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186 Hinnant & O’Looney

Abstract

We examine the adoption of information technology within local governments in the United States. The social and technical factors that impact the process of technological innovation are discussed in reference to the adoption of advanced electronic government (e-govern- ment) technologies in local government. In particular, we discuss how the adoption of IT, and e-government, is influenced by the local government’s motivations to innovate, technol- ogy characteristics, available resources, and stakeholder support. We then discuss several strategies that may address these factors. We argue that local governments should seek to formally assess the need to adopt e-government technologies, develop new funding strategies, and develop a mix of in-house and contracted IT services. While local governments have aggregately adopted advanced transaction-based forms of e-government at a lower rate than state and federal governments, it is our contention that local governments are merely reacting to innovation factors within their social and technical environments.

Chapter X

IT Innovation in Local Government:

Theory, Issues, and Strategies

Charles C. Hinnant, U.S. Government Accountability Office, USA

John A. O’Looney, University of Georgia, USA

IT Innovation in Local Government 187

Introduction

Within the governmental framework of the United States, it can legitimately be argued that local governments play a far more prevalent role in the day-to-day existence of both individual citizens and private and nonprofit organizations than do state and federal governments. After all, a simple assessment of the numbers reveals that local governments outnumber state and federal governments 87,586 to 51 (U.S. Census Bureau, 2002). In addition, many citizens and organizations are simultaneously subject to a diverse array of local government jurisdic- tions and authorities, such as city, county, or special-district authorities. Furthermore, local governments play a crucial role in the provision of key public services, such as education, community development, public health activities, public utilities, solid-waste removal, law enforcement, and public safety. Given the critical services that local governments have traditionally provided, it is not sur- prising that, like other public institutions, they have long employed information technology as a means to improve internal operations in the production of those services. If we take a systems perspective, we can define IT broadly as we might any “computer-based informa- tion system [which is an] information system that requires hardware, software, databases, telecommunications, procedures, and people to accomplish goals” (Stair, 1992, p. 27). Employing this broad definition, it is obvious that the use of IT is necessary for even the most ordinary of activities undertaken by local governments. For example, examinations of local governments in the United States indicate that there has been a growing trend toward adoption of IT within local government over the past 25 years and that today virtually all make use of IT to one extent or another (Kraemer & Norris, 1994; Norris, 2003). In fact, a 1997 survey of city and county governments carried out by the International City/County Management Association (ICMA, 1997) indicated that only 3% of respondents did not use computers of some kind to support operations. As new forms of IT became available and adopted within society, local governments learned new ways of employing the technology to achieve their own institutional goals. For in- stance, during the 1970s and 1980s, much attention was given to the adoption and impact of mainframe and then personal computers on the operations and internal environment of local governments (Kraemer, Dutton, & Northrop, 1981; Kraemer & Norris, 1994; Norris & Kraemer, 1996). By the mid-1990s, the increasingly widespread use of distributed networks, such as the Internet and World Wide Web (WWW), began to shift the focus toward how public-sector organizations could harness this new form of IT to deliver information and services directly to the public. This new focus on electronic government, or e-government, reoriented the focus on how IT could be used by broader government reform initiatives to have agencies provide programmatic information and services to citizens and other stake- holders (Kraemer & King, 2003; Watson & Mundy, 2001).1

Local governments have quickly adopted at least rudimentary aspects of e-government. As indicated in Table 1, the U.S. Census reported in 2002 that 45.1% of counties, 31.1% of cities, 13.4% of townships, 17.8% of special districts, and 64.3% of school districts responding indicated that they provided information regarding their central activities via a Web site. Similarly, 54.1% of counties, 40.6% cities, 21.2% of townships, 34.6% of special districts, and 73.7% of school districts indicated that they provided a means for the public to communicate or transact business by use of the Internet or another computer-based

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information system. Furthermore, the size of the government, as measured by population, seemed to have a distinct impact on the adoption of e-government.2 For governments with populations under 25,000, only 19.8% indicated that they provided information regarding their activities on a government-controlled Web site, and only 30.7% indicated that they provided the ability for the public to communicate and conduct business via the Internet or other computer-based information system. Conversely, 93.4% of local governments with populations over 500,000 indicated that they provided information on a government- controlled Web site, while 90.6% indicated that they provided the ability for the public to communicate and conduct business via the Internet or other computer-based information system. Similarly, a more recent ICMA survey conducted in 2004 reported that almost all (99.4%) of respondents indicated that their local governments had Internet connectivity and 91.1% indicated that their local governments had a Web site.3 Furthermore, 92.3% indicated that they employed DSL (digital subscriber line), cable, or high-bandwidth connections to facilitate Internet connectivity (ICMA, 2004).

Central activity information is provided on an Internet Web site that is maintained or controlled by the government.

Public can communicate or trans- act business with the government using Internet, e-mail, or other computer-based system.

Government Type

Total Respondents

(n)

Yes (%)

No (%)

Response Rate

Yes (%)

No (%)

Response Rate

County 2,453 45.1 54.9 80.9 54.1 45.9 71.2

Municipal 15,116 31.1 68.9 77.8 40.6 59.4 73.8

Town or Township 10,397 13.4 86.6 63.0 21.2 78.8 61.4

Special Districts 20,337 17.8 82.2 58.0 34.6 65.4 57.9

School Districts 10,880 64.3 35.7 80.6 73.7 26.3 79.8

Total governments 59,183

Governments by Population Size*

under 25,000 25,125 19.8 80.2 70.1 30.7 69.3 68.1

25,000 to 49,999 1,329 69.4 30.6 85.5 67.1 32.9 70.8

50,000 to 99,999 784 81.0 19.0 92.9 74.5 25.5 71.0

100,000 to 249,999 458 91.5 8.5 96.0 83.3 16.7 74.2

250,000 to 499,999 149 91.3 8.7 98.7 85.3 14.7 67.5

500,000 or more 121 93.4 6.6 99.2 90.6 9.4 69.7

Total governments 27,966

Table 1. Local government use of Internet to interact with public (Source: 2002 Census of Governments, Vol. 1, n. 1)

Note: Calculations performed by author; *includes only county, municipal, and township governments

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While almost all local governments have adopted at least basic forms of e-government, such as a simple Web site or providing the ability for the public to communicate with the government through the use of e-mail, there is some question as to the extent to which local governments have pursued the adoption of more advanced forms and use of IT that might improve both the production and delivery of public services. Research indicates that many local governments have initiated at least rudimentary attempts to post information and provide basic online services, but few local governments have adopted more advanced forms of ICT that foster high levels of interactivity, communication, and actual political participation (Moon, 2002; Norris & Moon, 2005). Results from a 2004 ICMA survey of cities and counties also indicate that local governments may be relatively late adopters of more recent advanced forms of Web-based technologies. While a majority of respondents indicated that their Web sites provided the ability to download information or forms (council minutes, codes and ordnances, job applications) and participate in online communication with officials, relatively few offered more sophisticated abilities to interact or conduct transactions online.4 Similarly, the survey indicates that local governments also seem to be slow in adopting Web-based information systems, such as intranets, which are purported to improve internal information exchange and operations. Only about 50% of the local governments who responded indicated that they currently used an intranet. Of those local governments employing an intranet, most used them to facilitate internal communication and few used them for more sophisticated purposes, such as online training (29.4%), online procurement (26.6%), online project team collaboration (33.4%), and the management of time sheets (27.3%; ICMA, 2004). Most local governments seem to be late adopters—adopt- ing e-government technologies only after they have become established technologies and practices. There is little evidence to suggest that there exists high levels of adoption by local governments for relatively advanced IT, when compared to advanced IT’s rate of adoption by the private sector or state and federal governments. A recent study, based on survey responses conducted as part of the Pew Internet and Ameri- can Life Project (2006), estimated that 73% of adults in the United States were Internet users and that 42% of adults had broadband connections at home. Despite the seemingly high rate of general Internet use by the U.S. public, a recent study of dial-up and broadband users indicates that Internet users still have a slightly less positive view of how much the Internet has improved their interaction with local government when compared with the perceived improvements in interaction with state and federal government (Pew Internet and American Life Project, 2004).5 This seems to indicate that many local governments are not adopting and implementing advanced forms of IT in a manner that could potentially bring the purported benefits of openness, transparency, and more efficient service delivery often associated with e-government. This chapter attempts to provide a theoretical lens through which to examine the adoption of more advanced forms IT by local governments. By examining the literature on technological innovation, as well as more recent work regarding public-sector information systems, we hope to highlight the most important factors that influence the adoption of advanced forms of IT by local governments. Furthermore, we propose several strategies that may influence local governments’ ability to successfully adopt new forms IT.

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IT as Technological Innovation

The adoption and use of IT by local governments is certainly not a new phenomenon, but the adoption of e-government across all levels of government during the past decade has rejuvenated the interest in government’s use of IT by practitioners and academics alike. Unfortunately, the growing interest in e-government has not always coincided with an im- proved understanding of how local governments adopt and implement the more advanced forms of IT. If e-government can be viewed as the latest step in a progression of innovations in government that is predicated on the use of new forms of IT, then the literature associated with the adoption of technology within complex organizations may provide some insight into the social and technical factors that influence how e-government may be adopted by local government. Since technological innovation is typically defined as “the situationally new development and introduction of knowledge-derived tools, artifacts, and devices by which people extend and interact with their environment,” it would seem that a more complete understanding of e-government adoption within local governments would be informed by a better understanding of the innovation process (Tornatzky & Fleischer, 1990, p. 11). The process of technological innovation is often described as a set of stages that includes an awareness of new technology, understanding the match between the technology and organiza- tion, adoption of the technology, implementation of the technology, and routinization of its use (Tornatzky & Fleischer, 1990). While the process of technological innovation is often viewed in terms of a linear progression of stages, there is no certainty of a linear progression or ultimately success; the process often has many delays or reverses (Tornatzky & Fleischer, 1990). Similarly, the innovation process for most complex organizations is heavily influenced by the interrelationship of social and technical factors within the organization’s internal and external environments. With regard to technological innovation, issues surrounding the technology itself, the availability of required resources, the fit with the organization’s primary task, and an organization’s structural arrangements all play significant roles in the nature and success of technological innovation. Research indicates that the characteristics of the technology play an important role in deter- mining whether or not it will be adopted by an organization. Researchers have identified a rather long list of innovation characteristics that can increase or decrease the likelihood of adoption by organizations (Zaltman, Duncan, & Holbek, 1973). With regard to the adop- tion of technological innovation, a study by Tornatzky and Klein (1982) indicates that three primary characteristics are repeatedly associated with the adoption of new technologies: relative advantage, ease of use, and compatibility. Similarly, the extent to which a particular technology alters existing organizational processes also plays a role in the innovation process. So-called radical innovations usually involve a significant alteration of an organization’s processes or outputs, or significantly impact the organization’s key stakeholders (Dewar & Dutton, 1986; Ettlie, Bridges, & O’Keefe, 1984). Radical innovations generally experi- ence more risks for failure or setbacks than do technological innovations that involve only incremental changes in an organization’s existing technological environment. The decision to adopt a technological innovation, such as a new form of IT, is predicated on the assumption that organizational decision makers have sufficient awareness of new technologies to understand their potential benefits. This awareness is often discussed as a function of the knowledge that internal stakeholders possess regarding the applicability of

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new technologies or processes to the organization’s operations. In essence, the greater the information and knowledge assets that an organization has at its disposal, the more likely it is to find new technologies to address operational problems, and the more likely it is to understand and implement the technology (Fichman & Kemerer, 1997; Nilakanta & Scamell, 1990). Although all technologies require some learning on the part of the staff participating in the adoption, some technologies place many more demands on adopters for new knowledge and skills. Such technologies are believed to have inherent knowledge barriers because the knowledge required to implement them creates a barrier to diffusion (Attewell, 1992). In addition to the availability of resources, technologies that have greater levels of congru- ency with key organizational tasks may be perceived as more useful and, therefore, as a more successful adoption of technology (Cooper & Zmud, 1990). Similarly, studies have shown that internal decision makers, such as managers, search for technological solutions to problems that they face in carrying out their jobs. For example, they may show interest in new forms of IT if the organizational task for which they are responsible requires high levels of communication with external agencies (Bugler & Bretschneider, 1993). Such interest and support by key stakeholders may be important for the successful implementation of new technologies, as studies highlight the importance of managerial support (Beath, 1991). In addition, champions who informally and enthusiastically promote the new technology are also viewed as important during adoption and implementation (Tushman & Nadler, 1986). While some researchers have focused on user attitudes and perceptions toward IT innova- tions, there is some debate over the relative importance of the attitudes held by organizational members in comparison to the importance of organizational structure and processes (Hall, 1996). Some organizational-level research indicates that the structural arrangement of the organization plays an extremely important role in the ability to fully accept technological innovations. Organizations that have high levels of structural complexity, low levels of formalization, and low levels of centralization tend to initiate relatively more innovations than do organizations with opposing characteristics (Damapour, 1991; Duncan, 1976). Most of this research assumes that an organization’s successful adoption of technological innovations is linked to a perceived need for technology to improve performance or address requirements from external stakeholders. Overall, these findings indicate that the decision to adopt and fully accept IT innovations is a joint result of technology characteristics and the social system in which they are embedded.

