Implementation of the
Seven Management
Systems Recommendations
EPA
202/
1991.1
Prepared by the
Management and Organization Division
January 1991
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Go
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~ HEADQUARTERS LIBRARY
£ ENVIRONMENTAL PROTECTION AGENCY
a* WASHINGTON, D.C. 20460
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Purpose
In the late summer of 1990, the Deputy Administrator asked
the Management and Organization Division to evaluate the
status of the seven recommendations identified by the Manage-
ment Systems Review Task Force and outlined in his Novem-
ber 1,1989 memorandum, "Improving EPA's Management
Systems." With this in mind, M&O looked at the seven recom-
mendations to determine whether the recommendations had, in
fact, been implemented and what impact they had had.
Background
The Strategic Activities for Results System (formerly SPMS,
now STARS) and the Action Tracking System (ATS) have
been the subject of frequent review and changes. Both the
1986 review (by the Office of Policy, Planning and Evalu-
ation) and the 1989 report (Management Systems Review Task
Force) identified a number of problems and provided recom-
mendations for improving and strengthening the Agency's
management and accountability systems.
The 1989 Task Force stated "that the strategic planning aspect
of SPMS has been the least effective element of the system to
date....[and has] not conveyed a strong enough sense of the
Administrator's priorities and the Agency's ultimate goal of
maintaining and improving environmental quality." Conse-
quently, the Deputy Administrator adopted seven recommenda-
tions (identified by the task force) to ensure that EPA's man-
agement systems recognize complexity, quality, and environ-
mental benefit in the assessment of Agency performance;
increase the flexibility that Agency managers have in order to
focus limited resources on activities with the greatest impact;
place greater emphasis on measuring results; and create a better
balance between numerical activity tracking on the one hand,
and flexibility and quality on the other.
7 Recommendations
i ne seven recommendations adopted oy tne ueputy Aomin
istrator on November 1,1989 were:
Performance Standards. The Office of Administration
and Resources Management will issue guidance to all agency
managers and supervisors stating that numerical activity
targets should be used as only one of many tools in perform-
ance appraisals. Full attention should be given to quality of
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performance, teamwork, complexity of work, environmental
improvement, identification of problems, and finding ways to
continuously improve performance.
Sunset Provision. All STARS measures will have a
three year sunset provision at which time the continued use of
that reporting measure must be reviewed and justified. OPPE
will coordinate a process with National Program Managers and
Lead Regions to review those measures which will continue to
be tracked and explaining why those being dropped are no
longer needed.
Quarterly AA Memos. Each Program Assistant Admin-
istrator and OE, in close consultation with the appropriate Lead
Region, should produce a brief memorandum each quarter for
the Deputy Administrator, integrating both Headquarters and
Regional perspectives. The principal purposes of these memos
shall be to evaluate national program performanceboth in
advancing long-term environmental protection objectives, and
in improving quality of the tasks performed or environmental
services deliveredand to raise management issues which
require the Deputy Administrator's attention. Numerical
information used in formulating these reports should be drawn
from the STAR System and from program office information
systems, with additional insights drawn from on-site program
reviews.
Quarterly RA Memos. On a quarterly basis, beginning
with the fourth quarter of FY 1989, each Regional Administra-
tor may send a short issues memo to the Deputy Administrator
which describes successes and or problems in achieving re-
gional initiatives as well as other regional needs, such as
headquarters guidance, rulemaking, or other support for re-
gional/state implementation.
Regional Flexibility. National Program Managers
should develop clear guidance detailing explicitly how flexibil-
ity will be built into then- management processes. Regional
and Program officials should continue to develop joint targets
or estimates of each Region's activity levels in support of
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national program objectives through a genuine negotiation
process that recognizes variability among the regions and
states.
Regional Initiatives. By January 1990, Regional Ad-
ministrators should prepare short (no more than 10 page)
summaries of region-specific initiatives to be addressed during
the operating year. These summaries should include initiatives
which involve tradeoffs against national performance targets.
Each Region should prepare milestones or other progress
measures against which they will periodically report to the
Deputy Administrator. These plans will serve as one basis for
discussion with the Deputy Administrator during regional
visits.
Two-Year Freeze. The distribution of resources among
Regions will be frozen at the pro-rata shares in current work-
load models for a period of two years (FY91 and FY92).
Models should be re-run, adjusted or developed only if a new
program element is created, if the Regions and the Programs
agree that the existing model has become obsolete, or if the
total resources in the program change by plus or minus 10%
from the point at which it is frozen. Pricing factors and activity
levels should still be used and updated for budget justification
purposes. This freeze should be evaluated by a joint OPPE/
OARM team at the end of the first year.
