Human capital management (HCM), at the broadest level, aims to optimize the human element in achieving organizational objectives (e.g., Air Force missions). Tactically, this involves accessing, developing, and engaging Airmen, as well as evaluating the success of individuals and the systems associated with these activities. Although there are many ways to categorize the major functions of an HCM system, Figure 3-1 provides a graphical representation of some of the most prototypical activities, which are also reflected in the U.S. Air Force (USAF) HCM system. That is, individuals are brought into the Air Force through the processes of recruiting, selecting, and classifying, and they are developed through training, education, and assignments. In the chapters that follow, the committee describes current Air Force activities and research in these areas and discusses areas for enhancement and improvement. As Figure 3-1 also indicates, the Air Force works to keep Airmen engaged by providing meaning, growth, and challenge in their work and by rewarding and recognizing accomplishments. In this study, the committee put less focus on the day-to-day aspects of these functions (i.e., leadership, the content of Airmen job duties); however, in the chapters that follow, promotional and other recognition systems are discussed. Finally, Figure 3-1 indicates the critical role of evaluation in human capital systems: both the need to evaluate individuals in order for human capital to be managed (e.g., assessment for classification, evaluation for promotion) as well as the need to evaluate whether the systems of accessing, developing, and rewarding are working as intended, while always seeking opportunities for improvement. Much of this report focuses on these evaluations of individuals and of human capital functions in the Air Force.
This chapter takes a step back from specific USAF human capital functions (e.g., accessions, career field training) and focuses on what makes a human capital system as a whole effective (i.e., the macro-level attributes of the integration of these functions). That is, having people in their jobs and performing those jobs is not the same as having people who create value for the Air Force, and it is also not the same as the Air Force being able to capture that value for competitive advantage (Call and Ployhart, in press). Our focus here is on how the ways human capital (i.e., people) in the Air Force are accessed, trained, developed, managed, rewarded, and retained can lead to greater value and greater competitive advantage for the enterprise.
Some of those attributes are universal in any effective system, but the Air Force has some unique aspects, needs, and best practices. As such, this chapter identifies fundamental and relevant industry best practices, including professional standards, to be leveraged and incorporated into the unique military dynamic. As the ecosystem model in Chapter 2 illustrates (see Figure 2-2), there is great complexity in how the various elements of the USAF human capital system interrelate with each other and externalities to the ecosystem. Our objective in this chapter is to present desired attributes of an effective HCM system for the Air Force to provide a strategic overlay for the specific actions recommended in the Flight Plan contained in Chapter 6. To do so, we draw upon research literature (as referenced in this chapter); best practices used in other Services, agencies, and organizations; and information gathered during the data-gathering activities of this study.
Although a list of desirable characteristics and important elements of a human capital system could be quite lengthy, this chapter focuses on the attributes that emerged most prominently and consistently in the committee’s review of the research literature and best practices. In conducting this review, the committee solicited information from the other Services, other government agencies, and private-sector employers, and reviewed the vast body of human resources (HR) literature on acquiring, developing, engaging, and evaluating talent, to consider how the USAF HCM system might be enhanced. Out of that review, the final list of six attributes listed below were judged by the committee’s expert opinion, informed by discussions with key stakeholders across the Air Force, to also be the most relevant to the needs of the Air Force:
- Mission Responsive;
- Accurately Informed and Informative;
- Agile and Flexible;
- Innovative yet Disciplined;
- Collaborative; and
- Understood and Trusted.
These are the attributes that, in one form or another, the committee heard about most often from Air Force representatives and doctrine as desirable; these are also recognized in various ways in HR research and practice as attributes associated with more effective HCM (e.g., Frink et al.  and Nishii et al.  on understood and trusted; Wright and McMahon  on mission responsive; Wright and Snell  on flexible). As discussed below, most of these attributes also have inherent tensions or paradoxes that need to be balanced in their pursuit. As Figure 2-2 illustrates, actions taken to address one attribute will ultimately have impacts on others, and as such, changes need to be made with an understanding of how such changes will impact other areas of the USAF HCM ecosystem.
An effective HCM system is one that is responsive to the mission, allowing the Air Force to access, develop, engage, and evaluate Airmen in line with current priorities. When a mission change needs to occur to reflect a new strategic goal or immediate need, this responsiveness has to be accompanied by a careful eye to impacts on all nodes of the complex HCM system, as illustrated in the ecosystem model featured in Chapter 2 (Figure 2-2). This is in line with the strategic approach of adjusting HR practices to be “just right” in terms of vertical fit (the system supports the strategic goals of the organization) and horizontal fit (the system’s practices are aligned to reinforce the effectiveness of one another) (Han et al., 2019; also see Wright and McMahan, 1992 for an initial discussion of these two types of fit).
