An overarching strategic vision is needed that identifies the kind of capabilities that DOD will need in the future, the best way to provide those capabilities, and the changes in human resources planning and programs that will be required.”
In view of these studies, the Office of the Secretary of Defense published the Military Personnel Human Resource Strategic Plan (referred to in this report as the military personnel strategic plan) in April 2002 to establish military personnel priorities for the next several years. In this regard, the two plans constitute a positive step forward in DOD’s strategic management of the military workforce. The Social Compact indicates that benefits are important to alleviating some of the hardships of military life and emphasizes that providing consistent, high-quality benefits that meet the needs of service members and their families can yield a committed and long-term workforce. While progress has been made, DOD’s human capital plans do not yet satisfy the two factors we identified in our model as critical to the success of strategic human capital planning (one of the four cornerstones of sound strategic human capital management). First, the plans do not specifically address how DOD will integrate and align benefits and other human capital approaches to meet its overall organizational goals. It is also unclear how the initiatives, many of which are studies, will work in conjunction with one another to meet DOD’s goals. For example, one of the initiatives is to study alternatives to the military retirement system. The plan does not explain how retirement reform may be integrated and aligned with other initiatives such as DOD’s study of variable career lengths for officers. Thus, DOD lacks an overarching framework integrating its human capital plans for military personnel. Secondly, the plans do not satisfy the critical success factor of using data in human capital decisions. In addition, DOD’s plans do not discuss, at a strategic level, military workforce needs or gaps. Moreover, DOD lacks a process for enabling senior DOD officials to oversee the progress and implementation of its human capital plans from a strategic vantage point. Conclusions

DOD, in developing its human capital plans addressing military personnel and quality of life, has made progress in adopting a more strategic approach to human capital management. Such a process could assist in the integration and alignment of benefits and other human capital approaches to meet organizational goals and in promoting a fact-based, performance-oriented approach to human capital management. Recommendation for Executive Action

To improve DOD’s strategic human capital management, we recommend that you direct the Under Secretary of Defense for Personnel and Readiness to establish an oversight process by which senior DOD officials may integrate and align benefits and other human capital approaches and promote a fact-based, performance-oriented approach to human capital management. We focused on the two critical success factors that correspond to strategic human capital planning, namely (1) the integration and alignment of human capital approaches to meet organizational goals and (2) the use of data to make human capital decisions. We reviewed DOD’s human capital plans to determine the extent they satisfied these two critical success factors with respect to active duty military benefits.
Why GAO Did This Study

The Department of Defense (DOD) has, in the past, lacked a strategic approach to human capital management. In April 2002, DOD issued two human capital strategic plans for military personnel. One plan addresses military personnel management and policies; the second addresses quality of life issues affecting service members and their families. As a follow-on to its recent work on benefits for military personnel, GAO reviewed the extent that these two plans, in addressing military benefits, promote (1) the integration and alignment of human capital approaches to meet organizational goals and (2) the use of reliable data to make human capital decisions--two critical success factors for human capital planning. GAO also reviewed DOD's plans for overseeing the progress and implementation of its human capital plans.

What GAO Found

DOD's human capital plans addressing military personnel and quality of life represent a positive step forward in fostering a more strategic approach to human capital management. The two plans lay some of the groundwork needed to incorporate benefits into the strategic management of human capital. The plans, for example, recognize that benefits are important elements to meeting recruiting and retention goals and to alleviating some of the hardships of military life. However, the two plans do not satisfy the two critical success factors GAO has identified for human capital planning. The plans do not specifically address how DOD will integrate and align benefits with other human capital approaches to meet organizational goals. DOD's plans identify a number of initiatives, but the plans do not describe how individual initiatives, many of which are studies, will work in conjunction with one another to meet DOD's goals and objectives. For example, one of DOD's initiatives is to study alternatives to the military retirement system, and another initiative is to study variable career lengths for officers. However, the human capital plans do not explain how these two initiatives may be integrated and aligned with each other to achieve desired outcomes. The military personnel strategic plan also does not identify outcome-oriented performance measures or discuss, at a strategic level, military workforce needs or gaps in meeting these needs--the kinds of data used by high-performing organizations to manage their human capital. DOD lacks a process for overseeing the progress and implementation of its human capital plans from a strategic vantage point. Without such a process, DOD may have difficulty integrating and aligning benefits and other human capital approaches to meet organizational goals and promoting a data-driven, performance-oriented approach to human capital management. Moreover, an oversight process could help DOD officials maintain the momentum of their strategic human capital planning efforts. DOD is considering establishing a Defense Human Resources Board to maintain the viability of its strategic human capital planning, but DOD officials have not determined the roles and responsibilities of the board.