Methodology
The study took place from September through November 1990.
M&O collected information through 42 interviews with senior
managers and staff from the Regions, media programs, and
Offices of the Administrator, Policy, Planning and Evaluation,
and Administration and Resources Management. In addition,
M&O held a focus group attended by seven Regional Planning
Branch Chiefs and one manager from the FY90 lead region for
air. Further, M&O analyzed STARS, ATS, and budget data
and documents, as well as SES performance standards. Fi-
nally, M&O attended the annual Regional Planning Branch
Chiefs/STARS Coordinator's Conference. Altogether M&O
talked with 50 Agency senior managers and staff members.
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Contributors Project Team: Michael T. Schumacher
Tyrone D. Wells
Analytical Assistance: Cheryl B. Bentley
Julie Prior-Magee
Ralph J. Rizzo
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1. Workload Models
Findings:
The November 1989 recommendation was to freeze the
distribution of resources among Regions at the pro-rata shares
in the current workload models for FY91 and FY92. Models
would be opened, adjusted, or developed only to the extent
they met a plus or minus 10% requirement. This requirement
subsequently was changed to plus or minus 20% or 20
workyears, i.e., the "20/20" rule. Four models met the require-
ment and were run in FY91. They were: Wetlands Protection;
Coastal Environmental Management; Hazardous Waste En-
forcement; and Enforcement Policy and Operations.
For comparison purposes, FY 1989,1990, and 1991
budget data (final distributions) were examined to show the
trend in regional workyear distribution (see Figure 1). The
FY91 Agency increases, of which about 80% went to the
Regions, resulted from negotiations between EPA and OMB
to support the President's environmental concerns such as
Wetlands Protection, and to implement the Administrator's
environmental themes such as stronger enforcement, pollution
prevention, good science, and State/local government environ-
mental cooperation.
1400 -r
Deputy Administrator's Distribution of Regional Workyears*
Regions | 23456789 10
Fig. 1 * Distribution for FYI99I from DBAs and NPMs Distribution. June 12.1990
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25,
J? Change of DA's Distribution of Regional Workyears
16
Fig 2
4567
11989/90 Si990/91
13
10
Figure 2 shows the percentage change in workyears for
each Region between FY 89/90, and 90/91. The range of the
percentage changes was the same, 6%, for both comparison
periods (1 % to 7% for FY89/90, and 11 % to 17% for FY90/
91). The major difference between the two periods is that more
resources were available to be distributed in FY91. The fact
that the range of percentage changes was the same (6%) for -
both periods is an indication that the workload model freeze
imposed in FY91 did not negatively impact the way resources
were distributed to the Regions.
Given the labor intensive effort to justify and negotiate
changes in the workload models, the potential for "gaming the
system," and the disconnects between the current models and
the Agency's new strategic planning and relative risk direc-
tions, most Regions and Headquarters program offices favor an
indefinite continuation of the workload model freeze. More
than 70% of senior managers interviewed favored an indefinite
continuation of the freeze; less than 1% wanted to abolish
workload models altogether; and the remainder either wanted
an extension of the freeze, more creativity in the models, or
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had no opinion. Managers generally support opening the mod-
els for new programs such as the reauthorization of the CAA,
or if priorities change in old programs like the Combined
Sewer Overflows in the OW Enforcement and Permitting
Program. When the models need to be opened, there is strong
support for an up-front, open meeting between Regional and
Headquarters senior managers to decide on resource distribu-
tion methods.
Some Program officials suggest using either simpler
models based on groupings of like tasks (as opposed to defin-
ing tasks separately), or ones based on priorities identified by
the Regions and States. Officials also suggest that as EPA
moves to coordinate its strategic planning and budgeting
processes, the Agency's pricing factors should be utilized to
cost out the initiatives identified in Regional strategic plans.
Where needed, new pricing factors should be developed for
strategic planning initiatives that are not covered by current
workload models.
Some Regions believe that NPMs and Lead Regions
should jointly assess the impact of the freeze on their programs
and recommend to the DA whether or not to continue the
freeze.
If workload models are run again after FY92, most
Regions believe they should be the ones to determine which
models to open or modify in order to reduce any unnecessary
work.
The Regions want a mechanism to ensure there is
Regional input when decisions are made on allocating Head-
quarters vs. Regional resources.