For the Air Force, both vertical and horizontal fit are important. The Air Force requires an HCM system that is mission-connected and strategic (e.g., assessing and developing Airman competencies to meet changes to the mission; providing incentives to retain individuals that have mission-critical competencies such as pilots or cyber). At the same time, it is important to maintain good alignment between processes of accession, development, engagement, and evaluation. To get to “just right” in the HCM system requires that there be responsiveness to strategic goals while ensuring that interdependent HR practices are carried out in seamless and complementary ways. For example, ramping up training of Airmen to reflect a shift in strategic or immediate (tactical) priorities could ensure vertical fit. But if prioritization of that training is not considered in light of what is happening with accession (are enough individuals being brought into the Air Force
with the competencies to succeed in that training?) or engagement (are those trained given opportunities to use those skills in ways that encourage retention?), the lack of horizontal fit can undermine the vertical fit.
The system affords multiple points of intervention through which to promote and achieve mission responsiveness. If the mission requires greater competence in cyber warfare, for example, there can be greater efforts in recruiting those interested in cyber, greater assignments of Airmen made to cyber-related occupations, greater training of cyber skills, and greater efforts to retain key talent in cyber. Even though responding to the mission does not always necessitate adjusting all aspects, it does require ensuring that a change in one aspect (e.g., reducing training in one area) does not lead to misalignment in another (e.g., incentives continued for occupations with declining numbers of openings). Therefore, interventions to improve employee job performance can create value for an enterprise, but the extent to which that value is captured by the organization is conditional, given these types of dependencies (Call and Ployhart, in press).
The ecosystem model detailed in Chapter 2 (Figure 2-2) illustrates the challenge the Air Force faces in getting sufficient alignment to ensure fit with its strategic goals and mission while simultaneously ensuring that the various aims of the system (i.e., access, develop, engage, evaluate) stay well aligned. The ecosystem model shows that feedback loops—where a change in one variable could cause changes in other variables that eventually modify the first variable again—have to be traced and considered (as a descriptive example, see the fictional story of a “future shock” contained in Chapter 2); what’s more, it shows that the effects of one change can cascade through more than 100 feedback loops, affecting many aspects of the human capital system. An effective system has the attribute of mission responsiveness (i.e., vertical fit) that includes consideration of interdependence and reciprocal relationships so that changes meant to meet an immediate or strategic goal in one element are not made without considering the cascading effects through the system and effects on alignment or complementarity of key HR functions (i.e., horizontal fit).
Accurately Informed and Informative
Human capital systems involve many points of decision-making and forecasting about individuals and units: who to access, what assignment to give an individual, how many individuals with a certain set of competencies are needed, what will affect individual retention decisions, what is the likely rate of retention for a given occupation, etc. The effectiveness of the system is fundamentally influenced by the accuracy of the information that feeds into it (Boudreau et al., 2019; Cronquist, 2019). Ensuring the system is built on accurate and valid information makes it more informative for
forecasting and planning purposes (Boudreau and Cascio, 2017; Johnson and Zeider, 1991; Marler and Boudreau, 2017). For example, an updated, secure, meaningful, and accessible personnel database is necessary to inform personnel decisions; an active research function is needed to ensure the validity of decision processes and methods (Miller, 2019); and accurate and detailed information on Airmen is required to do advanced forecasting and meaningful manpower planning (Landers, 2019; Roland, 2019).
Inaccurate or incomplete data at one point can be deleteriously amplified by feedback loops and so contribute to misinformed decisions, poor forecasting, and other challenges throughout the system because of the cascading effects. To illustrate using the ecosystem model, if the data informing decisions about person-job fit are incomplete, outdated, or not integrated well with information about position requirements, this will affect the aggregate competency level of service members, training attrition, and job satisfaction. All these factors can lead to unforeseen chains of events downstream. As we will discuss in detail in the chapters that follow, this is complicated further by the fact that information available in one part of the system is not always easily retrieved or shared with another part (e.g., information on individual retraining needs that is not easily shared with those examining overall training attrition or those designing processes for reassignment). This siloing of information leads to a less effective system overall. Ensuring that the system is built on accurate and shareable information also makes it easier to detect positive trends as well as intervention needs.
