AN AGENCY DEVELOPING ITS HUMAN CAPITAL STRATEGY: THE INTERNAL REVENUE SERVICE

Napoleon Avery, Deputy Chief Human Resource Officer at the Internal Revenue Service (IRS), gave a briefing on "Strategic Human Capital Management" in June 2002. In his talk he mentioned that the strategic management of human capital must be achieved due to looming retirements and skill imbalances, and to reduce layers between citizens and decision-makers, better align skills, and provide greater flexibility to acquire and develop talent and leadership (www.psc-cfp.gc.ca/conf2002/presentations/ avery_strategic_hrm.ppt). The human capital strategy for the Internal Revenue Service is organized around four strategic human resources (HR) imperatives: renewal, investment, performance, and transition. In turn, the HR life cycle of the IRS is plan, recruit, educate, develop, sustain, and transition. According to Avery, the center of the IRS approach is the human resources strategy and structure. Currently, the IRS has a new decentralized HR organization structure and governance mechanisms, strategic partnerships (with senior leadership team and union), HR staff renewal, strategic measures and evaluation, and an HRIS (Human Resources Information System) strategy. The IRS plans on heading toward process reengineering, PeopleSoft implementation (HR Connect), and career development strategy for HR professionals.

In terms of the "Plan" function in the HR life cycle, the IRS is heading towards an integrated workforce planning tool, leadership succession plan, and annual strategic HR plan. Under "Recruit," the IRS is going towards direct-hire for critical skills and mid/senior level recruiting strategy. For "Educate," the IRS is heading towards online course repository (competency-based) and curriculum, e-learning investment fund, continuing curriculum redesign (high-tech/high-touch), and advanced learning technology acquisition vehicle. Under "Develop," the IRS wants career management systems for mission-critical occupations, frontline/senior manager readiness programs, and university leadership training. For "Sustain," the IRS is moving towards payband expansion, new bargaining unit appraisal system, seasonal employee health benefits, SES (Senior Executive Service) demonstration project, cafeteria health benefits plan, and elder care subsidies. For "Transition," phased retirement and web-based change management training are being proposed. Thus the IRS, with its five-year Strategic HR Strategy, is striving to achieve the "best-in-class" status in strategic HR in the following areas (www.psc-cfp.gc.ca/conf2002/presentations/avery_strategic_hrm.ppt):

• Treat HR as fundamental to strategic management

• Integrate HR staff into top management team

• Leverage external partnerships

• Hire, develop, and sustain leaders based on competencies

• Communicate a shared vision

• Hire, develop, and retain employees based on competencies

• Use meaningful performance management systems

• Support and reward teams

• Use employee input

• Measure effectiveness