Most of the Regions and some Program officials be-
lieve the workload models are currently inconsistent with
EPA's strategic planning process. The reason for this inconsis-
tency lies in the fact that the models reflect national priorities
and do not take into account Regional priorities such as com-
parative risk projects and strategic planning initiatives.
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Recommendations: The Task Force report concluded that "management ac-
countability will not be fully effective if the resource allocation
system is unchanged." The workload models were frozen in
response to that Task Force conclusion. The following recom-
mendations provide short and long term options relating to the
freeze on workload models:
Short Term Options
- More than 70% of senior managers interviewed favor
freezing the models indefinitely in light of the disadvantages
outlined in the Findings section. The downside, however, to
freezing the models indefinitely is that over time the workload
does change, and the FY90 base at which the models were
frozen may not be reflective of the change. To balance these
concerns, the workload models not meeting the 20/20 rule
should continue to be frozen for at least another fiscal year
(FY93) beyond the DA's initial recommendation.
- OPPE and OARM must strengthen their relationship
as joint stewards of the Agency's management accountability
systems. To ease the impact of two very confusing and over-
lapping processes on the regions and NPMs, OPPE and OARM
should strive to issue budget and planning guidance in joint
documents.
- Because relative risk studies and strategic plans will
have a significant impact on the Agency's budget direction and
budget priorities, the Comptroller's Office needs to assume a
more active and visible role in the Agency's planning process.
- Following the distribution of FY93 resources in May
1992, the NPMs and Lead Regions should jointly assess the
impact of the freeze on individual workload models and recom-
mend to the AA/OARM and Deputy Administrator whether or
not to continue the freeze. This assessment and final decision
should be completed no later than March 1993. While the
freeze is in place, a senior managers' forum such as the Easton
Planning Conference should be carried out to decide on re-
source distribution methods.
Long Term Option(s)
- Alternatives to the models should be developed.
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Despite the overwhelming response tor continuing the freeze,
coupled with the need to improve the linkages between the
strategic planning and budgeting processes, OARM and OPPE
should co-chair a workgroup to find ways to reconcile the two
processes. The workgroup should have the active participation
and support of the DAAs.DRAs, NPMs, and SBOs. The
workgroup should begin its assessment and alternatives analy-
sis immediately in order to have a workable, agreed-upon
alternative to the models in place by the FY-94 planning and
budget cycle. The workgroup should begin with an assessment
of the actual Congressional limitations imposed so that it is
clear how much flexibility is available within the current
political framework. Policy issues for the workgroup to con-
sider include: the feasibility of changing statutory or political
limitations on the allocation and use of resources; the appropri-
ate use of resources saved, e.g., toward increased flexibility;
and the design approach of the models themselves-e.g.,
whether they should be designed around each NPM's 4-year
goals rather than by program element, around a region's indi-
vidual strategic goals, or as cross-media models.
If the workgroup determines that there are no viable
alternatives to the workload models and the models are contin-
ued, the following options should be considered:
use the models as a tool to link strategic planning to the
budget process by applying pricing and workload factors to de-
termine resource needs. Use the models to also allocate re-
sources to the Regions;
include the DRAs and DAAs in deciding which models
to revise (presently the SBO, OD/NPM, and Lead Media
Region decide which models to revise); and
if new strategic plan-based models are developed,
consideration should be given to an appropriate mechanism for
reviewing the models or sunsetting the models, as is being
done with STARS measures. Under such an approach, each
year some fixed percentage (e.g., 15-20%) of the models would
come up for review.
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2.. Sunset Provision
Findings:
The November 1989 recommendation was to give each
STARS measure a three-year sunset provision, at which time
the continued use of that reporting measure must be reviewed
and justified by OPPE, the NPM, and the Lead Region.
Most interviewees felt that STARS measures were
important indicators of performance and should be retained.
However, most also felt that STARS contains many extraneous
measures which are unnecessary and that the Agency must be
more selective about what is tracked in STARS and over what
period of time. Most interviewees felt that there is very little
difference between SPMS and STARS at this point. However,
they acknowledge that STARS will become a more meaningful
management tool when measures have been targetted for elimi-
nation or sunsetting; and when the system includes environ-
mental indicators and other measures of overall environmental
success.
OPPE was given the task of coordinating the process
between the NPMs and Lead Regions to review the STARS
measures. As of yet, there is no documented agreement or
process in place. Further, there is no clear criteria or plan for
whether the sunset measures should be staggered and when the
actual clock begins. Although Task Force members informed
M&O that they intended to have the sunset clock begin with
FY90 measures, OPPE states that the clock began with FY91
measures. Since FY91 targets were not set until October 1990
(See Appendix B), it is too early to determine the effectiveness
of this recommendation. October 1992 would mark the earli-
est possible expiration of STARS measures.