There can be a tension between ensuring that one has “all the right data” when making decisions regarding an uncertain future and, on the other hand, times when the situation calls for decisions in the absence of complete data (e.g., the current lack of clear understanding of the rates of contagion, recovery, and other information regarding COVID-19). A well-informed system, where decisions are made based on accurate and complete data, where processes are routinely evaluated and validated (Miller, 2019), and where data are easily integrated and accessed to address questions, does not have to be one that stymies action. Increasing data accuracy and accessibility enhances forecasting and allows decision-making under uncertainty (Yusko, 2019) to proceed with confidence that the system is providing the best available information.
Agile and Flexible
Agility is the quality of being nimble and quick; flexibility refers to being supple and pliable. When it comes to human capital systems, one can think of flexibility as a capability that is needed to achieve agility when change occurs. Flexibility in HR practices can allow one to respond
to predicted or likely change (e.g., as economic conditions expand and contract, the Air Force has flexibility [within boundaries] to adjust incentives for enlistment and retention); agility comes into play when relative predictability is disrupted and a change requires a quick response. An agile system is one designed so that when unpredictability occurs that affects human capital functions, flexibility can more quickly and easily be enacted. Indeed, agility has been shown to have the greatest impact on performance of organizations when there is greater environmental volatility (Tallon and Pinsonneault, 2011).
In developing an HCM system that can be agile and adapt to changing circumstances, flexibility in how HR is constituted is a required system capability. HR flexibility has been defined by researchers as the ability to reconfigure resources quickly to meet immediate needs or strategic challenges (Wright and Snell, 1998), and can be discussed in terms of different types of resources (Way et al., 2015, 2018). The forms of particular relevance to this study, listed below along with Air Force-specific considerations, are often more immediate and tactical than strategic:
- Ability to acquire or quickly develop needed competencies (e.g., cyber skills in an increasingly cyber-focused mission, cross training, speed of accession processes, quality of accession and assignment);
- Ability to quickly deploy alternative HR practices (e.g., incentives to retain valued Airmen when family responsibilities or economic forces or the goals of the mission change);
- Ability to deploy and redeploy employees who can successfully perform a variety of activities (e.g., readiness of Airmen to adapt to new missions and assignments, ability to move across career fields, flexibility of assignment processes); and
- Ability to readily acquire, deploy, and dismiss contingent workers (e.g., use of the Total Force, including reserves and civilians versus active duty Airmen).
To be agile, then, the Air Force would want a system that can quickly engage this flexibility in response to unanticipated change. To illustrate using the ecosystem model, an agile HCM system would be one that could detect a technological advance, analyze its implications for the Air Force, and then engage flexible resources to make adjustments in assignment, training, and retention practices to adapt to the effects of that advance (see Chapter 2, example of a Future Shock, for concept map). In fact, as the historical examples contained in Box 3-1 illustrate, the Air Force has been very flexible to meet its mission in times of crisis.
Agility does not mean change is undertaken without forethought. Actions taken to quickly acquire competencies and to deploy practices and
people to address a change must be done with awareness of downstream implications of each of those changes on other parts of the ecosystem, lest the horizontal fit is lessened. There can be counterproductive tensions between maintaining alignment and being agile (Tallon and Pinsonneault, 2011). For example, processes that have become automated and routinized (e.g., what data follow an Airman through his/her career; how assignments are typically sequenced) can work against attempts to enact change.
Similarly, agility does not mean that all change happens quickly. Some changes (e.g., new training programs for next generation aircraft, new assessments at the point of enlistment) may require considerable time and investment to fully implement effectively. However, an agile organization will recognize that the changing nature of the roles of Airmen and the changing nature of the mission will require changes in HCM practices, and will be continually monitoring, updating, and preparing for those changes (including future shocks as described in Chapter 2), making their implementation more seamless.
Further, an effective HCM system achieves agility by way of an awareness of potential resistance to implementation of change. Agility can only fully happen when change is designed with strategic implementation in mind and is not disconnected from the day-to-day and immediate realities of those who have major roles in accessing, developing, engaging, and evaluating Airmen. In particular, agility cannot be achieved when resourcing makes change infeasible or when a high velocity of change is expected from those already under-resourced in executing day-to-day current requirements. Indeed, it has been demonstrated that paradoxically the most agile and resilient organizations are ones that actually focus on creating stability to allow people to focus on their work and not worry about disruptions (Pulakos et al., 2019).