Social and Technical Issues to Consider When Adopting E-Government within Local Government

E-government is often associated not only with the adoption of IT, but specifically the adop- tion of advanced forms of IT, as well as organizational practices that are often employed in the private sector to facilitate electronic commerce, or e-commerce. IT innovations, such as Internet-based applications that provide integration and efficiency in a company’s supply chain or more transaction-based services for customers, are often proposed as a means to facilitate similar efficiencies for government. As previously discussed, several studies have

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highlighted the difficulty for local governments, on a whole, to adopt the more advanced forms of IT that are often associated with e-government (Moon, 2002; Norris, 2003; Norris & Moon, 2005). The slow adoption rates of many of the advanced e-government interactive technologies, such as transaction-enabled Web sites, personalization of Web sites, and online political forums, seem to highlight the relatively slow diffusion of more advanced forms of IT within many local governments (Hinnant & O’Looney, 2003; O’Looney, 2001a, 2001b; Norris & Moon). However, it is important to understand that the adoption of advanced IT almost always necessitates significant investments in resources, as well as back-end integra- tion of the new technology within the government’s technological and social processes. Our discussion of technological innovation within complex organizations provides additional insights into the sociotechnical factors that most likely impact the adoption of IT within local governments. A review of the literature on technological innovation reveals several dimensions that should be considered when evaluating the adoption of innovation by local governments. These include goals and motivations to adopt, technology characteristics, availability of resources, and the support of various stakeholders.

Goals and Motivations to Innovate

By most accounts, the reasons for adopting new forms of IT at the local government level are varied, but not necessarily surprising. The adoption of internal IT systems by local governments during the 1970s and 1980s was notably marked by the desire to increase internal efficiencies (Northrup, Kraemer, Dunkle, & King, 1990). Another motivation for the adoption of e-government is purported to be gains in efficiency within the provision of public services. Still another is the improved interaction and transparency with the public that many of the Internet-based technologies promise to facilitate (Moon, 2002). While most local governments have not yet adopted the most advanced forms of Internet-based technologies, many have implemented some type of Web site to improve communication with the public. Given that one goal of local government adoption of e-government should be to more effectively provide services to external stakeholders, it is somewhat surprising that most local governments do not seem to actively gauge what online services or features are desired by their citizens. A 2004 survey conducted by ICMA demonstrated that, while 67.8% of respondents indicated that they believed e-government has improved communica- tion with the public, only 10% of local governments actively survey citizens or businesses to establish what they actually want online (ICMA, 2004). Most local governments that have adopted more advanced forms of e-government practices seem to do so in order to facilitate or improve a specific functional area or to achieve spe- cific operational cost reductions. For example, in a few cases, local governments, such as Montgomery County, Maryland, have begun to reduce its costs for energy by consolidating the buying power of 18 county agencies and organizations, as well as conducting online auctions for energy (Robinson, 2006). In other circumstances, local government agencies or departments adopt IT systems that facilitate intergovernmental efforts within a respec- tive functional area or jurisdiction. For example, Pennsylvania’s Justice Network (JNET)

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is a system initiated by a consortium of government agencies, in order to integrate criminal justice database systems throughout the commonwealth. JNET is designed to facilitate criminal justice information sharing and has many local, commonwealth, and federal law- enforcement organizations as stakeholders (Hinnant & Sawyer, 2003). While such case studies are in many ways idiosyncratic, they highlight how local governments do not seem to adopt IT for impromptu reasons. Rather, they seek to adopt IT when it is believed that it will result in the attainment of goals that are desirable to a specific program, department, or to the broader jurisdiction.

Technology Characteristics

The characteristics associated with a specific form of IT also play a role in whether it is ad- opted within a local government. For example, studies examining the adoption of computer applications by local governments indicate that applications perceived to have greater visibility and less uncertainty with regard to cost were more likely to be adopted (Perry & Danziger, 1979; Perry & Kraemer, 1979). This also seems to be true of the more current forms of IT that are often associated with e-government. For example, this may provide some insight into why most local governments offer a basic Web site, but few have adopted more interactive online technologies. In addition, it is important to understand that some advanced forms of IT may also possess higher levels of risk for local governments. For example, the use of some advanced Web sites employed by private-sector firms, such as Amazon.com, track user behavior in order to personalize the future content that the user views on the Web site. Similar technologies and practices are available for use by local governments and could be used to provide the citizen user with tailored government information or services. However, the collection of such data by local governments may present significant challenges since they may be legally required and/or understandably expected by the public to protect all personal information collected (Hinnant & O’Looney, 2003). While it is useful to understand a technology’s specific characteristics, it is also important to understand that such characteristics cannot be considered outside the societal and organiza- tional contexts within which the technology may be adopted and implemented. At one level, the adoption of IT may be assessed across a set of local governments in order to evaluate overall levels of diffusion. However, it should be clear that the successful adoption of a particular IT, within a specific local government context, has more to do with how well the IT is judged to accomplish a specific task and the degree to which it fits within the exist- ing technical environment.6 With regard to the adoption of more advanced e-government technologies, local governments or their subunits are probably less likely to adopt IT that is significantly more sophisticated than its existing technical systems. The adoption of more radical forms of e-government technologies would most likely cause too heavy an invest- ment in resources or introduce the need for significant adjustments to internal administrative systems. For example, recent surveys indicate that local governments perceived the greatest potential impacts of e-government to be increased demands on staff, changes in the role of staff, and the need to reengineer business processes (Norris & Moon, 2005).7

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Availability of Resources

Tied closely to both the motivation to innovate as well as the characteristics of a specific IT, is the local government’s available resources. Resources may take several forms, such as financial resources, the number of available staff, or the knowledge assets that are re- quired to adopt and implement a respective technology. The adoption of any IT is known to have potentially significant impacts on the internal processes of any organization and this is also true of IT adoptions by local government organizations. The adoption of many forms of IT associated with e-government potentially requires significant departures from the organization’s existing technical and administrative systems. In order to successfully identify, adopt, and implement a new form of IT, the organization must possess, develop, or obtain significant knowledge and expertise regarding not only the technology in question, but also how that technology may be successfully integrated with the existing social and technical structures of the organization. Surveys of local governments consistently indicate that the lack of sufficient financial resources, Web staff, and Web expertise are the top three barriers to e-government initiatives (ICMA, 2004; Norris & Moon, 2005). Furthermore, examinations of advanced online technologies, such as personalization of services, also indicate that the adoption of new online services is often slowed by limitations of technical expertise and budgetary considerations (Hinnant & O’Looney, 2003). Financial resources may be crucial not only for the initial development or acquisition of IT, but also for its successful integration within an organization’s administrative systems. Integra- tion of new IT often requires significant adjustments to existing systems. These adjustments may come in the form of reengineering administrative systems or subsequent changes in the necessary skills possessed by staff who operate the new IT system. More importantly, financial resources may also provide a means for acquiring additional knowledge that the IT may require. This may be in the form of training current staff or in acquiring knowledge from private-sector consultants or vendors. Despite the need for financial resources, 81.7% of local governments had no separate budget item for e-government and only 40.6% of local governments have a separate IT department that is responsible for IT and e-govern- ment (ICMA, 2004). The more advanced the IT is relative to the local government’s current technical systems, the more knowledge and financial resources may be required since prior work has indicated that a local government’s existing level of technological sophistication influences its ability to adopt new forms of IT (Norris & Kraemer, 1996). With regard to the adoption of e-government, this may simply mean that those that are already relatively technologically sophisticated have the resources to draw on in order to adopt and implement even more advanced forms of e-government. Conversely, less sophisticated organizations are less likely to possess the skills and knowledge necessary to sidestep the knowledge barriers that are so often associated with the adoption and implementation of new IT.

Support from Managers, Political Leaders, and Other Stakeholders

While goals, resources, and IT characteristics all play important roles in whether a local government organization will adopt a new form of IT, so will decision makers from both

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within the organization and in the broader political environment. Obviously program man- agers, and in some cases political leaders and external stakeholders, should play a role in the development of the organizational goals that precede the actual adoption of any new IT. Their political support throughout the innovation process is also important for the success- ful adoption of new IT. With regard to the adoption of advanced forms of e-government, program managers, and the operations that they oversee, are more likely to experience the impacts of any changes that the new IT brings. For example, surveys indicate that e-govern- ment has the potential to alter the role of staff and the demands on staff, and necessitate the reengineering of processes (ICMA, 2004). Or, the adoption of IT may reinforce the power of existing administrative social structures (Kraemer, King, Dunkle, & Lane, 1989). While e-government, or any IT adopted, may improve operations and introduce efficiencies into internal administrative processes, it may also alter processes in a variety of unforeseen ways. Program managers are in a position to reap the benefits of any positive changes initiated by IT, but they also bear some of the risk for any negative impacts. While local government administrators and managers play a role in IT adoption, political leaders also play a potentially important role. Although surveys indicate that only 12.5% of local governments cite lack of support from elected officials as a barrier to e-government, e-government can directly impact the nature of the interaction elected politicians have with the public. Over 65% of local governments now provide direct communication with elected officials through their Web sites. Furthermore, the same survey indicates that 39.9% of re- spondents indicate that e-government did increase citizen contact with elected or appointed officials (ICMA, 2004). So, the potential exists for e-government to directly impact the political lives of elected officials. Some scholars (e.g., Ihrke, Rabidoux, & Gabris, 2000; Svara 1990) suggest that council-staff relations can also play a role in how innovations are perceived. Essentially, they argue that a positive relationship between council and staff will lead to innovations being perceived as successful by other local government actors. Such a positive relationship between council and staff may also signal additional buy-in and support from elected officials in the case of e-government adoption by local governments. In addition, a key role played by elected officials has to do with funding. A 2004 ICMA e-government survey indicated that 92.6% of local governments funded e-government initiatives through general revenues (ICMA, 2004). Therefore, regarding IT, the most important role elected officials could play is to provide the financial support, through general revenues, for local government organizations to be innovative.

Strategies for Adopting IT in Local Government

Considering the social and technical factors that influence the technological innovation process and introduce risk into such a public context, it is important to highlight some stra- tegic activities that may assist local governments in successfully adopting and implementing new forms of IT. Such activities should include an organizational assessment of needs and planning, as well as the development of funding sources and acquisition strategies. While prescriptive actions can be derived and discussed for the adoption of new forms of IT, it should be noted that the sheer variety of local governments, along with the intraorganizational variety with regard to knowledge and resources, makes a prescriptive discussion about the adoption of new IT less than systematic and certainly limits its generalizability. However,

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prescriptive discussions may be used to elicit new ideas and considerations for both future research and practice.

Formally Assess the Need for IT and Plan for Innovation

Prior to undertaking the adoption of an IT innovation that may require a local government to invest significant amounts of resources, it is important for the adopting organization to fully analyze the goals it intends to address with the IT, what tasks the IT is designed to accomplish, and the resource allocations required to implement the IT over its life of opera- tion. In the case of e-government technologies that are designed to facilitate interaction with citizens, businesses, or other external stakeholders, an assessment of goals should include an assessment of whether the IT is actually desired by the potential user. With regard to the adoption of advanced forms of e-government, such as the use of personalization of Web sites, Hinnant and O’Looney (2003) proposed that governments should pay close attention to the level of sophistication of the citizens within their jurisdiction, in order to gauge the real demand for a particular online innovation. However, an ICMA study in 2004 indicated that only about 10% of local governments conduct surveys to determine what online services their citizens want. As for other e-government technologies, such as online procurement systems, successful adoption would depend on whether private-sector vendors either pos- sess, or are willing to acquire, the knowledge and systems that may be required to use the online innovation. Similarly, any acquisition of new IT or IT-management practices should also include an assessment of the level of fit between the IT and the institutional goals it is attempting to address. This may require the organization to undertake formal evaluations of the ad- ministrative processes that the IT seeks to improve, as well as of its specific technology characteristics. This assessment may also be completed as a precursor to the development of a formal technology plan that addresses how the IT will deal with specific organizational goals, as well as analyzing the return on investment associated with acquiring the IT. While such formal assessments and justifications of new IT systems have become prevalent in large private firms, state governments, and federal government agencies, it is less likely that most local governments have developed the internal capacity to complete such tasks (Hinnant & Sawyer, 2003; U.S. General Accounting Office [GAO], 2004). Furthermore, it is important to understand that the extent of any assessment and planning activities should be considered with regard to the adoption process and the IT being adopted. IT innovations that may require significant resources during adoption or that have significant inherent risks may give reason for more formalized, thorough, and rigorous planning efforts. In addition, an early assessment of need and IT planning also serves a broader purpose to inform and, in some instances, educate other stakeholders. For example, such preparatory efforts may illuminate the benefits of potential adoption efforts to managers and political leaders, therefore assisting in garnering their political and financial support. Likewise, such efforts can also highlight the potential costs and risks inherent in IT adoption. Overall, such planning activities may not only enable local governments to better understand how the adop- tion of an IT innovation might address organizational goals or administrative processes, but

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they also provide a means to mitigate some of the risk associated with adopting IT within such a public environment.