The Regions and Program offices are concerned that the
lack of up front communication from OPPE in this area may
result in future hardships due to additional and unknown
requirements they will have to fulfill. All agreed, however,
that the sunset provision recommendation is necessary and a
positive tool in reducing or limiting the number of measures.
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Recommendation:
OPPE needs to take steps to implement the initial Task
Force recommendation. We recommend that OPPE immedi-
ately assess which measures should be deleted from STARS,
and develop a "sunset plan." The sunset plan should use the
DA's November 1989 decision as the starting point for implem-
entation, and should include a timetable for each Regional
STARS measure to sunset, groundrules for negotiating STARS
measures between the Regions and NPMs, and the criteria and
process for review and justification of measures remaining in
STARS. This material should be disseminated and agreed
upon with the DRAs and the NPMs by May 1991 to mesh with
the planning and budgeting processes for the outyears. OPPE
should evaluate the sunset provision after its first three-year
cycle to determine whether or not the number of measures is
actually being reduced, and to assess the quality and impact of
new measures being added to the system.
3. Quarterly RA
Memo
Findings:
The November 1989 recommendation was to submit to
the Deputy Administrator a quarterly memo from the Regional
Administrator describing successes and/or problems in achiev-
ing Regional initiatives, other Regional needs, or other support
for Regional/State implementation.
« Four (4) separate guidance documents were issued for
the quarterly RA memos (two from the Deputy Administrator,
one from OROS/LR, and one from OPPE). This caused confu-
sion in the regions and inconsistencies in the quarterly memos'
purpose, format, and content The Regions believe it is Head-
quarter's responsibility to issue proper guidance and assure that
the process works. Appendix A illustrates the sequence of the
four guidance documents.
M&O's review of the memos, as well as comments
received during the interviews, reveal that the memos have
evolved into a narration of accomplishments rather than a
candid assessment of what is and what is not working in the
Regions. This has caused frustration and confusion about the
purpose and value of these memos.
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* The intended "open" distribution of the memos pre-
vented Regions from using the memo as a mechanism to
communicate sensitive matters to the DA. However, the actual
distribution of RA memos among the program offices and the
Regions was minimal at best. Hence, only the DA, OPPE and
a few Regional people got to see these "watered-down"
memos. Neither OROS/LR, OPPE, or the DA's Special Assis-
tants have assumed the responsibility of assuring the distribu-
tion of the memos.
The Regions expressed strong resentment about the
memo becoming a "Christmas tree." They cited the addition of
new requirements, such as the OE "Mid-Year Performance Re-
view," as inappropriate add-ons which also contributed to the
excessive length and bureaucratic content of the documents.
Although the Task Force never specifically called for
feedback to the Regions on their memos, feedback became an
expected norm. On average, it took two to four months for
feedback to the RAs. The delayed feedback contributed to the
RAs not using the memos to discuss serious issues. By the
time the Regions would get a response, the situation would
have changed. Therefore, most RAs decided to address serious
issues in their telephone calls or visits with the DA.
Despite the above, the Regions agreed that the memos
could become a good tool for communicating with the Deputy
Administrator. A frequent comment was that the DA's hand-
written notes showed he takes a personal interest in the issues.
All the interviewees expressed interest in improving the quar-
terly memos.
Subsequent to instituting the quarterly memos, the DA
instituted quarterly meetings with the RAs, similar to the regu-
lar meetings conducted with the AAs. The meetings are in-
tended to augment communication and involve the Regions
more in planning, agenda setting, and implementation. There
is some question about whether these meetings supersede the
need for the quarterly memos; and/or how to best use the two
vehicles to the maximum advantage.
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Recommendations: Although the memos are submitted quarterly, their
format and content fall short of achieving the true spirit of the
reform. The following recommendations are intended to
strengthen the memos as a communication tool between the
RAs and the Deputy Administrator:
We suggest that all guidance on purpose and format
come from a single source, preferably OPPE. OPPE should
first clarify directly with the DA what he wants to get from the
memos, how the content differs from the focus of his meetings
with the RAs, how he intends to use the information, and the
need or desire for some form of feedback. OPPE should elicit
the D A's feelings and direction with respect to the level, type,
frequency, and length of the reports, including his program-
matic and political criteria. The DA should not be expected to
read about every issue and accomplishment in each region but
should be asked to articulate the kinds of issues and events he
is interested in. This information should be clearly communi-
cated to and discussed with the regions to assure their full
understanding and ownership. M&O suggests that a primary
purpose of the memo should be to bring to the Deputy
Administrator's attention, Regional issues, priorities, solutions,
and initiatives which might not otherwise be available to him.
