No management issue facing federal agencies could be more critical to their ability to serve the American people than their approach to strategic human capital management, including attracting, retaining, and motivating their employees. High-performing organizations in the private and public sectors have long understood the relationship between effective "people management" and organizational success. However, the federal government, which has often acted as if federal employees were costs to be cut rather than assets to be valued, has only recently received its wake-up call. As our January 2001 Performance and Accountability Series reports made clear, serious federal human capital shortfalls are now eroding the ability of many federal agencies and threatening the ability of others to economically, efficiently, and effectively perform their missions. ^[3] The problem lies not with federal employees themselves, but with the lack of effective leadership and management, along with the lack of a strategic approach to marshaling, managing, and maintaining the human capital needed for government to discharge its responsibilities and deliver on its promises. ^[4]

All five of the agencies we reviewed have experienced challenges in managing their human capital. Each has implemented management changes in response to the challenges they face, including implementing strategies to empower and involve employees.

FAA faces challenges, including the need to enhance communication and teamwork, and to provide employees with the training and skills they need to operate effectively. For example, we have reported on FAA's implementation of management reforms, including delegating authorities to teams, to improve its rulemaking processes.