Develop Alternative Funding Sources

The ability to acquire new IT is also predicated on the availability of the financial resources necessary not only to acquire the IT system, but implement the IT system and operate the IT system in the future. The availability of financial resources is consistently cited by lo- cal governments as one of the most significant barriers to e-government adoption (ICMA, 2004). Since the management of local government IT systems is often the responsibility of functional subunits that are often funded through general revenues, it would appear that IT innovation is often hampered by both the lack of a central IT department, as well as specific funding sources within local government. This situation is often exacerbated if the local government has limited sources of revenue with which to invest in new IT. If financial resources are limited, the local government should seek out alternative sources of revenue or participate in functionally specific IT projects that are funded through state or federal government funding programs. In assessing how e-government projects are funded, survey data indicate that currently 92.6% of local governments use general revenues to fund e-government. Some other sources of revenue, such as utility revenues (9.8%), federal and state grants (7.5%), enterprise funds (7%), and transaction fees from services (5.2%), are used by local governments to fund part or all of their e-government initiatives (ICMA, 2004). Given the somewhat limited number of financial resources that are readily available from within government administration, it would seem prudent to make use of whatever other mechanisms possible to make IT in- novations available. One alternative is the increased use of grants from federal and state governments. While such grants may be very limited for general IT acquisitions, they may be used to foster IT innovation within specific functional domains. For example, Department of Homeland Security grants aimed at enhancing emergency preparedness, law enforcement, or domestic security may be used to fund IT and interoperable communications systems, as well as cybersecurity improvements in local government IT infrastructures (U.S. Depart- ment of Homeland Security, 2005). In addition to grants, financial costs can sometimes be alleviated by seeking partnerships with state and federal governments. For example, state and federal agencies may sometimes take on most of the development costs of some intergovernmental IT systems in order to achieve a specific programmatic outcome. The financial investment for local government may be dramatically reduced, since it may be limited to smaller acquisitions of equipment or personnel training. In other situations, private-sector firms may be willing to partner with local government in order to provide online services to citizens. For example, local governments may contract with private firms to provide online for-fee services, such as the provision of marriage licenses or birth certificates, especially if there are other means of citizens requesting those services in person or by mail. Given the diversity within local governments with regard to the public services provided, existing IT knowledge, and the probability of limited financial resources, adopting innovative e-government solutions may

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require a mixed-funding approach in order to develop the different components and systems of a broader e-government initiative within local government.

Mix In-House Knowledge and External Expertise

Each local government usually provides a variety of services and, therefore, may possess a wide variety of knowledge assets across functional departments. This, coupled with differences with regard to available financial resources and the sheer variety of IT characteristics, means that local governments are faced with several choices regarding how much of a particular IT initiative to develop in house and how much to acquire through contracts with private- sector firms. According to a recent ICMA survey, only 38.5% of local governments report that they host their own Web sites, while more report that their own staff design their Web sites (55.9%), manage Web-site operations (77.1%), and integrate Web sites into existing databases (68%; ICMA, 2004). However, the mix of in-house vs. contracted IT development and operations may depend on the relative complexity of the IT being considered in relation to the knowledge and expertise present within the local government organization. It may be reasonable for a local government’s in-house IT staff to develop some IT if the technology is already fairly established or if the IT staff have sufficient knowledge and experience working with the specific form of IT. For example, the knowledge required to design and build a basic Web site would not generally be considered a complex undertaking in today’s technological environment. In fact, late adopters of any technology can employ the lessons and knowledge developed by early adopters, potentially reducing costs and risks of failure. At the somewhat other extreme, local governments may need to rely heavily on IT vendors for development and operation of IT applications and systems that are far more complex than the local government organization’s current level of technical sophistica- tion. In some instances, the high costs associated with updating and maintaining aging IT systems, maintaining knowledgeable staff, and developing new e-government systems in house are viewed as cost prohibitive. Some large cities, such as Minneapolis, Minnesota, have contracted with private-sector companies and outsourced the city’s IT operations in an attempt to reduce overall costs (Butterfield, 2006). In reality, most local governments will likely find some mix of in-house knowledge and external expertise that is the most efficient and effective means to develop, implement, and maintain new IT. Contracting for services that depend on employee knowledge of end users’ needs, desires, and behaviors, as well as accepted administrative processes, puts contrac- tors at a particular disadvantage, since they are more likely to have explicit knowledge of the technology, but less knowledge of the local government’s administrative processes and culture. Brown and Brudney’s (1998) study of the use of geographic information systems (GISs) provides some evidence as to the risks of an outsourcing strategy in an area that is likely to involve a high level of specialized knowledge. Their study indicated that there is a limit to the cost effectiveness of outsourcing core information-system functions. By surveying local government GIS managers, they found that these managers reported that small to moderate levels of contracting out of GIS services yielded clear benefits for their organizations, while higher levels of outsourcing did not appear to produce clear benefits. In fact, in cases where the government moved to near exclusive provision of these services via contractors, the costs and delivery time for the services reached unacceptable levels.

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Moreover, contract-only projects tended to produce fewer benefits in terms of operational productivity and performance, organizational decision making, and customer service. The estimated break-even point for the outsourcing of GIS projects in the study was 25% con- tracted work. That is, projects in which more than 25% of the total budget was spent on outsourced services tended to produce diminished returns. Findings such as these indicate that a local government’s own IT staff and program ad- ministrators possess necessary knowledge of administrative processes with which new IT must be integrated. Likewise, external vendors and consultants may be at times necessary to supply knowledge and support more advanced forms of IT. The reliance on contracted IT development and operation services from the private sector does necessitate additional skills within local government focused on overseeing the administration of those services. For example, local governments need to maintain communication with the contractor in order to evaluate, maintain, and assess performance information regarding the contracted IT system or services. Furthermore, in many cases, the local government must possess significant project-management skills in order to provide oversight of the contractor’s development of new IT systems (Chen & Perry, 2003).

Conclusion

The diffusion of IT within society during the past decade has refocused attention on how new forms of IT may be used to transform institutions within the private and public sectors. Academics, political observers, and vendors have often advocated e-government initiatives as a means of increasing transparency, openness, and overall efficiency in public-service delivery. However, local governments have sometimes been singled out as a group for being late adopters of IT innovations when compared to state and federal governments or private-sector firms. At first glance, the impression may be that most local governments are IT laggards that fail to serve the citizens and businesses in their jurisdictions by not creat- ing sophisticated IT infrastructures or by not offering a myriad of highly interactive online services. However, is this impression accurate or fair? Any objective assessment would probably indicate the opposite to be more accurate, as well as fair. In reality, it could be argued that local government organizations are incredibly hetero- geneous with regard to their administrative and political goals, as well as the social and technology environments in which they operate. Whether a local government should adopt a new form of IT, such as advanced online services, is a question that should ultimately be based on the government’s own specific jurisdictional considerations. A local government’s administrators, as well as appointed and elected political leaders, are ultimately responsible for allocating their jurisdiction’s resources in a manner that stands up to public scrutiny. Since many local governments are actually quite small in size, have limited resources to allocate, and may not experience significant public expectations about adopting advanced forms of IT innovations such as e-government, it could be argued that remaining somewhat behind the technological learning curve may be, for many governments, the most politically responsible course of action. This course allows other institutions to bear the costs and risks associated with developing and adopting new IT.

200 Hinnant & O’Looney

Note

The views expressed in this chapter are solely those of the authors and do not necessarily reflect the views of the GAO or the U.S. government.

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Endnotes

1 While e-government is most often touted as a means to facilitate interaction with citizens, the same underlying technologies can also be configured to interact with a variety of other stakeholders such as other local governments, businesses, state governments, or the federal government.

2 Organizational or institutional size is commonly found to be related to the adoption and use of IT (Delone, 1981). Population size is essentially a proxy measure for the amount of resources that an organization may have available to facilitate the adoption, development, and implementation of IT.

3 The 2004 ICMA e-government survey was mailed to chief administrative officers in cities with populations of 2,500 and over and to county governments with council-administrator or council-elected executive forms of government. The survey achieved an overall response rate of 42.9% with 3,410 respondents.

4 Fewer than 10% of respondents indicated that the local government Web site provided means to pay for taxes, utilities, bills, fines, fees, or business-license applications online. Only 10.2% of respondents indicated that they provided a means to complete permit applications online (ICMA, 2004).

IT Innovation in Local Government 203

5 Dial-up users indicated that the Internet has improved interactions with both state (47%) and federal (49%) governments a lot or somewhat. Only 35% of dial-up users indicated that the Internet had improved their interaction with local governments. Similarly, broadband users indicated that the Internet has improved interactions with both state (59%) and federal (61%) governments a lot or somewhat. Only 45% of broadband users indicated that the Internet had improved their interaction with local governments (Pew Internet and American Life Project, 2004).

6 It is important to note that there is often considerable variation in the goals, needs, and techni- cal sophistication across the departments within a single local government. Therefore, an IT system may fit and be perceived as beneficial by some departments and not by others.

7 Norris and Moon (2005) also report that the same ICMA survey indicates that fewer local gov- ernments mention potentially positive impacts of e-government such as reduced time demands for staff, reduced administrative costs, a reduction in the number of staff, or increases in nontax revenue.

204 Swiss

Chapter XI

Information Technology as a Facilitator of

Results-Based Management James E. Swiss, North Carolina State University, USA

Abstract

The most widely accepted normative model of good public and nonprofit management is often called results-based management. It encourages planning and target setting to make the organization more proactive, an emphasis on outcomes to make the organization better focused on its mission, quick performance feedback to make the organization more respon- sive, and continuous process improvements to make the organization better able to serve its clients. These changes are possible only with supporting information technology. This chapter discusses ways that IT, including GIS, dashboards, and data mining, can support the new management model. However, IT can increase management effectiveness only if its role has been carefully designed. Before implementing major IT changes, top public and nonprofit managers must begin by determining what information would best guide upcom- ing major decisions. They must also decide how they wish to balance system integration vs. costs, disintermediation efficiencies vs. client guidance, internal information accessibility vs. security, and frontline worker empowerment vs. organizational uniformity.

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Introduction

The role of information technology in government and nonprofit management has constantly evolved over the years. This evolution has generally been driven by continuing improve- ments in IT. However, IT’s management role has recently been changing more rapidly, and this time it is because public management, at least as much as IT, has substantially changed. This chapter will discuss some of the ramifications of this new role for IT within public and nonprofit management. In the first of three sections, it will briefly describe the new normative model of best management practices. The second section will look at ways that IT can advance this new management model. The final section will examine some policy choices that must be confronted when incorporating IT into public and nonprofit manage- ment systems.

The New Model of Public and Nonprofit Management

The Changing Definition of Good Management

During the past decade, consultants, texts, academics, and professional societies have all combined to change the accepted definition of good management. Twenty years ago, public or nonprofit managers who listened to their workers, kept their operations moving smoothly, and calmly handled occasional crises would usually be considered outstanding managers by peers and by outsiders. Today such managers would likely be viewed as competent, but disappointingly passive. To be seen as outstanding, today’s managers must proactively move their agencies to higher levels of performance each year. The current normative model of management calls upon managers to continuously improve their agencies’ performance by scanning their environments purposively and then using the resulting information to set agency targets for improved results, including improved customer satisfaction. The new model then suggests ways of flattening the organizational structure, streamlining its pro- cesses, and speeding up its feedback systems in order to help produce these continuously improving results.1 Confusingly, this single new model has been given at least three different names: results- based management, strategic management, and performance management. We will use the term results-based management in this chapter. (Adding to the confusion, a fourth term—new public management, or NPM—is also sometimes treated as a synonym. However, NPM is a broader concept that includes results-based management, but then also adds a strong market emphasis, calling for more public entrepreneurship and increased privatization of govern- ment programs. NPM’s market-oriented policy prescriptions lie outside this chapter’s focus on internal management improvements, and we will not consider NPM further.) Results-based management combines several streams of management changes that developed separately, primarily in the business world. Total quality management (TQM) was first. Total

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quality management has a long history, but its current influence stems from the late1980s, when many major U.S. corporations adopted such TQM approaches as frontline worker empowerment, process benchmarking, and continuous measures of customer satisfaction. Reengineering, with its tools for process improvement, was implemented by many companies a few years later.2 Government and nonprofit agencies soon began to adopt modified versions of these business techniques, and later added performance (outcome) measurement to the mix. By the start of this century, these tools had been combined and synthesized into a model of best management practices that looked far different from those of 20 years earlier. This results-based model has achieved widespread acceptance. At the federal level, it was endorsed by the Clinton administration as well as by the George W. Bush administration, and by Congress through the Government Performance and Results Act of 1993. The model is also widely accepted by city managers (Kearney, Feldman, & Scavo, 2000; Moon & de Leon, 2001), and has been promulgated by the major public managers’ professional societies.3 Actual governmental implementation has substantially lagged in the symbolic acceptance of these new models, but it too shows steady increases (Kettl, 2005; Moon & de Leon, 2004; Moynihan, 2006; Poister & Streib, 2005). The Primary Characteristics of Results-Based Management

The differences between the older and newer models of good management can be summed up in three terms. The new model attempts to make government and nonprofit agencies more proactive, more agile, and more results oriented. To produce these characteristics, an organization undertakes a number of steps. Four of the most important are:

• As part of its strategic planning process, the agency scans its environment to spot relevant trends (whether opportunities or threats) before they affect the agency.