The format needs to produce a memo that highlights priority
items immediately, in a way that is sensitive to the DA's
schedule and interests. Once the DA's direction is clearly
articulated, OPPE should evaluate the content of the memos
and give clear and direct feedback to regions who continue to
submit accomplishments or "Christmas tree" reports.
Quarterly memos should not be used to elevate sensi-
tive issues because of the sensitivity involved, the time lag for
response, and the potential for broad distribution. Meetings
or conference calls are more effective for discussing issues of
concern.
Feedback conveys to the Regions the DA's interest and
support for their role in accomplishing the Agency's environ-
mental agenda. However, the format and content of feedback
should be based on the DA's articulated purpose and use of the
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memo. Feedback could be provided through a variety of
mechanisms, including verbally by phone or during regional
visits, by having the DA note comments directly on the incom-
ing document, or by providing a formal written response. The
feedback mechanism should be determined based on the DA's
style, its value to the Region, and its ability to be timely. If the
DA determines that two-way feedback is a function of the
memos' purpose, then timeliness is essential to the Regions
and to the memos' success. When written feedback is used,
response time should be kept to one month. This will allow the
Regions to respond to questions or requests in their next quar-
terly memo if necessary.
The Regions should send their quarterly memo to the
DA and a copy to the A A/OPPE. OPPE should, as soon as
possible after all Regional memos are received, batch and dis-
tribute copies to all Regions, OE, OROSL/R, and the Program
Offices. We also recommend that all offices and Regions
ensure that significant issues from the memos received from
other offices be communicated to the appropriate staff within
their office.
4. Quarterly AA Memo
Findings:
The November 1989 recommendation was for the Pro-
gram AAs and AA/OE, in consultation with the appropriate
Lead Regions, to submit to the Deputy Administrator each
quarter a brief memorandum that integrated both Headquarters
and Regional perspectives on national program performance.
* Like the RA quarterly memos, guidance on format and
content from OPPE was not clear to the AA's staffs, because
the guidance varied in terms of format and did not address the
DA's initial recommendation. This, combined with the breadth
and complexity of the programs, led to memos becoming
simply "show-and-tell" pieces. In addition, the Program
offices are generally not interfacing with the Lead Regions to
integrate both the Headquarters and Regional perspectives in
their memos. Although not the original intent of the AA
memos, the Programs do believe that the memos serve a
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useful function by documenting problems, and by presenting
information not captured in the 90-day, Biweekly, and White
House reports, or in the biweekly meetings between the AAs
and the DA.
Recommendations: The following are intended to strengthen the memos as
a communication tool between the AAs and the Deputy Ad-
ministrator
Like the Quarterly RA memos, all guidance on purpose
and format should come from OPPE. OPPE should clarify
directly with the DA what he wants to get from the memos; for
instance, how the content differs from his regular meeting with
the AA's, how he intends to use the information, the length of
the report, and the need or desire for some form of feedback.
The DA should clearly articulate whether the memo must
integrate HQ and Regional perspectives. M&O suggests that a
primary purpose of the memo should be to provide periodic
(not less than quarterly) evaluations of national program per-
formance as well as bring to the Deputy Administrator's atten-
tion key issues and accomplishments that do not overlap items
already mentioned in the Biweekly, 90-Day, or White House
reports. The format needs to produce a memo that highlights
priority items immediately in a way that is sensitive to the
Deputy Administrator's schedule and interests.
If the DA decides that the memo should integrate HQ
and Regional perspectives, NPMs have the responsibility for
soliciting input from the Lead Regions to reflect both Head-
quarters and Regional perspectives on national program per-
formance.
Each media AA should send their quarterly memo to
the DA and a copy to the AA/OPPE. OPPE should, as soon
as possible after all media AA memos are received, batch and
distribute copies to all program media offices, OE, OROSL/R,
and the Regions. We also recommend that all offices and
Regions ensure that significant issues from the memos received
from other offices be communicated to the appropriate staff
within their office.
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5. Regional Initiatives
Findings:
The November 1989 recommendation was to prepare
short summaries of Region-specific initiatives which involve
tradeoffs against national performance targets. These initia-
tives become important as they represent the commitment to
cross-media efforts that dovetail with relative risk and strate-
gic planning priorities.
