directly from the
mission. I mean, the three goals are the two aspects of our
mission, individually providing good service to every taxpayer
we deal with and----
Senator Voinovich. Was the union involved in any of this in
terms of being at the table?
Mr. Rossotti. The union, and I will let Colleen speak for
herself, she has been our partner, and Bob Tobias before that,
in every one of these committees. All of these things that we
run, we have what we call an executive steering committee,
which is a top-level group that oversees the change process. I
am, in most cases, a member of that and head of it, although
some executives are heads of some of the----
Senator Voinovich. So the executive steering committee is
the vehicle that you use to get input from a variety of people,
including your unions?
Mr. Rossotti. Yes, and Colleen, and before her, Bob Tobias,
have been members of these executive steering committees at the
top level for every one of these change initiatives we have
done. But that is only at the top level. Then we have the
teams, and that is why Mr. Jacobsen and Mr. Allen are here.
They happen to be two members of the teams.
At the present time, I would say we have over 500 or 600
people working on various teams, and they include bargaining--
usually, about half of them are bargaining unit people, people
that are members of the union that actually participate,
usually for a full time period, maybe 3 to 6 months on one of
these teams. I am sure, if you would like to, you can speak to
them on the panel and ask them how it works.
Senator Voinovich. I am really interested in the
organizational structure.
Mr. Rossotti. Right.
Senator Voinovich. Is it a structure that has been fruitful
from everyone's point of view? If it has been a good structure,
then perhaps it is a structure that could be replicated, and
that is what we are looking for, things that are working in
your respective shops that could be absorbed or taken under
consideration by other departments.
Mr. Rossotti. I do think that this way of doing things is
something that I adapted from my previous life, where I was
involved with different clients on change, and what it boils
down to is that change, if it is anything more than a small
change in a small area, involves people at different levels
vertically in the organization and also cross-functionally,
across this way. So you have to somehow find a way to engage
all of this at the same time.
Now, what we have is basically three ideas. One is the
executive steering committee, which is the top-level
leadership, which we meet regularly on a very substantive
basis. We have a small program management office, which is a
full-time group of people to manage the project and make sure
that it is kept on track, the trains run on time. Then we have
a fluid set of teams, integrated teams, that represent people
from different levels of the organization and different areas
of technical expertise that work together for a limited period
of time to come up with proposals and recommendations. That is
basically the process we use, and it is all kind of laid out
there. There are other aspects to it. I also believe----
Senator Voinovich. The people who are on the teams are
picked by you and by the union?
Mr. Rossotti. That is right.
Senator Voinovich. Once their job is done, do they leave
the team? Have you undertaken any quality management training
for all of your employees to the extent that you would create
teams that would be working continuously on improvement?
Mr. Rossotti. Yes. I was only referring on this part of the
discussion to some of these major change processes. The IRS
also has a whole quality process at the local level in each of
the districts and local offices. In most of them, they have
quality teams and a quality coordinator that does more local
kinds of constant quality improvement kinds of activities.
What we have not done yet, and I will be honest about this,
what we have not done yet well is we have not yet linked these,
I will call them more strategic changes, with, I will call them
the more tactical kinds of changes that need to go on at the
local level. That is kind of a next step that we have to do,
moving forward.
Senator Voinovich. Would you like to comment on training?
We discussed the fact that that is very important to your
workforce.
Mr. Rossotti. Right.
Senator Voinovich. Is the money in your budget? When you
put your budget together, do you specify that portion of it
that would be used for training?
Mr. Rossotti. Yes, we do, and I think that, as I assessed
it when I took into office, was a really major problem at the
IRS in that I would call it a training deficit had accumulated.
It is interesting, if you go back, and I was not involved with
it, but I have read some things, at one time, the IRS was well
known. People would come into the IRS because of the good
training that they could get. Unfortunately, because of budget
cuts and other reasons, that kind of fell off for a period of
time. When we had some early discussions with employee groups
right after I took office about what was the biggest barrier
that was preventing you from being able to deliver good quality
service, training was the No. 1 item.
So we really went to work and tried to come up with some
improved commitment of resources as well as some improved ways
of delivering training. It was not only resources that was
involved, it was also the quality of the training and the
meaningfulness of the training.
We have been successful in getting additional budget money
allocated, and in this budget year, the Congress has actually
fully funded our request, so we are very glad for that. And
yes, we are going to put that aside. We actually have different
categories of training. We have technical training on things
like tax law. We have management training and quality training.
We also have, though, some special things because of our
modernization. The balanced measures, which is our whole way of
implementing these set of goals, is a huge effort, because we
are literally retraining our whole management cadre as well as
our union partners and many front-line people in this whole
balanced measure concept. That is underway.
Senator Voinovich. But I would be interested in knowing,
when you put your budget together, in terms of percentages and
overall personnel allocation and you get X number of dollars
for that and then you specifically calculated what it was that
you needed for training, I would be really interested to see--
--
Mr. Rossotti. In terms of actual dollars?
Senator Voinovich [continuing]. What percentage of your
budget is actually being used for training?
Mr. Rossotti. Yes. I would have to get that number for you.
I do not recall the number offhand. What we did, though, was
what we allocated was what we thought we needed for training
for these different categories, technical training, and the
balanced measures training. We added it all up and said, this
is what we need to put in, and we really have gotten in this
current--we did not have it before, but in this current budget
year, we have gotten pretty close to what we asked for.
It is important to know that the way the Federal budget
works, at least in our agency, for training, the dollars only
go for what are the out-of-pocket costs for training, like the
travel costs to bring people in and the facilities. The time of
the people, which is a big part of the cost of training, is not
really charged to training. It is charged to whatever their
normal account is. It is just the way the Federal accounting
works, at least in our agency.
So, actually, the number that you see, whatever it is, and
I will get it for you, is really not the full cost of what the
total training commitment is, because the real cost is the time
of the people being trained and that is not included.
The information referred to follows:
QUESTION AND ANSWER TO INFORMATION REFERRED TO ABOVE SUBMITTED BY MR.
ROSSOTTI
Question: What percentage of your budget actually is being used for
training?
Answer: The training budget line items for Fiscal Years 1998
through 2000 are as follows:
----------------------------------------------------------------------------------------------------------------
Training Total Budget Percent
----------------------------------------------------------------------------------------------------------------
1997 Actuals........................... $57,700,000 $7,095,000,000 0.81
1998 Actuals........................... $78,000,000 $7,558,000,000 1.03
1999 Actuals........................... $89,000,000 8,155,000,000 1.09
2000 Planned........................... $106,000,000 $8,350,000,000 1.27
----------------------------------------------------------------------------------------------------------------
Senator Voinovich. Right. But you can train in-house, you
can bring people in, you can send people out, there are a
variety of opportunities for people at work, is that right?
Mr. Rossotti. Yes, that is right.
Senator Voinovich. Last but not least, what if somebody
does a bang-up job? Let us say someone comes to a supervisor
and says, I have a good idea and we can save $1 million a year
or $2 million or whatever. What do you do to reward that
individual?
Mr. Rossotti. Well, there--and again, I am not an expert on
all these personnel regulations and so forth, but there are
some limited bonus possibilities that people can get bonuses
for based on their performance, and we have various kinds of--
they are called awards, and we have various kinds of agreements
with NTEU for bargaining unit people on how those awards are
distributed. Those are regularly administered in that way.
There are also things called special act awards, where you
can give someone a specific bonus for, it is literally called a
special act. It might be appropriate in the circumstance you
suggested. I can get for you--I do not know what the limits are
of those dollars, but they are----
Senator Voinovich. But is there a formalized incentive
program in place that the people who work at the Internal
Revenue Service understand is available to them?
The information referred to follows:
QUESTION AND ANSWER TO INFORMATION REFERRED TO ABOVE SUBMITTED BY MR.
ROSSOTTI
Question: Is there a formalized incentive program in place that the
people who work at the IRS understand is available to them?
Answer: Yes there is.
The IRS awards program for its General Schedule employees is
administered in accordance with government-wide regulations issued by
the U.S. Office of Personnel Management (OPM). These regulations give
Federal Agencies wide latitude to develop awards programs suitable to
their needs. Cash awards require two levels of management approval and
all employees are eligible for recognition.