• The agency proactively sets results-based targets, both long range and short range. Results, also called outcomes, are measurable effects on people outside the organiza- tion. For a school, the results (outcomes) might include increases in learning, or in later earnings. For a police department, results could include increases in convictions, decreases in crimes, and greater feelings of safety. For a health department, results include fewer days out from work, fewer days of hospitalization, or fewer deaths. Because customer satisfaction is always one important goal for any public or nonprofit agency, customer ratings are always among the results tracked.4

• The agency then gathers continuing information on how well it is reaching those outcome targets and takes remedial action if there are shortfalls.

• The agency attempts to increase customer satisfaction by offering quick, one-stop shopping that allows the client to receive coordinated services from one location, and in many cases, from one person. Such coordinated service delivery is promoted by empowering frontline workers to handle more of a customer’s needs, and by mecha- nisms for coordinating (and in some cases permanently cutting across) functional silos.

Information Technology as a Facilitator of Results-Based Management 207

Empirical Evidence for the Efficacy of Results-Based Management

Both business and government managers have enthusiastically embraced many new man- agement approaches over the past half century. Some of these new management tools and approaches have left lasting imprints, but far more have quickly died and are remembered today only as fads (Light, 2006). Does empirical evidence indicate that results-based man- agement is more than another short-lived fad? The record is promising but mixed, with strong evidence for the efficacy of some aspects of results-based management, but slim evidence for other aspects. For example, there is as yet little evidence for the efficacy of strategic planning in the public or nonprofit sector, although private-sector studies suggests that strategic planning can, under some circumstances, pro- duce improvements (Boyne, 2001; Miller & Cardinal, 1994). There is good evidence that process-improvement techniques drawn from reengineering and TQM sometimes produce positive changes in internal governmental activities, including fewer errors, lower costs, and shorter cycle times. However, their effect on outcomes is far less clear (Mani, 1995; Poister & Harris, 2000). The evidence is best, and the results most dramatic, for management approaches based on target setting and feedback. A large number of studies show that goal setting and results tracking often produce major gains in organizational outcomes (Locke & Latham, 1990; O’Leary-Kelly, Martocchio, & Frink, 1994; Perry, Mesch, & Paarlberg, 2006; Rogers & Hunter, 1992). An overall evaluation, then, might conclude that the efficacy of some aspects of results-based management is unclear, but that many important components do have empirical backing.

Results-Based Management’s Intense Appetite for Information

Results-based management makes rigorous demands of government and nonprofit agencies. A results-oriented agency proactively determines a long-range direction and then advances in that direction through a series of goals and objectives expressed in terms of desired re- sults, that is, the specific, measurable outcomes expected. In order to pursue these outcomes nimbly, it avidly seeks and digests current information about changes in the environment, about its own progress toward outcomes, and about customer satisfaction. It ensures that it is able to act quickly upon this information by restructuring its operations so that its orga- nizational structure is flatter, its frontline workers are more empowered, and its processes are streamlined to reduce cycle time and handoffs. To meet the demanding expectations of this management model, an agency requires a great deal of complex data: timely, complete information about both processes and outcomes. The model also requires that the organization have the ability to act promptly on that in- formation. These requirements can be met only by agencies that take advantage of recent developments in information technology, and this management role for IT is the subject of the next section.

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Information Technology and Results-Based Management

IT in Public and Nonprofit Agencies: The Historic Emphasis on Operations Over Management

Management texts distinguish operations from management. Operations, usually carried out by frontline workers, are the day-to-day activities of public and nonprofit agencies. Operations would include such activities as a teacher teaching fifth-grade students, a doc- tor treating patients, or a sanitation crew picking up garbage. Routine supporting services for these frontline activities, such as purchasing or inventory control, are also classified as operations. Management, on the other hand, is the process of coordinating and directing many such operational activities to produce an effective agency. Management has commonly been the mission of the middle and upper levels of organizational workers.5 For a school district, for example, keeping the records of one student is a concern of operations. However, when the student records are aggregated and used to determine how one school has performed compared to another school (or compared to a target), the information is now a concern of management because this aggregated information can be used to direct the organization. For most government and nonprofit agencies, IT has historically been much more important for operations—running the inventory reorder system, the accounting system, and the payroll system, or maintaining records for each client transaction—than it has been for management. (This suggests that many of the governmental and nonprofit IT systems over the years that were termed management information systems [MISs] might more accurately have been termed operations information systems.) However, IT’s management role in these organizations is now rapidly expanding. We will look at IT’s role in results-based management by examining its impact on each management step that was discussed in the first section.

IT’s Role in Scanning the Environment and Setting Long-Range Goals

As part of strategic planning, agencies scan the organizational environment to spot early trends (opportunities and threats) so they can move proactively. IT, in the form of data mining, can help agencies in such scanning by showing agencies relationships and trends that they never expected. At the federal level in particular, as Cahlink (2000) reports, data mining is often used for long-range planning. For example,

the Justice Department has used it to find crime patterns so it can focus its money and re- sources on the most pressing issues. The Veterans Affairs Department has used it to predict the demographic changes among its 3.6 million patients so it can prepare more accurate

Information Technology as a Facilitator of Results-Based Management 209

budgets … [and] the Internal Revenue Service [IRS] uses the technology at its customer service center to tracks calls in order to pinpoint the most common customer needs.

The IRS can then address these needs through its long-range plans (see also U.S. Govern- ment Accountability Office, 2004a). Geographical information systems (GISs) also play an important role in strategic planning, especially for local governments. By using the GIS data to track physical and demographic changes block by block and neighborhood by neighborhood, a city or county gains the in- sights it needs to understand trends and to determine the best long-range approaches. IT’s Role in Promoting Agility Through Quicker Feedback

Results-based management emphasizes making the organization more nimble so it can adjust quickly to change. An agency’s agility is enhanced by the early warnings of outside changes provided by strategic planning and by the quick reaction times of empowered frontline workers. However, an agency’s agility depends most of all on its ability to quickly secure current information about the agency’s ongoing performance. Such real-time performance data ensures that good performance can be immediately reinforced and that performance shortfalls can be promptly remedied. The steady increase in IT portability has been an important contributor to more timely feedback. One good example is provided by the management of a very large parks main- tenance program:

For a decade, New York City’s parks and recreation department sent inspectors into parks to rate the performance of its maintenance teams. The inspection crews compiled massive reports covering all 1,500 city parks. The task was so overwhelming that the report could only come out three times a year, and by the time it came out, the data was stale and too mountainous to be useful. Three years ago, the department overhauled the inspection program and bought four hand- held computers. The computers fit into the palm of one hand, and show a menu of the twelve parks features, from lawn condition to graffiti, that inspectors rate as either acceptable or unacceptable. Inspectors enter information through a touch-screen keypad and can add ad- ditional comments through a handwriting feature. At the end of the day, the data is uploaded straight into the database that the department uses to churn out performance reports. ... By speeding the data-collection process, the technology allowed … [the department] to move from voluminous triennial reports to biweekly performance reports on roughly 115 parks at a time. (Swope, 1998, p. 61)

Because of new forms of IT, the top managers of the parks department had fresher, more usable data to establish accountability. The department became more agile, with far quicker remedial responses. The overall conditions of the parks rapidly improved, with the percent- age of parks graded acceptable almost doubling from 44 to 83% (Swope, 1998).

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IT’s Role in Promoting a Focus on Overall Results

Two IT-based tools, GIS and dashboards, have played particularly strong roles in helping organizations to focus on overall results.

The Role of GIS

Geographic information systems are a particularly useful managerial tool because they allow managers to see overall patterns. Most large police departments, for example, now use GIS to display crime results district by district. Inspections departments, planning departments, fire departments, and other agencies also gather, analyze, and display their performance measures through GIS. New York’s Comstat is the premier example of this approach. As one observer notes,

In police circles the tense and theatrical NYPD Comstat meetings are the stuff of legend. All the top cops pack into a “war room” around a large rectangular table. Colorful com- puter-generated maps flash up on a screen, showing recent crime trends and statistics. A precinct commander takes the hot seat, and questions start flying: “Why are robberies up in this neighborhood? What are you doing about it?” ... [In all cities with similar systems,] geographic information systems and database tech- nology bring the statistics to life. And commanders are held responsible for reducing crime in their areas. For many departments, this process—especially the accountability part—is nothing short of revolutionary. (Swope, 1999) As it developed, Comstat (also commonly spelled Compstat) broadened the range of results it tracked. For example, citizen groups feared that too much attention to crime rates alone led to goal displacement, and so Comstat also began to hold commanders accountable for such outcomes as the number of citizen complaints about police behavior and similar measures of police civility. The resulting range of measures helps produce a good overall picture of performance. Other cities have taken the same IT-enabled feedback model and applied it to all city services, not just police. Baltimore, for example, holds Citistat agency meetings every 2 weeks, with “the projection screens awash with spreadsheets, graphs and maps, visual representations of how well each city agency is doing its job.” The head of the Baltimore Parks and Recreation Department says, “Citistat has redefined what our jobs are…We need to constantly evalu- ate what we’re doing and see it makes a difference” (Swope, 2001). Different versions of Citistat-style performance-monitoring meetings are now found in many cities throughout the United States (Behn, 2006).

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The Role of Dashboards (and Scorecards)

Beyond GIS, other IT-based tools also help agencies track and examine their performance. As illustrated by Comstat and Citistat, the pace of feedback has quickened in many organi- zations. In the past, agency personnel would often receive written summaries of their unit’s performance measures infrequently, with quarterly reports most common. This undercut the rapid feedback that is one of the main advantages of performance measurement. Now many agencies post performance information on intranets, making weekly and even daily information available for decision making at all levels. Because performance-reporting systems are still evolving, different public and nonprofit agencies use different names for their online performance reports. For example, some give them agency-specific names, and others term them balanced scorecards.6 However, the most common term for online reporting systems, especially ones that emphasize graphics and interactivity, is dashboards.7 Dashboards integrate the information that is often now scattered among incompatible legacy systems so the agency can gain a complete overall view of its ongoing performance. A dash- board will show 6 to 12 key performance indicators, usually including such measures as the number of clients processed, customer-satisfaction ratings, error rates, cost data, progress in ongoing projects, and client outcomes. Dashboards display much of their data graphically, through bar charts, pie charts, and trend lines. Graphical presentations help managers to more quickly see patterns that might otherwise be hidden in long columns of figures. When managers look at a dashboard, the graphical presentation immediately alerts them to changes or problems. A few dashboards are less traditional and move beyond bar charts to display many key measures as dials, with worrisome “red zones” marked. When the arrow for, say, this month’s error rate moves into a red zone, all managers recognize that their error targets have been missed, and that they should quickly begin to implement changes to improve accuracy. Because dashboards tend to report relatively short-term data, with some categories updated weekly or even daily, managers get the quick feedback necessary for results-based manage- ment. Because the dashboards are interactive, managers can drill down to learn more about how each category applies to particular geographic areas, or particular kinds of clients. Timely performance information, such as that provided by dashboards, is also an important facilitator of organizational learning and continuous improvement. The best organizations constantly experiment with new approaches. Such experiments provide important trial-and- error-based learning, but only if timely performance results are readily available so that promising new approaches can be recognized and then institutionalized, and disappointing experiments can be terminated promptly. In short, the best performance information systems—whether called online performance reports, balanced scorecards, or dashboards—provide all the information that managers would need in order to set short-term and long-term performance targets, to gather process and outcome information about progress toward those targets, and to conduct research on ways to perform better (Dover, 2004).