The process for collecting and utilizing these summa-
ries has not been managed well. The Regions were asked to
submit initiatives by January 1990 without receiving any prior
guidance. OPPE issued guidance in January 1990 after ques-
tions were raised about the request. Some Regions had submit-
ted their initiatives by then and were asked to redo their
initiatives to comply with the new guidance. This caused
frustration and confusion.
Since the initiatives were redone and submitted to
OPPE, the Regions have not had any feedback and feel that
their initiatives have fallen into a "black hole." It was unclear
to the regions whether the lack of feedback implied acceptance
or rejection of the initiatives. This has created a feeling among
the Regions that their initiatives have become an additional re-
porting requirement stacked onto the already heavy reporting
burden they carry.
The timing for preparation of the summaries does not
mesh with the strategic planning process. The summaries were
called for three months after the Regions would have negoti-
ated their FY90 STARS commitments and developed their
workplans. The Regions believe that the Regional initiatives
should evolve from the strategic plans and thus be tied to the
budget process rather than be a separate exercise.
There is disagreement among the Regions, as well as
between the Regions and OPPE, about how/whether to track
the initiatives. Although the OPPE guidance called for track-
ing regional initiatives in ATS, the Regions were instructed by
OPPE to report progress on their FY90 initiatives through the
quarterly management memo so as not to further burden the
Regions. Because of the loose nature of the quarterly
memos, many regions do not feel that they get "credit" for their
regional initiatives.
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OPPE asked for submission of FY91 initiatives by
June 1990. This did not happen because there was no follow-
up on the FY90 initiatives or guidance on the number of initia-
tives, content, or format for the FY91 initiatives. The Regions
expected OPPE to issue guidance for the FY91 initiatives to
avoid repeating the problems with the FY90 exercise. OPPE
decided not to issue guidance for FY91 initiatives and to
correct the timing by postponing a new round of initiatives
until those regions which had not completed their comparative
risk projects have done so. The new timeline for Regional
Initiatives is set to follow the Administrator's February 1991
Spring Planning Meeting and will be based on OPPE's com-
pleted review of the Regional strategic plans.
Recommendations:
OPPE needs to integrate Regional initiatives with the
development of STARS commitments, Regional workplans
and budgets in the planning process by issuing guidance on
their purpose/content/format; formalizing a tracking mecha-
nism; and adjusting the planning cycle to coordinate initia-
tives, STARS commitments, strategic plans, and budgets in a
logical and timely sequence.
OPPE should also formalize how initiatives will be
tracked since they represent the Regions' commitment to re-
solving cross-media environmental problems and must be
tracked in a vehicle that reaches the DA's attention. Options
for tracking include STARS, ATS, individual regional tracking
systems, or quarterly memos.
6. Regional
Flexibility
The November 1989 recommendation was to build
flexibility into management processes, and for each media
National Program Manager to develop clear guidance on how
they would accomplish this. Regional and Program officials
would continue to develop joint targets or estimates of each
Region's activity levels in support of national program objec-
tives through a genuine negotiation process that would recog-
nize variability among the Regions and States.
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Findings: When asked to define "Regional flexibility," M&O
received mixed responses according to who was asked. Based
on M&O's assessment of the responses, we have determined
that regional flexibility is most frequently defined as the
ability of each Region to set its priorities through negotiating
fewer performance measures and having greater authority to
direct resources toward relative risk or other strategic geo-
graphic issues not spelled out in the NPM's National Agenda or
Operating Guidance. Such authority would allow Regions to
begin to address local environmental risks and concerns. This
definition, however, is fraught with problems from an NPM
perspective.
Flexibility is difficult to negotiate with NPMs because
national environmental priorities, Congressional mandates, and
public demands reduce the NPMs' ability and incentive to
allow for greater flexibility. This raises questions about how
flexible the Regions can really be in addressing geographic
environmental risks.
The allocation of resources by program element has
created a culture incompatible with "real" Regional flexibility.
First, NPMs are not willing or able (given their obligation to
meet Congressional mandates) to let the Regions shift re-
sources across media, which would contribute to the allocation
of resources for environmental priorities based on relative risk.
Second, Regional Administrators hesitate to "disinvest" re-
sources because of potential retribution in the following year's
resource allocation. Third, because workload models allocate
resources among the Regions based on a "zero-sum game,"
individual Regions are reluctant to be "too flexible" for fear of
Regional "raids." All three issues, the NPMs' lukewarm
support, the allocation of resources (workload models), and the
zero-sum budget, have hindered "real" flexibility. The FY92
Regional budget allocations are likely to substantiate this
finding.