Suggested Awards are granted when IRS adopts employees' written
suggestions to improve the efficiency, effectiveness, or economy of
operations. Suggestions are evaluated by program experts on a cost/
benefit basis and recommended for adoption or non-adoption to the
appropriate program manager. If a suggestion is adopted, the employee
(or group) receives a share (typically 10 percent) of the first-year
net tangible or intangible benefits, which IRS gains from the
suggestion. In recent years, IRS has granted approximately 200
suggestion awards totaling $80,000 annually. Individual suggestion
awards average about $400.
Special Act, Special Service, and Managers Awards are lump-sum cash
awards granted to recognize specific accomplishments by individual
employees or groups whose accomplishments are in the public interest
and have exceeded normal job requirements. In Fiscal Year (FY) 1999,
IRS granted approximately $8 million in special act or service awards.
Individual award amounts are determined by management based on
Servicewide award guidance and the value and scope of the contribution.
Performance Awards are lump-sum cash awards that are based on
individual employees' ratings of record-performance ratings assigned at
the end of the appraisal period. Employees must receive a rating of
record of Fully Successful or higher to be eligible.
For bargaining unit employees, the amount of these awards is
determined through local negotiations between the IRS and the National
Treasury Employees Union. Generally, management and the union develop
systems that distribute available performance awards funds to employees
based on factors such as their overall ratings, ratings on job
elements, grade, and time spent in specific position. There are
approximately 100 local performance awards agreements in the Internal
Revenue Service.
Performance awards for some non-bargaining unit employees are
administered in the same fashion as for bargaining unit employees in a
particular locality. However, management is also free to develop
different performance awards systems for non-bargaining unit employees
in accordance with applicable regulations.
In FY 1999, IRS granted approximately $47 million in performance
awards to its employees.
Quality Step Increases are additional, permanent within-grade
salary increases of about 3 percent of basic pay which may be granted
to reward exceptional sustained performance. To be eligible, an
employee must have received an Outstanding rating of record and meet
other government-wide and IRS requirements.
In FY 1997, IRS granted Quality Step Increases to approximately 2.4
percent of its eligible employees.
Time-Off Awards may also be granted to employees. These are not
additional awards but an alternate form of the cash awards described
above. At management's discretion, a monetary award may be granted to
an employee as cash only, as time-off only, or as a combination of cash
and time-off. This program, which was negotiated with the National
Treasury Employees Union, is designed to increase employee productivity
and creativity and the enhance the quality of work life. In FY 1999,
IRS granted time-off awards valued at approximately $2 million to its
employees.
Incentive Pay. Data Transcribers working in our tax processing
Service Centers are eligible for additional pay based on the speed and
accuracy of their work.
Honorary Awards may be granted in conjunction with, or separate
from, the awards described above. They are granted to employees or
groups to recognize exceptional service or contribution. These awards
often take the form of certificates, plaques or medals and may be
granted during special employee recognition ceremonies. The
Commissioner's Award is the highest honorary award granted by IRS.
Mr. Rossotti. Yes, there is. It is called the award program
and it is worked out with the union, and that is the formalized
process that is largely keyed to their performance ratings on
the job. I was just responding to your question. There are some
additional things that you can do for somebody who does a
special act, where you can give them those rewards.
Senator Voinovich. If you have done that in any case, I
would like you to describe----
Mr. Rossotti. I will get that for you, yes.
Senator Voinovich. Under what circumstances.
Mr. Rossotti. Sure. I will get that for you.
Senator Voinovich. Thank you. Ms. Johnson, in the General
Services Administration, how much employee involvement do you
have?
Ms. Johnson. In terms of formulating some of the----
Senator Voinovich. In formulating your mission statement,
your goals, and objectives.
Ms. Johnson. It is terrific to hear another example. We are
a much smaller agency, so I think we are able to have a little
bit more fluidity in our culture and our process, but we are
still a sizeable organization. Putting everyone on the
Internet----
Senator Voinovich. How many people are in the GSA?
Ms. Johnson. Fourteen thousand, approximately.
Senator Voinovich. So the IRS has about 104,000, Mr.
Rossotti?
Mr. Rossotti. Our number is about 100,000.
Senator Voinovich. Yes, and you are----
Ms. Johnson. We see ourselves as smaller and, therefore,
able to try out some innovations that----
Senator Voinovich. For the people in the audience here,
just to get an idea of what 14,000 means, I was mayor of the
City of Cleveland and we started out with about 9,800
employees, so that gives you a comparison. It is a big agency.
Ms. Johnson. We started 3\1/2\ years ago at 20,000 and we
have reduced substantially through major buy-outs, which was a
wonderful tool for us, a fabulous tool for us, because it did
not mean we had to do anything but say to people, if you choose
to leave, we would be delighted to help you, and if you choose
to stay, we would be delighted to have you. In the course of a
couple years, well over 30 percent of our organization moved
on.
I have to say, we were a little concerned that we were
stripping muscle out of the organization, but I do not think
that has happened. I think that it is a disservice to the
people who remained and who had been in the wings or underneath
or down in the organization and they have stepped up. We had
maybe one or two small pockets of specialties that we needed to
supplement, but the buy-out was a tremendous----
Senator Voinovich. You had 20,000 people----
Ms. Johnson. This is very approximate, 20,000, right.
Senator Voinovich [continuing]. Approximately, and you have
gone to about 14,000.
Ms. Johnson. Fourteen-thousand, yes.
Senator Voinovich. And the major way of reducing was
attrition----
Ms. Johnson. Entirely through buy-outs.
Senator Voinovich [continuing]. And one of the reasons for
the buy-out was to save money. But in addition to that, perhaps
you put yourself in a position where you could get some new
people in with skills that maybe you did not have, or----
Ms. Johnson. Well, I am sorry to say, the way the buy-out
legislation was created, we lost the FTE. I believe that is in
the legislation. It might be in the regulations. But we offered
buy-outs and part of the circumstances of them were people
could take them and leave, but we could not person-for-person
replace them. So this was a leap of faith that at a smaller
size, we could still find the skills we needed to run our
business.
Senator Voinovich. So it was a buy-out with no replacement?
Ms. Johnson. No replacement, right. That is the way it was
done.
Three years ago, when we put in the Internet, made that
available to everyone, I have to say, that opened a lot of
channels for us to involve employees in discussing things like
our visions, our direction, our performance, and our customers.
We have developed in a much more iterative way, as I was
saying, the four visions that we function under. One of them is
to thrill our customers. That was a statement that Dave Barram
used early on in his administration and people seemed to pick
up on it. After they laughed, they said, I think I know what
you are talking about.
When we put up our chat line on the Internet, the first
question we asked every employee was, comment on the best story
you have of when you, yourself, were a thrilled customer, and
we had tremendous stories coming up over the chat line about--
--
Senator Voinovich. Let me ask you, Mr. Rossotti talked
about the fact that he involved people through technology.
Ms. Johnson. Right.
Senator Voinovich. And what you are saying to me is the
people really get into this, use the Internet and the chat
rooms?
Ms. Johnson. Oh, yes. They use it to tell stories----
Senator Voinovich. With 10 or 15 percent of your people?
Ms. Johnson. Actually, because we do not trace who makes
comments on the chat line, we cannot actually count, and we
have tried very hard to overcome their anxieties that they are
being watched when they type.
Senator Voinovich. OK. So it is----
Ms. Johnson. We have, though, when we put up a question for
a week, we will get 800 comments, and I am sure some of them
are repetition, and we try to get on and talk, too. We do not
keep that up continuously, but when it is up, we get a lot of
attention. So that is one way in which we have a more informal
but technologically-based conversation about the things going
on at GSA, and I think that is very important.
Senator Voinovich. Do you have an executive committee like
IRS has with the unions?
Ms. Johnson. We have a senior management team that includes
our regional administrators and our central commissioners. We
are both a geographic and a service organization, kind of a
matrix, and that is a senior team. We have had some measurement
meetings this last year with that group plus some that
certainly the unions have been involved in. And yes, that
leadership team, because it is spread around the country, is
not one that meets as a total group more than maybe quarterly,
and that has not happened as much recently, but there is a
story behind that.
Senator Voinovich. Do your regional teams have executive
committees where they have union representation?
Ms. Johnson. They do not call them executive committees. I
know that there are a couple of senior executives in each
region and when and as they are working on matters, I
understand they meet regularly with their union partners. Of
course, it varies from region to region and some regions are
much bigger, so it is a different kind of engagement. Sometimes
it is very informal, a lot of back and forth, my impression.
Senator Voinovich. But you would not characterize it as
being a formal process?
Ms. Johnson. In some regions, I characterize it as being
quite formal. In other regions, my understanding is when there
are only a couple hundred people, there is a fair amount of
back and forth in the course of business and invitations to
meetings, which I am sure formalizes some of it.