Innovative Yet Disciplined
An effective HCM system is one that encourages innovation, continuously strives for improvement, has a forward focus, anticipates developments of interest, and uses forecasting to make plans and adaptations in how Airmen are accessed, developed, engaged, and evaluated. Innovative cultures are ones with willingness to experiment, high tolerance for failure, high collaboration, and high levels of psychological safety (Pisano, 2019). However, there are paradoxes within innovative cultures that seem particularly relevant to the discussion of how the USAF HCM system can achieve maximum effectiveness.
For example, successful innovative organizations (e.g., Google, Amazon, Apple) have a high tolerance for failure but also have low tolerance for incompetence: hiring systems at these organizations focus on attracting top
talent, performance standards are high and clearly communicated, and individuals are given feedback and developmental opportunities to thwart obsolescence (Pisano, 2019). The Air Force, in particular, may not be willing or able to tolerate failure in certain undertakings, and therefore also may place a high premium on competence. An innovative HCM system does not mean that failure is occurring because of incompetence, but that failures that provide valuable learning are accepted. For successful innovation, willingness to experiment has to be accompanied by high discipline around innovating—selecting experiments carefully, designing them rigorously, having clear criteria for moving forward or killing an idea (Pisano, 2019). Indeed, a forthcoming publication discusses “innovation delusion” or how the pursuit of change for the sake of being innovative can lead to a loss of focus on core mission work, with too many people preparing for careers of the future and not enough for current needs, with too much focus on building new systems without any attention to focus on maintaining current processes and structures, and the like (Vinsel and Russell, in press). Importantly, the pursuit of innovation should not lead to neglect of maintenance and upkeep (Russell and Vinsel, 2016, 2018).
To illustrate with the ecosystem model, an innovation in online learning tools and capabilities could provide opportunities for adaptive training, allowing individuals to complete coursework at their own pace. But implementing adaptive training without disciplined research to indicate how much guidance to give, the frequency and form of assessments of learning needed, or the role of learner motivation, would likely lead to an innovation that fails at implementation. For the Air Force to be innovative in its human capital practices, it also needs to be disciplined in evaluating potential innovations, using methodologically rigorous approaches to evaluate the viability of new ideas. We return to this point about the value of research capabilities as a means to achieving innovation in the following chapters.
Finally, echoing the earlier discussion of how awareness of implementation challenges is needed to be truly agile, organizations need to be alert to potential “innovation fatigue” brought on by frequent introductions of innovations that are either coupled with high rates of failure or are supplanted too quickly by the “next thing” (Chung et al., 2017). Innovation fatigue can result in a lack of a motivation to implement new ideas. Further, care must be taken to not simply blame an “innovation deficit” for a lack of progress on an issue (i.e., if only we innovated in our pre-enlistment assessment or in our basic training, we would not have these performance problems) (Pfotenhauer et al., 2019). The desire to encourage innovation should not become a bias that marginalizes functions and leaders not explicitly supporting innovative efforts, or that leaves decision-making to those in innovation roles without considering the voices of those in other, maintenance-oriented roles (Pfotenhauer et al., 2019).
With expertise distributed across the Air Force, an effective HCM system requires knowing who knows what, having good connectivity, and having an incentive to reach out and learn from each other (Olson and Olson, 2014a, 2014b). As we will detail in Chapters 4 and 5, there are many opportunities for greater interaction and information sharing by units that have roles in acquiring, developing, engaging, and evaluating Airmen, and such collaborative efforts would enhance system effectiveness. Indeed, emergence enabling states are described as the cognitive (e.g., shared knowledge), behavioral (e.g., coordination and pacing), and affective (e.g., cohesion) states that are the key mechanisms for developing a culture whereby human capital resources influence both the creation of value for the organization but also greater capturing of that value for competitive advantage (Ployhart and Moliterno, 2011).
Strongly collaborative environments are seen by the committee as key to the promotion of innovation with individuals who engage in team-based high-involvement activities who will interact in problem solving, knowledge exchange, building mutual trust, and aligning objectives (Li et al., 2018). However, effective innovation places a high value on both collaboration and individual accountability (Pisano, 2019). Collaboration does not imply consensus, and the sharing of data, expertise, and ideas does not negate the ownership of certain processes and elements by different units in the Air Force. Actually, the converse is the key to an effective HCM system: effectiveness comes from ownership and accountability along with a networked, distributed expertise that can collaborate with agility on emerging issues.