Recommendations:
The keyword here is patience. Regional flexibility
requires significant management, institutional and cultural
change in the Agency. Congressional statutes and processes,
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workload models, and the Agency's internal organization by
media are major institutional barriers to the implementation of
Regional flexibility. Regional flexibility involves a great deal
of judgment and risk-taking in a culture that sometimes only
values those attributes in words, but not actions. To succeed
will require open dialogue about the risks; and the willingness
to deal forthrightly with the possibility of failure or external
criticism. Senior managers need to agree on flexibility not
only in theory but also in practice. Successful implementation
of this reform would require continuous reinforcement by the
twelfth floor of the Agency's commitment to flexibility, the
reduction or absence of inter-Regional shifts in resources, the
end of Regional "raiding," workload models remaining frozen
for at least two more years, and RAs having the ability to shift
resources within their respective Regions. To aid in the im-
plementation of Regional flexibility, we recommend:
As a short term measure to help bridge the transition to
"real" flexibility, the DA should consider increasing the current
five percent redirection from base program budgets (redi-
rected to better link planning and budgeting) to support Re-
gions that develop good strategic plans targeting disinvestment
and reinvestment proposals for cross-media activities.
A minimum should be set that causes enough "stretch-
ing" to drive home the seriousness of the DA's commitment to
flexibility. That minimum should be set in the 5-15% range. A
possible model for this approach is the OSWER "Rip-Flex"
Plan. The RIP-flexibility plan allows a Region to propose
trade-offs of up to 15% of total State and Regional resources
(State grants, Regional FTEs and extramural funds) from
national priorities for use on Region or State-specific priorities.
RAs need to be given more authority and encourage-
ment to establish stronger Regional/State relationships. Close
political contact with State leaders will provide additional
political leverage to convince Congress not to micromanage
EPA by focusing solely on the number of actions taken. Over
time, this will enable the Agency to "recapture its own agenda."
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Performance Standards
The November 1989 recommendation was to use nu-
meric activity targets as but one of many performance evalu-
ation tools, thus de-emphasizing their importance in exchange
for additional focus on the quality of performance, teamwork,
complexity of work, environmental improvement, identification
of problems, and ways to continuously improve performance.
Findings: Surprisingly, an analysis of 118 FY89 and 120 FY90
SES Performance Agreements, which included 866 and 816
standards respectively, showed a slight increase in quantitative
measures. In FY89,16% of the standards were quantitative; in
FY90,22% were quantitative. (See Figure 3.) The slight
increase in quantitative standards may be attributed to either
mid-year revisions of the agreements or M&O's analytical inter-
pretation of the term "quantitative." Regions 2 and 8, however,
did reflect a decrease of 3 and 12 percentage points respec-
tively, as did the Offices of Enforcement and Water, each of
which showed a modest decrease of 1 and 2 percentage points
respectively. (See Figures 4 and 5.) With the exceptions men-
SES Performance Standards
BRfi
Fig. 3
FY 1989 FY 1990
1 TOTAL NO. OF STANDARDS E3 NO. QUANTIFIABLE
Page 20
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% of Quantifiable Regional Standards
43
I 2 3
Fig. 4
4567
1FYI989 0FY1990
10
% of Quantifiable Program Office Standards
FijS
(Vft
22
OE OPTS OSWER
IFY1989 0FY1990
OW
Page 21
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tioned above, no decrease of quantitative measures has oc-
curred in the SES performance standards themselves. Since the
Task Force recommendation was issued after FY90 agreements
were put in place, it is understandable that the recommendation
had no effect in FY 90. The interviews validated this finding,
although some interviewees also felt that the new emphasis
need not be formalized in performance standards, but merely
"applied" during performance appraisals.
The emphasis on "bean counting" cannot be ignored in
a culture driven by numbers. Many NPMs believe that if
"beans" lose their importance, old line base programs may
suffer. In addition, some Regions requested additional STARS
measures to gain more "beans." The use of numeric activity
targets often creates a numbers game during performance
evaluations since these targets do serve as one measure of ac-
complishment.
Enforcement across all programs continues to place a
heavy emphasis on "beans." One reason may be that public
and Congressional perception of EPA's enforcement history
continues to exert pressure on the Agency to keep the number
of enforcement actions up and visible. As a consequence,
tension results as the Regions work to produce more enforce-
ment outputs while simultaneously accommodating a deempha-
sis on the use of numeric activity targets.