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Dashboards are built, in part, from enterprise resource planning (ERP) systems. Therefore organizations without an ERP system will usually find that developing an effective ERP system is a major step toward securing useful performance information. However, dashboards extend well beyond ERPs. As Liang and Miranda (2001, p. 15) point out, “The very data that executives need for strategic and tactical decision making often requires the combination of data from ERP and non-ERP application sources (e.g., cost accounting information, efficiency indicators, customer information, performance measures, historic data for forecasting).” Dashboards are still far less common in government and nonprofits than they are in busi- nesses. Even many public and nonprofit agencies that do use online reporting systems such as dashboards still have a long way to go to automatically integrate the data from what were once stand-alone systems. However, substantial progress has been made in many cases, and the pace seems to be accelerating. IT’s Role in Coordinating and Streamlining Services to Provide One-Stop Shopping

Fostering Coordination Through Information Integration

Results-based management promotes one-stop shopping, which brings together all related services in one location. For example, a low-income client could receive help with hous- ing, food stamps, income maintenance, health care, and job training from one location and possibly from just one case manager. One-stop shopping is usually advocated as a way of helping clients save time and avoid confusion, and these in fact are major benefits. However, far more importantly, such cross-functional coordination can help government achieve its most important long-range program results because attacks on any social problem—poverty, crime, or substance dependency—are more likely to succeed if they are coordinated rather than delivered piecemeal by different organizations at different times under different rules. Such a coordinated service system requires coordinated information streams. Integrated information systems, then, not only increase client satisfaction through one-stop shopping, but more importantly increase the agency’s ability to produce meaningful results.

Fostering Streamlined Services Through IT-Driven Disintermediation

Information systems, particularly Internet-based systems, can also foster greater efficiency and quicker services through disintermediation: in plainer English, by eliminating the middleman or -woman (Jallat & Capek, 2001). In the private sector, for example, online travel sites allow consumers to order tickets directly from airlines, eliminating the time, information loss, and cost of travel agents who once mediated between consumers and airlines. Disintermediation leads to greater efficiency because the service is provided with fewer handoffs (i.e., steps involving different actors). In government and nonprofits, information systems provide a faster, more seamless experi- ence for clients by enabling two types of organizational disintermediation: decreasing the

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number of handoffs to middle managers, and decreasing the number of handoffs to frontline information processors and advisors.8 IT’s potential to decrease layers of middle manage- ment has been widely discussed and analyzed. IT, particularly expert systems and online help lines, can take over some of the roles that middle managers once played as resident experts and coordinators for less-experienced frontline workers. Moreover, middle managers traditionally carried information from upper management to frontline workers, and now this role, too, is diminished because IT allows direct, immediate connections. IT also allows agencies to decrease or even eliminate many frontline advisors and coordinators, such as job-placement brokers or college course advisors, because clients can now directly access job or course listings, and can use online systems to register for job interviews or for courses. This form of disintermediation saves money and empowers clients, but it also raises policy choices that we will discuss in a later section. Summarizing IT as a Management Facilitator

Results-based management aspires to be proactive, agile, and results oriented. IT in the form of data mining helps agencies proactively scan the environment. IT in the form of handheld computers helps the agency to agilely monitor results, and client-focused interactive Web sites helps the agency to quickly and agilely deliver services. Finally, IT in the form of GIS and integrated performance information systems (i.e., dashboards) helps the agency focus on the overall results. At every step, IT provides capabilities that are crucial to results-based management.

Policy Choices in Using IT to Advance Results-Based Management

When managers first consider ways that they can use IT to facilitate results-based manage- ment, they must begin by making a series of policy decisions. Among the most common choices facing top managers are deciding where the balance should lie between costs and the level of systems integration, between the efficiency of disintermediation and the need to guide clients, between internal data accessibility and privacy concerns, between efficiency and political openness, and between frontline empowerment and organizational uniformity. This section will briefly discuss each of these choices in turn. Balancing the Extent of System Integration with Costs

Looking into the future, an ideal information system would move beyond a dashboard for a single agency. One of the most important management trends of recent years is that many services are often delivered not by one agency, but by networks of agencies. For example, often federal, state, local, nonprofit, and contracted for-profit agencies all work together in

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an area like job training and placement. To take another example, an even larger network of agencies works together to help at-risk families, concurrently providing psychological counseling, job training, food stamps, housing aid, health care, and other services. The most important desired result—a satisfactorily functioning family—is produced by all these agen- cies together. When dealing with such common policy areas, then, an ideal performance-re- porting system would foster the exchange and integration of management data across many cooperating agencies, including both governmental and nonprofit ones. However, even within a single large agency with multiple legacy systems, it is often extremely costly and time consuming to integrate existing systems in order to produce the most useful management information. Moreover, the more ambitious the integration effort, the higher the possibilities of failure. Says a report on integrated governmental ERP systems, “From Arkansas to Iowa to San Antonio and beyond, ERP implementations have been tripped up and nearly deep-sixed by problems …” (Perlman, 2004). Gartner, an independent research firm, has estimated government’s failure rate at close to 60% for outsourced systems-inte- gration projects (Perlman, 2002). Therefore, managers taking their first steps toward using IT in results-based management must make difficult decisions about how to balance the advantages of integrating a large number of information systems on one hand, and implementation cost and risk on the other. Balancing the Efficiency of Disintermediation vs. the Need to Guide Clients

As discussed earlier, IT allows agencies to eliminate intermediaries, allowing customers to directly appraise and choose their own services. This disintermediation has great ad- vantages in reducing costs and empowering clients. At the same time, though, it can have disadvantages as well. The type of disintermediation that raises the most complex management questions is the potential elimination of many frontline client advisors. A generation ago, a job seeker at a government employment agency might well work entirely through a job counselor who would screen job opportunities and help contact potential employers. Now, job seekers usu- ally interact much less with such frontline advisors because they are often quickly directed to Internet-based job listings that they screen on their own; they can then use IT to send applications and otherwise communicate directly with employers. Agencies have similarly used IT to eliminate many frontline advisors for such functions as helping government em- ployees to invest their retirement funds, or helping community-college students choose and register for courses. This type of disintermediation is often termed coproduction because it replaces the agency’s intermediary with the efforts of the clients who help coproduce their own results. Such IT-driven efficiencies speed the process and give the client more direct control, but some agencies have discovered that their systems assumed too high a level of client information. Some clients may want the advice and reassurance provided by human intermediaries, such as job counselors who suggest job-seeking strategies, retirement counselors who suggest investment choices, or college advisors who help students to evaluate possible course selec- tions. Other clients may be pleased to be able to avoid such advisors, yet they may make

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consistently poor choices without them, thereby diminishing the program’s results. System designers, then, must balance the efficiency gains of disintermediation with the clients’ need for personalized guidance.

Balancing Information Integration and Accessibility vs. Privacy Risks

When all the information that applies to a single client is scattered among various unintegrated databases, management is greatly impeded, but privacy is less threatened. Results-based management calls for integrating information, but gathering all the information about a cli- ent in one place and making that information accessible to any worker that the client may contact (one-stop shopping) greatly increases the possibility of privacy infractions: More information is available from any one leak, and there are also more places from which it can leak (Ghere & Young, 2001; U.S. Government Accountability Office, 2005, 2006). Similarly, defense, foreign affairs, and police agencies often need to safeguard sensitive information about national security or ongoing police investigations, and therefore they face a trade-off between making internal information quickly accessible to their workers vs. information security.9

Management information services are increasingly outsourced for efficiency reasons (Thibodeau, 2001) and this, too, may increase the risks of information leakage because it increases the number of individuals with access to the information while decreasing the ability of government leaders to directly monitor them. In making decisions about IT and management, then, top managers must first make a policy decision about the desired balance between efficiency, usually promoted by making complete information easily accessible to employees, and information security.

Balancing Political Openness vs. Organizational Efficiency

Just as there are trade-offs involved in determining the extent of employee access to some types of organizational information, there are sometimes trade-offs in determining the extent of public access to ongoing governmental management information. Some organizations have begun to publicly post their weekly and monthly performance information on their Web sites to demonstrate that they are open and accountable. For most agencies, there is no downside to these short-term public reports because they discover that the (unfortunately) general public has an unwavering lack of interest in their performance measures. However, such short-term postings present a greater trade-off for health, environmental, regulatory, and other agencies with politically charged missions and intense interest groups because interest groups are able to use this information to slow the managerial decision process and to move the ultimate decisions away from efficiency (Ghere & Young, 1998; Musso, Weare, & Hale, 2000). For example, a state forestry agency may find that its weekly performance information about controlled burns or acres planted will enable both environmental groups and industry groups

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to intervene with agency leaders and legislative overseers every time a short-term target they approve of is missed or one they disapprove of is exceeded. Managers must now spend time responding to these interventions. Openness is gained, but efficiency is lost, and sometimes responsiveness to the wider public is lost because of the need to respond to intense narrow groups. If top agency administrators decide these costs are too great, they may decide to distribute short-term performance information only internally through intranets, and other- wise report only broad outcome information to the public. That has been the path taken, for example, by the Atlanta dashboard designers (Edwards & Thomas, 2005). Whatever their choice, top managers in such controversial policy areas must decide on the appropriate bal- ance of openness vs. efficiency as they plan their use of IT in management. Balancing Frontline Worker Empowerment vs. Organizational Uniformity

Even if frontline workers have access to agency or client information, a distinct although related question is what power they are given to act on that information. The more deci- sions are set by the top, the more the organization will treat each client uniformly, and this uniformity is often viewed as fairness. However, different clients bring subtly different problems and concerns to organizations, and if frontline workers are empowered (within some limits) to use their own discretion, the organization will be more flexible, and the morale of frontline workers will usually be enhanced as well. Bovens and Zouridis (2002) point out that IT advances have greatly changed the roles of a certain type of “street level bureaucrat,” those frontline government workers who make decisions about whether clients are eligible for certain levels of health care benefits, pub- lic housing, food stamps, or job training.10 In the past, such workers had to apply a great deal of individual judgment (Lipsky, 1980). Now they may be better seen as “screen-level bureaucrats” with much less discretion because software will often suggest and sometimes even determine levels of eligibility with no human intervention. For most large agencies, the decision about how much power to devolve to frontline work- ers will greatly affect the information system. Ironically, the same IT that enables frontline workers to be empowered, because it puts complete information at their fingertips, allows top management to micromanage intensely because they can instantly call up every bit of information about what frontline workers are doing and deciding. A decision about the level of frontline empowerment that best meets society’s needs, then, must precede many decisions about the information system (Bovens & Zouridis, 2002; Ghere & Young, 1998).

An Overview of the Managerial Balances: Why Management Choices Must Precede IT Choices

Many discussions of planning for IT systems focus on relatively narrow IT issues. For ex- ample. They often recommend that organizations plan for scalability so the system can grow

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as the organization grows, break major IT projects into pieces so they can be implemented and monitored better, and set clear project-management expectations (U.S. Government Accountability Office, 2004b). These are important guidelines, but they must be preceded by more fundamental decisions about the agency’s mission and about what facets of man- agement are most important in advancing that mission. Only then can meaningful decisions be made about how any new IT system can support management. When managers are trying to determine the right organizational structure, Chandler (1969) once famously advised that they should recognize that “structure follows strategy.” In other words, whether any given structure is right for an organization cannot be determined in the abstract. The organization must first choose its strategic direction, and then the right structure is the one that best fits that managerial strategy (Chandler, 1966). This simple concept applies to information systems as well, but it is sometimes ignored by top government managers when they are making (or quite often, delegating) IT decisions. Decisions about the information systems, particularly managerial information systems, should not come before decisions about the organization’s managerial direction. Managers must first decide what managerial balances—between efficiency and openness, for example—they wish to create; only then will some IT systems be correct and others ill-suited for that chosen strategic direction. We have already discussed five decisions about balances or trade-offs that must precede many IT decisions. Beyond those five broad policy decisions, more specific managerial decisions that precede IT decisions would include the following:

• What are the most important decisions facing our agency, and what specific informa- tion would be most useful in helping us make those decisions?

• For each specific item of information gathered, who in the organization needs it to make better decisions, and in what form will they find it most useful?

• Who outside the organization needs to know it, and again in what form? • What incentives do managers now have to actually use the information they are given,

and how can those incentives be strengthened? If IT experts make all the major choices about an agency’s IT systems, they are in fact determining much of the agency’s strategic and management direction. As Zuurmond and Snellen (1997, p. 205) have said, “Managing the information architecture means manag- ing the organization ... [because] these architectures control the decision premises of all organizational members.” An organization’s strategic decisions should not be a by-product of IT choices made by technical experts on technical grounds. Instead, they should reflect the long-range plans, management goals, and policy balances that have been thoughtfully determined by agency managers. IT choices then naturally follow. Because it forces managers to face basic questions about the agency’s policies and man- agement, the process of designing information systems can be a powerful form of strategic analysis that can create a much more effective, results-driven agency.