Senator Voinovich. Training, how do you approach that?
Ms. Johnson. Our training--can I talk about total quality
management?
Senator Voinovich. Yes.
Ms. Johnson. When we came into the organization, there was
a tremendous push on for total quality management in GSA and it
had actually lived out its cycle. It had devolved to having
action committees around, but I think that they were really a
little passive. So we----
Senator Voinovich. Can I interrupt you?
Ms. Johnson. Of course.
Senator Voinovich. I want to define total quality
management. I talk to people and they say they have quality
management, and it is not what I understand quality management
to be. And that is one of the problems around here. So I want
you to understand how I define it.
Total quality management focuses on the internal and
external customers, establishes an environment which
facilitates team building, employee contribution, and
responsibility, risk taking, and innovation, analyzes work
processes and systems, and institutionalizes a goal of
continuous improvement. If it is going to be successful, the
elements that I think must be present are management and union
partnerships, effective employee training, modern personnel
policies, and an established system to measure program
outcomes, which is a characteristic, of course, of the Results
Act.
I keep hearing people say, we have the Results Act and we
are doing our performance plans, and I ask, do you have any
involvement of your employees in putting that together? This is
an important question. Then the issue after that is, how are
you going to achieve the results that your performance plan
calls for, and that is where quality management aspect comes
in.
So I am interested: How are you implementing quality
management?
Ms. Johnson. I appreciate that. When I was in
manufacturing, TQM had a very term-of-art form to it, and in
GSA, we, I think, can appreciate your definition and embrace
it.
Senator Voinovich. I want to point out one other thing. We
did not call our program in Ohio quality management. My unions
did not like it. When we got this process started, they were
unhappy because they were not involved, and thank God, I had a
good relationship with the union president and he said,
``George, this is not working out.'' I said, ``Well, let us
stop it.''
We went up to Xerox and spent a day up there with their
folks to try to get back on track. On the way up, it was total
quality management. On the way back, we changed it to quality
services through partnership and eliminated the management, but
fundamentally, it is quality management. But they felt more
comfortable with those words rather than TQM. I am sorry. Go
ahead.
Ms. Johnson. I always enjoy hearing all these stories. They
are very helpful to share.
Our four visions do not include the word ``quality'',
either. They are change, excellence, honest conversation, and
thrilling the customer. So they are customer focused and they
are about changing and they are about having honest
conversations internally so that we can understand performance
measurement, talk to each other about that, share real numbers,
and so on.
There are many vectors here. Training is--I also do not
have the numbers in front of me of the actual resources we
dedicate to training, but we also have pushed hard to widen the
idea of what training is.
Senator Voinovich. Here is what I am interested in. Every
year, you have to put a budget together.
Ms. Johnson. Right, and how much of that is devoted to
training.
Senator Voinovich. And you submit that to the Office of
Management and Budget. I would be interested in learning the
discipline you use in determining the money that you are going
to spend on training. Or do you just have a personnel item and
then try to squeeze the training out of that?
Ms. Johnson. There is a direct line in the personnel
resources account. However, we also look to our CIO or IT
organization because that is where we bought and brought in our
online university, for example. That is not in the personnel
budget. It would be a couple of different places that we could
pull those numbers from.
That has been a significant project, because we felt that
we needed to expand what people looked at training as a
delivered course that I must attend to, or a sense that my job
and my customers and my results require me to get better at
something, so I need to get out and push on that.
So we are trying to pull people towards training rather
than push training at them, and we do that, I think, obviously,
by focusing on the customer, but also by focusing on
measurements, and we have a good story about measurements to
tell. I will summarize it quickly by saying it started with
getting the data better and then getting the data out to
everyone on the Internet and then having a very rigorous
process of reviews that we go through regularly in which we do
not yell, we talk about measurements, and people begin to see
what is happening with respect to their particular arena.
In our Public Building Service, we have been particularly
aggressive in tying this to a compensation process, where
certain monies have been set aside so that the regions who
perform best on the measurements then get some money in
response to that.
Senator Voinovich. I am familiar with that fact, and it
gets into the incentives. You have bonuses. You have set, what,
eight standards that you measure your regional people on, and
then if----
Ms. Johnson. And that is in the Public Building Service,
yes.
Senator Voinovich. And regions compete with each other in
terms of those eight goals?
Ms. Johnson. Right. Yes.
Senator Voinovich. And then if somebody does better, there
are bonuses that are available to the people that are the most
successful.
Ms. Johnson. And it is a new program and so far, it has
gotten a lot of people's attention, especially when the first
checks went out. Suddenly, that got everybody livened up.
We also have changed our performance award process away
from a year-end calculation for everyone and have moved towards
just a mechanism called fast track, in which we allow managers,
based on their budgets, to make decisions about how they want
money to be--how much money they want reserved for awards, and
then people give fast tracks, which means if someone does
something or performs something, you can apply for that award
overnight and hand them a check the next day.
The first year of doing this, there was a lot of learning
about this process because it was pushing the responsibility
for saying thank you and rewarding out. The second year, what
was interesting about the data is that a lot more of the money
began to flow across organizations. People were saying thank
you to customers and to clients internally and just
acknowledging help from central staffs and so on. So I think
that has helped us force people to honestly recognize when a
good job is done and to say thank you. It has been a very nice
mechanism for us.
Senator Voinovich. I would be interested in how you did
that--does the regular law allow you to do that, the bonuses,
within----
Ms. Johnson. Very much so.
Senator Voinovich. You have the discretion?
Ms. Johnson. Yes.
Senator Voinovich. Mr. Rossotti, do you have the ability to
give people bonuses?
Mr. Rossotti. Yes, we do.
Senator Voinovich. You do?
Mr. Rossotti. There are various programs that will give
people bonuses. They generally call them awards, but that is
what they amount to.
Senator Voinovich. I think the idea of rewarding people is
a good one. In Ohio, we usually did it two or three times a
year. We would recognize people and they would get financial
incentives. We would give them a catalog where they could get a
TV set, or they would decide whether they wanted the money or
they wanted----
Ms. Johnson. Off the GSA schedules. [Laughter.]
I will say, though, that we have not relied only on
monetary awards and recognition. We have tried a number of
different things, and the nicest one is our Deputy
Administrator, Thurm Davis, has something called the Giraffe
Award, and he gives these beautiful little wooden giraffes out
to people for sticking their necks out.
Senator Voinovich. That is great.
Ms. Johnson. It is a risk recognition. So it is not that
you have changed something dramatically, but you have tried
something.
Senator Voinovich. I want to thank you very much for coming
here this morning. We enjoyed your testimony and I look forward
to working with you.
Ms. Johnson. Thank you.
Senator Voinovich. I would like to welcome Colleen Kelley,
the new President of the National Treasury Employees Union, and
Bobby Harnage, who is the National President of the American
Federation of Government Employees. Thank you for being here
and thank you for your patience. I know you are both busy
people. Bobby, I saw you looking at your watch and you probably
have something to do, but thanks for being here.
Mr. Harnage. We are doing good.
Senator Voinovich. Ms. Kelley.
TESTIMONY OF COLLEEN M. KELLEY,\1\ NATIONAL PRESIDENT, NATIONAL
TREASURY EMPLOYEES UNION
Ms. Kelley. Thank you, Mr. Chairman. As the President of
the National Treasury Employees Union, representing over
155,000 Federal employees across the Federal Government, I am
very pleased to be here today.
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\1\ The prepared statement of Ms. Kelley with an attachment appears
in the Appendix on page 65.
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I believe we are in agreement, Mr. Chairman, that the most
important resource the Federal Government has is its employees.
It has been shown time and time again that when Federal
agencies involve employees, front-line employees, in the
decision making process, that everyone wins, the agency, the
employees, and most of all, the agencies' customers, the
taxpayers. Pre-decisional involvement for employees is the key.
It should come as no surprise that when employees are involved
in work process decisions before they are made, productivity
increases and cost savings result.
Perhaps nowhere is this more important today than at the
Internal Revenue Service. The IRS interacts with more citizens
than any other government agency or private sector business.
Twice as many people pay taxes as vote. NTEU takes great pride
in the fact that we have had a cooperative relationship with
the IRS dating back more than a decade. Over those years, we
have built on ideas that have worked and we have tossed out
those that have not worked. We have learned from each other and
we continue to build on that relationship as new situations and
challenges arise.