Furthermore, organizations and their people need to be “collaboration ready.” This means that there are incentives in place that encourage cooperation and collaboration. If incentives are in place to reward only individual behavior, there is likely to be competition rather than collaboration. To promote effective and efficient collaboration, reward collaborative behavior (e.g., in research, credit for being a co-author on a paper) and positive impacts on organizational goals (e.g., mission success or turning research results into effective policy). Although collaboration across organizations such as the Air Force that are geographically dispersed may require a larger amount of effort than for those whose people physically work close together, there are plenty of technologies (e.g., for communication, to record and make information accessible, and to retrieve information) and strategies (e.g., training, reward structures, or conferences) to motivate and enable people to behave collaboratively.
To illustrate using the ecosystem model, if a disruption such as a global pandemic occurred, a siloed approach would have those involved in accession, training, forecasting, research, and other areas each determining
impacts on their immediate operations. A collaborative system, on the other hand, would have the means to quickly convene relevant networks to share information and best practices, as well as to consider cascading effects (e.g., a halt to basic training operations leading to unfilled requisitions and empty schoolhouse seats, further leading to a decline in available Airmen in critical roles, and perhaps even gaps in developed leaders in a short span of time). The accountability for delivery in one’s specialty remains, but collaboration enhances responsiveness.
Understood and Trusted
An effective HCM system is one that is clear, transparent, and easily understood. Airmen need to know what is required of them to perform jobs well, to obtain promotions, to be selected for desired assignments, etc. Leaders need to understand what development can be expected from training, what factors have gone into assignments, and what is being done to boost retention of valued personnel. Decision-makers and forecasters need to understand what the data they are being provided with really mean. Transparency does not mean that all decisions are shared with all or explained to all, but rather that individuals have awareness of how processes work (e.g., how do individuals get selected for special training opportunities? What are criteria for promotion?) and trust that effective decisions are being made within defined processes and with best evidence and practice brought to bear. As an example, the ecosystem model shows that the inherent complexity of the USAF HCM system can sometimes lead to opacity about a specific decision (e.g., a decision may be made to lessen seats in training based on a future needs forecast, but that might not be readily apparent or adequately explained to a recently accessed individual who was hoping for that occupational direction).
Research on attributions illustrates how human capital systems can be misunderstood or not trusted (Nishii et al., 2008). This research suggests that the attitudes and behavior of Airmen as well as the performance of units are affected by attributions made by Airmen as to why HR practices are the way they are. If a negative motive attribution is made (e.g., training is set up this way only to save money; the assignment system is set up with a disregard for family life), the system as a whole ends up being less effective due to the distrust. If positive motives are attributed to HR practices (e.g., the Talent Marketplace is designed to help people advance in their careers and be satisfied with assignments), Airmen will associate the system with positive employee attitudes and performance. An effective HCM system is one Airmen understand and trust.
Among researchers, there are two dominant perspectives on the relationship between HR systems and organizational performance: best practices and best fit (Boon et al., 2018; Wright and Ulrich, 2017). The best practices perspective suggests that there are approaches to managing human capital (e.g., accessing, developing) that are universally going to lead to better outcomes for organizations if implemented correctly (Delery and Doty, 1996; Huselid, 1995). The best fit perspective suggests that the most effective HR practices will depend on how aligned those practices are with the specific organizational context (e.g., Jackson et al., 1989).
As the ecosystem model in Chapter 2 shows, the Air Force has a complex set of contingencies that affect how its HCM system elements interact with one another as well as with the external environment and the organization’s mission. The best practices perspective also suggests that the Air Force should study what has been considered most effective in HCM, both in other Services and in the private sector, and apply the best to the Air Force. Indeed, we would be remiss if we did not note that there are professional, scientific, and legal standards and guidelines that greatly inform the best approaches to the functions of acquiring, developing, engaging, and evaluating talent. Although the needs of the Air Force demand many unique HCM approaches, there are aspects of the USAF HCM system where being guided by universal best practices is appropriate and effective.
Given the complexities of the Air Force system illustrated in the ecosystem model (Figure 2-2), the committee also sought input from many different stakeholders of the USAF HCM system to think about best fit. The best fit perspective would suggest that it is of primary importance to align HR practices with the unique context of the Air Force to yield the most effective HCM system. For example, how the Air Force assigns individuals to positions requires a complex consideration of mission-driven requirements and not just individual competencies, desires, and position requirements, as might be the case in other organizations. In the next two chapters, we describe the current practices of the Air Force, noting where we feel it might learn from best practices elsewhere as well as noting where the mission and strategic priorities suggest practices that best fit the Air Force’s unique needs.
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