WHAT HUMAN CAPITAL STRATEGY MODELS AND MEASURES ARE AVAILABLE IN THE FEDERAL GOVERNMENT?

According to the testimony of David Walker, U.S. Comptroller General, "Using Strategic Human Capital Management to Drive Transformational Change" (July 15, 2002 before the National Commission on the Public Service), federal agencies need to transform their cultures and shift their overall orientation from (GAO Report 02-940T):

• Processes to results

• Stovepipes to matrixes

• Hierarchical to flatter and more horizontal structures

• An inward focus to an external (citizen, customer, and stakeholder) focus

• Management control to employee empowerment

• Reactive behavior to proactive approaches

• Avoiding new technologies to embracing and leveraging them

• Hoarding knowledge to sharing knowledge

• Avoiding risk to managing risk

• Protecting turf to forming partnerships

Coincidentally, many of these goals form the basic tenets for knowledge management. On April 12, 2001, David Walker gave a presentation entitled "Human Capital and Knowledge Management: Connecting People to Information." In his talk, Walker highlighted how knowledge management assists human capital management (http://www.gao.gov/cghome/km):

• Supports matrix management (i.e., with mechanisms to bring the right people with the right skills together to maximize the value and manage risk involved with any undertaking);

• Aids coordination across borders, sectors, agencies, levels, and boundaries;

• Helps leaders and employees embrace needed cultural transformations;

• Helps leaders manage change;

• Helps managers plan their IT efforts to support employee's knowledge sharing needs;

• Helps employees identify their efforts to their organization's strategic plan by assisting in building expertise, enhancing professional development, improving recruitment, and improving retention.

For many of these reasons, knowledge management can be seen as a key pillar of an organization's human capital strategy.

In April 2001, the American Society for Training and Development issued recommendations on improving the human capital management in the federal government. One of the recommendations was to encourage agencies to develop a learning strategy that includes e-learning as a key component for maximizing technology for customized, anytime, anywhere learning. Developing a learning strategy should be a critical part of an agency's human capital strategy. According to Professor Ian Cunningham in the United Kingdom (http://www.selfmanagedlearning.org), a good learning strategy should include the following:

• Change strategies need to include reference to learning needs that will be part of the change (i.e., a learning strategy has to be part of a change process).

• Learning has to be seen as an organizationwide commitment, managed from the top and highly visible.

• Much learning cannot be achieved through quick-fix modes.

• Other people management practices need to tie in with a learning strategy.

• Shared learning needs encouragement.

David Skyrme, in his article "Developing a Knowledge Strategy" (http://www.skyrme.com/pubs/knwstrat.htm), believes that learning is an important component of a "knowledge strategy" as well. A knowledge strategy typically has two thrusts. The first is to make better use of the knowledge that already exists within the firm. The second major thrust of knowledge-focused strategies is innovation— the creation of new knowledge and turning ideas into valuable products and services (http://www.skyrme.com/pubs/knwstrat.htm). Here, transforming individualized learning into organizational learning is critical.

On March 15, 2002, GAO released "Model of Strategic Human Capital Management" (GAO Report 02-373SP) that agencies could follow. This model has four human capital cornerstones, eight critical success factors, and three levels of measurement. The model is shown in the following table:

HUMAN CAPITAL CORNERSTONES	CRITICAL SUCCESS FACTORS
Leadership	Commitment to human capital management Role of the human capital function
Strategic human capital planning	Integration and alignment Data-driven human capital decisions
Acquiring, developing, and retaining talent	Targeted investments in people Human capital approaches tailored to meet organizational needs
Results-oriented organizational cultures	Empowerment and inclusiveness Unit and individual performance linked to organizational goals

Each of the critical success factors can be described in three levels, as discussed in GAO Report 02-373SP:

Level 1:	The approach to human capital is largely compliance-based; the agency has yet to realize the value of managing human capital strategically to achieve results; existing human capital approaches have yet to be assessed in light of current and emerging agency needs.
Level 2:	The agency recognizes that people are a critical asset that must be managed strategically; new human capital policies, programs, and practices are being designed and implemented to support mission accomplishment.
Level 3:	The agency's human capital approaches contribute to improved agency performance; human capital considerations are fully integrated into strategic planning and day-to-day operations; the agency is continuously seeking ways to further improve its people management to achieve results.