Our partnership efforts are constantly being tested. They
are being reworked and they are being revised in the face of
funding restrictions and changes in the tax laws. There is
often a temptation to blame IRS employees for the complexity of
the tax laws. This fact makes it even more important that the
IRS and NTEU work together to make sure that employees have the
tools that they need to perform their jobs. IRS employees are
competent, hard working, and motivated individuals who want to
deliver a high-quality product to the American taxpayer.
Commissioner Rossotti knows this, and his efforts to
empower employees have reaped rewards for the agency, as well.
Following enactment of the IRS Restructuring and Reform Act,
Commissioner Rossotti set in motion a process to restore the
public's confidence in the IRS. The Commissioner recognized
that any meaningful reform had to include the active
participation of the front-line employees, and his employees,
he has repeatedly acknowledged, are the cornerstone of what
will make the IRS successful in the future.
NTEU has long argued for meaningful input for employees,
not only at the IRS but in every Federal agency. At the IRS,
communication between management and the employees who make the
IRS work has been crucial to efforts to restore the public's
confidence in the IRS.
One particular focus of our partnership with the IRS has
been improving customer service. This has included providing
not just longer office hours, but hours that meet the
taxpayers' needs, such as taking our services to more customer-
friendly environments like libraries and shopping malls,
employing the latest technology to do this, and also providing
the critical training that employees need to do the job that
they want to do.
Another excellent example of our partnership with the IRS
was the establishment of nationwide problem solving days. These
were set up to provide taxpayers with one-on-one assistance
with tax questions and problems. Surveys following these
problem solving days have shown that both taxpayers and
employees believed that these efforts were successful beyond
their expectations. Given a clear goal and adequate time and
resources, IRS employees can deliver a level of service that in
many cases actually exceeds that expected by taxpayers.
The IRS modernization plan also called for the
establishment of 11 different design teams to examine specific
aspects of the work of the IRS. Hundreds of front-line IRS
employees who are represented by NTEU are working on these
teams today, including Glen Jacobsen and David Allen, who you
met earlier, who Commissioner Rossotti introduced.
However, more than 2,300 NTEU members responded to the
initial possibility of involvement in the modernization of the
IRS, even though their involvement on these teams meant many
months away from home and from their families. I think
Commissioner Rossotti would agree with me that employee input
has been instrumental in the design improvements that have been
made to date.
I am also very pleased to report that just last month, the
National Treasury Employees Union received three National
Partnership Council awards for our work with the IRS, with the
U.S. Customs Service, and with the Food and Nutrition Service.
Awards were given to teams that have successfully embraced
labor-management cooperation that has resulted in better and
more economical service to the taxpaying public. We were
pleased to share in these awards, which are excellent examples
of what can be accomplished by providing a voice to front-line
employees.
NTEU and the IRS, acting as partners, have taken major
strides toward modernizing the service. The challenge for our
union and for our members is to continue to make sure that our
voices are heard and that the knowledge and the expertise that
we have gained on the front lines over the years is used to the
agency's advantage.
Like IRS employees with their dedication and their
abilities, all Federal employees want to deliver first-rate
programs and services. NTEU has long argued for meaningful
input for employees in every Federal agency. Partnership is an
avenue that permits us to work together towards our shared
goal, and for that reason, we have embraced it. Thank you, Mr.
Chairman.
Senator Voinovich. Thank you very much. Mr. Harnage.
TESTIMONY OF BOBBY L. HARNAGE, SR.,\1\ NATIONAL PRESIDENT,
AMERICAN FEDERATION OF GOVERNMENT EMPLOYEES
Mr. Harnage. Mr. Chairman, on behalf of the more than
600,000 Federal and D.C. Government employees represented by
AFGE, I thank you for inviting me to testify today. Our union
is deeply committed to working with Federal managers, the
administration, and Congress to ensure that the Federal
Government carries out its responsibilities with quality as the
top priority.
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\1\ The prepared statement of Mr. Harnage appears in the Appendix
on page 77.
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In 1993, AFGE and other Federal sector unions published a
report called ``Total Quality Partnership,'' which we presented
to the Clinton Administration. This led to discussions that
resulted in Executive Order 12871, directing agencies to
develop labor-management partnerships to reinvent government.
In our report we wrote, ``No one feels stronger about the
meaningful transformation of the Federal workforce than Federal
employees. Our members have much at stake in the outcome of the
reinventing government process. We simply cannot fathom a
continuation of the outmoded ideas, processes, and attitudes
which currently prevail in Federal service. The quality of our
lives and those of the public that we choose to serve are in
the balance.''
We did not call our proposal total quality management, or
TQM. In those days, TQM was much talked about and tried, but
agencies tended to involve unions as an afterthought, if at
all, and rarely engaged the energy and expertise of front-line
workers.
Mr. Chairman, I know that TQM is an important issue to you,
but the phrase may not carry some meanings that you intend
because of the way it was used in the Federal Government some
years ago. For many Federal employees, it just does not convey
the collaboration and the participation that we expect. That is
why we called our proposal total quality partnership and
envisioned something very much like the total services through
partnership you developed with the State Employees Union when
you were the Governor of Ohio.
My testimony covers three examples of AFGE's efforts to
make our commitment to quality into reality. Two are
longstanding successful labor-management partnerships, which
have improved operations for the benefit of taxpayers, Federal
workers, and managers. The third partnership, between AFGE and
the General Services Administration, is currently at a
crossroads. In fact, there has been dramatic change in the
AFGE-GSA situation in just the 3 weeks since I submitted my
written testimony to this Subcommittee.
In July, GSA announced its intention to close its four
distribution centers as well as its four forward supply
centers. This followed an abrupt end to what our union
considered promising partnership discussions about how to
respond to GSA's declining sales. In September, GSA was ordered
to cancel the facility shutdowns and its associated reductions
in force and begin bargaining with AFGE on the matter. Our
prospects looked grim when GSA said it would continue with its
plan to close the facilities, despite the arbitrator's order.
But just this week, we reached an agreement that will keep
the operation going while we attempt to revitalize the
partnership and put it to work to find a better solution for
the Federal Supply Service. It has been a bit of a roller
coaster ride, but I remain optimistic that we will succeed in
our efforts to build a successful partnership that serves the
needs of the public, GSA, and its employees.
I would like to turn now to two AFGE labor-management
partnerships that have stood the test of time. Our local at the
Crane Naval Surface Warfare Center in Crane, Indiana, has been
in a partnership management since before the President's
Executive Order. As the partners began to realize that their
very future of their facility was under threat, they joined
together to turn things around. They saw that under the Federal
contracting out processes, they had little control and watched
helplessly while vendors picked off lucrative pieces of their
business, leaving the rest bleeding and weakening. They
described this as being killed by 1,000 cuts.
Crane operates with a $500 to $600 million annual business
base and is the second largest naval installation in the
continental United States. The union and management are putting
into place an ambitious and courageous business and processes
reengineering. They have identified millions of dollars in
projected savings and are making decisions based on data about
what kind of work they should be doing and how they should be
doing it. In addition to saving millions of dollars, they
possibly are also saving lives.
The U.S. Mint is another agency whose labor-management
partnership is a source of pride to us. AFGE and the U.S. Mint
signed the first partnership agreement in the Department of
Treasury in 1994. Prior to that, we had a long history of
adversarial relationships and spent far more time trying to win
cases against each other rather than trying to improve the way
we did our jobs. The key to success at the Mint, as it is at
Crane, is the willingness of the agencies to engage the union
as a full partner in the most important, fundamental issues of
the workplace.
The Mint asked AFGE to join in developing the agency's
strategic plan. Since the first joint strategic planning
meeting in 1994, AFGE and the Mint have worked together to
reach the goals they set and redefine them each year. They
documented $1.4 million in cost savings, cost avoidance, and
improved resource allocations in 1997. In 1998, the Mint-AFGE
partnership was on track to reduce annual expenses by an
additional $4.7 million. In addition, the profits from
producing and selling circulating coins have increased from
$428 million to $594 million. That is a $166 million
improvement.
The amount of money the Mint has sent back to the American
people through the general fund has increased from $465 million
to $562 million, and that is a $97 million increase. The Mint
estimates that 25 percent of this increase was attributable to
cost reduction measures that the partnership had put in place.
Improving customer service was also a prime focus of the
partnership, with dramatic results.
Mr. Chairman, I admire the partnership that you developed
with your employees' union when you were Governor of Ohio and I
believe that our experience at the Mint and at Crane comes
close to approximating Ohio's quality service through
partnership. Our experiences have clearly shown that
partnership works when the parties truly are committed to them
and they are allowed to work on important matters.