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Behn, R. D. (2006). The varieties of Citistat. Public Administration Review, 66(3), 332-340. Bovens, M., & Zouridis, S. (2002). From street-level to system-level bureaucracies: How information

and communication technology is transforming administrative discretion and constitutional control. Public Administration Review, 62(2), 174-184.

Boyne, G. (2001). Planning, performance and public services. Public Administration, 79(1), 73-88. Cahlink, G. (2000). Data mining taps the trends. Government Executive, 32(12), 85. Chandler, A. D. (1969). Strategy and structure: Chapters in the history of the American industrial

enterprise. Cambridge, MA: MIT Press. Dover, C. (2004). How dashboards can change your culture. Strategic Finance, 84(4), 43-48. Edwards, D., & Thomas, J. C. (2005). Developing a municipal performance measurement system:

Reflections on the Atlanta dashboard. Public Administration Review, 65(3), 369-376. Ghere, R. K., & Young, B. A. (1998). The cyber-management environment: Where technology and

ingenuity meet public purpose and accountability. Public Administration & Management: An Interactive Journal, 3(1).

Jallat, F., & Capek, M. J. (2001). Disintermediation in question: New economy, new networks, new middlemen. Business Horizons, 44(2), 55-60.

Kearney, R. C., Feldman, B. M., & Scavo, C. P. F. (2000). Reinventing government: City manager attitudes and actions. Public Administration Review, 60(6), 535-548.

Kettl, D. F. (2005). The global public management revolution (2nd ed.). Washington, DC: Brook- ings.

Liang, L. Y., & Miranda, R. (2001). Dashboards and scorecards: Executive information systems for the public sector. Government Finance Review, 17(6), 14-19.

Light, P. C. (2006). The tides of reform: Patterns in making government work, 1945-2002. Public Administration Review, 66(1), 6-19.

Linden, R. M. (1994). Seamless government: A practical guide to reengineering in the public sector. San Francisco: Jossey-Bass.

Lipsky, M. (1980). Street-level bureaucracy. New York: Russell Sage Foundation. Locke, E. A., & Latham, G. P. (1990). A theory of goal setting and task performance. Englewood

Cliffs, NJ: Prentice Hall. Mani, B. G. (1995). Old wine in new bottles tastes better: A case study of TQM implementation in

the IRS. Public Administration Review, 55(2), 147-158. Miller, C. C., & Cardinal, L. B. (1994). Strategic planning and firm performance: A synthesis of more

than two decades of research. Academy of Management Journal, 37(6), 1649-1665. Moon, M. J., & de Leon, P. (2001). Municipal reinvention: Managerial values and diffusion among

municipalities. Journal of Public Administration Research & Theory, 11(3), 327-351. Moynihan, D. P. (2006). Managing for results in state government: Evaluating a decade of reform.

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Good management or good democracy? Political Communications, 17(1), 1-19. O’Leary-Kelly, A. M., Martocchio, J. J., & Frink, D. D. (1994). A review of the influence of group

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Perlman, E. (2004). The ERPworks. Governing, 17(5), 55-60. Perry, J. L., Mesch, D., & Paarlberg, L. (2006). Motivating employees in a new governance era: The

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Endnotes

1 Results-based management also encourages workplace teams, and suggests ways of tying results to group incentives and to budget decisions. However, these are areas where IT has a smaller role, and so they will not be covered here.

2 Reengineering included both a philosophy, which was rapidly jettisoned by most govern- ment agencies, and a series of tools, which were widely adopted and continue to be used. The philosophy held that the most effective process improvements required very radical changes that were usually conceived and implemented in a top-down manner. This philosophy proved strikingly impractical for government. The tools included approaches for decreasing cycle times and making services more seamless for customers. Among these approaches were ways of capturing information just once, parallel processing, job enlargement, and case management. These process tools and approaches proved quite useful for producing incremental government improvements. The best public-sector introduction is Linden (1994).

3 Of the major professional managers’ societies, the American Society for Public Administration (ASPA) has most explicitly endorsed the approach. In 1996, it established the Center for Account-

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ability and Performance in order, according to the ASPA Web site, “to address the requirement for all levels of government to move to performance-based, results driven management.” The two other professional societies, International City/County Managers Association (ICMA) and the National Association of Schools of Public Affairs and Administration (NASPAA), have also published official books and monographs on results-based government.

4 In the public sector, increased customer satisfaction is never the only goal and often it is not the major goal. Regulatory agencies, such as bank examiners, restaurant inspectors, highway patrol officers, will often find that doing a good job will rarely delight their most attentive customers such as bank owners, restaurant managers, and speeders. Meanwhile, their other customers (the general public) are inattentive. Other agencies, like the U.S. State Department and health research agencies, will often find that most of their customers do not have enough information to evaluate their performance. Therefore, even though customer ratings are always useful in government, they play a less central role than they do for business, and they are accordingly only one piece of information within a range of results.

5 Although management is traditionally the purview of middle and upper organizational levels, we will later discuss how this distinction is breaking down because both results-based manage- ment theories and IT advances have made it possible to move more management decisions to frontline organizational workers.

6 A balanced scorecard is a particular type of performance report that usually focuses on four organizational sectors: processes, human-resource development, results, and customer ratings. Unlike the term dashboards, the term scorecards does not indicate that the reports are necessarily online.

7 Of course, very small organizations will sometimes track and report performance measures using only simple spreadsheets to total and compare monthly figures. For most organizations, however, performance data are usually tied to more sophisticated information-processing ca- pacities, as discussed in this section.

8 In government, many types of Internet-based disintermediation can also produce operations- level effects, such as allowing government to buy supplies, screen bids, and sell bonds much more efficiently. Because these are not managerial-level effects, they lay outside our scope in this chapter.

9 Some sophisticated systems do tailor the information shown by the need to know of each user. However, such systems are expensive and difficult to keep up to date as users, information, and clearances change month to month.

10 Bovens and Zouridis (2002) point out that this IT-driven loss of discretion and autonomy does not apply to all of Lipsky’s (1980) street-level bureaucrats. Those who deliver particularistic services to a small group of clients at a time—health care providers or teachers, for example—have not lost much discretion to IT. Parenthetically, the authors also point to a level beyond “screen level” bureaucrats where all human discretion has been removed and government decisions are made by IT systems with no face-to-face contact. They call this level “system level bureaucracies” and provide a number of European examples.

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Chapter XII

Managing IT Employee Retention:

Challenges for State Governments

Deborah J. Armstrong, University of Arkansas, USA

Margaret F. Reid, University of Arkansas, USA

Myria W. Allen, University of Arkansas, USA

Cynthia K. Riemenschneider, University of Arkansas, USA

Abstract

IT employees are critical to the successful functioning of contemporary governmental agencies. Researchers and practitioners have long sought to identify workplace factors that influence employee retention. In this chapter we review the existing literature on fac- tors that may reduce the voluntary turnover of public-sector IT professionals. Examples are presented that illustrate what states have been doing to improve their ability to retain their technology workforces. We conclude with an in-depth review of two studies addressing workplace factors that may influence state government IT personnel retention. The first is a study from a single state, designed to test factors potentially influencing affective commitment (a precursor of turnover intention) for state IT workforces. The second is a study from two states, designed to examine factors potentially influencing retention of state IT workforces. The message for decision makers is clear: When it comes to the retention of IT personnel, workplace and job characteristics matter. The insights from this chapter should aid public agencies in their ongoing efforts to retain quality IT professionals.

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Introduction

All levels of government face serious staffing challenges. These challenges are especially salient when it comes to IT employees who are critical to the successful functioning of contemporary governmental agencies. Estimates of unfilled public- and private-sector IT jobs range from 342,000 to 600,000 (Catlette & Hadden, 2000; Passori, 2000). Almost 87% of state governments lack the IT personnel they need (Newcombe, 2002) at a time when the federal government is devolving more responsibilities for public-policy implementation and quality service delivery to the state level, many current public-sector employees are contemplating retirement, and the public and private sectors of the economy are competing for a limited number of skilled IT employees. Unfilled public-sector IT positions present a significant threat to government’s ability to serve the public, making it vital that govern- ments identify ways to attract and retain IT personnel. Researchers have long sought to identify workplace factors that influence employee retention and commitment. In the most comprehensive study to date on voluntary turnover in state governments, Selden and Moynihan (2000) found retention was more likely when state gov- ernments provided better pay, more internal mobility opportunities, and employee-friendly human-resource practices. In their study of state government personnel, Thatcher, Stepina, and Boyle (2002-2003) found employees expressed considerable willingness to quit when they perceived better opportunities elsewhere. Thus, turnover in IT environments is affected by the state of the economy, pay rates, and attractive opportunities in other organizations. This chapter provides insights that may be utilized to influence the retention of IT personnel in the public sector. Initially, the chapter describes how public-sector managers face private- sector competition for qualified IT employees. Sometimes staffing shortages and budgetary concerns are managed through outsourcing or offshoring. For states that do not select those options, it becomes important to identify how to create attractive working environments. Therefore, the scholarly literature discussing issues related to voluntary turnover and af- fective organizational commitment is reviewed in order to identify what organizations can do to create more attractive working environments for IT employees. This is followed by a discussion of what a sample of states that have been recognized for their excellence in IT personnel initiatives have done. An in-depth review of two public-sector IT workforce studies follows. The first study identifies factors associated with affective commitment and job satisfaction, and the second identifies factors associated with turnover intention (reten- tion). The chapter concludes with ideas on what public-sector managers can do to retain valued IT employees.

Public-Sector Employers Face IT Staffing Issues

Public-sector employers face two related staffing issues. First, they face recruitment and retention issues since private-sector business can offer IT employees better salaries and incentives. Second, in order to deal with labor shortages and/or control costs, many federal, state, and local agencies are considering outsourcing or offshoring some IT functions.

Managing IT Employee Retention 223

Private-Sector Competition

As stated previously, the number of unfilled public- and private-sector IT jobs is sizable and expected to grow. Thus, developing ways to retain current employees and attract future ones is important. Frequent turnover of valued employees can be a costly challenge in or- ganizations and even more so in an area such as IT that is facing a renewed labor shortage. High turnover often is more damaging to an organization than the inability to recruit new employees (U.S. Merit Systems Protection Board, 2002). With regard to hiring and retaining IT personnel, research has found that public-sector agencies have historically had limited ability to compete with the private sector. Bozeman and Bretschneider (1986) report that public-sector agencies experience difficulties in hiring IT personnel because of a real or perceived lack of flexibility in their hiring practices and limited support for in-house training. Lan, Riley, and Cayer (2005) found that public-sector agencies had trouble recruiting and retaining IT personnel because of uncompetitive com- pensation packages, inflexible recruitment and human-resource practices, tight technology budgets, and an unfavorable public image. One factor contributing to turnover intentions of IT personnel in the public sector may be the weak relationship between performance and pay and between performance and promo- tion compared to the private sector (Bozeman & Bretschneider, 1986; Bretschneider & Wittmer, 1993; Mohan, Holstein, & Adams, 1990). Another contributing factor may be the array of job options open to skilled IT personnel outside the public sector. In a study of state government employees, Kim (2005) found turnover intentions of IT personnel are affected by attractive job opportunities in other organizations. The limited public-sector literature focused on retention and turnover among IT professionals (e.g., Kim; R. W. Perry, 2004; Reid, Riemenschneider, Allen, & Armstrong, 2006; Selden & Moynihan, 2000; Thatcher et al., 2002-2003) suggests that maintaining a supportive work environment as well as providing a challenging task environment could provide measures to counterbalance the compensation issues and attraction of jobs outside the public sector.

