PAgency Introduction/Review
According to the agency’s website, the mission of the Department of Housing and Urban
Development “is to create strong, sustainable, inclusive communities, and quality affordable homes for all” (performance.gov, 2014). Established by the United States Congress in 1965 as an Executive, Cabinet-level agency, the Department of Housing and Urban Development (HUD) has the following responsibilities:
• Facilitate and promote redevelopment and growth in the urban areas of the U.S.
• Implement and oversee Federal activities that directly affect housing and urban development.
• Prepare and provide all necessary technical assistance and information to all governments at the local level, with regard to the development of solutions to community level and metropolitan problems.
• Foster and encourage the most effective and efficient regional cooperation in devising, implementing, and conducting community and metropolitan projects and programs.
• Engage and foster cooperation and with private enterprise to further the objectives of HUD.
• Devise and implement ongoing studies, which are comprehensive in nature, and subsequently make results available to agencies within the field of housing and urban development (performance.gov, 2014).
Values, Policies and Practices
From its inception, HUD’s early vision was based on three strategic goals for human capital:
1) Mission-focused agency
2) High-quality workforce
3) Effective succession planning
Moreover, HUD reflected the atmosphere within the agency as “At HUD, we value our
employees.” The department added, “We clearly recognize that our employees are the critical
component in fulfilling HUD’s mission to increase homeownership, support community development, and increase access to affordable housing free from discrimination. Our employees continue to believe in our mission, have a strong commitment and sense of purpose in their work, and are enthusiastic about working at HUD” (HUD, FY 2003 – FY 2008).
The programs that operate under the auspices of Housing and Urban Development are both numerous and extensive in nature. The breakdown of the major programs includes, Community Planning and Development, Federal Housing Administration (FHA), Public and Indian Housing, Fair Housing and Equal Opportunity, Policy Development and Research, Government National Mortgage Association (Ginnie Mae), Office of Housing Counseling, Office of Sustainable Communities and a number respective sub-programs that operate under the umbrella of the larger categories (HUD, 2015). Clearly, HUD and its branches hold a great deal of responsibility for addressing the needs of American citizens.
Problem Identification
In his article from November of 2014, Rosiak reports that HUD has 7,400 tenured employees. Over the past year, it is estimated that only five HUD employees were terminated, suggesting that even if the workers are not stellar in nature, HUD rarely fires anyone. Given that some 4,200 people employed by HUD are estimated to be making six-figure salaries, one cannot help but have difficulty reconciling the practices going on at the housing department (Affordable Housing Finance, 2012). Rosiak was fortunate enough to locate a woman who had been fired in the last year. Without revealing any identity, another longtime HUD employee offers this observation, “There is a pervasive tolerance of low, or no, standards. Many employees do little or no work and management does nothing about it,” (Rosiak, 2014).
Another practice emerged and created one more battle within HUD, which relates to the way in which the agency “was obsessed with increasing the number of minorities who worked there, even if it meant hiring unqualified individuals or keeping them in their jobs even if they didn’t perform” (Rosiak, 2014). But, to be clear, the problems within HUD cannot be ascribed to any one person or any single group. The problem is a result of, as Rosiak sees it, “A culture of mediocrity in which it’s enough to disburse federal grants while doing minimal due diligence” (2014). Practice of this nature creates a less than efficient work environment and is a mindset that is enabled, allegedly, by HUD’s mid-level management.
Moreover, the problems with HUD’s operations can be traced back to the early 1990s, if not before, a situation that stirred up “congressional threats of extinction” (Curhan, 1995). In response to pressure being put on HUD, the Department committed to reinventing itself. Curhan writes, “HUD outlines its reorganization plans in the 1994 ‘Reinvention Blueprint,’ and the 1995 ‘HUD Reinvention: From Blueprint to Action’” (p. 239), with its intent to ‘implement aggressive reforms.’ The opening chapter in HUD Reinvention: From Blueprint to Action starts with this excerpt:
More than any other Federal agency, the U.S. Department of Housing and Urban
Development (HUD) is defined by its relationship with communities across the Nation. Everything HUD does… is geared towards supporting the development and maintenance of healthy, thriving communities of opportunity (HUD, 1995, p. 11).
Given such goals and responsibilities, the HUD Blueprint suggests that the effectiveness of HUD’s has experienced a disconnect, essentially being charged with a significant range of responsibility, despite HUD being one of the smallest among Federal Government agencies. The report continues, “The nature of those responsibilities also tends to make HUD’s staff passive recipients of information and applications rather than true partners for change in communities” (p. 11).
