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New Organizational Health and Performance Directive for Federal Agencies: A Fertile Field for Research in Employee Engagement and Leadership Development

The views expressed are those of the author and do not necessarily reflect the views of ASPA as an organization.

By Bill Brantley
May 5, 2023

The Office of Management and Budget (OMB) recently released a memo on Measuring, Monitoring, and Improving Organizational Health and Organizational Performance in the Context of Evolving Agency Work Environments. The memo directs agencies to improve organizational health and performance when enhancing work environments. Federal agencies will develop Work Environment Plans describing how agencies will address organizational health and performance. Agencies are directed to “[e]stablish routines to assess and optimize such changes, monitoring progress and diagnosing issues related to organizational health and organizational performance on an ongoing basis.” Agencies are also to “[i]dentify a set of indicators, which may be adjusted over time, that each agency-identified major operating unit will use for measuring, monitoring, and improving organizational health and organizational performance.”

My Research Into Organizational Health and Agility

Between 2013 and 2015, I worked as an analyst for the Office of Personnel Management’s (OPM) Strategic Workforce Planning Group. I was tasked with determining how to measure the organizational health of a government agency. This assignment led to an extensive study of the organizational health concept, which branched into the organizational agility concept. At the same time, I was working on employee engagement research. Because of our group’s work on revising the government-wide Human Capital Framework (a collection of best practices in public agency human resource management, I began to see connections between organizational health, organizational agility and employee engagement. A common factor in all three areas is the central importance of leadership. I asked what type of leadership is needed to create and lead a healthy and agile organization with high employee engagement while successfully delivering its mission.

I continued the research after I left OPM. Over the years, I’ve refined the concepts of organizational health and agility with a focus on the role of leadership. I developed a theoretical framework, the Agile-Healthy-Attractive (AHA) Organization, informed by Josh Bersin’s Simply Irresistible Organization framework, McKinsey Consulting’s Organizational Health Index and Worley, Williams and Lawler’s Organizational Agility framework. Each framework has similar elements and factors to the other frameworks (although the frameworks may use different terms and definitions), with leadership permeating each framework.

I was influenced by Dinh, Lord, Gardner, Meuser, Liden and Hu’s (2014) article in The Leadership Quarterly, “Leadership Theory and Research in the new millennium.” They conducted an “extensive qualitative review of leadership theory across ten top-tier academic publishing outlets” (p. 36) to examine 66 leadership theories. Their findings illuminate the need for leadership theory to focus on how leaders shape organizational processes and are shaped by organizational processes. “As a field, we have amassed an extensive body of research and theory that has solidified the importance of leadership in organizational science. However, we also know much more about the outcomes of leadership than the processes that affect the emergence of these outcomes” (p. 55).

My research uses selected questions from the Federal Employee Viewpoint Survey (FEVS) to build a Leadership Communication Index that I compared to OPM’s Employee Engagement Index. The hypothesis is that there is a positive correlation between employee engagement and good leadership communication. I also postulate that good leadership communication drives positive organizational outcomes by providing internal alignment of mission with agency operations. Good leadership communication also significantly impacts the quality of execution by employees and the building of the agency’s capacity for renewal.

Establishing the Links Between Employee Engagement, Leadership Development, and Organizational Health and Performance

“OPM recently developed a Performance Confidence Index that measures ‘the extent to which employees believe their organization has an outstanding competitive future, based on innovative, high-quality products and services that are highly regarded by the marketplace.’ The Performance Confidence Index on the OPM FEVS is a combination of five items assessing employees’ perception of their work unit’s ability to achieve its goals and produce work at a high level and, ultimately, provides insights into organizational health and organizational performance.”

Along with the FEVS items, agencies are encouraged to develop other organizational health and performance measures. The OMB Memo lists many indicators in Appendix 1. I see a big challenge in finding a good set of measures that directly connects the measures and a given agency’s organizational health and performance. The chosen measures must also align with other concerns, such as the agency’s ability to provide good customer service while being effective and efficient in its operations. What is missing in the measures are ways to assess agency leadership—especially senior management.

There are mentions of improving employee engagement in the OMB Memo. It would help the agencies to create stronger connections between leadership development and employee engagement to improve organizational health and performance. Shuck and Herd (2012) made a case for the connection between employee engagement and leadership development, and further research is needed to demonstrate the connections. As federal agencies implement the OMB Memo, they can provide the data to study the links between leadership, engagement and organizational health and performance.

Author: Bill Brantley teaches at the University of Louisville and the University of Maryland. He also works as a Federal employee for the U.S. Navy’s Inspector General Office. All opinions are his own and do not reflect the views of his employers. You can reach him at https://www.linkedin.com/in/billbrantley/.

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