Please use our models of these agencies to wisely involve
the unions as dual partners, such as Crane and such as the U.S.
Mint. We sincerely hope that we are embarking on a joint effort
that will add GSA to the list of model labor-management
partnerships. With these type of successes, it should not be
optional today. It should be required.
That concludes my testimony, Mr. Chairman.
Senator Voinovich. Thank you very much.
Based upon the testimony from the GSA, it did not appear
that the process of involving employees was formalized. Could
you contrast the kind of organizational structure that you have
at Crane versus what you have with GSA and why is one more
successful than the other?
Mr. Harnage. Well, it is sort of like real estate and being
in the restaurant business. It is all in location, location,
location. In this, it is all in attitude, attitude, and
attitude.
I think the IRS showed a prime example of the difference.
The fourth item listed on that chart was the engagement of the
employees and managers at all levels of the operation. I
noticed that the GSA representative evaded your questions when
you tried to find out the participation of the union at
different levels of their program, and the answer was--they did
not say yes, they are at all levels. The answer was, we do
contact them. We do get in touch with them. So they are not
sitting at the table, and that is a significant difference.
At Crane, Indiana, we are at all levels. At the U.S. Mint,
we are at all levels. Where we had employees there, they
retired at the same grade and in the same job as when they went
to work working for the U.S. Mint. They had absolutely no
career development, no career advancement. Today, they have a
career ladder, they have a career advancement, and we are still
saving money and doing a much better job and are much
productive because the employees were allowed to participate in
deciding how the job ought to be done. I think you recognized
early on when you were governor that the people who really know
how to do the job are the ones that are doing it.
Senator Voinovich. I would be interested in having your
perspective on the organization at the Mint and Crane, and then
compare it with the General Services Administration.
Mr. Harnage. I will give you two very quick examples. When
Crane started to initiate their proposal----
Senator Voinovich. At Crane, you are working with the
Defense Department and the Navy, is that it?
Mr. Harnage. Right.
Senator Voinovich. So it is military people that are your
interface, then.
Mr. Harnage. Right. Exactly. At Crane, Indiana, when they
started to implement their program, they came to AFGE at the
headquarters and we sat down and talked about the program and
we bought into it. We said, it is risky, it is innovative, let
us try, and it worked.
At GSA, when they announced that they were going to close
these facilities and have this reduction of force of somewhere
between 1,500 and 2,000 Federal employees, I was advised at an
interrupted lunch, one hour before the announcement to the
public, of what they were going to do. That is the difference.
Senator Voinovich. So the point is, specifically, that it
would have been great if you had a formal process where they
had sat down and said, we have got problems out here. Here is
what they are. Can we sit down and figure out how we can work
together to try to improve them, so there would be
participation in that decision making rather than having you
react to it after it was a done deal.
Mr. Harnage. That is true, and I have to give them some
credit. There was some participation at different subcommittee
levels leading up to that. But the problem was, the trust was
not there, and willingness to take the risk was not there. Even
though they have a lot of testimony about risk, management
risk, they were not willing to take any at the top level,
because at one point, they finally said, this is not going
where we want it to go. This is the end of it. Then they made
the decision to close the facilities, which is not,
incidentally, saving the money that they indicated it would
save. In fact, it is going to wind up costing the taxpayers
money, not actually saving them.
Senator Voinovich. Ms. Kelley, it appears that you have a
pretty good formalized process with the Internal Revenue
Service.
Ms. Kelley. We do, Mr. Chairman. At all levels of the
organization, there is a formal structure in place that
includes NTEU. I would say the IRS and NTEU work very hard at
helping each other to make that system work because it is very
easy, and with everything happening every day, for something to
get missed, not intentionally, but just with the speed at which
things happen. So we work very well, I think, and very hard to
help each other to keep us in the process.
Senator Voinovich. I would like the staff to look at what
is going on at IRS and then look at Crane and the Mint and see
how that is working out and how that was put together. It could
serve as a model that we could apply to other agencies.
The other thing I would be interested in is your objective
appraisal of that kind of partnership in some of the other
Federal agencies where you represent workers and at what stage
you think they are, in terms of this formalized employee
involvement procedure.
One of the things that I talked to Mr. Rossotti about
yesterday is that when Congress passes changes in the Internal
Revenue Code, they probably think about how long it will take
for the ``professionals'' to deal with the system, but I
suspect that none of them think about how much help the people
who have to run it internally need to have. Let us say this
session there are going to be some extenders or some new
changes in the code. How much time do you get to implement
those? Are they usually effective the year later? How fast do
you have to respond?
Ms. Kelley. It depends on what the law requires. It is not
unusual that things that are passed in October or November are
put in place for taxpayers the next January 1, literally 6 or 8
weeks after being passed, and that creates all of the obvious
problems for the front-line employees who are specifically
answering the toll-free telephone lines where taxpayers call
and expect to have the answers to their questions.
It is complicated by the fact that it is not--once the law
is passed, that is not the end of defining what the real change
is for the taxpayer. Behind that has to come a lot of technical
work on regulations to implement the law, and oftentimes those
are not even in place until after the effective date. So it is
very difficult. It puts employees in a position where they do
not have the tools that they need and cannot provide the
information taxpayers want. So it is a very difficult
situation.
Senator Voinovich. That is one of the things that ought to
be considered when these changes are made. If they are minor
changes, it is one thing. But for major changes, consideration
should be given to delaying them for a year so that your people
can get ready for it, get the training and the things that are
necessary so that you can actually get the job done for people.
Ms. Kelley. I think that is a very fair request, and I will
tell you that we do at every opportunity. We would appreciate
your assistance in helping to make that happen, because often
what happens is the tax changes are caught up in the heat of a
lot of other things in a specific bill and, candidly, the last
thing anybody who is voting is thinking about is, what happens
next. We work hard in that education process and look forward
to working with you to help us with that.
Senator Voinovich. How about training? It appears that you
have training money that is part of the budget, and Mr.
Rossotti said they have made some real progress in this budget
to get more money. How do you feel about that, and then I would
be interested, Mr. Harnage, in your comment in terms of the
money that is being provided for training for your folks.
Ms. Kelley. The IRS has definitely made inroads in the past
few years concerning training. Training is one of those areas
that I do not know that there can ever be enough of. While the
money is there from a funding standpoint for external develop
of courses or travel or sending people to training, the problem
becomes the FTEs, the staff years. Using customer service as
the perfect example, these are the employees who are on the 800
toll-free lines year-round and in order for them to be at
training, they have to be off the phones. There are times when
that cannot happen, and depending on the volume of calls and
the needs of taxpayers, it is not possible for the IRS to
release them to do the training that they require.
Now, we have worked very closely the last 2 years with
developing a training plan that would prioritize the training
that was needed by each employee to give them the skills they
need to do their job, and that program is well on its way. But
in my opinion, it is tied more directly to the total agency
budget for FTEs, for funding of staff years, than it is to what
you see in a dollar line item for training. It is much more
about the staff years and the ability to----
Senator Voinovich. So, basically, you get money and then
you have to carve out a portion of it for training. Would you
be better off if, when putting the budget together, there was
some real thought being given to the percentage of the budget
that would be used for training, so it is understood that is
what it is to be used for?
Ms. Kelley. That would be one way to do it, but the problem
that creates is then the employees are not available to do the
work that the taxpayers need and expect them to do. So I think
that the real answer is, increased funding for the agency so
that it can staff with the employees it needs to not only do
the job but make sure that they have all the skills they need
and all the training they need. So it is really about increased
appropriations.
One of the things that we are very worried about in the
upcoming budget cycle is the discussion about across-the-board
cuts. If that happens in any of the agencies, history tells us
the first place we will see the impact will be in training.
There will not be time to do the training and there surely will
not be money, and then all the levels of customer satisfaction,
employee satisfaction, it will all just roll downhill and we
run the risk of being further behind next year than we were 2
years ago. So I am hoping that we will be able to work through
this and that will not happen.
Senator Voinovich. I have been through that, and so have
our employees. It is not easy. I would be interested in your
recommendations on how you would handle the training budget and
how it becomes formalized. Ideally, you have the money for
training and then you have the money for your full-time
employees--do you get what I am saying?
Ms. Kelley. I do.
Senator Voinovich. You are squeezing your training money,
but at least it is in a separate pot. It is not part of the
FTEs. So I would really be interested in your thoughts in that
regard, both of you.