Outsourcing and Offshoring

An organization outsources by contracting all or part of its information-technology func- tions to another company (Nam, Rajagopalan, Rao, & Chaudhury, 1996; Sinensky & Wasch, 1992). In an onshore outsourcing operation, the outsourced IT work takes place in the same country as that of the outsourcing firm’s IT department, whereas with offshoring, the outsourced IT work takes place in a country different from that of the outsourcing firm’s IT department (Fish & Seydel, 2006). As in the private sector, state and federal governments are increasingly considering outsourcing and offshoring as viable options to deal with la- bor shortages in the IT field (Garson, 2003). According to Edelman, Reynolds, and Holle (1997, p. 2), “Outsourcing has increasingly been examined by various governmental units as a potential solution to declining growth in agency revenues while attempting to enhance program service delivery in an era of devolution.” Government’s reliance on nongovernmental businesses and workforces is of course not new, nor are the perennial problems with service integration across levels of government and

224 Armstrong, Reid, Allen, & Riemenschneider

coordination among multiple public and private providers. Light (1999), in a study for the Brookings Institute, estimated that approximately 8 million contract workers complement a federal workforce of about 2 million. The Bush administration’s competitive sourcing initiative essentially sees public and private workforces competing for work that tradition- ally was considered to be the domain of the public sector (Light, 2003). Imposed head-count constraints force agencies to consider contracting and outsourcing even if they are philo- sophically opposed to it, or if the true cost savings or other organizational benefits cannot be clearly ascertained (Chen & Perry, 2003; White & Korosec, 2005). Thus, in many instances, governments, because of their complex technology needs, are increasingly using the ser- vices of large private-sector companies. Chen and Perry (p. 5) report that “government IT outsourcing is expected to be the fastest-growing segment of the overall federal IT market. The growth rate is estimated to be about 16 percent per year between fiscal year 2001 and 2006, reaching $13.2 billion.” According to these authors, the forms of outsourcing most widely used by federal agencies include network services, data-center services, call centers, Web hosting, and other types of application services. Coordinating the activities of literally thousands of public and private IT providers offers daunting technical and accountability challenges for public-sector managers. Service integra- tion across multiple platforms and applications and across geographical space are only the most obvious challenges. Avoiding service interruptions using largely proprietary applica- tions, keeping up with rapidly advancing technologies, and justifying and communicating increasing costs to the general citizenry and legislative bodies remain ever-present challenges. From the perspective of the public-sector manager, preserving transparency, accountability, and privacy protection can clash with private businesses’ intent to maintain their competitive position. Contracting, and more recently outsourcing and offshoring, reflects an ongoing constitutional struggle over the continued blurring of the public and private spheres within government since the potential for the intermingling of interests is a serious concern (Chen & Perry, 2003). A core tension within this approach to governing is to keep government operations small while holding private contractors accountable for their performance (for an extensive discussion see Guttman, 2003). At the state level the picture is a similar one but more murky with some states embracing outsourcing or offshoring and others resisting the trend. IT remains one of those areas where state governments see opportunities to achieve cost savings or to compensate for lack of available expertise. In states with outsourced services, the majority of such services are for technology or administrative support. State policy makers are getting better in discerning where true cost savings can be achieved while avoiding some of the pitfalls of outsourcing (Chi, Arnold, & Perkins, 2003; Government Accountability Office, 2006). A recent Govern- ment Accountability Office report of state-administered social-services programs reported that in the 15 states surveyed, actual savings associated with outsourcing and/or offshoring parts of the service, mostly in customer service and software development, ranged from less than 1% to over 20%. For example, Florida awarded a private outsourcing firm a multiyear contract to take over the state’s benefits and payroll administration as well as the training and recruiting of state workers. The state is expected to save millions of dollars in managing its antiquated and disparate personnel systems (Overman, 2003). Other states have been less receptive to outsourcing and/or offshoring. In 2004 more than 200 bills were introduced in state legislatures to prevent outsourcing and/or offshoring (Sakar,

Managing IT Employee Retention 225

2005). Two states, New Jersey and Arizona, prohibit outsourcing (Government Account- ability Office, 2006). In 2005, 19 state legislatures were presented with bills that addressed outsourcing issues (“2005 Outsourcing Bills,” 2005). Many of the bills included prohibitions against outsourcing, included measures to tightly monitor contracted services, or prevented outsourcing if, as a consequence, state jobs were lost. Pressures to resist outsourcing come from several sources: unions attempting to protect relatively high-paying jobs in light of continued manufacturing job losses, security or privacy concerns over protecting sensitive data, and concerns over hidden costs in managing mixed public and private systems. In summary, states face pressure to provide IT services as the federal government devolves more responsibilities to the state level. This is taking place within a labor environment where there is competition between public- and private-sector employers for a limited pool of qualified IT personnel within the United States. Some states are deciding to manage the lack of personnel by outsourcing or offshoring IT functions, whereas other states are resist- ing those trends. For states that resist outsourcing or offshoring, deciding how to attract and retain IT personnel capable of managing the various phases of IT resource acquisition and managing complex contracts or outsourcing arrangements, while assuring contract compli- ance, becomes vital. The next section discusses literature identifying workplace conditions associated with voluntary employee turnover in order to help public-sector managers create a working environment conducive to IT personnel retention.

Voluntary Turnover of Public-Sector IT Professionals

Employee turnover has been associated with significant economic and noneconomic costs. Economic costs include separation, replacement, and training costs. The annual economic per-person cost of turnover can range from $1,200 to $20,000 depending on the position (Hatcher, 1999), and the replacement cost of an experienced IT computer programmer may reach well over $20,000 (Griffeth & Hom, 2001). Noneconomic costs include losses in terms of leadership, organizational knowledge, and innovation capacities. Additional losses may include disrupted work processes, inattention to different employee groups, increased stress on the remaining workforce, and diminished attention to external changes and stakeholder needs (Pinkovitz, Moskal, & Green, 2001). Given such costs, the study of voluntary employee turnover, largely conducted in private- sector organizations, has been an area of interest for almost 30 years (e.g., Bluedorn, 1982; Mobley, Griffeth, Hand, & Meglino, 1979; Steers & Mowday, 1981). Researchers have identified numerous antecedents to voluntary employee turnover covering categories such as leadership, coworkers, stress, pay, job content, and the external environment to name a few (Griffeth, Hom, & Gaertner, 2000; Mobley et al., 1979; Porter & Steers, 1973). Griffeth et al.’s meta-analysis is the “most wide-ranging quantitative review to date of the predictive strength of numerous turnover antecedents” (p. 463). Two of the most important proximal precursors to the withdrawal process that they identified were organizational commitment and job satisfaction.

226 Armstrong, Reid, Allen, & Riemenschneider

While organizational commitment has been found significant in the private sector, it is important to investigate the extent to which it is vital to public-sector employee retention because some public-administration scholars have emphasized the distinct motivations, ethi- cal obligations, and service commitments of public-sector agency employees (e.g., Frank & Lewis, 2004; Mosher, 1982; Nyhan, 1999; Perry & Porter, 1982; Rainey, 1982; Romzek, 1990; Staats, 1988; Wright, 2001). Relevant differences between private- and public-sector employees have been reported in terms of reactions to intrinsic and economic rewards (e.g., Crewson, 1997; Kim, 2005), the value of extrinsic and intrinsic employee motivations (e.g., Frank & Lewis), and affective organizational commitment (e.g., Nyhan; Zeffane, 1994). As organizational commitment emerged as a significant antecedent of turnover in the Grif- feth et al. (2000) meta-analysis, we focus on it in the next segment and look at the role of organizational commitment in the retention of public-sector IT employees.

Affective Organizational Commitment

Organizational commitment involves an individual’s level of commitment to his or her organization. Affective organizational commitment is a strong belief in and acceptance of the organization’s goals and values, and a willingness to expend effort on behalf of the organization (Mowday, Steers, & Porter, 1979). Several studies have confirmed the strong (negative) relationship between affective organizational commitment and voluntary turnover (e.g., Farrell & Stamm, 1988; Griffeth et al., 2000; Mathieu & Zajac, 1990; Michaels & Spector, 1982; Mowday et al., 1979; Tett & Meyer, 1993). Few studies of affective organizational commitment have occurred in public-sector orga- nizations (for exceptions, see Balfour & Wechsler, 1996; Irving & Coleman, 2003; Kim, 2005; Liou & Nyhan, 1994; Maranto & Skelley, 2003; Nyhan, 1999; Steinhaus & Perry, 1996; Thatcher et al., 2002-2003). According to Reid et al. (2006, p. 322), “This lack is surprising due to the concept’s prominence in the organizational behavior literature, and the critical need to identify factors that might favorably influence the retention of public sec- tor IT employees.” In one of the few studies investigating affective commitment in public agencies, Liou and Nyhan (p. 111) concluded that “affective commitment not only explains more than 27% of the variation in public employee commitment to their organization but also correlates significantly with employee tenure.” Researchers (e.g., Steers, 1977) have consistently identified personal characteristics (e.g., tenure, sex, education, and need for achievement), job characteristics (e.g., challenges, opportunity for interaction, feedback from supervisor), and work experiences (e.g., organi- zational support, rewards for performance) as key antecedents of affective organizational commitment (Reid et al., 2006). While Meyer, Stanley, Herscovitch, and Topolnytsky (2002, p. 38) found that demographic variables tend to “play a minor role in the development of organizational commitment” when looking across employment sectors, IT employees share a common set of personal characteristics that may be especially relevant to their affective organizational commitment and eventual retention. They have a high need for challenging work, have a lower need for social interaction (Couger & Zawacki, 1978), and are more ambitious, logical, and conservative than the norm (Wynekoop & Walz, 1998). Hackman and Oldham (1976) introduced the concept of job characteristics. Job-characteristics variables that have demonstrated a positive relationship with affective organizational com-

Managing IT Employee Retention 227

mitment include goal setting, work schedules, and task variety (e.g., Hackman & Oldham, 1980; Locke, Latham, & Erez, 1988; Thatcher et al., 2002-2003). Job-characteristics variables that have demonstrated a negative relationship with affective organizational commitment include role ambiguity, subjective stress, and intergroup conflict (e.g., Cammann, Fichman, Jenkins, & Klesh, 1978; Chan, 1989; Greaves & Sorenson, 1999; Irving & Coleman, 2003; Jamal, 1990). We highlight these variables because of their prominence in and relevance to IT work settings. Work-experiences variables that are commonly associated with voluntary turnover and/or retention transcend immediate job contexts and reflect more generally on organization-wide policies such as interrole conflict (i.e., work-family conflict; Eisenberger, Armeli, Rexwin- kel, Lynch, & Rhoades, 2001; Thompson, Jahn, Kopelman, & Prottas, 2004; Thompson & Mastracci, 2005), perceived support from the organization (Eisenberger, Huntington, Hutchison, & Sowa, 1986; Hutchison, Sowa, Eisenberger, & Huntington, 1986; Meyer et al., 2002), leader-member exchange (e.g., Albrecht, 2005; Albrecht & Travaglione, 2003; Harris, Kacmar, & Witt, 2005; Somech, 2003), and pay for performance (Meyer et al.). Al- though the role of pay for performance in enhancing affective organizational commitment has received mixed support in public-sector settings (Thatcher et al., 2002-2003), state and federal governments are adjusting their pay scales and benefit packages in hopes of reduc- ing employee turnover. Interrole conflict has been discussed as a stressor for IT employees (Ahuja, 2002; Greenhaus, Collins, Singh, & Parasuraman, 1997). The scholarly literature has identified key variables influencing an employee’s affective organizational commitment and has verified a strong link between affective organizational commitment and voluntary turnover. Many state government organizations interested in retaining valuable IT employees have considered implementing policies and practices, based on findings in the scholarly literature, that influence the affective organizational commit- ment of their employees. In the following section, we will illustrate with a few examples what state governments are currently doing to address the employee-retention pressures that they are facing.

State Government Experiences

The following provides a few illustrations of what states have been doing to improve their ability to retain their technology workforces. We conclude this segment with a review of two studies. The first study explored factors influencing affective organizational commit- ment for state IT workforces, and the second examined factors potentially influencing the retention of state IT workforces.

State Initiatives

The following states were selected based on scores calculated by Governing Magazine and reported in the magazine’s 2005 report titled Government Performance Project: Grading the States, which recognized states for their excellence in IT initiatives. The Web sites of

228 Armstrong, Reid, Allen, & Riemenschneider

all the states that received ratings of B+ or better were read by the authors, along with the Web sites of those states’ IT departments. The following states provided the most informa- tion regarding their IT initiatives.

Missouri

In February of 2005, the state of Missouri conducted an IT environmental scan including input from 23 agencies to identify the trends and issues related to Missouri state government (Missouri IT Environmental Scan Summary: February, 2005). Of particular importance was the area of IT staffing—identified as one of four major subject areas along with citizens, IT consolidation, and agency business partners, management, and users. The lack of organiza- tional commitment, lack of advancement and salary increases, increased workload, lack of training opportunities, and uncertainty regarding the IT consolidation initiatives were identi- fied as IT employee dissatisfiers and demotivators. The proposed initiatives for IT staffing included the creation of a strategy for managing potential staff losses due to budget cuts, recruitment by the private sector, and retirements. Other initiatives included the identifica- tion of training needs and the development of training plans, and the provision of flexible work schedules, recognition, performance-based incentives, and raises when possible. With the improvement of the economy in Missouri and in general, concern was expressed over losing IT workers to the private sector.