While the ratio of numerical activity targets showed
little change, interviews revealed that managers and supervi-
sors did emphasize the quality of performance, teamwork,
TQM, and environmental improvement during the actual FY-
90 performance evaluations. Most managers and supervisors
believed that rewriting the standards after issuance of the No-
vember 1,1989 memo was not worth the effort. They believe
that the current standards will work for the time being and
should not be revised until there is a vision and specific blue-
print for the integration of strategic planning and performance
expectations. OHRM's guidance documents issued in FY90
lay the groundwork for future revisions of performance stan-
dards. There is general agreement that standards after FY91
will reflect a move toward more emphasis on quality.
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Recommendations: While the actual performance evaluation discussions
seem to emphasize the quality of individual performance,
changes to the written standards lag behind, NPMs and Re-
gions should be advised to make pen-and-ink revisions to the
current SES standards to deemphasize quantity and emphasize
quality, and to continue to apply qualitative standards and
judgment in their assessments of SES performance. Formal re-
visions to SES performance standards should be made once the
new blueprint for managing strategic planning and relative risk
is promulgated. OHRM should assess the quality of the re-
vised performance agreements at the end of that performance
cycle in which standards are revised in preparation for im-
provements to the standards for the next performance year.
In the interim, OHRM and Regional Human Resource
Offices should issue guidance and/or conduct self-help ses-
sions on setting qualitative results-focused performance
standards including examples of useful measures, and should
also develop follow-up mechanisms to reinforce and assist
managers and supervisors in rewriting performance standards,
especially in those offices and regions (OAR, OPTS, and
Regions 3,4,5,7,8,9, and 10) where quantitative elements
constitute more than 25% of the total.
The twelfth floor should be particularly careful and
consistent both in what it says and in the memos it signs about
the importance of numbers vs. quality to avoid unneceassry
tension and confusion. Conflicting messages over the past year
through both performance evaluation and planning/budgeting
directions have caused tension with respect to enforcement cri-
teria, STARS numbers vs. new initiatives, and how to achieve
the balance between "beans" and how well a task is done.
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CONCLUSION
Our assessment of the implementation of the Deputy
Administrator's seven reforms to the Agency's management
systems points to weaknesses in timing, feedback, and guid-
ance. Most; if not all, are attributable to the growing pains of a
new process that uses strategic planning and budgeting to
change the Agency's direction and to strengthen its manage-
ment accountability.
Now that the planning process has had a year to mature,
several things need to happen: (1) opportunities should be vig-
orously pursued to break down the institutional barriers that
stand in the way of linking the planning and budgeting proc-
esses; (2) top management must continue to reinforce its vision
for the Agency, while also clearly sending the message that
EPA has to maintain its credibility; and that to do that, some
amount of "keeping the numbers up" is necessary, even though
it creates tension in striking the correct balance between bean-
counting and quality. Care must also be exercised so that the
message is not interpreted to imply that the numbers are no
longer important, or to mislead the Regions and States into
believing that if the actions are not in STARS or ATS they are
not important; (3) OARM and OPPE will need to work more
closely as joint stewards of all aspects of EPA's management
systems; and (4) the 1989 Task Force's recommendation no.
14 (for OPPE to assume responsibility for monitoring the full
implementation of the DA's recommendations) should be im-
plemented.
The Deputy Administrator's reforms to the Agency's
management systems have EPA managers grappling with
linking strategic planning and budgeting, setting measurable
environmental goals, and promoting innovative strategic
choices. Effective changes in the management systems and
culture become critical to the Agency's long-term success. We
believe that change will come incrementally and gradually, and
the Findings and Recommendations resulting from this assess-
ment will facilitate such changes.
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Appendix A
Quarterly RA Memo Guidance Flow
Sft-
10/1/89 ORO issues
guidance to RA's
DA'S 11/1/89
memo to
all employees
3/7/90 DA sends memo to RA's.
Guidance changed.
Change reflected in 2nd qtr. memo
3/20/90 OPPE sends guidance to RA's.
Incorporates all previous guidance
and clarifies format.
RA's follow form/content
in DA's 11/1/89 memo
OR010/1/89 memo ignored
Response to 4th qtr '89 memo
tookonavg. 3 mos.
Response to 1st qtr "90 memo
ranged from 2-4 mos.
Response to 2nd qtr '90 memo
ranged from 1-2 mos. There
was some confusion on format
A-1
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