Do you want to comment on training?
Mr. Harnage. Well, I will just say that one of the
significant differences in the Crane situation as well as the
U.S. Mint than most other situations is that their training was
designed to prevent a crisis rather than react to a crisis. It
was a strategic plan where they knew where they wanted to be
and they planned to get there through the training of the
employees.
So at Crane, Indiana, where we did reduce the workforce
probably 20 percent or a little bit better, the reduction in
force was the last resort listed on their items. That would be
the last possible resort. And as a result, through attrition
and through training, they have been able to keep that promise.
There have not been any reductions in force at Crane. Even
though they are operating much more efficiently, much more
effectively, and saving millions of dollars with less people,
there has not been a reduction, and they refer to it as the
University of Crane. They provide training, so that when they
know they are going to lose somebody, they have somebody being
trained that is going to remain and be able to pick up that job
and carry on.
The same thing with the Mint. As I said, they now have a
career ladder where people can get promoted and move up, and
that has increased their productivity and has allowed them to
work with less employees than what they had before.
Senator Voinovich. Sure. People are inspired. They know
they have a chance to get going. But is there a specific line
item at both of those places for training or not?
Mr. Harnage. There is at Crane, and I am not too sure there
is at GSA. There is some training in GSA, but unlike Crane and
all, there is not a strategic plan to prevent a crisis. It is
more or less to get the job done today and react to a crisis.
Senator Voinovich. The last thing I would ask both of you
is are you satisfied with the formalized incentive package that
is available? Is it adequate? I would like your comments on it.
Mr. Harnage. The incentive package----
Senator Voinovich. Incentives for people coming up with new
ideas, saving money, and----
Mr. Harnage. I am not too sure that it is satisfactory in
that in too many circumstances, the employees do not
participate in how that incentive will be distributed, how much
it will be and how it will be distributed. So it is not looked
at as a real reward, but something that somebody got, that
maybe all of them were entitled to but one or two got it. So I
do not know that in my environment that the incentives are all
too great.
Senator Voinovich. Is it an across-the-board incentive
package for all Federal employees, or does it differ from one
department to another?
Mr. Harnage. It differs from department to department.
Senator Voinovich. I would be interested in your comments
on that.
Ms. Kelley. For our part, the negotiated award system is
for annual performance rather than for incentives or for
savings, which is what you had asked earlier, Mr. Chairman. It
occurred to me in your prior question that from years ago when
I worked at the IRS through today, it is very seldom that you
hear about an employee making a suggestion that saved X number
of dollars and that resulted in an incentive payment of Y to an
employee. I have made myself a note to actually go back and see
if I can get a better handle on how often that happens, because
my sense is, other than the negotiated awards system for the
bargaining unit employees that NTEU negotiates, I do not know
that there is much in the way of a suggestion that saves X and
results in a reward of Y, and that is something I need to get
more information on and I will be glad to share with you when I
get it.
Senator Voinovich. I would like to know what it is. To me,
it is not an incentive system just because the employees
understand that it is there.
Ms. Kelley. That is right.
Senator Voinovich. Thank you so much for being here, and
again, I look forward to working with you. Yes, Mr. Harnage?
Mr. Harnage. If I could just make one final comment on Mr.
Akaka's question when you were out of the room, or his
statement that he was glad to see that GSA had decided not to
go through with their closures, which was going to cost a lot
of jobs in the blind community, I am not too sure that they
have made that decision. As a result of the arbitrator's award,
they had to go back and begin negotiations with AFGE. In the
agreement that we reached this week is we have agreed to set
that arbitrator's award aside if they will turn back the
calendar and go back to May.
But I continue to have the impression that this may be them
just going through the motions, that they do not intend to
change the end results, just change how they get there. If that
is true, it is going to be very unfortunate. But being the
optimist that I am, I have been willing to take the gamble and
set that arbitrator's award aside and say, OK, let us get back
to the table. I am sure if the attitude is right, we will reach
what is best, in the best interest of government and the best
interest of the taxpayers. But that is going to take constant
vigilance to make sure that they are just not going through the
motion.
Senator Voinovich. The attitude of individuals is important
and the trust level is very, very important. It is amazing what
you can do when you have trust. I have seen that in this
country on a lot of issues.
Mr. Harnage. That is very true.
Senator Voinovich. It would be a whole lot different if
there were more trust. Thank you very much.
Ms. Kelley. Thank you, Mr. Chairman. I look forward to
working with you.
Mr. Harnage. Thank you.
Senator Voinovich. Thank you.
Our next witness is Christopher Mihm, and again, Mr. Mihm,
I want to thank you for your patience. He is the Associate
Director of Federal Management and Workforce Issues of the
General Government Division at the U.S. General Accounting
Office.
I really appreciate the cooperation that we receive from
GAO. GAO is working right now to help us evaluate the 560
education programs that we have to decide whether they are
really getting the job done. One of the things about this place
is that they just keep adding. I do not ever see anybody
subtract. For example, in the education area, there are a lot
of new ideas. I said, why do we not go back and look at what we
are already doing, see if there is some stuff that we are doing
that we ought not to be doing, maybe put the money in something
that is better, or just plain save the money?
So your services are very, very important. I hope that your
team understands that. A lot of us look to you for help,
because we really cannot do our oversight work without your
help.
Mr. Mihm is accompanied by Jim White, who is the Director
of Tax Policy and Administration Issues, and Bernard Ungar,
Director of Government Business Operations.
Mr. Mihm, we will start off with you.
TESTIMONY OF J. CHRISTOPHER MIHM,\1\ ASSOCIATE DIRECTOR,
FEDERAL MANAGEMENT AND WORKFORCE ISSUES, GENERAL GOVERNMENT
DIVISION, U.S. GENERAL ACCOUNTING OFFICE; ACCOMPANIED BY JAMES
R. WHITE, DIRECTOR, TAX POLICY AND ADMINISTRATION ISSUES,
GENERAL GOVERNMENT DIVISION, U.S. GENERAL ACCOUNTING OFFICE;
AND BERNARD UNGAR, DIRECTOR, GOVERNMENT BUSINESS OPERATIONS
ISSUES, GENERAL GOVERNMENT DIVISION, U.S. GENERAL ACCOUNTING
OFFICE
Mr. Mihm. Thank you, Mr. Chairman. The point that you are
making about the overlap and duplication of education programs
is something, as you know, that we see in program area after
program area across the Federal Government. There is a natural
tendency to add new programs on top of existing ones, rather
than going back and asking about what are we getting
cumulatively from the effort we already have underway and what
are we getting individually from various programs and
strategies that are in place. So we are pleased that we are
able to support your efforts in this area.
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\1\ The prepared statement of Mr. Mihm appears in the Appendix on
page 94.
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Jim White, Bernie Ungar, and I are pleased to be here today
to contribute to your ongoing efforts to identify ways to
improve the management and performance of the Federal
Government. As you pointed out, Mr. Chairman, successful
management change often takes years. I believe you mentioned,
in the case of Ohio, it took 8 years to really get the TQM
effort that you had there instilled across the State
Government.
Our work suggests that six elements are particularly
important in implementing and sustaining management improvement
efforts so that they take root and genuinely address the
problems they are intended to fix. These elements, most of
which we have discussed at least in passing this morning, are,
first, a demonstrated leadership commitment and accountability
for change; second, the integration of management improvement
initiatives into programmatic decision making, that is, not
having it be seen as a stand-alone function separate from the
program work; third, rigorous planning to guide decisions;
fourth, employee involvement both to elicit ideas and build
commitment; fifth, organizational alignment to streamline
operations and, importantly, clarify accountability; and
finally, sixth, strong and continuing Congressional oversight.
Our written statement discusses each of these in some
detail, so in the interest of brevity, I am going to focus on
the three of those that are most directly related to the people
aspect of management improvement, that is, leadership, employee
involvement, and organizational alignment.
First, in regards to leadership, perhaps the single most
important element of successful management change initiatives
is the sustained commitment of top leaders to change. This
commitment is most prominently shown through the personal
involvement of top leaders in developing and directing the
reform efforts, and I think we have heard two very good
examples of that in the first panel this morning. Top
leadership involvement and clear lines of accountability for
making management improvements are critical to overcoming
organizations' natural resistance to change, marshaling the
resources needed in many cases to improve management, and
building and maintaining the organization-wide commitment to
new ways of doing business.