In February of 1995, the extent of HUD’s problems became the focus of the United States General Accounting Office’s (GAO) High-Risk Series. This series consisted of a review and report task that examined different federal programs, which were considered high-risk, based on the fact that the agencies in question seemed “especially vulnerable to waste, fraud, abuse, and mismanagement” (GAO, Bowsher, 1995). Indeed, the scrutiny of HUD had been initiated in January of 1994 (Bowsher, 1995). The GAO report highlighted four significant deficiencies demonstrated by HUD, which had been identified as ‘long-standing department-wide.’ The deficiencies are excerpted below from the GAO report.
• Weak internal controls: These issues had created fraud, abuse, mismanagement, and waste that were embarrassing for the department and the administration. Additionally, inadequate monitoring systems associated with major contract operations resulted in the theft of millions of dollars by private real estate agents; agents retained the profits of FHA-owned property sales instead of submitting the fund to the Treasury.
• An ineffective organizational structure: The agency’s headquarters, 81 field offices, and 10 regional offices experienced poor communication and misunderstanding that became a fundamental problem. Overlapping of tasks as well as ill-defined responsibilities led to fragmented services and conflicting duties. Each group (headquarters and field office) blamed each other for the failures of the program.
• An insufficient mix of staff with the proper skills: With the overall lack of clarity and direction, HUD experienced a 25% decrease in staff, which went from 17,041 in 1980 to 12,823 in 1993. Inadequate resources and staffing have greatly interfered with fundamental activities of the FHA. The lack of staff with the proper qualifications combined with financial and management information systems created a widespread program failure.
• Inadequate information and financial management systems: HUD lacked integrated, effective, and reliable information and financial management systems. Moreover, the efforts by HUD to correct this problem “have been impeded by ineffective planning and management oversight” (GAO, 1995).
In the decade that followed the 1995 report, the GAO has continued to monitor HUD as the agency has continued over the years to work towards meeting the requirements for compliance set by the GAO. Subsequent updated reports have been published periodically, which reflect that HUD has met certain required standards, but also needs to continue to work on other problems within the agency.
Clearly, as described, HUD faced numerous challenges, criticisms, and was the focus of critical scrutiny from the early 1990s. Following up on the needed changes, HUD’s Chief Human Capital Officer issued a statement, which is excerpted as follows from the HUD Revised Human Capital Plan, FY08 – FY09:
Over the past decade, HUD has significantly improved the effectiveness of its program delivery and results, through an improved organization and alignment of its operations and staff resources, increased automation of business processes, and more efficient use of a reduced workforce. In 1994, HUD was the only cabinet-level agency to be placed on the Government Accountability Office’s (GAO) high-risk program watch list in its entirety; GAO attributed HUD’s unique distinction to an ineffective organizational structure, resource management deficiencies, and systemic weaknesses that precluded HUD from effectively mitigating high-risks in any of its core program areas. In addition, budget cuts have reduced HUD’s workforce from its 1994 level of 12,748 to the 2008 level of 9,262. To address GAO’s high-risk agency issues, and the reduction of its workforce, HUD has undergone a number of organizational, functional and systemic changes to more efficiently and effectively deliver its programs with available resource levels (HUD Revised Human Capital Plan, FY08–FY09).
Outcomes
As noted, periodic updates have been issued that reflect HUD’s efforts to become fully compliant. And while certain aspects have been addressed, some in their entirety, the GAO updates continue to cite HUD for what appears to be one of its weakest components, namely, Strategic Human Capital Management. For example, the 2001/2002 report provides this assessment:
As we reported in July 2002, human capital management is the most pressing cross- cutting management challenge facing HUD. The need for HUD to recruit and hire
is exacerbated by the upcoming wave of potential retirements that HUD faces. More than half of HUD’s professional workforce (staff in grades GS 9 through 15) will be
eligible to retire by August 2003. HUD has done little outside hiring in the past decade
(GAO, 2002, p. 74).
From reading the literature, it seems that HUD has been able to correct specific issues related to aspects of the housing programs. What they have continued to struggle with are the issues with their own human resource personnel.
In 2007, the Office of the Inspector General issues an Audit Plan for the Department of Housing and Urban Development. After years of dedicated effort, which was characterized by the OIG as resulting in significant financial and management reforms, HUD was removed in January 2007 from GAO’s “high risk” list. This represents the first time in 13 years that HUD was not considered high-risk. HUD still has a number of aspects of their program that require improvement but, given the progress made on the most difficult issues, the OIG is determined to continue working the HUD (OIG/HUD, 2007, p. 4).