Besides the GAO model for human capital, OPM (through the Human Resources Management Council) has a Human Capital Scorecard that considers five areas as key dimensions of human capital: Strategic Alignment, Strategic Competencies (Talent), Leadership, Performance Culture (Strategic Awareness), and Learning (Knowledge Management). The following tables outline the performance goals and measures under each of these five dimensions (http://www.opm.gov/humancapital/scorecard.htm):

Strategic Alignment: Align human capital policies to support the accomplishment of the agency's mission, vision, goals, and strategies (which define its direction and its expectations for itself and its people).

Performance Goals	Measures
There is an explicit and well-communicated link between HR strategies and plans and the agencies' strategic objectives	Agency has documented links between HR strategy and plans with mission/program objectives. Agency has effective process for communicating the link between HR strategies and plans with mission/program objectives.
The organization is well structured to support its mission	Agency has effective restructuring and organizational deployment plans and is taking actions based on them. The standard for "effective" is deploying the appropriate workforce mix to get the job done.
Employees understand their organization's plans and are involved in the strategic planning and reporting process	Employees understand how their job fits in and contributes to fulfilling the agency mission.

Strategic Competencies (Talent): Recruit, hire, develop, and retain employees with the strategic competencies for mission critical occupations.

Performance Goals	Measures
Desired competency levels in mission-critical occupations is achieved	Agency meets gap-reduction targets developed from restructuring plans.
Desired recruitment/retention rate for employees with strategic competencies is achieved	Agency meets staffing/retention rate targets for employees with strategic competencies.
Desired quality level of new hires is achieved	Agency meets quality-level targets for new hires.

Leadership: Ensures that leadership in the agency inspires, motivates, and guides others towards goals; coaches, mentors, challenges staff; adapts leadership styles to various situations; models high standards of honesty, integrity, trust, openness, and respect for individuals by applying these values.

Performance Goals	Measures
Agency recruits, develops, and retains high performing leaders	Agency meets staffing/retention target for high-performing executives and managers. Agency has effective plans for leadership recruitment (including identifying potential leaders from within the organizations), development, and succession that include specific objectives, actions, and timetables, and an analysis of candidate pools. Agency creates a culture in which employees believe that they are encouraged to assume more responsibilities and to accept assignments that provide leadership opportunities.
Agency leaders create high levels of motivation and commitment in the workforce	Employees are focused on results and show interest in improving the services of their organization.
Leaders maintain high standards of honesty and integrity that serve as a model to the whole workforce	Employees hold their leaders in high regard.

Performance Culture (Strategic Awareness): Create a culture that motivates employees for high performance, based on their contribution to the work of the organization, and common values while ensuring fairness in the workplace.

Performance Goals	Measures
Agency develops, rewards, and retains high performers and deals effectively with poor performers	Agency has effective performance management system that adequately distinguishes between levels of performance. Employees believe that their performance is valued by the organization for its contribution to fulfilling the agency's missions. Agency effectively manages employees who are performing below expectations.
Employees are engaged and focused on achieving the results expected of them	Employees believe that their organization has set high but realistic results-oriented work expectations for them.
Agency fosters a climate that values diversity	Employees believe that differences are welcomed and contribute to the work of the organization. Agency sets realistic diversity goals and targets and is meeting them.

Learning (Knowledge Management): Promote a knowledge-sharing culture and a climate of openness; promote continuous learning and improvement.

Performance Goals	Measures
Knowledge management strategies and/or systems are in place	Agency has effective strategy for knowledge management with targeted objectives and defined results.
Agency invests strategically in training and development opportunities for employees	Agency strategies include investment assumptions and cost-benefit analyses for training and development opportunities.
A climate of learning and growth exists throughout the agency	Employees believe that their organization supports their development and expects them to improve their skills and learn new skills to do their jobs better.

In November 2002, OPM, OMB, and GAO decided to combine their work into a comprehensive human capital framework. This framework is called the "Human Capital Assessment and Accountability Framework" and consists of the following:

Human Capital Standard for Success	Critical Success Factor
Strategic Alignment	Human capital focus Government-wide human capital collaboration Human resources collaboration
Workforce Planning and Deployment	Workforce planning Workforce deployment
Leadership and Knowledge Management	Leadership planning and implementation (Senior Executive Service, Managers, and Supervisors) Change management Integrity and inspiring employee commitment Strategic knowledge management Continuous learning and improvement
Performance Culture	Performance management Diversity Employee/labor-management relations
Talent	Workforce analysis Competition for talent
Accountability	Agencywide system for ensuring accountability in human capital