Washington

In the Washington State Department of Information Services (DIS) 2005-2007 biennium strategic plan, one of the core values states, “Our employees are our most valued assets and their well-being is crucial to our success” (Washington State Department of Information Services, 2005, p. i). A part of the 2005-2007 strategic initiative is to conduct surveys every 2 years of all DIS employees, to report the results, and to follow up with responsive action plans. Another strategic objective is to move to a performance-based culture. DIS proposes to establish key competencies for all employment positions, ensure that each DIS employee has an annual evaluation, train employees to know how to use the performance development plan, and assure that proper training and policies are in place for each employee to meet the goals of his or her performance management plan. Additionally, the state has been working to develop a mechanism to be able to capture every DIS employee’s training profile in order to ensure the employee had taken all of the mandatory training. Internal communications between all DIS employees are enhanced via Webcasting and video on demand. This al- lows all employees to be connected regardless of the time of day or location. Finally, the state of Washington is implementing a succession planning process to help employees plan for advancement by knowing what key competencies are needed for each position. If the employee needs training to develop a particular competency for a position, he or she can get the training before applying for a vacated position. The goal of DIS is to increase employee retention and maximize return on training investments. Therefore, in attempting to retain its IT employees, Washington appears to be paying attention to characteristics specific to IT employees including their ambition and their desire for professional development.

Managing IT Employee Retention 229

Delaware

The state of Delaware’s strategic annual report sets the goal to become the employer of choice with a workforce that is empowered, capable, supportive, and accountable (Department of Technology & Information, 2004). Some initiatives to meet this goal include providing IT employees with the opportunity to grow professionally and personally, improving com- munication throughout the organization, and improving the performance management and compensation plans. Another initiative is to deploy and improve an employee recognition plan. Delaware computes an employee satisfaction index that is based on employee satisfaction surveys. Like Washington, Delaware appears to be targeting some of its retention initiatives toward those personal characteristics of IT employees including ambition and the need for challenging work, as well as work-experiences variables such as pay for performance.

Michigan

In Michigan, close to 60% of the IT workers are age 45 or older, and this state is faced with the challenge of replacing the IT knowledge base as these workers begin to retire (From Vision to Action, 2005). One strategy is to increase the diversity of the IT workforce by creating interview panels that are diverse in terms of gender and race. Michigan is also recruiting from college job fairs throughout the state. The state further focuses on improve- ments in the management of its IT workers in order to maintain a balance between work performed by contract employees and that performed by state IT employees. The Michigan Department of Information Technology (MDIT) hired 140 staff to replace contract employ- ees and saved $19 million annually (From Vision to Action, 2005). Another area where Michigan is making changes is the classification and compensation of its IT workers. The state has recently initiated a special project to review how the private sector and other public organizations compensate and classify the delivery of IT services. The goal is to be able to offer a competitive compensation package designed to attract and retain IT work- ers. The MDIT has regularly scheduled town-hall meetings and department blood drives to encourage teamwork, and offers telecommuting. Finally, Michigan provides a series of online training programs that cover both technical and behavioral issues. Therefore, in an attempt to retain and replace employees, Michigan is addressing the issues of outsourcing, job characteristics, work environment, and personal growth needs of IT employees previ- ously discussed in this chapter.

Virginia

Like Michigan, the Virginia Information Technologies Agency (VITA) has around 35% of its IT staff being age 50 or older. In the next 5 years, this percentage will increase to 55%. Additionally, the need for workers with specialized IT skills will increase as will the compe- tition for hiring and retaining these workers. VITA recognizes the need to offer specialized training for all of their IT workers (Virginia Information Technologies Agency, 2006b). In November of 2005, the Commonwealth of Virginia entered into an IT infrastructure part- nership with Northrop Grumman Corporation (Virginia Information Technologies Agency,

230 Armstrong, Reid, Allen, & Riemenschneider

2006a). This partnership is the first of its kind in the United States. The infrastructure part- nership includes such tasks as maintaining equipment and services for mainframes, servers and operating systems, and providing e-mail as well as data-center facilities and staff. The current VITA employees who perform infrastructure operations have the option of going to work for Northrop Grumman or staying with the state. Virginia appears to be taking a unique approach to the outsourcing issue discussed earlier in this chapter.

State IT Workforce Studies

The following studies were selected based on their usage of public-sector IT workforces as the sample, and their applicability to the phenomenon under study (IT workforce retention). The first study tests factors influencing affective organizational commitment for state IT workforces, and the second tests factors influencing turnover intentions for state IT work- forces. Taken together, these studies demonstrate the importance of job-characteristics and work-environment variables for the retention of public-sector IT employees.

Study 1

The first study by Reid et al. (2006) is intended to provide a backdrop for the challenges that governmental employers face in retaining their IT workforces. The sample for this study was IT employees working for a south-central state with one of the highest voluntary turnover rates of state government employees in the nation. The independent variables in their study included goal setting, role ambiguity, task variety, subjective stress, intergroup conflict, interrole conflict, perceived organizational support, leader-member exchange, and performance-pay contingency, and the dependent variables were affective organizational commitment, and its correlate, job satisfaction. Reid et al. (2006) found that perceived organizational support, leader-member exchange, role ambiguity, and task variety were the largest contributors to a canonical function that explained 53% of the variance in affective public-sector commitment and job satisfaction. Consistent with previous research (Albrecht, 2005; Albrecht & Travaglione, 2003; Lee, 2004), their findings indicated that in the public-sector IT environment, it is important to have a climate of organizational support and a supportive working relationship with supervisors. In contrast to research findings in the private sector (e.g., Ahuja, 2002; Igbaria, Parasura- man, & Greenhaus, 1997), in Reid et al.’s (2006) study, interrole conflict and salary issues did not rise to a significant level of concern for employees. Perhaps this is because larger organizations such as state government agencies (Durst, 1999) and organizations with sizable numbers of female employees are more likely to provide family-friendly benefits (Osterman, 1995). In addition, employees may enter the public sector understanding that their salaries are not likely to be comparable with their private-sector counterparts, or feel- ing other benefits available to public-sector workforces provide sufficient counterbalance so that pay does not become a major issue. However, since the pay for the IT employees in this state was in the bottom 25% of the states, their finding was surprising. Among the job-characteristics variables, Reid et al. (2006) also found that role ambiguity and task variety strongly contributed to the variance explained in affective public-sector

Managing IT Employee Retention 231

commitment and job satisfaction. Reid et al.’s findings were consistent with past research regarding the negative relationship between role ambiguity and affective organizational com- mitment (e.g., Igbaria & Greenhaus, 1992), but in contrast to Thatcher et al. (2002-2003). Reid et al. also found support for the link between task variety and affective public-sector commitment in the state government IT workforce:

One explanation for this finding may be that many public sector agencies are severely un- derstaffed so individuals are asked to “pick up the slack” and take on tasks outside of their official job description or serve constituents across many agency units. While these chal- lenges are a source of task variety, they may also adversely affect employees by increasing the potential for role ambiguity. (p. 327)

In contrast to previous private-sector research, Reid et al. (2006) found in this public-sector context other job-characteristic variables (i.e., goal setting, intergroup conflict, and subjec- tive stress) appear to have a lesser influence on affective commitment and job satisfaction. One explanation provided by the authors for this finding may be that “researchers have found that goal setting by individual employees is often limited in public sector settings, and may, therefore, be less central to employee affective public sector commitment and job satisfaction than other factors” (p. 327). Interestingly, no gender differences were found in this sample, which was 53% male.

Study 2

The second study by Kim (2005) is intended to provide a different perspective on the chal- lenges that governmental employers face in retaining their IT workforces. The sample for this study was IT employees working for two states, Nevada and Washington, with voluntary turnover rates of 16% and 6 to 10%, respectively. The independent variables investigated included work exhaustion, role ambiguity, role conflict (job characteristics), participatory management, project resources (work environment), advancement opportunities, training and development, and performance-pay contingency (human-resources management), and the dependent variable was turnover intention. Among the job-characteristics variables, only work exhaustion was positively associated with turnover intention. This finding is consistent with previous research in the private-sector IT workforce (e.g., Moore, 2000). In response to this finding, Kim (2005, p. 149) asserts, “To address the issue of work exhaustion, managers and supervisors can adjust work expectations and establish more reasonable target dates for the completion of IT projects.” Among the work-environment variables, participatory management was negatively as- sociated with turnover intention. Kim (2005, p. 149) states, “Participatory management practices also facilitate a clear understanding of IT project objectives, policies, and role expectations.” Among the human-resources-management variables, consistent with previ- ous research (e.g., Selden & Moynihan, 2000), advancement opportunities were negatively associated with turnover intention. Interestingly, no gender differences were found in this sample, which was 66% male.

232 Armstrong, Reid, Allen, & Riemenschneider

From a managerial perspective, the findings from these studies may aid public agencies in their ongoing efforts to attract and retain quality IT professionals. First, whether addressing turnover intention directly or affective organizational commitment as a proximal precur- sor to turnover intention, these studies indicate that in contrast to the private sector, in the public sector, gender and monetary compensation do not play a role. Second, public-sector managers play a key role in enhancing employees’ affective public-sector commitment and job satisfaction, two key constructs previously and strongly linked to turnover in the public sector (Thatcher et al. 2002-2003). Thus, quality supervision may play a significant role in influencing retention by creating an environment where employees feel supported by both their agency and their managers. Participatory management practices and career advancement opportunities may be two mechanisms through which management may demonstrate support. In addition, public-sector managers may be able to increase task variety and/or decrease role ambiguity by shifting tasks and/or workloads in response to individual needs. This may help increase job satisfaction and affective organizational commitment, and decrease work exhaustion and turnover intentions.

What is to be Done?

From our analysis of the states recognized for their excellence in IT initiatives, it appears that there are a few common strategies these states are pursuing. States may want to look to these strategies to increase the retention of quality IT employees. See Table 1 for a summary of strategies being employed. For example, four of the five states drawn from Government Performance Project: Grading the States (2006) appear to believe that training and development efforts are a key to retain- ing valued IT workers. This is consistent with private-sector IT personnel research (e.g., Couger, Oppermann, & Amoroso, 1994; Couger & Zawacki, 1978; Wynekoop & Walz, 2000) that found the need for achievement, challenge, autonomy, opportunities, and learning are important to IT professionals given the personal characteristics of such employees. Three of the five states are focusing on performance-based incentives as a means of retaining quality IT personnel. Bozeman and Bretschneider (1986) found that public-sector managers perceive a weaker relationship between performance and pay than private-sector manag- ers. From the study results presented, the pay-for-performance contingency appeared to have a minor impact on affective public-sector commitment, job satisfaction, and turnover intention. Thus, in contrast to the private sector, in a public-sector context, it appears that salary issues may be managed if employees perceive a climate of managerial support and receive recognition in other forms from management. The states of Delaware, Missouri, and Washington understand this aspect and are focused on performance-based pay as a means of achieving employee retention. Communication seems to be a key focus for the successful states. The Washington state government is using Webcasting and other technologies to communicate with employees, while the Michigan state government uses regularly scheduled town-hall meetings to keep employees informed. Lastly, employee surveys and recognition are being used to keep in

Managing IT Employee Retention 233

touch with employee needs and concerns. Communication is a key to reducing role ambi- guity and uncertainty, which were negatively related to commitment and job satisfaction in the in-depth case study reported in this chapter. Clear supportive communication from supervisors, as discussed in the scholarly literature on leader-member exchange, also is a key to retaining IT employees. From the previous discussion, it is apparent that all levels of government are concerned with hiring and retaining vital IT workforces but are not averse to outsourcing some functions to the private sector to keep pace with the technological changes. At the same time, managers must be sensitive to the unique responsibilities of public agencies and the unique political environments to which they must respond. It is clear that blended workforces of contract and permanent employees have become quite common in some public agencies, and some states and federal agencies have engaged in outsourcing and offshoring. Such approaches are being used to deal with the persistent pressures of finding qualified employees or re- sponding to unique circumstances. Yet, even with demonstrable cost savings that might be derived from such activities, these benefits can only be part of the equation. The message for public-sector decision makers is clear: workplace and job characteristics matter. A sup- portive work environment with clear, reasonable work expectations and identified career opportunities is a key factor in IT personnel retention. IT professionals, who have the op- tion of working almost anywhere in the economy, may be more demanding in this regard. Public-sector managers should take notice of these aspects if agencies wish to retain this valuable segment of the workforce.

Table 1.

Strategy State

MO WA DE MI VA

Training and Development × × × × Flexible Work Schedules × Telecommuting × Employee Recognition × × Performance-Based Incentives × × × Compensation × Employee Surveys × × Annual Evaluations and Performance Development Plans × Communication × × × Succession Planning × Increase Diversity × Decrease Contract Employees ×

234 Armstrong, Reid, Allen, & Riemenschneider

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pad3711 chapter 11.pdf (p.19-35)
pad3711 chapter 12.pdf (p.36-53)