Given the literature about HUD and its multi-year struggle with improving their
strategic human resource management problems, it raises an interesting question. Are there likely to be significant differences between how human resource management is conducted in business and corporations that make such issues less difficult than to the extent that they arguably affect government agencies, such as HUD? In an article from 2002, Tompkins addresses this question, suggesting that business and personnel policies and practices are almost second nature to corporations. Perhaps, as Tompkins points out, government agencies have been somewhat lagging behind in appreciating the fact that “human resources are the key to success in both public and private organizations” (Tompkins, 2002, p. 95). There is a main distinction, as Tompkins contends, “Government agencies rarely operate in competitive markets and thus do not develop business strategies in the same sense that private organizations do. And because they function within larger systems of authority, they do not enjoy the same degree of autonomy that private organizations do to alter their personnel policies or provide performance-based incentives to employees” (Tompkins, p. 95). If public agencies are to make use of the business approach to strategic human resource management, it needs to be done in a different manner, which is likely to require making changes in design that are suitable to the profile of public agencies. Also, once the approach has been adjusted, the means of implementing the strategies will also have to be somewhat unique to the respective public organization.
Perhaps one of the biggest influences in public agencies is the network of authorities in which they are embedded. When public organizations are working on strategies, there are a number of elements that come into play, which are not necessarily relevant to corporations. Tompkins explains:
Whereas business executives are relatively unconstrained in making strategic decisions, the constraints encountered by public administrators often cause them to make strategic choices other than those they believe are best suited to mission attainment (p. 101).
A public organization is likely to have to decide between competing messages that may be political, economic, or relationship oriented in nature.
Exploring the differences between business and public organizations and human resource management Wechsler and Backoff engaged in analyzing state agencies in Ohio, which resulted in the emergence of three basic patterns:
Developmental strategies: In this mode, strategies are crafted in order to strengthen and enrich the status of the organization, its resources, and it ability to develop positive plans for the future. According to Wechsler and Backoff, “ The strategy is based on an awareness of and attention to external actors and forces, but the impetus for strategic action is internal, as is the locus of strategic management control” (1986, p. 323).
Political strategies: Strategies of this type can be represented in more than one form. For example, when there is a change in environmental conditions, a new strategy surfaces in order to accommodate a change to a new or different balance of power among external influencers, thus limiting pressure for change within the organization.
Protective strategies: For this example, Wechsler and Backoff focused on the Department of Public Welfare. They note, “A hostile and potentially threatening environment, combined with limited organizational capacity, produces the protective strategy. This strategy seeks to accommodate strong external influence, while maintaining the organizational status quo” (p. 324).
Reflecting on human resource management in public organizations in 2015, Berman, Bowman, West, and Van Wart emphasize the significance for managers to be highly aware of how trends in the environment of government agencies can have a powerful impact on the manner in which personnel decisions are made. The following elements will be reviewed briefly as having the potential to influence human resource management:
• Changing workforce: Described as becoming both “grayer and younger,” the situation as it currently stands sees the Baby Boomers retiring, as there is also an increase in the age of experienced workers and managers. Despite a need for their shoes to be filled immediately, Generation X and the New Millennials may not be ready for the challenge. It is speculated that newer generations are likely to change jobs and not show the kind of loyalty that workers from previous generations had.
• Declining confidence in government: Faith in the government has been experiencing a relatively steady decline, except for a period of time following the 911 terrorist attacks. Although the federal government seems to be worth of less confidence than state and local, the latter are also declining. This is likely to result in an erosion of “the morale of the civil service.” If the public sector is to build their human resources reserve, re-establishing trust is going to be a key factor for public agencies.
• Declining budgets, leading to increased use of alternative work arrangements: Between tax limits, political pressures regarding spending, and budget cuts, the impending exit of Baby Boomers from the workforce is creating attention to work arrangements that are alternative, as a means of keeping costs down.
• Rightsizing and downsizing despite population growth: In 2012, the U.S. federal civilian workforce was 2.1 million people, which is actually 100,000 less than the number n 1946. This has resulted due to periodic downsizing over time. Downsizing of this nature, however, has left managers with added burdensome duties and responsibilities.
• Demands for productivity gains: Every level of government wants to improve performance levels and productivity, but without any increase in costs. It is estimated that only a third of government employees saw their jobs as having any incentive or awards program that might stimulate a stronger effort to put forth their best efforts.
• Emerging virtual workplaces and virtual government: Innovative organizations are able to come up with increasingly flexible working arrangements, thanks to the information technologies. This trend not only has the potential to alter employer and employee relationships, it also has an impact on the interaction between citizens and government.
• Decentralization and increased managerial flexibility: Berman et al. explain, “Recent civil service reforms at all levels of government have loosened restrictions and increased managerial discretion over matters of pay, hiring, discipline, and termination” (p. 16).