Organizational Problem #2 -- Regional Leadership Style and Organizational Culture

The problem in Trenton was resolved by the direct intervention of the Region II RIG. Specifically, he identified the problem as being caused by the toxic nature of the rivalry between the two Trenton managers in conjunction with the prevailing custom within the OIGs that audit teams always be assigned to one manager for the long-term. Generally, that is a beneficial arrangement because it promotes long-term relationships between supervisors and subordinates and enhances their efficiency as teams. In this particular case, the RIG realized that the prevailing custom leant itself to well to the climate of antagonism and to a competition between the audit teams of the respective managers that was neither productive nor conducive to the optimal organizational climate within the office. The RIG imposed an audit team rotation rule according to which the RIG would assign the audit teams to one manager or the other for every project. The principle purpose was to prevent the audit teams from developing any allegiance to one manager or the other. Furthermore, to start the office out from a new neutral position in this respect, he mixed up the existing audit teams themselves to ensure that any relationships and (especially) inter-team rivalries that had developed previously were extinguished. Finally, the RIG also met privately with all of the senior auditors on each new audit teams and with the two managers and instructed the senior auditors to report any inappropriate rivalry or antagonism promoted by either manager and indicated that no reprisals of any kind would be tolerated in connection with those reports. Since that series of changes, the Trenton regional office has not caused any delays or problems in investigation or report generation processes.

Organizational Problem #3 -- Federal Compensation and Employee Motivation

In late 2006, the executive branch of the U.S. federal government authorized a new employee evaluation and compensation scheme (Damp, 2007) that was immediately adopted by DHHS. Specifically, employee evaluations would no longer be limited to the "meets or exceeds expected standards" or "fails to meet expected standards" system. According to the new system, HHS employees (including HHS-OIG employees) are now graded on a scale of "Unacceptable"; "Minimally Successful"; "Fully Successful"; and "Exceptional" (Damp, 2007).

In addition to providing a means for employees to distinguish themselves through high performance, the new federal regulations also authorized financial bonus rewards for employees whose overall performance rating for the entire fiscal year met the "Exceptional" standard. The amounts of those rewards are determined by the agency official in charge (in this case, the RIG) and awarded from any annual budgetary surplus in the agency's fiscal allocations for the previous year (Damp, 2007). As a result, HHS-OIG employees now have...

Previously, the primary incentive of most agency employees was simply to perform well enough to reach the "general working civilian grade" of GS-12, since most of them are hired at the GS-7 to GS-9 grade.
That is because while within-grade salary "step" increases are merely a function of "time in grade" (generally one year), promotions to higher working grades was the only attainable goal for all HHS employees below the supervisory grade of 13 or the managerial grade of 14. Since the available 13 and 14 grades are limited by the needs of the office, promotion beyond Grade 12 is usually coordinated with the expected promotion or retirement of current Grade 13s and 14s. Therefore, most Grade-12 HHS employees would typically coast out their careers unless they had particularly strong aspirations to progress into management. Meanwhile, the backbone of the agency is precisely those Grade 12s.

Since the new employee compensation and evaluation regulations and standards took effect, there has been a marked difference in the performance of HHS employees across the board, but especially among the Grade-12s. First, it is no longer possible to attain the highest recognized level of performance by simply doing average work. More importantly, there is now a financial incentive associated with superior performance since only employees rated "Exceptional" are eligible for end-of-year financial bonuses. Likewise, the new system promotes a beneficial relationship between supervisors and subordinates with respect to career development that is highly conducive to both individual and organizational success (Kinicki & Williams, 2005; Maxwell, 2007). As a result, productivity and employee morale have improved significantly.