Second, successful management improvement initiatives often
require the active involvement of managers and staff throughout
the organization. This was clearly the point that you and
Senator Akaka underscored in your opening statement and in the
questions that you asked. Our written statement provides a
number of tools and strategies that high-performing
organizations have used. I am just going to touch on a couple
of those.
First, working with employees at all levels and employee
organizations, including unions. We heard some good stories of
that earlier today, of how that is working. Too often, however,
the opposite is the case at the Federal level. That is, that
unions and their management are not working well together.
For example, the U.S. Postal Service's longstanding
challenges in labor-management relations illustrate for us the
importance of having shared and agreed upon long-term
strategies that managers, employees, and unions are all working
towards. Labor-management relations at the Postal Service have
been characterized by disagreements that have hampered efforts
to automate some postal systems that could have resulted in
savings and helped improve Postal Service performance. Although
there has been some recent progress, labor-management problems
persist and continue to contribute to higher mail processing
and delivery costs than is necessary. So if we could make
progress on labor-management relationships at the Postal
Service, we could cut costs and improve mail processing.
The second key element is training. Simply stated, serious
management improvement efforts often require a serious
commitment to employee training and skill building.
Commissioner Rossotti and Ms. Johnson spoke of the importance
of training to the reinvention efforts that are underway at
their respective agencies.
We did a survey of managers across government in 1996 and
1997--these are GS-13s and above, through the SES--and found
overall that the picture was quite gloomy. We found that about
60 percent or more of supervisors and managers reported that
their agencies had not provided them with the training
necessary to accomplish critical results-oriented management
tasks, things like setting goals, setting performance measures,
gathering performance information, using performance
information to improve their operations.
At the request of the Subcommittee, we are going back into
the field and doing this survey again to see if there has been
any improvement over the last 3 years, but nevertheless, when
you have the key employees and managers in the Federal
Government telling you that they have not received the training
to do the key management tasks that they need to do, that is a
very disturbing picture.
Senator Voinovich. You are saying 60 percent?
Mr. Mihm. Sixty percent or more in each of various
categories that we looked at said that they had not received
the training that they needed.
The third key area of employee involvement is devolving
authority. Employees are more likely to support changes when
they have the necessary authority and flexibility to advance
agencies' goals and improve performance, but we have found that
much work appears to be needed across the Federal Government in
this regard. Let us go back to the survey.
We found that less than one-third of non-SES managers--this
is at the GS-13s, 14s, and 15s levels--felt that to a great or
very great extent they had the decision making authority they
needed in order to accomplish their goals. Only about half of
the managers said that they were being held accountable for
results, that is, rather than just adherence to the
requirements of a position description. And again, this is part
of what we are resurveying managers at the request of this
Subcommittee.
My final point this morning concerns the need for
organizational alignments to streamline operations and clarify
accountability. We have heard from earlier panels some of the
changes underway in terms of organizational alignment at GSA
and IRS. Equally interesting, in our view, are some of the
actions that have taken place at the Office of Student
Financial Assistance.
Last year, Congress created a new organizational structure,
and this gets, I think, directly to the questions that you were
raising, Mr. Chairman, about creating incentives and really
being very clear about creating the right incentive structures
that we want. The new structure exemplifies, in our view, new
directions and accountability for the Federal Government by
appointing a Chief Operating Officer who reports directly to
the Secretary of Education. That Chief Operating Officer for
Student Financial Assistance is held directly and personally
accountable through an employee contract for achieving
measurable organizational and individual goals. The Chief
Operating Officer may receive a bonus for meeting performance
goals or may be removed for not meeting them, which, as you
well know, is not common in the public sector. Likewise, the
Chief Operating Officer is to enter into annual performance
agreements with his or her senior managers, and they are also
eligible for substantial bonuses when their contract
requirements are met and removal in the cases where they are
not.
In summary, Mr. Chairman, we have found that successful
management improvement efforts often contain a variety of
critical elements that I mentioned at the outset of my
statement. Experience has shown that when these elements are in
place, lasting management reforms are more likely to be
implemented that ultimately lead to improvements in the
performance and the efficiency of government.
This concludes our statement. Jim, Bernie, and I would be
happy to answer any questions that you may have.
Senator Voinovich. You have had an opportunity to hear the
presentations of the people from GSA and from IRS, and then
from the respective union presidents. I would be interested in
your observations on the extent to which there is quality
management as I have defined it across the Federal system. It
seems to me, and this is why we had the IRS in, that they have
a handle on something there, and from what Bobby Harnage said,
he at least seems to be satisfied with what they have at the
Mint and at Crane.
Mr. Mihm. I am not familiar with that.
Mr. Ungar. It sounds familiar, but I am not sure.
Senator Voinovich. I am just saying that at least they seem
to be happy with it. But what is your general observation,
across the board, of the extent to which what I would define as
quality management or quality partnership, as distinguished
from the Results Act and performance plans is in place?
Mr. Mihm. I think that, and this is sensitive to me because
I have responsibility for the Results Act back at GAO, I think
if you are looking across the Federal Government for the
elements that, as you have defined as quality management, you
will find many of those elements in place, but there is a long
way to go in virtually all of the agencies. In regard to what
implementation of the Results Act has taught us and especially
what the gaps are and why it suggests we need more efforts of
the type that you are suggesting, Mr. Chairman: When we looked
at the annual performance plans that agencies have issued for
fiscal years 1999 and 2000, one of the key weaknesses that we
saw is that agencies were not able to articulate how what they
did on a day-to-day basis, leads to broader programmatic
results. This gap in agency performance planning--this gap in
agency understanding about what they do--is to us indicative of
a lack of understanding in agencies of how we can go about
improving performance when our performance goals are not being
met. You will recall that under the Results Act, the reports on
performance are due this coming March.
In other words, when we look at implementation of the
Results Act, we see in many cases some very good goals.
However, we are not seeing the infrastructure underneath,
either in the programs or the management systems in place that
lead us to have a great deal of confidence that agencies are
going to be able to tell you, ``We did not meet the goal but
here is what we are going to do in order to improve
performance.''
I do not know if Jim or Bernie have specific comments on
GSA or IRS in that regard.
Mr. White. I will respond, Mr. Chairman, in terms of IRS. I
am responsible for the work we do on IRS at GAO. Your
definition of total quality management started out by
mentioning the focus on external and internal customers, and
that is the approach that IRS has taken. The three goals they
have established for IRS now to support their mission statement
are service to all taxpayers, service to each taxpayer, and
they also have a focus on employees and developing employee
productivity.
But you also mentioned in discussing quality management
implementation. IRS at this point has a plan. The hard part of
what IRS is trying to do is going to be in the implementation
phase, and that is where things like training come into play.
There has been a lot of discussion about training here. I
would just like to point out that I think training needs to be
complimented by things such as the employee evaluation system,
that training alone will not change the culture at an agency.
Training alone will not dramatically change the way IRS
employees interact with taxpayers. Training needs to be
supported by other changes at the agency, such as with the
employee evaluation system.
Our work on their evaluation system shows that it does not
currently support the new mission statement. The IRS recognizes
that. It is going to take several years before they get a new
evaluation system into place. They have begun work on that. But
it has to be an approach that focuses on all of these areas
simultaneously.
Senator Voinovich. Does everyone at the IRS have a
performance evaluation every year, that they sit down with
their supervisor and go over?
Mr. White. Yes. What we found when we reviewed, and this is
the existing old employee evaluation system, all employees get
evaluated. The evaluation right now often focuses on
enforcement of tax laws. There is very little focus on service
to taxpayers.
Senator Voinovich. Have they revised it? I have seen all
kinds of performance forms--we have one in my office--that have
been put together. Have they revised the evaluation forms that
they use to reflect that, or are they still using the old ones?
Mr. White. They are still using the old ones right now.
They have recognized the need to do this. It is going to take
several years to get a new process in place. In the meantime,
we have given them some suggestions in a report we recently
issued on how they could better use the existing system. For
example, in the narrative portion of the employee evaluations,
managers could put more of an emphasis there on customer
service than they are right now.
Senator Voinovich. If somebody became the new secretary of
X and they reviewed the management of their department, if they
called your office, could they get what you consider to be the
best examples of performance evaluation forms?
Mr. Mihm. Yes, sir. We would be happy to work with them on
showing them the best practice to the extent that we have seen
it. We would be pleased to.
Senator Voinovich. That is nice to know that it is
available. Mr. Unger.
