Strategic Human Capital Management: The Critical Link

By Walker, David M. | The Public Manager, Spring 2000 | Go to article overview

Strategic Human Capital Management: The Critical Link

Walker, David M., The Public Manager

Designing, implementing, and maintaining effective human capital strategies will be critical to enhancing the goal of maximizing the performance and ensuring the accountability of the federal government.

By now, all the anticipation and festivities marking the new millennium are behind us. But federal managers may feel--and justifiably, I think--that the new beginning in federal management practices really arrived a decade ago--without all the hoopla but with significant implications for the way the federal government works. The year 1990 saw the passage of the Chief Financial Officers Act, the first in a series of landmark management reforms intended to steer federal agencies toward a more businesslike, performance-oriented approach to fulfilling the government's commitments to the American people. The reforms of the 1990s signaled the arrival of a new era of accountability for results--an era in which it would be unacceptable for federal agencies merely to continue business as usual.

The new reforms addressed federal financial management, information technology management, and results-oriented goal setting and performance measurement. Together they constitute most of the essential--and mutually dependent--elements of the modem performance management model. Still, one critical element of performance management has yet to find the broad conceptual acceptance or political consensus needed for fundamental reform to occur. That missing link is "people management," or what we at the General Accounting Office (GAO) call human capital management.

The fact that a consensus on reforming the government's human capital systems has yet to emerge is not surprising, considering that attention to workforce issues has rarely been a top priority in government. Workforce planning traditionally has been glossed over by federal agencies, and has only occasionally been a part of their strategic and programmatic approaches to mission accomplishment. But the environment in which the federal government now operates is changing at a rapid pace--technology is merely one prominent example--and with these changes, profound questions are emerging about the inherent role of government; the public's expectations for government; and the appropriate missions, strategies, and skills that federal entities must have to meet future demands. Those who run federal agencies must recognize that their people are a key asset if they hope to find workable solutions and respond appropriately to these emerging questions. An agency's people will define its character and its capacity to per form. Federal agencies that do not strive to enhance the value of their people--their human capital--do so not just at their own risk, but at the taxpayers' risk as well.

We at GAO use the term human capital because--in contrast to traditional terms such as personnel and human resource management--it focuses on two principles that are critical in a performance management environment. First, people are assets whose value can be enhanced through investment. As the value of people increases, so does the performance capacity of the organization, and therefore its value to clients and other stakeholders. As with any investment, the goal is to maximize value while managing risk. Second, an organization's human capital policies must be aligned to support the mission, vision for the future, core values, goals, and strategies by which the organization has defined its direction and its expectations for itself and its people. An organization's human capital policies and practices should be designed, implemented, and assessed by the standard of how well they help the organization pursue these intents. As we look ahead, managing people strategically will be all the more important as gover nments confront the emerging issues of the new century.

New Century, New Challenges

The new century finds the United States prosperous and at peace. But the world still harbors challenges that will clearly place ever-greater demands on our energies and ingenuity. …

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