Mr. Ungar. Mr. Chairman, I can comment just briefly on GSA
and the Postal Service in relation to your initial question. I
would say that both had a common experience back in the early
1990's, and that was that both GSA and the Postal Service were
in crisis situations. In the GSA's case, we did a study in mid-
1995, we call them management review studies, of several
agencies, and at GSA, if you will go back a few years, I think
that no customer was happy with GSA. I think they were calling
for GSA's demise and you had a number of things coming
together, the National Performance Review and so forth, at the
same time. GSA did go through quite a transformation.
In terms of your definition of TQM, I think the biggest
change that I have seen in GSA that has turned it around is its
customer focus. It went from an organization that did not care
about its customers to an organization that really does care.
It went from an organization that provided mandatory compliance
and participation with almost all voluntary participation now,
and that really did require a complete change at GSA. Now, I do
not think they are where they need to be yet in the areas you
have talked about, but they are certainly a lot different today
than they were 7 or 8 years ago.
Similarly, at the Postal Service, they were not making very
much--in fact, they were losing money for a string of years and
they finally realized that something had to change and it did
change at the Postal Service. They actually adopted the Malcolm
Baldridge quality criteria as the whole framework for their
management approach to doing business. Of course, it is a
business, like GSA is. They have made a lot of progress over at
the Postal Service. As Chris had mentioned, they still have a
long way to go with employee involvement and working with their
employees, but it is a problem that they have had for many,
many years. As you said in the State of Ohio, it is not going
to be solved overnight.
Senator Voinovich. Right. Again, we have had some examples,
and it would be interesting from my perspective if you apply my
definition of what quality is, I would be interested in your
looking at the two examples that Mr. Harnage gave, and then the
IRS, to see how they compare.
I am looking for an agency where this is working to observe
the organizational structure that has been put in place,
understanding that for it to be successful, the leader has to
be involved. I think one thing people have to understand is
that if this is going to work, if you take Federal agencies,
the secretary has to get involved. I am not patting myself on
the back, but our program in Ohio worked because I was
committed to it. In fact, when I got my 3-day training, five
union presidents got their training at the same time, so they
knew I was committed to it. I showed up.
It would be interesting to define what it takes to get it
done, find some really good examples, then see if we can share
that information, best practices, with some of these other
agencies, and see if we cannot help those agencies that are
trying to change.
My thought is, and I will be candid with you, is that I do
not expect to get a whole lot done next year, because it is the
last year of the administration and you have agencies that are
wrapping up. In Ohio, I think we spent the last 6 months trying
to get things ready so that we could pass the baton to the next
administration. You are really not doing new stuff, you are
just trying to make sure that whoever comes in will be able to
continue without any real hitches.
Who knows how the presidential election is going to work
out, but the fact is that I would like to use this next year to
keep working this thing to get it into a position where if this
administration is succeeded with another Democratic
administration, that we can go to that administration and talk
to them about it, or if there is a Republican administration,
that we could sit down with them in the beginning and talk
about some of these things, because I suspect that even if Vice
President Gore ends up being the next President, he is going to
have new secretaries, and certainly if a Republican is elected,
they will have new folks in there.
I think the ideal would be to try to get to them right at
the gate and share with them what they could be doing that
would really make a difference in terms of the performance of
their respective agencies.
I have this feeling, and maybe I am being disrespectful,
but I have been watching and lobbying the Federal Government
for 18 years. I was President of the National League of Cities,
and then Chairman of the National Governors Association, and I
have seen administrations come and go. So often, it looks like
the new secretaries come in and they get assistant secretaries,
deputy assistants, and so forth, and they get all involved and
very little attention is paid to the rank and file middle
managers and folks that have been around for a while.
I will never forget, this is a long time ago, Bill Saxby
from Ohio became the Attorney General of the United States and
I was one of his assistant attorney generals and I came down to
see him sworn in. It was in the Great Hall at Justice. I looked
at the expressions on the faces of the people that were there,
I really studied them, and all I read was, ``We were here
before you and we will be here after you.''
Mr. Mihm. And they were.
Senator Voinovich. Yes, they were. That is the group of
people that we need to reach, I think, if we are going to
really see some changes made in the delivery of services to the
people of this country.
Mr. Mihm. The issue that you are raising, Mr. Chairman, is
a substantial one and we have found that the lack of political
attention to management improvements can kill a management
improvement effort. Obviously, the vast majority of people that
come to Washington for political positions do not intend that
their legacy would be ``a sound management infrastructure.''
They come for policy reasons. Often, turnover is very high in
these political positions and certainly does not last the 8
years or so that would be needed to sustain a management reform
effort.
One of the things that we have been urging Congress to do
is to use the confirmation process, to ask questions (and I say
this obviously knowing about the recent one for the Deputy
Director for Management) to use the confirmation process to
make clear to political appointees that Congress is putting a
great deal of interest and emphasis in sound management and
improvements within agencies, that it is not something that is
just other duties as assigned or something that they should
staff out. It is something that they will be held personally
responsible for and be asked about when they are up for
oversight and appropriations hearings. That sends very, very
powerful messages.
Mr. White. Mr. Chairman, if I might, the point you are
making about middle-level management is a point that we made in
July in testimony before the Ways and Means Committee in the
case of IRS, that IRS has very strong leadership now at the
top, leadership trying to manage this massive change effort,
but the IRS is so big and the amount of change required is so
large that top management alone cannot do it. Change is only
going to be implemented if middle-level management gets
involved in planning the details of it and then in actually
carrying out the change.
Senator Voinovich. Yes. That raises another point that hit
me when you were talking about the Results Act and the
performance plans to comply with the Results Act. It would be
interesting when you are going through these plans, and you are
doing that now, it would be interesting to find out just how
much involvement there has been in some of those agencies with
the folks that are down the line. The really great plans are
the ones where somebody has realized that if they are really
going to put something together, that the effort has to involve
a lot of folks.
Mr. Mihm. We have actually touched on that as part of the
survey that we did of managers and they are surveying again.
This is non-SESers, but it is still managers within the Federal
Government. Less than half of them said that they had been
involved in developing performance measures. Less than half
said that they had been involved in analyzing data on the
performance of their programs. Less than half said that they
had been involved in using performance data to determine
whether or not performance goals were being met. In fact, only
about a third of the non-SESers said that, and when you look at
the SESers, it only climbed to a little bit over 50 percent.
So, basically you have, of the executive cadre of the
Federal Government, only a little over half are reporting
involvement in using performance data to determine whether or
not the goals at their agency were being met. That is a
depressing picture, in our view.
Senator Voinovich. There is a lot of work to do. I look
forward to working with you and putting something together that
we can share with the next group, not taking anything away from
the people that are there, but as I said, I have been around
this business a long time and I know next year is not going to
be the greatest year to come in with a lot of innovation.
I was interested, and I thought Congress was smart, that
Mr. Rossotti has a 5-year contract, which I think is terrific
because he has some time, not enough to complete it, but at
least to get started with it. I thought that was a really good
move on the part of Congress.
Mr. Ungar.
Mr. Ungar. Mr. Chairman, I just wanted to reemphasize, I
think, the importance of your point, that regardless of who the
individual is who is going to be the head or the top person in
an organization, without that person's personal involvement, I
do not think you are going to get down to the middle management
level. I have responsibility not only for GSA and the Postal
Service, but also the Mint, and I think the common thread
through those three, plus my personal experience in GAO where I
headed up our quality program for a few years, is that without
that personal commitment and active involvement of the top
person, it is probably not going to succeed. So the more that
the Subcommittee can get at that or the full Committee during
confirmation process, if they get a commitment from whoever the
top person is for implementation, it would be very important.
Senator Voinovich. For the new folks that are coming in, it
would be interesting to have a management primer for them, and
basically ask them to come in and talk about what they would be
doing, what do they think about this, does it make any sense to
them, is it foreign to them, if they are supportive, and if
they are supportive, what they are going to do, so you get a
sense right off the bat about how committed they are to the
management of an agency.
We have some good folks in the Federal Government, some
good folks, and I respect them. But I think too many times,
people get the job and they think of it as, well, I am the
secretary and my job is just to go out and give speeches and
they forget about how important it is for them to pay attention
to management. If they are not involved in it personally, then
they ought to have somebody who is right next to them that
every morning gets up and worries about management.
Thanks very much, and as I said, I look forward to working
with you. Thank you.
Mr. Mihm. Thank you, sir.
Senator Voinovich. The Subcommittee is adjourned.
[Whereupon, at 11:10 a.m., the Subcommittee was adjourned.]
A P P E N D I X
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